The simulated attack was backed up by a simulated news report. It starts with the college basketball March Madness application for cellphones. The supposed hacker used it to gain access to all the information stored inside.

The fear grows that with the push of a couple buttons and an internet connection, experienced hackers could get inside personal computers. Except for shutting the system down completely, they can also take total control of one’s personal information.

“[In such a case] peoples’ bank accounts may begin to either increase or decrease by a random amount,” Chertoff said. “That would not only mess up the banks in terms of their capital, but it would cause a crisis of confidence in the banking system.”

NSC members worked diligently through their clues to the bottom of the source. Both Russia and China are a real threat, according to the simulated council. And the US government is lagging; Washington could barely handle the recent record snowfall. The question, then, is how citizens can expect that the government will be able to handle a cyber attack.

“One of the great lessons of the snowfall is that it’s all about preparation,” claimed Chertoff. “The more prepared you are, the better it is, and the better able you are to deal with the consequences of a disaster, whether it be natural or manmade.”

So, based on these exercises – are we prepared?

“Well, clearly not,” said Rick Roscitt, the Chairman & CEO SMobile Systems

“This is a vulnerability and it needs to be dealt with,” agreed John Negroponte, former Director of National Intelligence.

Especially with so many people now using smartphones.

“Smartphones really are mobile computers, and they need to be protected with security software, the same as the computer systems are,” Roscitt added.

If not, it could affect everything – from banks to electrical grids, even travel – paralyze the system and spread.

“An incident in one part of the country or in one part of our society could spread very rapidly to society as a whole,” stated John Negroponte. “That’s the nature of the problem.”

The solution still seems a long way off.

Vitaly Kamlyuk from the Russian-based computer security company Kaspersky Lab explained where most of the threats come from:

“China is well known for its enormous number of malicious applications being developed. And Russia stays in the list of the countries that create the most sophisticated and complicated Malware. And no country is well-prepared for cyber terrorist attacks.”