WSJ What’s News - How China-Linked Hackers Attacked U.S. Internet Providers

Episode Date: September 25, 2024

P.M. Edition for Sept. 25. The cyberattack, called Salt Typhoon, is one of many intrusions U.S. investigators have linked to China in recent years. And as world leaders gather for the U.N. General Assembly, The Wall Street Journal’s Shayndi Raice discusses how Israel has resisted international pressure over its war in Gaza and conflict with Hezbollah. Plus, the art market is tanking, but Sotheby’s has bigger problems. WSJ reporter Kelly Crow explains why. Tracie Hunte hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

Looking for a collaborator for your career? A strong ally to support your next level success? You will find it at York University School of Continuing Studies, where we offer career programs purpose-built for you. Visit continue.yorku.ca. How U.S. Internet providers were targeted in a new China-linked cyberattack. And world leaders at the United Nations are expected to focus on Israel's fighting in Gaza and Lebanon. But how much will it matter?

There will be a lot of condemnations of Israel by all sorts of countries, and most of those countries are not going to impose any sort of actual consequences on Israel beyond just excoriating them at the UN. Plus, how self it is feeling the pain from a tough art market. It's Wednesday, September 25th. I'm Tracy Hunt for the Wall Street Journal. This is a PM edition of What's News, the top headlines and business stories that move the world today. We begin today with an exclusive report.

According to people familiar with the matter, hackers linked to the Chinese government have broken into a handful of U.S. Internet service providers in recent months seeking sensitive information. The hacking campaign called Salt Typhoon by Investigators hasn't previously been publicly disclosed. It's the latest in a series of incursions that U.S. investigators have linked to China

in recent years. In the attack, the actors linked to China dug into America's broadband networks, aiming to establish a foothold within the infrastructure of cable and broadband providers that would allow them to access data or launch a damaging cyber attack. According to people familiar with the matter, investigators are exploring whether the intruders gained access to Cisco systems routers.

These are core network components that route much of the traffic on the internet. A Cisco spokeswoman didn't immediately provide a comment. The people also said Microsoft is investigating the intrusion and what sensitive information may have been accessed. A spokesman for the company declined to comment. China has routinely denied allegations from Western government technology firms that it

relies on hackers to break into foreign government and business computer networks. The Chinese embassy in Washington didn't respond to a request for comment. Vice President Kamala Harris and former President Donald Trump are offering competing visions for the U.S. economy, aiming to gain an advantage on a central concern for voters. Harris outlined her approach to the nation's economy in an address today from Pittsburgh aimed at reassuring voters about her ability to harness economic growth. The Democratic presidential nominee vowed to bring a pragmatic approach to the U.S. economy with a focus on manufacturing and middle-class opportunities. Harris outlined plans for a set of tax incentives that would seek to spur next-generation industries

crucial to the economy and national security. The new tax credits for investments in manufacturing and production would span key areas including bio-manufacturing, aerospace, artificial intelligence, and quantum computing. In his own speech yesterday in Georgia, Donald Trump offered his economic prescriptions, vowing to implement large tariffs against China and slash the corporate tax rate. Harris and Trump are vying for support against the backdrop of a generally strong economy. But inflation remains a top concern for voters, creating anxiety among the electorate, and manufacturing job growth has been flat.

And for a look at how various Trump or Harris policy proposals might affect your personal finances, check out our Your Money Briefing podcast. They've got a special series called Your Money, Your Vote running every Sunday from now to October 6th. Israel's military chief told troops that airstrikes against Hezbollah were in preparation for a potential ground invasion of Lebanon. As we reported this morning, Israeli air defenses intercepted the militant group's first attempted missile strike on Tel Aviv. The missile was targeting the headquarters of the Mossad spy agency.

Hezbollah blames Mossad for the assassination of several of its leaders, as well as pager attacks on its members. Meanwhile, world leaders are gathering this week in New York for the United Nations General Assembly. Israeli Prime Minister Benjamin Netanyahu is scheduled to address the body on Friday. International efforts to isolate and punish Israel for its conduct in Gaza and intensifying clashes with Hezbollah are nowhere more evident than at the UN. Yet Israel has not backed down. Joining us now is Shain Dei Reis, the Deputy Bureau Chief for the Middle East and North Africa for the Wall Street Journal. Shain Dei, what should we expect to hear from Netanyahu?

We should expect a very robust defense of Israeli actions over the last year, including how Israel has handled the war in Gaza and especially a defense for Israel's military campaign in its north against Hezbollah and also a very strong excoriation of double standards by the UN. In Israel's view, the UN is really essentially anti-Semitic and that it singles out Israel unjustly for criticism. There have been more condemnations and resolutions against Israel than any other country.

He often repeats things like that. And so we should expect all of that. As you mentioned, the UN has issued condemnations, resolutions, and even brought legal cases to UN courts against Israel. Can any of these have real impact? It's a really good question. Yes and no.

I think that one of the things that you'll see at the General Assembly this week is that there will be a lot of condemnations of Israel by all sorts of countries, and most of those countries are not going to impose any sort of actual consequences on Israel beyond just excoriating them at the UN. But you mentioned the court cases. That definitely will have real world consequences. There are two ICJ cases right now, International Court of Justice, which is the UN's legal body.

One is for charges of genocide that's been brought by South Africa. The other one is that there was a non-binding advisory opinion that determined that Israel's occupation of the West Bank was illegal and needed to stop immediately. And so there's going to be efforts at the UN to implement those rulings. They probably won't be very successful. One of the reasons why the UN is not particularly effective is because the US protects Israel at the UN. And there's no reason to think that that will stop anytime soon. What's the role of the US in all of this? The US is in a little bit of a difficult situation because they do want Israel to go for a ceasefire

that would see hostages released. They want a ceasefire in Gaza so that there can also be calm in Israel's north. But the US has a difficult situation because it does agree with Israel that Hamas needs to be destroyed. It definitely agrees with Israel that Hezbollah is the aggressor in the campaign in the north. At the same time, what the U.S. really wants is for Israel and moderate Arab countries to form their own coalition of sorts that could serve as a counterbalance to Iran. For the U.S. to be able to do that, Israel is an absolutely key player. And so it's hard to influence around the edges when you don't really have the strongest

tools at your disposal, which could be, obviously, stop exporting arms. The U.S. is not going to do that. Or to stop vetoing resolutions at the U.N., again, something the U.S. just isn't going to do. Shandy Race is the Wall Street Journal's deputy bureau chief for the Middle East and North Africa. Coming up, Sotheby's challenges in a failing art market. That's after the break. The art market is grinding through a rough patch, and no one's feeling it more than Sotheby's. The auction house was once bringing in at least $7 billion in sales annually, but now

there are signs the company might be running out of cash. Joining us now is The Journal's Kelly Crowe, a staff reporter covering the art market. Kelly, what are some of the problems that Sotheby's is dealing with right now? Kelly Crowe Sotheby's is kind of in a world of hurt, in part because it's got this owner that's really highly leveraged. Patrick Draghi is a fascinating character, a self-made billionaire, born in Morocco and educated in France. He's made his money through Altice, which is a broadband's communication.

So he knows cable companies and he's known for being pretty good at trimming costs at companies. And so, so that he's trying to sell art while also trying to cut costs, be lean and mean, and then also spend a ton of cash rehabbing or buying new brick and mortar spaces all over the world. And that sort of pressure cooker at a time when art is not selling for gangbusters has just really put them in a really tough spot financially. So, what is Sotheby's saying about this and what is it doing? Sotheby's is doing everything it can to try to reassure its bondholders and the market

overall that it will ride it through. You know, markets are cyclical. And last month, it reached out to a sovereign wealth fund connected to Abu Dhabi and arranged this billion dollar deal that should offer sort of a cash infusion, but that money is not in hand yet. And so Sotheby's is saying that all of these financial worries are overblown. They don't want to rattle the market any more than it already is. So another famed auction house, Christie's, has also taken a hit. Is the whole art market in trouble? Is this a sign of a broader issue?

Yeah, it's just lousy timing, right? So right at a time when Sotheby's owner is under all this pressure to offload $60 billion of debt, it's trying to see Sotheby's owner is under all this pressure to offload $60 billion of debt. It's trying to see Sotheby's through a tough spot on its own. Part of it is that bondholders have been nervous that Drahi's been withdrawing dividends from the company. So pulling money out right at a time when the auction house just needs a little bit more float. But frankly, none of us were paying all that much attention when paintings were selling for $200 million a pop, right? Like, when art is selling, honestly, one Modigliani can settle the balance sheet in one fell swoop. But that's not happening right now, and so they really don't have any one painting

or any one estate. There's no Rockefeller, there's no Paul Allen, there's no sort of big billion dollar estate that can just come through this season and save the day. Kelly Crowe covers the art market for the Wall Street Journal. U.S. stocks turned weaker today, erasing some recent gains in the absence of any major new catalyst to keep driving them higher. The Dow fell 0.7 percent or roughly 293 points to snap a four-day winning streak. The S&P 500 slipped 0.2 percent while the tech-heavy Nasdaq composite ticked up less than 0.1 percent. And that's what's news for this Wednesday afternoon. Today's show was produced by Pierre Bienneme and Anthony Bansi with supervising producer Michael Kosbidas.

I'm Tracy Hunt for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.