WEBVTT - GVA's Garrity on Election Cybersecurity: Is It Hackable?(Audio)

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<v Speaker 1>Broadcasting live to New York, Bloomberg eleventh to Washington, d

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<v Speaker 1>C Bloomber to Boston, Bloomberg Well under It, to San Francisco,

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<v Speaker 1>Bloomberg nine to the country, zoos A General one nineteen

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<v Speaker 1>and around the globe the Bloomberg Radio Plus happened Bloomberg

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<v Speaker 1>dot Com. This is taking stock. I'm Kathleen Hays along

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<v Speaker 1>with p M. Fox. Let's like, just about anything and

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<v Speaker 1>everything can be hacked this in this day and age.

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<v Speaker 1>But what about the coming presidential election? Is the proper

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<v Speaker 1>cybersecurity infrastructure in place? And oh boy, how about maybe

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<v Speaker 1>updating some outdated voting machines A special guest look at that,

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<v Speaker 1>PIM guess we'll be speaking with David Carty about cybersecurity

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<v Speaker 1>and the upcoming election. Right now, though, let's go to

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<v Speaker 1>Katherine Caterin and the Bloomberg News from for Bloomberg Business Flash.

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<v Speaker 1>Thank you, Pam Well. There could be more records on

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<v Speaker 1>Wall Street today. Socks are advancing as traders pushback bets

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<v Speaker 1>on high or interest rates in it uneven economic growth

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<v Speaker 1>in the US. A report today showed a homebuilder confidence

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<v Speaker 1>is up. Bloomberg's Viney del Judais has a details Steady

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<v Speaker 1>job growth and low interest rates are boosting prospects for

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<v Speaker 1>the housing market. The home builder confidence in DEX rose

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<v Speaker 1>to sixty this month from July's reading a fifty eight.

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<v Speaker 1>Readings above fifty suggests the market is good. The report

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<v Speaker 1>is sponsored by the National Association of home Builders and

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<v Speaker 1>Wells Fargo Looking Ahead. Tuesday, the Commerce Department issues data

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<v Speaker 1>on actual starts of new construction in July at the

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<v Speaker 1>Bloomberg First Word Desk on Veni del Judais Bloomberg Radio.

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<v Speaker 1>We check the markets every fifteen minutes throughout the trading

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<v Speaker 1>day on Bloomberg Radio. DAL industrial average is up seventy

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<v Speaker 1>one points four tens of a percent at eighteen thousand,

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<v Speaker 1>six hundred forty seven smp F I founded up seven

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<v Speaker 1>points a third percent. Trading the NAZAC is up thirty

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<v Speaker 1>one point six tents of a percent of fifty two

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<v Speaker 1>sixty three plus. Texas Intermedia crude oil up a dollar

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<v Speaker 1>thirty three a barrel, that's a gain of three percent.

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<v Speaker 1>Trading at two sparkled up two dollars and ounce at

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<v Speaker 1>and the Tenure Treasury is down eleven thirty seconds with

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<v Speaker 1>yield of one point by five percent. Among today's talk

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<v Speaker 1>business stories. Some US endowments and foundations are souring on

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<v Speaker 1>hedge funds. Hedge fund fees and lagging performance are caused

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<v Speaker 1>for concern for nonprofit investors who are reducing their allocation.

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<v Speaker 1>That's according to a survey published by n EPC of

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<v Speaker 1>Boston based consulting firm with one eighteen endowment and foundation clients.

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<v Speaker 1>The private equity firm TPG IS agreed to buy two

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<v Speaker 1>small cable providers r C and Telecom Service and Grand

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<v Speaker 1>Communications Networks. And now let's get an update of some

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<v Speaker 1>of the other stories we're following today. Thank you Catherine

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<v Speaker 1>from the Bloomberg Newsroom. I'm Jill Schneider. This news update

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<v Speaker 1>is brought to you by the Jeep Grand Cherokee, the

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<v Speaker 1>Republican presidential nominee Donald Trump is in Youngstown, Ohio, where

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<v Speaker 1>he's delivering a speech on foreign policy. Trump talked about

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<v Speaker 1>the growth of Islamic State in two thousand and fourteen.

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<v Speaker 1>Isis was operated in seven nations who were in seven nations. Terrible,

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<v Speaker 1>but that's what it was. Today, they're fully operational in

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<v Speaker 1>eighteen countries, with aspiring branches in six more, for a

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<v Speaker 1>total of twenty four and many believe that number is

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<v Speaker 1>actually twenty eight to thirty countries. Vice President Joe Biden

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<v Speaker 1>campaigned alongside Hillary Clinton today in Scranton, Pennsylvania. He said

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<v Speaker 1>Donald Trump can't relate to middle class Americans. This guy,

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<v Speaker 1>don't you care about the middle class. And I don't

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<v Speaker 1>even blame him in a sense because he doesn't understand it.

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<v Speaker 1>He doesn't have a clue. No, he really, I mean

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<v Speaker 1>he really doesn't. He doesn't have a clue. Biden said

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<v Speaker 1>Trump is quote totally unprepared to lead the country. Volunteers

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<v Speaker 1>with both are part of the rescue effort in Badly

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<v Speaker 1>Did parts of Louisiana. State officials say about twenty thousand

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<v Speaker 1>people have had to be rescued and ten thousand or

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<v Speaker 1>staying at shelters. The flooding has killed at least six people.

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<v Speaker 1>Friends and families said goodbye today to a New York

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<v Speaker 1>City woman who was found dead after going for a

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<v Speaker 1>run near her mother's Massachusetts home. Vanesa Marcotte was twenty

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<v Speaker 1>seven and worked for Google. No arrests have been made.

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<v Speaker 1>Global News twenty four hours a day, powered by more

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<v Speaker 1>than twenty d journalists and analysts in more than one

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<v Speaker 1>twenty countries. I'm Jill Schneider and this is Bloomberg. Catherine,

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<v Speaker 1>thank you, And now let's get a quick check of

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<v Speaker 1>the market. Stole Industrial laverage up seventy points at eighteen thousand,

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<v Speaker 1>sixty six, smp F I founded up seven point, the

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<v Speaker 1>NASTAC up thirty points at fifty two sixty three, and

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<v Speaker 1>that's a Bloomberg business slash. This is taking stock with

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<v Speaker 1>pim Box and Kathleens on Bloomberg Radio. Over the weekend,

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<v Speaker 1>Congressional Democrats, they scrambled to figure out the scope of

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<v Speaker 1>an unprecedented leite that we're view the personal cell phone

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<v Speaker 1>numbers and email addresses of nearly two hundred current and

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<v Speaker 1>former Democrats in the House of Representatives. The posting of

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<v Speaker 1>an online spreadsheet contained this personal information with lawmakers as

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<v Speaker 1>well as senior staffers. Is this something that could affect

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<v Speaker 1>the election, and indeed, could the election itself be hacked?

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<v Speaker 1>We turned now to David Garretty. He is a principal

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<v Speaker 1>at g v A Research, a columnist at Investopia Investopedia,

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<v Speaker 1>and he can be followed on Twitter at g v

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<v Speaker 1>A Research. David, thanks for being here, Thanks for making

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<v Speaker 1>me stumble on investopedia. UM, tell us about hacking and

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<v Speaker 1>we've learned about this revelation of cell phone numbers and

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<v Speaker 1>email addresses from Democrats in the House. Is it possible

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<v Speaker 1>that that could also mean that the computer and the

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<v Speaker 1>tallying system for our national election could be hacked. Well,

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<v Speaker 1>him to sort of address the issues. Um, if we

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<v Speaker 1>go back to the two thousand election, we remember hanging

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<v Speaker 1>Chad's down in the state of Florida. We were basically

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<v Speaker 1>reminded of the fact that, uh, the election in two

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<v Speaker 1>thousand was decided by the Supreme Court voting in favor

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<v Speaker 1>of George W. Bush. Now, Congress in two thousand two

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<v Speaker 1>passed an act called the Help America Vote Act, and

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<v Speaker 1>this made available but four billion dollars with the funding

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<v Speaker 1>which was used to go out and purchase voting machines. Um.

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<v Speaker 1>These were put in place, but there hasn't been much

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<v Speaker 1>investment made in terms of the infrastructure, if you will,

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<v Speaker 1>of the vote casting system. Since so we're operating in

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<v Speaker 1>a situation right now where in two thousand sixteen, we

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<v Speaker 1>have forty three states that are using electronic voting machines

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<v Speaker 1>that are at least ten years old, and out of

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<v Speaker 1>those number, fourteen of those states have voting machines that

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<v Speaker 1>are fifteen years or older. Now, bear in mind that

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<v Speaker 1>most of these voting machines rely upon a Microsoft Windows

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<v Speaker 1>operating system, except the operating system that they're using is

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<v Speaker 1>most likely Windows XP, which Microsoft stops supporting back in

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<v Speaker 1>April of two thousand fourteen, which from a practical standpoint

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<v Speaker 1>means that there have been no security updates, no patches,

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<v Speaker 1>no support for these systems since April of two thousand fourteen,

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<v Speaker 1>which raises the question that if there were an interest,

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<v Speaker 1>someone could probably find a way to degrade the operating

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<v Speaker 1>performance of those machines, not so much as to change

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<v Speaker 1>the votes, us most likely to impede the ability of

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<v Speaker 1>voters to actually cast their ballots through an electronic machine,

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<v Speaker 1>which is why you're seeing people say, look, we need

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<v Speaker 1>to ensure for this presidential election coming up in November,

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<v Speaker 1>that there's a sufficient supply of paper ballots available. So

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<v Speaker 1>enter hacking. I get that the voting machines are obsolescent,

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<v Speaker 1>not mode. And I love the fact you point out

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<v Speaker 1>that they're you know, they're running on an old, outdated

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<v Speaker 1>Microsoft system. But you know this is this the state

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<v Speaker 1>of the world, and we forget sometimes is how far

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<v Speaker 1>behind a lot of things are. How could we be

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<v Speaker 1>hacked Someone just goes in and changes the votes from

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<v Speaker 1>Clinton to Trump or Trump to Clinton. There have been

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<v Speaker 1>experiments that have been done, you know, by the government

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<v Speaker 1>in terms of there's the Argonne Lab, which is part

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<v Speaker 1>of the system of nationwide labs. We have Lawrence Livermore,

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<v Speaker 1>Sandy are others where they've actually run experiments or tests

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<v Speaker 1>as a sort of a weekend experiment, and they've been

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<v Speaker 1>able to hack into voting machines and actually change votes. Now,

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<v Speaker 1>the point I'm raising here isn't so much the fact

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<v Speaker 1>that votes are changed, but the fact that you degrade

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<v Speaker 1>the system. If people look at past elections and people

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<v Speaker 1>look at questions of voter disenfranchisement, people have raised concerns

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<v Speaker 1>about voter ID laws, But most of these older machines

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<v Speaker 1>are in districts that are less well off, that can't

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<v Speaker 1>afford to won't spend the money to upgrade the infrastructure.

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<v Speaker 1>And clearly where there has been voter disenfranchisement in the past,

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<v Speaker 1>it's been in terms of lower socio economic classes or districts.

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<v Speaker 1>So if there were efforts to not only impede turnout,

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<v Speaker 1>but to impede the performance of those people who do

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<v Speaker 1>turn out to vote, obviously finding a way to degrade

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<v Speaker 1>the performance of the voting machines would be one way

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<v Speaker 1>to do that. For eighty two dollars, I understand that

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<v Speaker 1>you can buy a Sequoia, a VC advantage machine. It's

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<v Speaker 1>one of the oldest machines still in use. Voting machines

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<v Speaker 1>such as these are in views in places like Louisiana, Virginia,

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<v Speaker 1>and New Jersey, Pennsylvania. Took a Princeton, a computer science professor,

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<v Speaker 1>about five minutes to hack into the machine. Right now,

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<v Speaker 1>the challenge that we have here in the United States,

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<v Speaker 1>and so we've got about, you know, nine thousand different

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<v Speaker 1>districts that have controlled either on a local level or

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<v Speaker 1>a state level with respect to supporting voting machines. Now

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<v Speaker 1>there there, there are, there's not a standard of machines

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<v Speaker 1>that are being used. So arguably from a hacking standpoint,

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<v Speaker 1>the fact that you've got this heterogeneous infrastructure. Maybe some

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<v Speaker 1>extent serves to impede any efforts to hack. But the

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<v Speaker 1>point can be made here and is made here that

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<v Speaker 1>this is something we should be concerned about. From the standpoint,

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<v Speaker 1>we look at a voting process that should be transparent,

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<v Speaker 1>it should have high integrity, and it should be one

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<v Speaker 1>which in the current environment, is not capable of being

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<v Speaker 1>rigged ten seconds. Donald Trump has famously said, I'll look

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<v Speaker 1>out the election could be rigged to stay. Garritty agree that,

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<v Speaker 1>at least in terms of cybersecurity, it could. I think

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<v Speaker 1>that this argues very much for using paper ballots in

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<v Speaker 1>the upcoming election. All Right, did Garritty? You can find

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<v Speaker 1>the terrific essay he wrote a couple of weeks ago

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<v Speaker 1>on Investopedia. Dave Garrity is principle at g b A

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<v Speaker 1>Research joining us today in our New York study. Thinks.

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<v Speaker 1>So much for coming in, Dave. I'm Catheine Hayes along

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<v Speaker 1>with PM Fox. This is taking Stock on Bloomberg Radio.

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<v Speaker 1>We're going to be looking at the stock market and

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<v Speaker 1>where it goes next. This is Bloomberg coming up on

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<v Speaker 1>taking Stock. Jonathan Gollub, chief US market strategist for RBC

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<v Speaker 1>Capital Markets. He's got a call of a target on

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<v Speaker 1>the SMP at two thousand two twenty five