10/12/2025: The China Hack, Booms, Busts and Bubbles, The Road to Damascus

0:06Can you think of any reason that China would target your little community? That's the exact question I had for the FBI when they visited me on that first day, and I still can't answer that question. No, I can't think of one reason. The FBI told Nick Lawler that China has hacked into the computers of vital American utilities, even his. in tiny Littleton, Massachusetts. If they're willing to go after that small provider that doesn't have a national security connection, that means every target is on the list. Do you think that we will have a crash? We thought it was a good time to check in with Andrew Ross Sorkin, one of the country's most influential financial reporters.

0:54He's just written a book about the market crash a century ago. Are you scared?

1:00Andrew Ross Sorkin:I'm anxious that we are at prices that may not feel sustainable. We are either living through some kind of remarkable boom. Or we're reliving. 1929. The deal between Israel and Hamas could lead to big changes in the Middle East. We spoke with a man who knows a thing or two about remarkable transformations. Syria's new president, Ahmed al-Shada. Have you ever seen that poster? The wanted poster? Yes, of course. You were designated as a terrorist by the American government. There was that$10 million bounty on your head. It would have been a waste. It would have been money ill-spent. I'm Scott Pelley.

1:47I'm Bill Whitaker. I'm Anderson Cooper. I'm Sharon Alfonsi. I'm John Wertheim. I'm Cecilia Vega. I'm Leslie Stahl. Those stories and in our last minute, New Hope for Peace in the Middle East, tonight on 60 Minutes.

2:09Until recently, Tim Hawk was among America's top spymasters. The four-star general spent 33 years in Air Force intelligence and rose to lead America's largest and most advanced intelligence agency. Agency. Hawke was also in charge of defending America from computer threats. In his first television interview since retirement, General Hawke is here to warn that China has hacked into U.S. computer networks to an astonishing degree, and he believes he knows why. The surprise, Tim Hawke told us, is that China is targeting not just the U.S. military and industry, but also Americans in their homes. I think initially we were surprised that China would target every American with these capabilities.

3:07That goes against every norm of international law. That certainly goes against how the United States military would approach targeting in a crisis or a conflict. That the fact that they would go after basic services as part of their effort that they have identified as unrestricted warfare is unconscionable. And what did they target? They targeted water. They targeted electrical power, infrastructure, transportation are examples of the types of things that were targeted. And in many cases, they're vulnerable. Multiple intrusions at utilities were discovered in 2023, and China had been on some of their computer networks at least five years.

3:50You're saying that the Chinese today are in American power plants, water treatment plants, other parts of the electrical grid, maybe even hospitals, telecommunications, all of that? So there is a daily contest that is going on to be able to deny China those accesses, but they are certainly attempting every single day to be able to target telecommunications, to be able to target critical infrastructure, both in the United States and in other countries. And they are doing that to try to ensure that they have an advantage in a crisis or a conflict. Is China preparing for war? There was no other reason to target those systems.

4:30There was no advantage to be gained economically. There was no foreign intelligence collection value. The only value would be for use in a crisis or a conflict. In 2024, Tim Hawk rose to lead both the National Security Agency, America's largest spy agency, plus U.S. Cyber Command, the military defense in cyberspace. Hawk took over just as the scope of China's hacking of utilities was becoming clear in a place no one would have imagined. Is Littleton a major supplier of some kind to the federal government? We are not. Major supplier to a military base? No. Nick Lawler is general manager of the Littleton, Massachusetts Electric and Water Utility.

5:20His town has 10 ,000 residents. Can you think of any reason that China would target your little community? That's the exact question I had for the FBI when they visited me on that first day, and I still can't answer that question. No, I can't think of one reason. The FBI visited in November 2023 to tell Lawler that China had access to his utilities computer network. He says the feds told him he was one of 200. How much of all of this is controlled remotely by computers? All of it. In his water treatment plant, Lawler showed us tanks of dangerous chemicals that are precisely controlled to deliver clean water.

6:07If you had control of these tanks, you've got control of Littleton, Massachusetts. You can poison the water. You can poison the water. But China was caught before it had operational control. With Lawler's permission, the feds watched what China was doing, and what they learned was part of an awakening for American security. If you are willing to go after a small water provider in Littleton, Massachusetts, what other target is off the list? So from that perspective, this is a national threat. It's one that needs to be addressed, but it's also one that every American should understand. Because if they're willing to go after that small provider that doesn't have a national security connection, that means every target is on the list.

6:58So help me understand, why Littleton? If we are involved in something in the Indo-Pacific that is becoming a challenge between the United States and China, the more that China could get us to focus at home means now our resources are focused in the homeland. That would distract us, distract resources, make it more difficult for us to mobilize in a crisis. Littleton may not be a very large place, but if the Chinese took its water offline, the entire country would be focused on it. And if there were three to four other examples simultaneously, plus an information campaign, it could seem much larger than it is, or it could be done in critical places that would have a greater effect.

7:45Other critical places believed to have been targeted by China over years include New York City's Metropolitan Transportation Authority, 13 gas pipeline operators, the Port of Houston, and major phone companies. But here's the bottom line on this. They have gotten to be very, very good at cyber operations. Mike Rounds thinks he knows why China is doing this. The Republican senator of South Dakota is chair of the Armed Services Cybersecurity Subcommittee. He believes China intends to deter the U.S. from standing up in a fight by hacking our most sensitive industries. But all it takes is a blip on the financial markets to delay certain trades by just milliseconds to put the market into an entirely different attitude about the security and the soundness of being able to make those transactions happen.

8:42You're talking about causing chaos on Wall Street. Threatening to be able to cause chaos on Wall Street would be something that they would love to do. And turning the lights on and off. Most certainly. Or to start out with, whether or not you can get an airline reservation. And so those are areas that they would love to do just so that when the time comes, in my opinion, They can look at it and simply say, we know where you're at. Don't mess with us. We're capable of causing real problems for you long term. China is causing those problems by exploiting vulnerabilities in network equipment. In Littleton, Massachusetts, China found a weakness in a network firewall.

9:22That's not unusual when software vulnerabilities go unpatched or when out-of-date equipment is no longer supported with security updates. Once inside, China did not install malware, which could be a red flag. Instead, it stole login credentials and masqueraded as a legitimate employee. They are just gaining access to that system and then attempting to lay dormant. They're not spending more time collecting intelligence or taking other activities. It's there if they need it later. Exactly. Do we even know how extensively the Chinese are into our systems? I don't think we have a perfect knowledge of that.

10:07How many Chinese attacks are there on U.S. systems in a day? I would expect that automated activity are happening at scans at the millions of devices throughout every single day. China denies the hacking. The White House told us it is working to assess exposure and mitigate the damage. In Littleton, the damage forced Nick Lawler to completely rebuild his network at a cost of more than$50 ,000. It is much more consuming to try to get somebody out of a network than to deny them access, which is why it's so critically important that we get the basics right in our critical infrastructure and in these substantive networks so that we aren't expending more resource to try to root them out.

10:55Tell me we're good at this. We are definitely good at this. Really? But the scale is a challenge. Very few understood the scale or the challenge as well as General Hawk. In the first Trump administration, he was promoted to two-star general, then three-star. But later, with a fourth star, he led the National Security Agency for only a little over a year. I got a phone call from a senior official in the Department of Defense that told me that the president had made a decision to remove me. He was fired in April after a far-right activist named Laura Loomer met with the president. Online, she explained that Hawk was disloyal and had been referred for firing.

11:41The evidence she pointed to publicly was Hawk's appointment by President Biden. She called Hawk's firing a blessing for the American people. That has got to be galling after your career. I know in my heart that every day I wanted to achieve the things for our nation that would make us more secure and make every American safe. And that continued to my last day of service. So from that perspective, it certainly was impactful to me and my family. But at the end of the day, it's about our nation and it's about our nation's security. You're sitting there with four stars on your shoulder. You have spent your entire life in the Air Force.

12:26and you've been accused of being disloyal, your reaction is what? That every day I woke up committed to our national security and to meeting the expectations of the president. Not disloyal? Absolutely not. The White House did not answer our questions about Hawk's firing from the National Security Agency. Later, Hawk retired from the Air Force. We do not have enough of these types of leaders and a loss of any one of them without strong justification is disappointing. A new acting head of the National Security Agency was appointed, but the week after the firing, Republican Mike Rounds, chair of the Senate Cybersecurity Subcommittee, saw Hawk's sudden termination this way.

13:15The departure of General Hawk is a loss for our nation, but will be a tremendous gain for any private or public entity where he decides to lend his expertise and leadership. I wish him Godspeed. That said, as our adversaries watch this hearing, it will be clear that no matter the scenario, our cyber mission forces are ready. The National Security Agency and U.S. Cyber Command are consequential organizations. The second I was no longer the leader, focus shifts to them. They have consequential missions to do. And for my family, it shifts to how do we serve in different ways. Today, Tim Hawk serves by teaching at Yale and consulting private industry, but sidelined in government as China expands its aggressive hacking, spying, and theft of intellectual property.

14:11There have been resignations and firings of other people focused on America's cyber defense. What does that mean for our national security? Our overall capacity is getting smaller while we know China's continues to grow. There is still immense capability in the U.S. government. And now it will be up to the administration to be able to use that and build partnerships with industry to be able to ensure that we're countering these threats. If the United States does not dominate in this space, what is at stake? First, I'm always confident in our nation. But if we don't dominate in this space, China gains advantage with the ability to continue to steal intellectual property, which impacts our economy.

14:54They could gain increased intelligence collection, which would help them every day and also in a crisis and conflict. And they could preposition in critical networks, both in the United States and with allies and partners, that could give them advantage in a crisis. We can't let that happen.

15:15Stocks took a nosedive on Friday after President Trump threatened a big tariff hike on China. Until then, Wall Street had been at record highs for months, which is why we decided to check in with Andrew Ross Sorkin, one of the country's most influential financial reporters. He's just written a book called 1929 about the market crash a century ago. We wondered if he'd run out of news to cover, or is he alerting us that what's been happening in the markets lately is a replay of what led to the most devastating financial collapse in our history? Tuesday, October 29th, 1929. Imagine the New York Stock Exchange back then.

16:02The crush of frightened traders dumping stocks. Investors losing their shirts, businesses, their homes. Sweeping away the roaring 20s. Walking that same but transformed floor today.

16:19Andrew Ross Sorkin:Everything's digital. Well, yeah, okay. Andrew Ross Sorkin says we're in our own roaring 20s, the 2020s, with stocks climbing for months just like then. The crazy part about this is from 1928 to September of 1929, the stock market was up 90%. When you say the stock market was way up, immediately I think of now. Are you scared? I'm anxious. I'm anxious that we are at prices that may not feel sustainable. And what I don't know is we are either living through some kind of remarkable boom, and part of that's artificial intelligence and technology and all of that, or everything's overpriced. Or we're reliving...

17:07Andrew Ross Sorkin:1929. There was so much anxiety... Sorkin has covered the markets for two decades. He joined the New York Times after college, soon founding the dealbook newsletter covering finance. He also co-hosts Squawk Box on CNBC, Good to see you, too. Thanks for having me. runs the Dealbook Summit, where he interviews the high and mighty. He co-created Billions, the TV show, wrote a bestseller about the 2008 crash, and now a book about 1929. We're always being undone by bubbles. There was the Internet bubble in 2000, the housing in 2008. Are we in another bubble, an AI bubble or something like that? I think it's hard to say we're not in a bubble of some sort.

17:58Andrew Ross Sorkin:The question is always when is the bubble going to pop? One symptom of a bubble is when the market goes up and up, but the underlying economy, the real economy, goes soft. And that appears to be happening right now. I would argue to you that the economy is being propped up almost artificially by the artificial intelligence boom. There are hundreds of billions of dollars that are being invested today in artificial intelligence. This is either a gold rush or a sugar rush. And we probably won't know for a couple of years which one it is. Four million shares a day. 1929 was a sugar rush caused by speculation and debt.

18:47But people who didn't really have much money were lured by Wall Street bankers to invest, using a newfangled concept to take on debt called credit. You only had to put down 10 % of the stock price, borrowing the rest from your broker.

19:06Andrew Ross Sorkin:Prior to 1919, most people did not take on credit or debt at all. It was a sin. It was a moral sin to use credit to buy anything. And it was really General Motors that basically came up with the idea that we're going to lend you money so you can afford to buy our cars. Brilliant. And then the bankers realized what's happening, and they realized that they can lend out money so that more folks can buy stocks. It was all sort of wrapped in the flag of democratizing access. And in good times, when the stock is going up, it's like free money. In bad times, you're on the hook and you're on the hook in a very bad way.

19:53Since then, laws, regulations and agencies have been put in place to protect investors, especially the less affluent, from being exploited. We put up barriers after 1929. Yes. Protections. Yes. So those are coming down. They're tumbling down. The SEC rules aren't as stringent anymore. Yes.

20:17Andrew Ross Sorkin:The Consumer Protection Bureau practically doesn't exist anymore. Correct. That's what concerns me. It's not that we're going off a cliff tomorrow. It's that there's speculation in the market today. There's an increasing amount of debt in the market today. And all of that's happening against the backdrop of the guardrails coming off. including guardrails that allow only the wealthy to invest directly in private companies that have fewer regulations, like AI startups, before they go public. So over the last 20 or 30 years, folks who had access to, who could invest in private equity and venture capital, clearly outperformed folks who didn't.

21:04That's how you really made money. But you have to remember that these kind of assets are gambles.

21:11Andrew Ross Sorkin:Public companies, after the SEC was created, were required to have all sorts of disclosure rules so that the public could understand what's going on inside them. Private companies don't have that. But historically, the average ordinary American wasn't really allowed to invest in the private companies. But in this flag of democratizing finance, there's a lot of people who want access to that. Isn't this something? This is spectacular. Sorkin took us to the Fifth Avenue mansion of one of the big bankers back then who pushed democratization. If this idea of bringing the regular guy into buying stock, if that was a big problem back in 1929, why are we going there again?

21:57Doesn't it defy some kind of logic?

21:59Andrew Ross Sorkin:There is a view that it's been only the elites that have had access to these investments. Facebook, before it ever went public. Uber, before it went public. So there was this idea that it's unfair, actually, to the ordinary investor, because we haven't allowed them to get access to some of these investment opportunities early. And there is a real push, partially by the Trump administration, partially by the industry itself, which wants to... Get more money. Get more money in. Yeah. To open up the market to more and more people. So we have these guardrails for a reason. I mean, they're there to protect, and they have protected.

22:44Andrew Ross Sorkin:They have protected a lot of people, but some people would say they protected people from getting rich. Many people don't believe in capitalism anymore. And I think a lot of it is because they were not a part of the growth of the economy. We went to Larry Fink, CEO of BlackRock, the world's biggest money manager, handling$12.5 trillion in assets like pension funds. His annual letter to investors is a kind of industry roadmap. In his latest one, he suggested opening our retirement 401ks, bastions of caution, to riskier private investments in the name of, wait for it, democratizing investing. As I wrote, there are many great opportunities to be investing in startup companies, to invest in AI or data centers.

23:42Right now, we are precluded to put those type of assets in many retirement products. And the Trump administration has now said we are going to allow in our 401k products the opportunity to invest in these private markets. But they are risky, aren't they? Yes, but everything is risky other than keeping your money in a bank account overnight. But we're talking about 401ks, investing out of retirement accounts. Yes. You're risking the nest egg or a little part of the nest egg. But what the markets will teach you over the last 100 years, even at the worst moments, if you have the ability to persevere and you have a long-term horizon, you're going to do fine.

24:30And a diversified portfolio is essential. We're not suggesting, you know, one shoe fits all. we are suggesting the opportunity to have that ability to invest in these private market investments. He also believes we should be investing in crypto. It wasn't that long ago that the big bankers, Jamie Dimon and Larry Fink, were saying that crypto was stupid and a fraud. I did say Bitcoin, because we were talking about Bitcoin then, was the domain of money launderers and thieves. But, you know, the markets teach you, you have to always re-look at your assumptions. There is a role for crypto in the same way there's a role for gold.

25:18That is, it's an alternative. For those looking to diversify, this is not a bad asset, but I don't believe that it should be a large component of your portfolio. Leo? But Sorkin says some crypto can be abused in ways similar to 1929. Take meme coins, cryptocurrencies that can be manipulated by speculators who pump them up then let them crash.

25:47Andrew Ross Sorkin:There are a number of examples where it felt like there was an inside group of people who were colluding to pump up some of these cryptocurrencies and other things. I'll give you a bizarre story of my own. I was on television with Larry Fink, and he makes a joke, I think, about how there should be a Sorkin coin. I think the Sorkin coin should— Sorkin coin. Well, two hours later, somebody makes a Sorkin coin. And all of a sudden, this Sorkin coin is now worth millions of dollars, and I'm watching it. Are you serious? Go up and up and up and up and up. the Sorkin coin peaked at$170 million worth of trading in a day.

26:27Andrew Ross Sorkin:And I think today it does something like$20 or$21 a day. I'm thrilled to have Bill Gates with us. Sorkin is trusted by the world's top business leaders, who talk to him often exclusively. I have no problem being hated, by the way. What role do you think these business leaders should be playing now? My own view is that most CEOs in America today are very scared to speak out publicly about anything. They are so worried that they are going to be potentially attacked by the administration or regulated. They're going to have a merger in front of some agency that's not going to be allowed to go through.