Last week we experienced a major “event” in the financial world. In a matter of minutes, the New York Stock Exchange lost nearly 1000 points or about $1 trillion. It caused panic and kicked off numerous investigations as to the catalyst of the dramatic and expensive incident.

There are five possible reasons for the black day.

1. It was a “simple” computer glitch.  The systems used to manage the incredibly fast and complicated buying and selling has a hiccup, and when the human traders saw the mistaken results, they piled on.

2. A trader typed “b” instead of “m,” turning a sale of several million into one of several billion and precipitating the rush to sell.

3. The ongoing financial crisis in Greece was the cause. The market had already lost over 900 points that week due to the shakiness of the European economies and the possibility of it spreading from Greece to Spain, Portugal and beyond. (In any case, Greece’s financial troubles probably contributed to whichever reason turns out to be the primary catalyst).

4. It was deliberately caused by crooked and unscrupulous traders seeking to cash in.

5. It was a deliberate attack trying to destroy confidence in the American (and Western) economic system.

    As stated, investigations to determine the cause are underway. At the AFCEA Joint Warfare Conference in Virginia Beach, former DHS Secretary Mike Chertoff and retired Adm. Tim Keating, former Commander of both U.S. Northern Command and U.S. Pacific Command, were asked if it was possible that the market fall was the work of terrorists. Both felt that it was not. John Brennan, the President’s advisor for Homeland Security and Counter Terrorism has stated without hesitation that this was not cyber terrorism. Despite lots of hand wringing and conspiracy theorizing, pretty much all the experts agreed that it was not a terrorist incident.

    Does this mean that all the earlier prophecies of doom about cyber terrorism were Chicken Little? Unfortunately, no they are not. Cyber terrorists going after our financial sector or other critical infrastructures are a real danger.

    Not every “bad” thing that happens will be caused by cyber terrorism, but that does not then mean that cyber terrorism is not a threat. In fact, I am concerned that our enemies will look at last week’s events and see how easy it may be to cause us great harm and concern. The bad guys do analysis too. They are watching how we respond to natural disasters, how we respond to nearly everything, and they learn.

    We need to be as least as good at learning as they are. We need to anticipate how they may perceive events and how they may adapt based on their analysis. And we must be prepared to deal with the results.

    Dr. Steven Bucci is director of the Allison Center for Foreign Policy Studies at The Heritage Foundation. He was previously a lead consultant to IBM on cyber security policy. Bucci’s military and government service make him a recognized expert in the interagency process and defense of U.S. interests, particularly with regard to critical infrastructure and what he calls the productive interplay of government and the private sector. Read More