Saturday, October 17, 2015

Big Mac Index

The big mac index is a quick attempt at explaining purchasing power parity.  The idea being that simply knowing the exchange rate is not enough to know how valuable your money from one country will actually be when you try to purchase actual goods there.

Here is the fun part though:
Critics of the presidency of Cristina Fern├índez de Kirchner in Argentina and many economists believe that the government has for years falsified consumer price data to understate the country's true inflation rate. The Economist stated in January 2011 that Big Mac index "does support claims that Argentina’s government is cooking the books. The gap between its average annual rate of burger inflation (19%) and its official rate (10%) is far bigger than in any other country." That year the press began reporting on unusual behavior by the more than 200 Argentinean McDonald's restaurants. They no longer prominently advertised Big Macs for sale and the sandwich, both individually and as part of value meals, was being sold for an unusually low price compared to other items. Guillermo Moreno, Secretary of Commerce in the Kirchner government, reportedly forced McDonald's to sell the Big Mac at an artificially low price to manipulate the country's performance on the Big Mac index. In June 2012, the price of the Big Mac value meal suddenly rose by 26%, closer to that of other meals, after The Economist, The New York Times, and other media reported on the unusual pricing. A Buenos Aires newspaper stated "Moreno loses the battle".

Friday, October 16, 2015

How is NSA breaking so much crypto?
For the most common strength of Diffie-Hellman (1024 bits), it would cost a few hundred million dollars to build a machine, based on special purpose hardware, that would be able to crack one Diffie-Hellman prime every year.

Would this be worth it for an intelligence agency? Since a handful of primes are so widely reused, the payoff, in terms of connections they could decrypt, would be enormous. Breaking a single, common 1024-bit prime would allow NSA to passively decrypt connections to two-thirds of VPNs and a quarter of all SSH servers globally. Breaking a second 1024-bit prime would allow passive eavesdropping on connections to nearly 20% of the top million HTTPS websites. In other words, a one-time investment in massive computation would make it possible to eavesdrop on trillions of encrypted connections.