Yes, there's some irony to this diary entry. In the past, I have been suggesting repeatedly that organizations who do not have an all-out requirement to keep a Java JRE runtime installed, should get rid of it. Yet, here I was, a couple of days ago, reviewing some SIEM events at a Community College where I help out with IT Security, when something caught my eye  (URLs defanged to keep you from clicking):

src='192.168.36.25' media-type='application/x-jar' url='GET hxxp://outdrygodo.mine. nu/finance/etzko5.jar'
src='192.168.36.25' media-type='-' url='GET hxxp://outdrygodo.mine. nu/finance/qkefaw.php'
src='192.168.36.25' media-type='application/octet-stream' url='GET hxxp://outdrygodo.mine. nu/finance/e32ezw.php?category=/&news_id=314214&date=1012&gen=j&lam=true'

Basically, a user here is getting an unsolicited Java Applet. A little while later, the same workstation gets an "octet stream" (think: executable). This can't be good. But why isn't anti-virus alerting on it?  [Yes, this is a purely rhetorical question :)]

Turns out, the workstation in fact has been infected. The JAR contained an exploit for CVE-2012-4681. And there is a "skype.dll" sitting in C:\ProgramData, and, even "better", it apparently happily talks to some server in the Ukraine:

src='192.168.36.25' media-type='-' url='POST hxxp://195.191.56. 242/posting.php?mode=reply&f=72&sid5=0ef2884d693eadc605e9bf726c1b9881'

Checking through the logs in detail now, we determined that the PC was talking to this server in the Ukraine whenever the user was logging into some web page. User goes to GMail? PC talks to the Ukraine. User goes to Amazon? PC talks to the Ukraine. User goes to online bank? Yup: you get the drift.  In between, the spyware kept mum. But whenever the user happened to enter some password, the spyware merrily ratted him out.

Looking through the logs even further back, we were able to determine that the original infection had happened when the user visited a - perfectly benign - newspaper web site, which at the time apparently was featuring a poisoned advertisement banner somewhere within the page content.  The entire attack happened compeletely stealthily, there is nothing the user could have seen or done  (maybe with the exception of Java popping up in the tray, but who pays attention to that?)

In short, if your Java JRE is unpatched, you will get hacked. Silently and stealthily. The bad guys will grab all your passwords for a week or so. And then, they will move in, and change your life.

In the case at hand, it was an e-banking application, of all things, that did not yet work with Java JRE 7, and had kept the user from upgrading his Java JRE.  From other users, I hear that some releases of enterprise software from large vendors like SAP, Oracle, etc, are also not fully compatible with the latest Java JRE, and thus force their users to remain exposed to attacks like the one described above.
 

Bottom line:
If you don't need Java JRE on your PC, get rid of it.
If you need it, patch it.
If you can't patch it because some silly application is not compatible with the patch, kick the [beep] of whoever supplies that application.

In case you are in the latter situation, feel free to share in the comments box below. Maybe there are other ISC readers similarly affected, and if you join forces, the vendor might be more inclined to listen.