During a November visit to the United States, Estonian Prime Minister Andrus Ansip comapared his country’s success in combating a massive cyber attack earlier this year to Bruce Willis in the recent fourth Die Hard film.

In the movie, the macho character almost single-handedly takes out a criminal organization that attacks the United States by hacking into its online security systems.

Similarly, in April and May, Estonia’s information technology (IT) infrastructure was subjected to a massive barrage of spam, viruses, and “botnet attacks,” which rely on thousands of hijacked personal computers. The cyber-attack came just after a series of riots sparked by the relocation of a Soviet Red Army war memorial in Tallinn. Investigations showed that the attack originated in Russia and had a degree of coordination, possibly through hacker gangs. The Russian government has denied any involvement.

Whoever was responsible for the cyber-attack, however, has ended up doing Estonia a favor by letting the small state showcase its credentials as a modern, technologically advanced country and leader in technological security.

“Due to efficient and fast security measures, we were able to neutralize the attacks,” Ansip said in Washington, D.C., in November. Rather than leave it to individual sites and hosts to sort out their own defenses, Estonia’s Computer Emergency Response Team (CERT) acted as a coordinating unit, concentrating its efforts on protecting the most vital resources while sacrificing less significant infrastructure and even implementing an online “diversion” strategy that made attackers hack sites that had already been destroyed. Defense Minister Jaak Aaviksoo said in Washington that U.S. officials told him Estonia coped better with the attack than the United States would have under similar circumstances.

Not content with being the plucky underdog that punches above its weight, Estonia has been committed for several years to nurturing state-of-the-art online technologies that are used in politics, banking, security, and other sectors. Now, in the wake of its successful defense against the cyber attack, Estonia says it will develop a cyber-security industry that will allow it to sell its expertise around the globe.

“Cyber-security is a new measure of security, which must be actively engaged in both on the domestic and international level,” Ansip said in Washington.

So highly regarded is Estonia’s online technology and security savvy that NATO’s new cyber-warfare center will be based there.

IN THE LEAD

Evidence of Estonia’s commitment to online technology development is not hard to find. In 2005, Estonia becamse the first country in the world to use Internet voting in local elections. There are plans to expand the program. By January 2006, more than 355 governement agencies had joined together in the virtual world, allowing them to exchange data using an advanced secure server system called “X-Road.” X-road is a message exchange system designed to enable secure communication and improve the availability of databases without endangering confidentiality.

Ninety-five percent of Estonia’s banking operations are now carried out electronically, according to official data. Students can receive exam results via SMS, and Estonians commonly use their mobile phones to pay parking fees. The country pulled off a public relations triumph when it opened a virtual embassy in the online computer game “Second Life” on 4 December. The virtual embassy will be used to market Estonia across the Internet.

In addition to these developments, Estonia is playing the cyber-security card at every possible opportunity, leaning heavily on its success in overcoming the attack last spring. “Cyber-attacks are a clear example of contemporary asymmetrical threats to security,” President Toomas Hendrik Ilves told the U.N. General Assembly in September. “They make it possible to paralyze a society, with limited means, and at a distance. In the future, cyber-attacks may, in the hands of criminals or terrorists or terrorist states, become a considerably more widespread and dangerous weapon than they are at present.”

Study: Many Boomers Lack Retirement Fund Study Says Nearly One-Third of Older Baby Boomers Haven’t Saved Enough for Retirement By EILEEN ALT The Associated Press

NEW YORK

Nearly one-third of baby boomers ages 51 to 61 are at risk of not having enough in savings to finance a comfortable retirement, according to a study being released Tuesday by the Center for Retirement Research at Boston College.

With its analysis, the center has joined the national debate over how much savings is enough and has done so on the side that says there’s a shortfall.

“We just don’t believe people are saving too much,” Alicia H. Munnell, a professor of management sciences at Boston College and director of the retirement research center, told The Associated Press.

A recently published academic study looked at the retirement preparedness of Americans who were in their 50s in 1992 and concluded that at least 80 percent had more than enough assets for retirement. Other scientists have argued that Americans may be saving too much.

The new Boston College study evaluated the same 51-61 age group, but looked at their finances in 2004, and found 32 percent to be “at risk” for not being able to maintain their preretirement standing of living in retirement.

The difference between the results, the center said, has to do with changes in the financial environment. For one thing, Americans now must wait until they’re older than 65 to collect full Social Security benefits; meanwhile, lower interest rates mean they’ll probably collect less on annuities and other investments. And many of today’s workers do not have pensions like the earlier generation but must rely on worker-funded 401(k) retirement accounts, the center said.

Munnell said Americans have two choices to save more or to work longer.

For older people, “working just two years more … can make a substantial difference” to retirement preparedness, she said.

“Working longer has a powerful effect because it shortens the period over which you have to support yourself and … lets you put off tapping your 401(k) and collect higher Social Security benefits,” she said.

The study was done using the center’s National Retirement Risk Index, developed with funding from Nationwide Financial, the long-term savings and retirement product division of the Nationwide Mutual Insurance Co.

Keith Millner, senior vice president and head of Nationwide Financial’s in-retirement division, said “there is a retirement crisis” because people are living longer, health care costs are escalating and workers aren’t saving enough.

“The No. 1 issue is inertia people aren’t doing anything,” he said. “They need to get educated, get engaged.”

Young workers especially can benefit from saving more because of the impact of compounding, he said.

On the Net:

Center for Retirement Research: http://www.bc.edu/crr

Nationwide Financial: http://www.nationwidefinancial.com

CITIGROUP DOWNGRADES PRICELINE.COM TO HOLD FROM BUY

Citigroup analyst Mark Mahaney says Priceline.com («www.businessweek.com») shares are up 41% since the company’s Nov. 8 third quarter EPS report, and trade very close to their peak 2-year forward EV/EBITDA multiple 18, vs. a 19 peak and a 14 average.

Mahaney’s core thesis has not changed since a May upgrade, with key long factors including: 1) impressive European growth platform; 2) business model driven sustainable competitive advantages; 3) positive exposure to rising prices in global travel market due to a “value” oriented offering; and 4) arguably sector’s best management.

He continues to view Priceline as a core Internet stock, but would prefer an entry/adding price closer to $100, which provides 20%+ upside to her $124 price target.

CIBC WORLD DOWNGRADES UBS TO UNDERPERFORM FROM SECTOR PERFORM

CIBC World analyst Meredith Whitney says she thinks UBS («www.businessweek.com») shares expensive at current levels vis-a-vis unrealistic consensus earnings estimates and given she has little actual confidence in her $3.80 2008 EPS estimate, which is 19% below consensus.

Whitney notes that UBS has only a “marked-to-market/model” and has not actually sold any assets, thus it beholden to a game of “catch up” on declining underlying values of such assets. She says the company’s underlying fundamentals are deteriorating; thus, she thinks until UBS actually disposes any of these assets, any true earnings base will be difficult to find.

With global banks in general trading below 9-10 times earnings, she thinks downside risk to UBS shares is in the low-to-mid $30s.

FRIEDMAN UPGRADES AMBAC FINANCIAL GROUP

Friedman analyst Steve Stelmach says he upgrades Ambac Financial («www.businessweek.com») to outperform from market perform after Moody’s affirmation of ABK’s triple-A rating. While big risks remain, he views the shares as undervalued, absent rating agencies’ requirements for sizable capital raise, which doesn’t appear forthcoming, at least according to Moody’s.

Stelmach says his new rating is based on losses coming within his targeted $1-$3 billion range, which is not a given, considering credit market uncertainty. He says it also assumes ABK could attract sufficient capital to fill void left by losses, which also not a certainty. But initial evidence is positive, with reports indicating MBI’s recent capital raise attracted multiple bidders.

BEAR STEARNS UPGRADES AMERICAN EAGLE OUTFITTERS TO OUTPERFORM FROM PEER PERFORM

Bear Stearns analyst Randal Konik says American Eagle Outfitters’ («www.businessweek.com») core American Eagle brand is well positioned in relatively favorable teen sub-sector. He says mid-teens annual EPS growth is visible; margins sustainable in high teens, counter to market fears.

Konik says the company has a healthy balance sheet, tons of cash, and free cash flow generation. He sees upside near 50% and 15% downside. He says his $30 target is conservative, based on 13 times his 2009 EPS estimate of $2.45, 6 times EV/EBITDA. He notes clean inventories, cost-cutting initiatives and tons of cash provide downside support.

He says at 9.5 p-e and 4.5 times EV/EBITDA (2008), this is the cheapest stock in his group.