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  • Thunberg Tells Davos: You’ve Done Nothing on Climate Change
    Bloomberg

    Thunberg Tells Davos: You’ve Done Nothing on Climate Change

    (Bloomberg) -- Sign up here to receive the Davos Diary, a special daily newsletter that will run from Jan. 20-24.Greta Thunberg brought a stark message to the business elite gathering in Davos: Everybody is talking about climate change, but nobody is doing anything.Her appearance at the opening of the World Economic Forum was a striking sign that the debate about how to stop the Earth warming has become mainstream in business circles. Yet only a handful of executives from the oil, gas and coal industries that are chiefly responsible for warming the planet were seen attending the panel at which Thunberg spoke on Tuesday.Meanwhile, U.S. President Donald Trump used his speech at the event to tout the benefits of soaring American oil and gas production and make a thinly veiled attack on those who warn about looming environmental catastrophe.“The climate and environment is a hot topic right now, thanks to young people pushing,” 17-year-old Thunberg said at the Swiss ski resort, where about 3,000 business and political leaders gather each year. “Pretty much nothing has been done, since the global emissions of CO2 have not reduced.”The Swedish activist’s words came as the World Economic Forum sounds alarm bells on climate change. This year and for the first time on record, environmental risks occupy the group’s top five long-term concerns, while corporate executives say they’re increasingly concerned about environmental issues. But young activists at Davos said none of this is enough.Thunberg is giving relevance to the Davos gathering, which for years has suffered from criticism that it was largely a billionaires’ playground where the rich debated among themselves without hearing outside voices. On Tuesday, there was a full room at this first 8:30 a.m. panel featuring young activists -- something relatively unusual for a climate change event at Davos.The debate on climate change is forcing businesses to respond to demands to stop carbon dioxide and other greenhouse gas emissions. While some have been slow in embracing the fight, executives at Davos highlighted that the overall views from within the business community have dramatically changed over the last decade or so, moving from denial and questioning science into complete acceptance.“I have come to Davos for well over a decade and I see behind the scenes, among top executives, a huge change in perception of the risk of climate change,” said Marco Dunand, the head of Mercuria Energy Trading SA, one of the worlds’ largest oil traders. “It’s not just talk: it’s translating into billions of dollars in investments in the energy transition.”Activists’ language has made its way to boardrooms across the world too. At another morning panel at Davos, Iberdrola SA Chief Executive Officer Ignacio Galan called on companies to close coal-powered plants in order to curb emissions.“We are in a hurry, we have to move fast,” he said. “There is already money available, cheap money, cheap technology, competitive technology and political decision in many countries to do so. Let’s not continue delaying and postponing”Trump EncounterTrump landed at Davos on Tuesday morning and was welcomed by the words “Act on climate,” carved into the snow on a hill near the helicopter landing zone. He didn’t mention the topic in his speech at the forum later in the day, focusing instead on America’s growing economy and record oil and gas production.“This is not a time for pessimism, this is a time for optimism,” Trump said as Thunberg watched from the audience. “We must reject the perennial prophets of doom and their predictions of the apocalypse. They are the heirs of yesterday’s foolish fortune tellers.”The President and the activist’s first and only meeting last year became instantly viral as Thunberg was filmed furiously staring at Trump. While they’ve never spoken face to face, they both seem to follow each other closely on Twitter.“Greta must work on her anger management problem, then go to a good old fashioned movie with a friend! Chill Greta, Chill!”, Trump tweeted in December shortly after the activist was named person of the year by Time magazine. Thunberg didn’t directly answer, but changed her Twitter biography to “A teenager working on her anger management problem.”Three-day MarchHundreds of climate activists are due to arrive at Davos on foot on Tuesday following a three-day march across the Swiss Alps. Protesters will gather at the ski resort and stage a demonstration calling for the end of the World Economic Forum. Companies attending Davos for the past five decades bear a great responsibility for today’s climate crisis, activists say.“We are tired of empty promises. But we have hopes,” said Puerto Rican activist Salvador Gomez-Colon. “We’re not waiting years to see the change that we want to see.”Thunberg urged businesses, governments and the media to listen to scientists. She cited research by the Intergovernmental Panel on Climate Change from 2018 that concluded that the carbon budget-- the amount that can be released while still keeping global warming limited to a specific level -- stands at 340 gigatons of carbon dioxide and that, at current emission levels it will be gone in less than eight years.“Since last summer I have been repeating these numbers over and over again in every speech,” she said. “I know you don’t want to talk about this. I assure you I will continue to repeat these numbers until you do.“(Updates with comments from Trump in third paragraph.)\--With assistance from Jeremy Hodges.To contact the reporters on this story: Javier Blas in Davos at jblas3@bloomberg.net;Laura Millan Lombrana in Santiago at lmillan4@bloomberg.netTo contact the editors responsible for this story: Aaron Rutkoff at arutkoff@bloomberg.net, James Herron, Christopher SellFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Macron, Trump May Have Tariff Truce in 2020 Digital Tax Spat
    Bloomberg

    Macron, Trump May Have Tariff Truce in 2020 Digital Tax Spat

    (Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. Presidents Emmanuel Macron and Donald Trump agreed to a truce in their dispute over digital taxes that will mean neither France nor the U.S. will impose punitive tariffs this year.Macron said on Monday he had a “great discussion” with Trump on the issue, without giving details.“We will work together on a good agreement to avoid tariff escalation,” he said on Twitter.“Excellent!” Trump said in a reply to Macron’s post, without providing additional information. Trump is en route to Davos, Switzerland, for the World Economic Forum.A White House readout of the call was notably more muted, saying only that the “two leaders agreed it is important to complete successful negotiations on the digital services tax” and “discussed other bilateral issues.” And neither a White House spokesman nor officials with the U.S. Trade Representative’s office would confirm that the U.S. president had called off his announced tariffs.Still, the possible respite may defuse transatlantic tensions that had been building between Washington and Brussels along another potential trade war front. Last week, Trump signed a cease-fire with China in phase one of a broader deal aimed at balancing trade between the world’s two largest economies.The European Union is an even bigger U.S. trading partner than China and supply chains between the two economies, particularly in automotive and financial services industries, are intertwined in ways that would make a tit-for-tat tariff dispute even more harmful to the world economy.Macron’s government still hopes to find a solution that fits within discussions at the Organization for Economic Cooperation and Development’s work on the issue, according to a French official who asked not to be identified in line with government rules.European finance ministers meeting in Brussels Tuesday will discuss progress of the OECD talks. While the OECD is still working on its proposal for taxing tech companies around the world, France pushed ahead with its own levy last year that hit U.S. internet giants like Google, Apple Inc. and Amazon.com Inc.“We now have an agreement between the two presidents to avoid any tariff escalation and avoid any trade war,” French Finance Minister Bruno Le Maire told reporters in Brussels before the meeting. “It’s remains a difficult negotiation -- with digital tax, the devil is in the details and we need to resolve the details.”Paris and Washington have discussed the possibility of France suspending the collection of the digital tax payments due in April as long as the U.S. refrains from imposing new tariffs, French officials said. But that wouldn’t constitute a withdrawal of the levy, they added. For its part, the French government denies its national tax is discriminatory and warned that the EU would retaliate if the U.S. imposed additional levies.The U.S. has said that the French tax discriminates against American technology companies, citing Section 301 of a 1974 American law that Trump has thus far reserved to justify tariffs against China. That opened the door to the U.S.’s threat to hit $2.4 billion of French goods with tariffs in retaliation.Among the French products targeted with duties of as much as 100% were luxury items like wine, cheese and makeup. One American wine merchant called it the biggest threat to the industry since Prohibition a century ago.For its part, the French government had warned that the EU would retaliate if the U.S. imposed additional tariffs.The dispute was another headache for European trade officials scrambling to expand their policy arsenal as the U.S. takes aim at a rules-based system for global trade that Trump argues is outdated and tilted against America. It also coincided with a change in leadership at the European Commission, the EU’s executive arm.EU trade commissioner Phil Hogan visited Washington last week for the first time in the job, partly to plead for talks rather than tariffs in disagreements like the French digital tax. At stake, he said, was transatlantic trade in goods and services valued at more than $3 billion a day.“Sounds like a fairly healthy relationship to me,” Hogan said Thursday in the U.S. capital. “So why put tariffs on these EU products to make them more expensive for your people?”The truce follows weeks of discussions between Treasury Secretary Steven Mnuchin and Le Maire, who were scheduled to meet Wednesday in Davos, Switzerland, the alpine resort town where government officials and business leaders gather during the winter to discuss whatever is ailing the global economy.The dispute has ramifications outside France as other countries try to come up with ways to generate revenue from the digital economy. Mnuchin told the Wall Street Journal that the U.K. and Italy will face American tariffs if they proceed with similar levies on foreign tech firms.U.S. and EU trade relations started to sour in 2018 when the Trump administration invoked national-security considerations to impose tariffs on steel and aluminum from Europe. As a U.S. military ally, the EU was infuriated and promptly retaliated with levies on iconic American brands such as Harley-Davidson Inc. motorcycles and Levi Strauss & Co. jeans.A subsequent U.S. threat to wreak significantly more economic damage by targeting the European auto industry with duties on the same security grounds led to a hastily agreed truce and a pledge by both sides to work toward reducing industrial tariffs across the board.Since then, the Trump administration has refused to start the tariff-cutting negotiations unless Europe includes agriculture in them. Also, it imposed levies on EU products in retaliation over government aid to Airbus SE that was deemed illegal by the World Trade Organization, and disabled the WTO’s appellate body,The EU, meanwhile, is pressing ahead with a plan for tariffs against the U.S. in a parallel WTO case over unlawful subsidies to Boeing Co.Trump, scheduled to speak Tuesday in Davos at the World Economic Forum’s annual meeting, on Sunday reiterated his frustration with Europe as a trading partner.“Europe has had tremendous barriers to us doing business with them. All those barriers are coming down. They have to come down,” he told a conference of farmers in Austin, Texas. “If they don’t come down, we’re going to have to do things that are very bad for them.”He added, “Europe was, in many ways, more difficult -- and is more difficult -- than China.”(Updates with possible French concession in the 11th paragraph)\--With assistance from Jonathan Stearns, Justin Sink and Chelsea Mes.To contact the reporters on this story: Ania Nussbaum in Paris at anianussbaum@bloomberg.net;William Horobin in Paris at whorobin@bloomberg.netTo contact the editors responsible for this story: Ben Sills at bsills@bloomberg.net, Brendan Murray, Wendy BenjaminsonFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Huawei CFO’s Lawyers Say U.S. Fraud Charges Are a ‘Facade’
    Bloomberg

    Huawei CFO’s Lawyers Say U.S. Fraud Charges Are a ‘Facade’

    (Bloomberg) -- Huawei Technologies Co. Chief Financial Officer Meng Wanzhou shouldn’t be dispatched to the U.S. because her alleged crimes don’t meet Canada’s legal tests for extradition, her defense lawyers said at the opening of hearings.At issue in a legal battle that has severely strained Canada-China relations is whether her extradition request meets the crucial test of double criminality: Would her alleged crime have also been a crime in Canada? If the judge rules it doesn’t meet that standard, she could be discharged, according to Canada’s extradition rules.Extraditing Meng “would undermine the double criminality rule,” her defense lawyer Richard Peck told the court in Vancouver.The hearings that began Monday offer Meng’s first opportunity to avoid handover to the U.S., which accuses her of fraud, saying she lied to HSBC Holdings Plc and tricked it into transactions that violated U.S. sanctions on Iran. Meng attended the hearing in a black dress with polka-dots that displayed the GPS tracker on her ankle as some 150 media and spectators watched the proceedings from the gallery.Her defense has argued that the U.S. case is, in reality, a sanctions-violations complaint that it’s sought to “dress up” as fraud to make it easier to extradite her.“Fraud is a facade,” Peck said. “In the end, we are being asked to impose on Canada an obligation to assist the U.S. in enforcing sanctions on Iran.”Her team, citing section 29 of Canada’s Extradition Act, says double criminality needs to be assessed as of February 2019 -- the date when Canada’s justice minister authorized the start of extradition proceedings.Iran SanctionsAt that time, Canada didn’t have sanctions on Iran. Therefore, her lawyers argue, her case fails to meet the double criminality test -- any transactions by HSBC wouldn’t have broken any Canadian laws.Associate Chief Justice Heather Holmes appeared to question whether the court might consider a broader time range. “It might not be as straightforward as it appears,” she said.If so, that could throw a spanner into the defense’s arguments. Meng allegedly tricked the HSBC banker at a meeting at a Hong Kong teahouse in August 2013, when Canada had a full embargo on trade with Iran. So any transactions by HSBC at that time would have violated Canadian sanctions.The judge also appeared to test another central pillar of Meng’s defense. Her lawyers have cited Canadian legal precedent to argue that for fraud to have occurred, HSBC must have been at risk of economic loss. “That essential element of risk of deprivation is missing,” Peck said, pointing again to the lack of Canadian sanctions.Holmes seemed to challenge that: if the case were considered as a domestic proceeding but for one change -- that Meng had lied to HSBC in Canada as opposed to in Hong Kong -- would that not be a prosecutable fraud case here, she asked.Defense lawyer Eric Gottardi, seemingly caught off guard, replied: “If there was dishonesty combined with a risk of deprivation, arguably you could make out the offense.”How Huawei Landed at the Center of Global Tech Tussle: QuickTakeDetained CanadiansMeng, the eldest daughter of billionaire Huawei founder Ren Zhengfei, has become the highest profile target of a broader U.S. effort to contain China and its largest technology company, which Washington sees as a national security threat. Meng, who turns 48 next month, is charged with bank and wire fraud, which carry a maximum term of 20 years in prison on conviction.China has demanded Canada release Meng, and has retaliated by slapping sanctions on Canadian products such as canola, while detaining two Canadians after her arrest in December 2018.The double-criminality hearings are scheduled for four days but the ruling would likely come much later -- possibly in months.As the extradition hearing began, Huawei released a video statement on its Twitter feed saying it has confidence in the process. “We trust in Canada’s judicial system which will prove Ms. Meng’s innocence,” spokesman Benjamin Howes said.Meng has been biding her time in a Vancouver mansion since her arrest. That’s in sharp contrast to the conditions endured by the two Canadians -- Michael Kovrig and Michael Spavor -- who were detained in China after her arrest.Prime Minister Justin Trudeau’s government says securing the release of the two men -- one a former diplomat, the other an entrepreneur -- is a priority and that it has asked the Trump administration for help. Foreign Minister Francois-Philippe Champagne told reporters Sunday at a cabinet retreat in Winnipeg, Manitoba, that he raised the issue last week with U.S. Secretary of State Mike Pompeo.Over the weekend, a senior aide to former Prime Minister Jean Chretien joined John Manley, a former Liberal deputy prime minister and industry minister, in urging Trudeau to consider ordering an end to the Huawei executive’s extradition as part of a prisoner exchange for Kovrig and Spavor.Asked about that proposal Monday, Deputy Prime Minister Chrystia Freeland said: “Our government has been clear that we’re a rule of law country and that we honor our extradition treaty commitments. That is what we need to do, and that is what we will do.”(Updates with court arguments starting 11th paragraph)\--With assistance from Stephen Wicary.To contact the reporter on this story: Natalie Obiko Pearson in Vancouver at npearson7@bloomberg.netTo contact the editors responsible for this story: David Scanlan at dscanlan@bloomberg.net, Jacqueline ThorpeFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Planes, Trains, Autos Eclipse Miners in Fabric of Canada Market
    Bloomberg

    Planes, Trains, Autos Eclipse Miners in Fabric of Canada Market

    (Bloomberg) -- Move over materials, there’s a new kid on the block. The C$300 billion ($230 billion) industrials group has ousted miners and forestry stocks to become the third-most valuable collection of companies on Canada’s equity market, behind banks and energy.Comprised mainly of transportation, engineering and construction stocks, industrials are generally seen as cyclical stocks and had blockbuster gains last year with a 24% rally. That was behind only tech and utilities.Last year Ballard Power Systems Inc.’s shares more than doubled after reporting a technology breakthrough that will reduce the amount of high-cost platinum used in its fuel-cell products. Air Canada came in second in the group after announcing a planned acquisition of tour operator Transat AT, accelerating its global presence in the leisure industry.Ballard’s surge has continued this year, climbing about 70% in January, as China signaled it wouldn’t further cut subsidies for electric vehicles, easing some fears for battery investors.One drag on the sector has been Bombardier Inc., which saw its stock slump and bonds tumble last week after the company said it was rethinking the A220 jet program with Airbus as it seeks ways to increase cash flow to help with paying down its $10 billion debt load. But, at a shadow of its former self, its contribution to the sectoral gauge is less than 1%.Markets -- Just The NumbersChart of The WeekEconomyCanadian businesses reported improved sentiment amid reduced concern about global trade conflicts, according to a Bank of Canada survey. Future sales like new orders have picked up, particularly outside of the energy sector, the Ottawa-based central bank’s fourth-quarter survey of executives found.Economists will see a big data dump on Jan. 22 with new housing price figures, inflation and the Bank of Canada’s rate decision.PoliticsPrime Minister Justin Trudeau’s bid to complete the Trans Mountain oil pipeline won a major victory Thursday as the nation’s top court rejected an appeal brought by British Columbia aimed at challenging the controversial project. The Supreme Court of Canada has dismissed the case, the court said in a statement.TrendingInCanada1\. St. John’s, Newfoundland, has declared a state of emergency as a blizzard ramps up with 75 centimeters of snow expected in the province.2\. And if you missed it, we taste-tested McDonald’s Corp. and Beyond Meat Inc.’s new PLT burger, which is getting a trial run in Ontario.\--With assistance from Steven Frank.To contact the reporter on this story: Divya Balji in Toronto at dbalji1@bloomberg.netTo contact the editors responsible for this story: Kyung Bok Cho at kcho7@bloomberg.net, Jacqueline Thorpe, David ScanlanFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • SNB Resisted Major Interventions as Franc Strengthened
    Bloomberg

    SNB Resisted Major Interventions as Franc Strengthened

    (Bloomberg) -- Sign up here to receive the Davos Diary, a special daily newsletter that will run from Jan. 20-24.The Swiss National Bank appears to have resisted taking dramatic action in the past week to curb the franc’s appreciation to the strongest in almost three years.Sight deposits at the SNB, considered an early indicator of activity, increased about 1.3 billion francs ($1.3 billion) to 585.9 billion francs in the week ending Jan. 17. That’s a gain of 0.2%, and analysts said it suggests no intervention.The figures come as the franc pushes higher against the euro, something the Swiss central bank has been battling against for a decade. The currency rallied 0.7% last week after the U.S. Treasury added Switzerland back onto its currency watch list.Yet the sight deposit data suggest the SNB didn’t do much to counter the rally, with Credit Suisse economist Maxime Botteron considering the figures in line with seasonal fluctuations. A spokeswoman for the SNB declined to comment on the data.The SNB has used interventions on-and-off for years, and the franc’s recent appreciation had raised speculation it might have done so again recently. To help control the currency, which investors typically buy at times of market stress, the SNB also has a deposit rate at a record low of -0.75%.Just days after the U.S. decision to monitor Switzerland, Alternate SNB Governing Board Member Martin Schlegel stressed that if policy needs to be eased, there’s room to expand the balance sheet.Swiss central bank officials don’t usually comment on intervention and they they publish statistics once a year.According to St. Galler Kantonalbank Chief Investment Officer Thomas Stucki, the SNB will continue to selectively intervene. An average franc appreciation of 1.5%-2% annually is manageable for the country, he said.“Our base case is that the pace of franc strength wears off -- but in the event of a deteriorating euro-zone outlook the franc appreciation drift could resume,” said Christin Tuxen, Danske Bank’s head of currency research.(Updates with comments starting in fourth paragraph)\--With assistance from Jan Dahinten and Love Liman.To contact the reporters on this story: Catherine Bosley in Zurich at cbosley1@bloomberg.net;William Shaw in London at wshaw20@bloomberg.netTo contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, William ShawFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Bloomberg

    Peter Schiff Says He’s Lost His Bitcoin After Wallet Freeze-Out

    (Bloomberg) -- Cryptocurrency skeptic Peter Schiff said he can’t access his Bitcoin holdings after his digital wallet stopped accepting his password.“I just lost all the Bitcoin I have ever owned,” Schiff, chief global strategist at Alliance Global Partners, said in a series of posts on his unverified Twitter account. “My wallet got corrupted somehow and my password is no longer valid.”In a follow-up post, Schiff said it was “not that great a tragedy” as the Bitcoin were gifted to him.“My plan was to HODL and go down with the ship anyway,” he said, employing a phrase used to describe holding on to the security. “The difference is that my ship sank before Bitcoin.”Many Twitter commentators pointed out that the Bitcoin holdings still exist, even if Schiff cannot currently access them. Schiff is also not the first victim of crypto password issues.Customers lost access to about C$190 million ($145 million) of crypto holdings at digital-asset exchange Quadriga CX last year as access to the firm’s digital wallets was lost with the unexpected death of its CEO.Schiff, a noted gold bug, is frequently critical of Bitcoin. In a November tweet he claimed marijuana was more useful than the digital currency as “you can smoke pot and get high. You can’t do anything with Bitcoin.”Bitcoin, the largest digital currency, is often proclaimed by cryptocurrency proponents as “digital gold” and a superior storage of value to the yellow metal thanks in part to its eye-popping gains of more than 9,000,000% since July 2010.To contact the reporter on this story: Eric Lam in Hong Kong at elam87@bloomberg.netTo contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net, Adam Haigh, Joanna OssingerFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Trump Hails ‘Paydirt’ for Farmers From His China, USMCA Deals
    Bloomberg

    Trump Hails ‘Paydirt’ for Farmers From His China, USMCA Deals

    (Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. President Donald Trump championed a pair of trade victories at a farm convention Sunday in Austin, Texas.“The two momentous trade deals we completed last week are just the beginning of a really incredible story,” Trump said in a speech to the American Farm Bureau Federation’s annual meeting.Earlier, tweeting as he prepared to travel to Texas from Florida, the president said farmers “hit ‘paydirt’ with our incredible new Trade Deals.”Trump is hoping that his “phase one” deal with China -- finalized in a White House signing ceremony last week -- and a renegotiated pact governing trade with Canada and Mexico that the Senate passed on Jan. 16 can buoy him with farmers, who have borne the brunt of the president’s trade wars.Under the deal negotiated with Beijing, China pledged to buy at least $32 billion in additional U.S. agricultural products over the next two years. The Chinese said they would “strive” for another $10 billion in agricultural purchases, but warned those sales would be dictated by market demands.Trump’s speech came two days before the formal opening of the Senate trial to decide whether he should be removed from office following the House vote in December to impeach him -- a fact that didn’t escape him on Sunday.Trump’s China Deal Is His Hedge Against Impeachment Damage“We’re achieving what no administration has ever achieved before. And what do I get out of it? I get impeached,” Trump said.While Washington and Beijing have inked their trade pact, China hasn’t specified how much of each American product it will import, and it’s not clear that the deal will substantially exceed agricultural purchases the country was making before the trade war began. Prices of commodities like soybeans, wheat and corn have remained relatively flat in the aftermath of the deal, suggesting traders don’t see an imminent surge in purchases.“Without more concrete details, we are deeply concerned that all of this pain may not have been worth it,” the National Farmers Union, which represents almost 200,000 American farmers, said in a statement. “Given the numerous deals that have been reached and then breached in the past two years, we are also skeptical.”Bankruptcies UpFarm bankruptcies surged late last year to their highest levels since 2011, largely clustered in Midwestern states crucial to the president’s re-election. Still, Trump has argued that subsidies offered by the Agriculture Department -- totaling around $28 billion over two years -- helped blunt the impact of the trade war on farms. Nearly 40% of last year’s projected farm profit came from trade aid, disaster assistance, federal subsidies and insurance payments, according to a report released by the farm organization hosting the president.“To defend our farmers I authorized $28 billion,” Trump said. “We get them to the small farmers, we get them to everybody. If it’s not, call me directly and I’ll call Sonny” (Agriculture Secretary Perdue) and give him hell.”The final installment of the aid is coming “very quickly,” Trump added.Water RightsThe president argued additional benefits would be realized under his Nafta reboot, the U.S.-Mexico-Canada Agreement, which improves market access for American dairy, poultry and eggs in the two neighboring countries. The revised trade agreement passed the Senate in a bipartisan 89-10 vote and Trump is expected to sign it.Trump said he backs having water rights reside with the states, not the federal government, as the administration moves to finalize a three-year effort to scrap an Obama-era water rule unpopular with many farmers.“As long as I’m president, America will never micromanage American waters,” he said. Perdue, introducing Trump, said WOTUS -- the Waters of the U.S. Rule -- “is no more.”The president’s appearance at the conference is his third in as many years, underscoring the political importance the White House places on the nation’s approximately 3 million farmers. A poll released last week from Reuters and Ipsos suggests the China trade deal has buoyed the president’s standing with farmers, an influential voting block in states like Pennsylvania, Wisconsin, Michigan and Minnesota that Trump’s Democratic challengers will likely need to win later this year in order to take back the White House.The survey found that 49% of those who said they or an immediate family member worked in agriculture supported the president’s farm policies, while 40% disapproved. That’s a reversal from September, when 45% disapproved of Trump’s approach and just 43% approved.\--With assistance from Mike Dorning.To contact the reporter on this story: Justin Sink in Austin at jsink1@bloomberg.netTo contact the editors responsible for this story: Alex Wayne at awayne3@bloomberg.net, Ros KrasnyFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Warring Libya Factions Agree to Set Up Cease-Fire Committee
    Bloomberg

    Warring Libya Factions Agree to Set Up Cease-Fire Committee

    (Bloomberg) -- Sign up here to receive the Davos Diary, a special daily newsletter that will run from Jan. 20-24.World leaders meeting in Berlin agreed to work toward a more durable cease-fire in Libya’s civil war, which has seen Russia and Turkey giving military support to opposing groups as countries outside Libya jockey for access to its energy resources.Eastern commander Khalifa Haftar, who is backed by Russia but walked out of truce talks in Moscow last week, and Libya’s internationally recognized Prime Minister Fayez al-Sarraj will now put forward five names each for a committee to hash out the terms of a more permanent halt to fighting, with the United Nations pushing for a meeting of that group in Geneva within days.Still, some five hours of talks in Germany on Sunday showed how global powers are struggling to find solutions to a conflict that’s raged for years and disrupted almost all oil output from the North African country. Haftar has led a months-long assault on Tripoli, and fighting continued outside the capital over the weekend. New York crude rose as much as 2% to $59.73 a barrel in early Asian trading. Neither Sarraj nor Haftar were in the room for the summit on Sunday, and organizers were careful to ensure they did not cross paths in Berlin. Instead they were holed up for some of the day at separate hotels in the city.Amid the peace effort, Libya’s national oil company said output is set to tumble to the lowest level since August 2011 after armed forces shut down a pipeline and Haftar supporters blocked oil exports at ports under his control. Serious questions also remain about the ability to monitor forces, get ragtag fighters to put down guns and end continued violations of a UN arms embargo.U.S. Secretary of State Michael Pompeo said Germany may make an announcement on cease-fire monitoring on Monday.“There was progress made towards a full-fledged ceasefire, a truce, temporary stand-down,” Pompeo told reporters aboard his plane after leaving the Berlin talks. “There’s still a lot of work to do.”Not EasyIf Haftar, who has led a months-long assault on the capital, Tripoli, relents and agrees to a truce deal alongside Turkey-backed Sarraj, the next phase would involve Libyan officials working to unite the country’s institutions and hold elections for the first time since 2014.“I’m not under any illusion that this won’t be a difficult path,” German Chancellor Angela Merkel told reporters on Sunday evening. She met separately with Haftar and Sarraj before the conference officially began.Merkel said the leaders who attended -- they included Russian President Vladimir Putin and Turkish President Recep Tayyip Erdogan -- agreed not to provide more military support to those inside Libya, and to work toward a political solution. And she said a fair distribution of Libya’s oil revenues would be part of any peace process.Failure to get Haftar completely on board risks seeing the holder of Africa’s largest proven oil reserves spiral into a major conflagration drawing in regional and international powers further, as happened in Syria. Russian mercenaries back Haftar’s forces, officials have told Bloomberg, and he has support from Egypt and the U.A.E., who see him as a bulwark against Islamic extremists. Turkish soldiers are training forces loyal to Sarraj, and Turkish-backed Syrian rebels have also joined the conflict.Pompeo said the U.S. hopes that the partial shutdown of Libyan oil exports “will be opened up as a result of this conversation” in Berlin. He didn’t elaborate.‘Appropriate Sanctions’In a communique issued at the end of the meeting, which included Egypt and the U.A.E., countries said they would commit to “refraining from interference in the armed conflict or in the internal affairs of Libya and urge all international actors to do the same.“ They also called on the UN Security Council to put appropriate sanctions on “those who are found to be in violation of the cease-fire arrangements.”UN Secretary-General Antonio Guterres said he expects the military officials from the warring sides to meet “in the next few days.”“I cannot stress enough the summit’s conclusion that there is no military solution to the conflict in Libya,” he told reporters. “All participants have mentioned it several times during the meeting, even those that are more directly involved in the conflict itself.”Officials from the U.A.E and Egypt used the meeting to urge Haftar to agree to a deal, according to a senior Arab official with knowledge of the discussions. But it’s unclear how much he listened to their arguments, the person said.The summit should be seen as only a small step given Sarraj and Haftar were not part of the formal talks, according to a senior U.S. official who asked not to be identified discussing the meeting. For a real shot at ending the fighting the main protagonists need to be more involved, the official said, and it’s not even clear they have sufficient control of their fighters to ensure a cease-fire holds.Acting Russian Foreign Minister Sergei Lavrov told reporters in Berlin the conference had been “rather useful.”“The Libyan sides have made a small step forward since their meeting in Moscow” last week, he said. But “it is clear that it is not yet possible to establish a stable serious dialog between them. The differences in approaches are too great.”Libya has been in turmoil since the 2011 NATO-backed ouster of Muammar Qaddafi, which ushered in years of instability that has left thousands dead, allowed Islamist extremists to dig in, and divided the country between rival administrations in Tripoli and the eastern city of Tobruk.The North African nation is also a gateway for refugees into Europe, so an end to the chaos there would be a critical achievement for governments on the continent grappling with anti-immigrant sentiment. It would also remove a key uncertainty for the oil market. On Sunday, Libya’s biggest oil field began to halt production after unidentified protesters shut down a key pipeline, compounding the other supply disruptions.Russia and Turkey are jockeying for influence in the Mediterranean, and have been key in the latest push for a Libyan cease-fire. Turkey recently signed a maritime border deal with Sarraj’s government that would be key to Ankara’s aspirations for more clout in the resource-rich waters of the Mediterranean. Turkish contractors would also like to revive billions of dollars in contracts abandoned in the chaos after Qaddafi’s overthrow.Access to Libyan oil is a major incentive for Putin, who may also use his leverage to secure concessions from Erdogan in both Libya and Syria. Erdogan attended the summit though he departed more than 30 minutes before it ended, leaving his foreign minister behind in Berlin.The U.S. has been paying more attention to the Libyan conflict since Russia’s entry and was represented in Berlin by Pompeo.Washington had held Libya at arm’s length since the killing of the American ambassador in Benghazi in 2012, and under President Donald Trump, sent mixed messages to Libya’s rival administrations. But it became more involved in pushing for an end to the fighting after Russian mercenaries were deployed in September.(Updates with latest oil disruptions in fifth paragraph.)\--With assistance from Nick Wadhams, Mohammed Abdusamee, Ania Nussbaum, Arne Delfs, Iain Rogers, Amy Teibel, Kevin Cirilli and Ugur Yilmaz.To contact the reporters on this story: Samer Khalil Al-Atrush in Berlin at skhalilalatr@bloomberg.net;Patrick Donahue in Berlin at pdonahue1@bloomberg.net;Ilya Arkhipov in Berlin at iarkhipov@bloomberg.netTo contact the editors responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net, Tony Czuczka, James LuddenFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Bloomberg

    Musk’s SpaceX Steps Toward Crewed Flights in Successful Test

    (Bloomberg) -- Sign up here to receive the Davos Diary, a special daily newsletter that will run from Jan. 20-24.Elon Musk’s rocket company passed a crucial safety test Sunday, clearing its last major hurdle to an historic first crewed flight for NASA, possibly in the first half this year.The hardware necessary for the first launch with astronauts will probably be in place by the end of February, Musk said at a press conference with NASA and SpaceX representatives following the test. The “collective wisdom” among his colleagues was that an inaugural flight was possible in the second quarter of 2020, he said.Sunday’s test shows SpaceX can safely abort a mission if something goes wrong after takeoff. It was delayed from the previous day due to poor conditions in the recovery area. Musk described the safety test as “picture perfect,” and congratulated the respective teams on their dedication.“I’m super fired up, this is great,” Musk added. “It appears probable that the first crewed launch could occur in the second quarter.”NASA Administrator Jim Bridenstine noted a number of parachute tests are still required prior to a crewed launch. Kathy Lueders, manager of the NASA commercial crew program, noted the “flawless execution” of the abort mission.The Falcon 9 rocket with Crew Dragon spacecraft launched from Kennedy Space Center in Florida at 10:30 a.m. About 84 seconds after liftoff, SpaceX demonstrated Dragon’s ability to eject from the rocket during an emergency.The in-flight abort test included a series of complex maneuvers before Dragon’s parachutes deployed, according to SpaceX’s press kit, and the craft splashed down in the Atlantic Ocean about 10 minutes after liftoff. The Falcon 9 rocket broke up offshore, as planned.Americans have not flown into space aboard a U.S. craft since the shuttle program ended in 2011. Sending astronauts to the space station also is an important step for Musk’s Hawthorne, California-based company. The billionaire aims eventually to transport people to the Moon and Mars.NASA awarded SpaceX and Boeing Co. a combined $6.8 billion in contracts in 2014 to revive America’s ability to fly to the space station without buying seats on Russian Soyuz capsules. Since then, the agency and both companies have suffered delays that have put the program more than two years behind schedule.In December, Boeing’s Starliner failed to dock with the station because of a problem with the mission’s timing software. The Chicago-based company and NASA are investigating, and the agency will decide if Boeing needs to perform a second flight without crew.(Updates with comments from press conference.)To contact the reporters on this story: Dana Hull in San Francisco at dhull12@bloomberg.net;Emily Barrett in New York at ebarrett25@bloomberg.netTo contact the editors responsible for this story: Benjamin Purvis at bpurvis@bloomberg.net, Kevin Miller, James LuddenFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • German Solar Car Startup Sono to Stay in Business After Crowdfunding Success
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    German Solar Car Startup Sono to Stay in Business After Crowdfunding Success

    (Bloomberg) -- Sono Motors GmbH, the embattled German startup working to serially produce a solar-charged electric car, said it’s achieved a crowdfunding goal that will let the company stay in business.The sum passed its 50 million euro ($55 million) goal Saturday, the Munich-based company announced in a tweet. It had hoped to raise the amount by Jan. 21.Sono announced the move to crowdfunding in December, after talks with potential investors broke down. Financial backers had demanded the company give up on the Sion car because they said it cost too much to manufacture, the company said in a statement at the time.“We realized again and again over the past few months that we have entirely different goals to traditional financial investors,” Chief Executive Officer Laurin Hahn said. “Aggressive growth and quick profits are difficult to reconcile with a sustainable corporate and vehicle concept.”The crowdfunding pushed back the expected production start of the car to Sept. 2021. The company had originally planned to start in 2019.If and when completed, the Sion would be able to charge conventionally through a power outlet or through solar panels integrated into the body that would recoup as many as 34 kilometers to its 255 kilometer range in a day.To contact the reporter on this story: Oliver Sachgau in Munich at osachgau@bloomberg.netTo contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Ian Fisher, Matthew G. MillerFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Cyber Strife Between U.S. and Iran Is Nothing New
    Bloomberg

    Cyber Strife Between U.S. and Iran Is Nothing New

    (Bloomberg Opinion) -- Experts are warning that the U.S. should expect more cyberattacks by Iranian hackers in retaliation for the death of General Qasem Soleimani in a targeted drone strike. Maybe they’re right. But let’s not kid ourselves:  Iran would be launching lots of cyberattacks anyway.And the danger of escalation would be ever-present.So far, despite the warnings, security researchers report that little has yet materialized. But that doesn’t mean nothing major will happen. Iranian’s official and semi-official hackers are among the best in the world, and both the U.S. government and private industry are bracing for possible attacks. Crucial sites are much better protected than they were a few years ago, but no protection will ever be perfect.Infrastructure, always an attractive target, has long been a focus of Iran’s hackers, particularly the group known as APT33 or Refined Kitten. Recent news reports have singled out Refined Kitten’s constant “password-spraying,” the relatively low-tech tactic of flooding infrastructure targets with common passwords(1) in the hope that some will work. However, those attacks aren’t a response to the current crisis; they’ve been going on at least since 2018.(2)The dates matter. What’s often called the “shadow war” between the U.S. and Iran has been going on for a long time. Last June, for instance, the U.S. retaliated for Iranian attacks on oil tankers and the downing of a drone by launching cyber assaults against “an Iranian intelligence group” believed to be involved. The U.S. action also followed a spike in efforts by Iranian hackers to breach computer systems at, among others, the Energy Department and U.S. national laboratories.It’s tempting to blame the shadow war on the policies of President Donald Trump, but the battle was joined long before he took up residence in the Oval Office. The Iranian efforts are usually dated to 2009, when the “Iranian Cyber Army” successfully attacked Twitter, proclaiming on the site’s homepage “U.S.A. Think They Controlling And Managing Internet By Their Access, But They Don’t, We Control And Manage Internet By Our Power.”The hacks continued throughout the Obama administration. In 2013, for instance, Iranian hackers “infiltrated the control system of a small dam less than 20 miles from New York City.” The next year, they attacked a Las Vegas casino owned by Sheldon Adelson. In 2016, the U.S. announced indictments against seven hackers said to be working on behalf of Iran’s Revolutionary Guard who were alleged to have “conducted a coordinated cyberattack on dozens of U.S. banks, causing millions of dollars in lost business.”Moreover, Iran never needed any provocation to unleash its hacking squads. In November of 2015, the New York Times reported “a surge in sophisticated computer espionage” by hackers based in the Islamic Republic, including “a series of cyberattacks against State Department officials.” Those attacks came four months after the signing of the Iran nuclear deal.My point isn’t that the accord somehow caused the attacks, perhaps by emboldening Iran. That’s nonsense. My point is that the existence of the accord didn’t prevent the attacks or even reduce their frequency or scope. Nor should anyone have expected such a result. In the Middle East, for better or worse, the U.S. and Iran are rivals, each seeking to exercise influence in the world’s most volatile region. As every disciple of conflict theory knows, rival powers often find it in their interest to cooperate on particular issues. But the fact that rivals sometimes cooperate – as the U.S. and Iran did, for example, in the battle against Islamic State — doesn’t suddenly make them allies. Neither did the nuclear deal.From the point of view of both countries, a battle in cyberspace feels far safer than one fought out with force of arms. One might suppose that because the U.S. is the dominant online player, a fight in the digital realm would be to its liking. But there are reasons to be wary.In an important recent essay in The Atlantic, Stanford’s Amy Zegart points to the paradox of U.S. tech dominance: “The United States is simultaneously the most powerful country in cyberspace and the most vulnerable country in cyberspace,” she writes. The more widespread and complex your systems, she argues, the greater the possibilities for a hacker to find a way in: “In the virtual world, power and vulnerability are inextricably linked.”And exploiting the opponent’s online vulnerabilities is a tricky and dangerous business. Few conflicts stay in the shadows forever. The trouble is, it’s impossible to predict when or how the battle will burst into the open.  Here one is reminded of Nobel Laureate Thomas Schelling’s description of “limited war” as being like fighting while in a canoe. “A blow hard enough to hurt,” he wrote in Arms and Influence, “is in some danger of overturning the canoe.” Once both canoes capsize and everybody’s in the water, there’s no way to tell who’ll drown.So far, the cyber-blows exchanged by Iran and the U.S. haven’t been hard enough to hurt in any deep and profound sense, even during the current atmosphere of crisis. The canoes have stayed afloat. One expert interviewed by the Washington Post suggested that all we’re likely to see is “small-scale interruptions and nuisance activities with limited impact” – in a word, vandalism. That’s what happened earlier this month, when Iranian hackers successfully defaced the website of the Federal Depository Library Program with a tribute to Soleimani. And if by chance you haven’t heard of the Federal Depository Library Program, that’s the point.But the fact that the cyber war between the U.S. and Iran has remained in the shadows so far doesn’t mean it always will. No matter who wins the 2020 presidential election, the battle war won’t go away.Neither will the risk of overturning the canoe.(1) If your password is on this list, then it’s common, and you should change it.(2) Refined Kitten, like other Iranian hacker groups, has also targeted companies involved with national security. One “soft” Refined Kitten technique involves posting fake notices about jobs in the defense industry, evidently in the hope of vacuuming up information from applicants.To contact the author of this story: Stephen L. Carter at scarter01@bloomberg.netTo contact the editor responsible for this story: Sarah Green Carmichael at sgreencarmic@bloomberg.netThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Stephen L. Carter is a Bloomberg Opinion columnist. He is a professor of law at Yale University and was a clerk to U.S. Supreme Court Justice Thurgood Marshall. His novels include “The Emperor of Ocean Park,” and his latest nonfiction book is “Invisible: The Forgotten Story of the Black Woman Lawyer Who Took Down America's Most Powerful Mobster.” For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Single-Family Zoning Is Weird
    Bloomberg

    Single-Family Zoning Is Weird

    (Bloomberg Opinion) -- Dahlem is one of the most affluent neighborhoods in Berlin, its lovely, leafy streets lined with large mansions — villas, the Germans call them(4) — built mostly in the early 1900s. As I walked from the thatch-roofed Dahlem-Dorf U-Bahn station to dinner at the home of a not-exactly-Daddy-Warbucks friend one recent evening, I initially puzzled at how he managed to afford such posh surroundings. Then I saw a villa with six doorbell buttons at the front gate instead of just one. I noticed one or two more such subdivided villas after that, plus a couple of small plaques indicating that there were doctor’s offices inside. My friend’s place turned out to be in a small apartment building that was newer than the surrounding houses, but built to about the same scale.Such mixed housing is not entirely unheard of in the U.S., but it is found mainly in neighborhoods that predate zoning, which began its stateside rise in the 1910s and 1920s.(5) In the zoning era, especially since World War II, the general rule for residential neighborhoods has been single-family houses and only single-family houses, with no apartments or businesses allowed.In Germany, which is usually credited with inventing zoning, this practice of dividing cities into areas intended for certain activities and building forms dates all the way back to the 1870s. Development in Dahlem, a former country estate that had ended up in government hands, was even managed by a Royal Commission for the Division of the Domain of Dahlem that dictated that buyers of plots had to erect villa-like buildings on them within two years or pay a fine.German zoning and planning innovations got lots of attention elsewhere, and the American reformers who began to advocate more restrictive urban development rules in the early 1900s were quite open about their Teutonic inspiration, at least until World War I. But while German laws and regulations do a lot to shape how and where people can build, they don’t dictate that single-family housing be segregated from all else. In fact, pretty much no other country does this to the extent that the U.S. does. As University of Georgia professor of landscape architecture and planning Sonia Hirt wrote in her charming and enlightening 2014 book “Zoned in the U.S.A.”:I could find no evidence in other countries that this particular form — the detached single-family home — is routinely, as in the United States, considered to be so incompatible with all other types of urbanization as to warrant a legally defined district all its own, a district where all other major land uses and building types are outlawed.Single-family zoning is now on the defensive in the U.S., with the Minneapolis City Council voting in 2018 to allow up to three housing units on every residential parcel, and the Oregon legislature doing something along the same lines (the rules vary by size of city) last year. Although similar legislation has so far failed in California, other reforms to allow homeowners to add units to existing houses have in the words of one expert put the state “on the precipice of single-family zoning functionally not existing,” and the bolder reforms aren’t dead yet.These efforts have engendered some alarmed — and alarmist — reactions. “Dems Declare War On Suburbs, Seek To Ban Single-Family Housing,” conservative journalist Luke Rosiak wrote on Twitter(6) in promotion of his Daily Caller article about a bill just introduced in the Virginia legislature that he claimed “could quickly transform the suburban lifestyle enjoyed by millions.” Suburbanist thinkers Joel Kotkin and Wendell Cox argued in City Journal that without widespread homeownership, “America will become increasingly feudal in its economic and social form.”Kotkin and Cox hinted but were careful enough not to claim outright that abolishing single-family zoning would have this effect. Their caution was warranted. Germany is in fact a country where both homeownership and single-family houses are minority phenomena, and I’ll leave you to decide whether that means it’s feudal. Lots of other affluent nations have homeownership rates similar to or higher than that of the U.S. (the highest tend to be in the formerly communist states of Eastern Europe) without U.S.-style single-family-only zoning.The most famous explanation for why single-family zoning is so prevalent in the U.S. is probably Dartmouth College economist William Fischel’s “Homevoter Hypothesis”: Except in a few cities, local politics is dominated by homeowners, homeowners favor policies that increase their property values and single-family zoning is perceived as doing just that.Hirt, who was born and grew up in Bulgaria, acknowledged the power of this reasoning in “Zoning in the U.S.A.,” but she argued that it is incomplete. “If real-estate economics was and continues to be the key factor, if residential property values inevitably decline in surroundings where multiple land uses and housing types are allowed,” she wrote, “shouldn’t people in the other capitalist democracies be equally fearful about their home’s environs and their home’s values?” She proposed instead that a particular set of cultural beliefs determined the form that zoning took in the 1920s, and that this form has subsequently shaped Americans’ notions “of the places in the city where we can and should meet each other, the streets we can and should travel on, how many cars we can and should have, and the kinds of homes we can and should live in.”Some of these pro-single-family-housing cultural beliefs date at least to the founding of the U.S., and the preferences of certain founders for the country over the city. Others were unique to the 1920s and really pretty nutty. Corner grocery stores were depicted as vectors of disease and disorder, while the landmark 1926 Supreme Court decision that established the legality of zoning asserted that “very often the apartment house is a mere parasite.” This was an era when lots of reformist types also supported eugenics, and the role of similar bigotry in the rise of zoning can’t be denied. But it was also driven by comparatively innocent beliefs that just happen to have been totally wrong. Zoning advocates argued, for example, that channeling residential development into neighborhoods of detached single-family houses far removed from shops and offices would be a boon to Americans’ health, while in fact the extreme dependence on automobiles that often resulted has been the opposite.Would getting rid of single-family-only zoning suddenly reverse all of this and transform suburbia? Uh, no. Ibraheem Samirah, the suburban Virginia dentist and newly elected state lawmaker who sponsored the zoning reform bill discussed above, said he thinks any change “would be much more long-term, much slower.” His hope, he told me last week, is to shift the balance in local housing politics a little by giving homeowners the opportunity to profit from developing their own properties instead of just fighting nearby development. “I’m trying to broaden the coalition for more affordable housing beyond developers to property owners,” he said.In Berlin, meanwhile, it’s not as if the absence of single-family zoning has solved all the city’s real estate problems. Purchase prices and especially rents are still low by the standards of the world’s major cities, but they’ve risen so much over the past two decades that the local government felt compelled to impose a five-year rent freeze last fall. Single-family zoning is not the sole cause of high housing prices in California, Virginia or elsewhere in the U.S. But it is kind of strange.(1) The Germans capitalize the first letters of nouns, and their plural for Villa is Villen, but close enough.(2) The first comprehensive zoning ordinance in the U.S. was New York's, enacted in 1916, but Los Angeles had begun setting aside "residence districts" in 1904 and the zoning code that really provided the model for the rest of the country was that of Berkeley, California, which was enacted after New York's but also in 1916.(3) His tweets appear to automatically self-delete, so I linked to a Vox article that quoted the tweet.To contact the author of this story: Justin Fox at justinfox@bloomberg.netTo contact the editor responsible for this story: Stacey Shick at sshick@bloomberg.netThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Justin Fox is a Bloomberg Opinion columnist covering business. He was the editorial director of Harvard Business Review and wrote for Time, Fortune and American Banker. He is the author of “The Myth of the Rational Market.”For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Bloomberg

    Musk’s SpaceX Test Postponed to Sunday Due to High Winds

    (Bloomberg) -- Elon Musk’s rocket company has one last, major hurdle to clear before it attempts an historic first flight of astronauts for NASA: proving it can safely abort a mission if something goes wrong after takeoff.A test of the abort procedure set for Saturday was delayed by 24 hours due to sustained winds and rough seas in the recovery area, SpaceX said on Twitter. It’s now targeting a six-hour window starting at 8 a.m. Eastern time Sunday.A Falcon 9 rocket with Crew Dragon spacecraft is now slated to launch tomorrow from Kennedy Space Center in Florida. About 84 seconds after liftoff, SpaceX plans to demonstrate Dragon’s ability to eject from the rocket during an emergency.The in-flight abort test includes a series of complex maneuvers before Dragon’s parachutes should deploy and the craft splashes down in the Atlantic Ocean about 10 minutes after liftoff. The Falcon 9 rocket is expected to break up offshore, according to SpaceX’s press kit.“You design this with the hopes that you never have to use it, but this is showing that it works in the real world,” said former astronaut Garrett Reisman, former director of space operations at Space Exploration Technologies Corp. and a professor of astronautics at the University of Southern California.The procedure is the final big test before NASA can certify that SpaceX is ready to ferry astronauts to and from the International Space Station. U.S. Air Force Colonel Bob Behnken and former Marine Corps test pilot Doug Hurley will be Dragon’s first passengers.“There’s a lot riding on this,” said Reisman, who remains an adviser to SpaceX.Americans have not flown into space aboard a U.S. craft since the shuttle program ended in 2011. Sending astronauts to the space station also is an important step for Musk’s Hawthorne, California-based company. The billionaire chief executive officer aims eventually to transport people to the Moon and Mars.Read more: Boeing and SpaceX Are Racing to Bring Astronauts, Then Tourists, to Space“This is the culmination of years of work,” Benji Reed, SpaceX’s director of crew mission management, said during a pre-launch press conference with NASA on Friday.NASA awarded SpaceX and Boeing Co. a combined $6.8 billion in contracts in September 2014 to revive America’s ability to fly to the space station without buying seats on Russian Soyuz capsules. Since then, the agency and both companies have suffered delays that have put the program more than two years behind schedule.In December, Boeing’s Starliner failed to dock with the station because of a problem with the mission’s timing software. The Chicago-based company and NASA are investigating, and the agency will decide if Boeing needs to perform a second flight without crew.SpaceX’s Dragon capsule successfully docked with the station in March as part of its Demo-1 test.(Updates with test moved to Sunday.)To contact the reporter on this story: Dana Hull in San Francisco at dhull12@bloomberg.netTo contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, Andrew DavisFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Jack Dorsey Asks Elon Musk How to Fix Twitter
    Bloomberg

    Jack Dorsey Asks Elon Musk How to Fix Twitter

    (Bloomberg) -- Elon Musk’s suggestion for how to fix Twitter? Identify the bots.Musk, the SpaceX and Tesla Inc. chief executive officer, was asked Thursday by Twitter Inc. CEO Jack Dorsey how he would fix the social network, where Musk has almost 31 million followers.“Give us some direct feedback,” said Dorsey, who spoke to Musk via a video call from a company meeting in Houston. Musk was projected onto a giant screen as thousands of Twitter employees watched the two executives chat. “If you were running Twitter,“ Dorsey continued, “what would you do?”“I think it would be helpful to differentiate” between real and fake users, Musk replied, according to a video posted to Twitter by an employee. “Is this a real person or is this a bot net or a sort of troll army or something like that?”“Basically, how do you tell if the feedback is real or someone trying to manipulate the system, or probably real, or probably trying to manipulate the system,” Musk continued. “What do people actually want, what are people actually upset about versus manipulation of the system by various interest groups.”It’s possible at least one of the groups Musk had in mind was “TSLAQ,” a loose collective of critics, skeptics and short sellers who often tweet using the hashtag combining Tesla’s ticker symbol with the -Q that is added when listed companies go bankrupt.Musk faces relentless criticism from the group on Twitter. The billionaire is one of the site’s most popular users and one of its most controversial. He called a British caver a “pedo guy” in 2018 and was later sued for defamation. Later that same year, he tweeted that he was thinking of taking Tesla private, prompting a temporary halt on trading and a U.S. Securities and Exchange Commission lawsuit.Musk, one of many high-profile Twitter users to speak at the company event this week, also predicted that humans would send a tweet from Mars sometime in the next five to nine years, according to videos posted by employees. After Dorsey and Musk finished chatting, model and cookbook author Chrissy Teigen, another popular user, made an appearance on stage.\--With assistance from Dana Hull.To contact the reporter on this story: Kurt Wagner in San Francisco at kwagner71@bloomberg.netTo contact the editors responsible for this story: Jillian Ward at jward56@bloomberg.net, Andrew PollackFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Bloomberg

    Pelosi Calls Facebook ‘Shameful’ in Allowing Misinformation

    (Bloomberg) -- House Speaker Nancy Pelosi called Facebook Inc. “very irresponsible” and “shameful” for the way the company allows false information to spread on its social media platform.She said that during the last election Facebook made no attempts to look at Russia’s use of the platform to spread disinformation and doesn’t view it as their obligation to try to stop it in the future.“They intend to be accomplices with misleading the American people,” Pelosi told reporters Thursday in response to a question about whether Chief Executive Officer Mark Zuckerberg and other tech executive have too much power. “I think their behavior is shameful.”Companies including Facebook, Twitter Inc. and Alphabet Inc.’s Google have been under pressure to take action to prevent the spread of false and misleading information on their sites. Facebook’s new policy to address “deepfake” videos has come under fire from some lawmakers and disinformation experts who say it fails to address other kinds of online manipulation.QuickTake: How Deepfakes Make Disinformation More Real Than EverThe California Democrat was asked about the social media company, given its proximity to her San Francisco district.“All they want are their tax cuts and no antitrust action against them, and they schmooze this administration in that regard,” Pelosi said. “They have been very irresponsible.”The company is facing antitrust probes by the U.S. Federal Trade Commission and Justice Department, as well as a majority of state attorneys general led by New York’s Letitia James.Facebook declined to comment on Pelosi’s remarks. The company has been working to better detect instances of foreign governments trying to manipulate U.S. users, and in recent years has taken down several campaigns similar to Russia’s effort during the 2016 presidential campaign.But Facebook has stopped short of fact-checking politicians, saying last week that it would allow candidates to continue to lie in their ads. Facebook executives have said the company shouldn’t determine truth or falsity in political speech. Instead, Facebook is putting political ads in a public archive, where voters can see who paid for which messages.(Updates with context on Facebook actions in the final two paragraphs.)\--With assistance from Ben Brody and Sarah Frier.To contact the reporter on this story: Billy House in Washington at bhouse5@bloomberg.netTo contact the editors responsible for this story: Joe Sobczyk at jsobczyk@bloomberg.net, ;Jillian Ward at jward56@bloomberg.net, Andrew Pollack, Alistair BarrFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • FDA Risks Sacrificing Its Standards for Speed
    Bloomberg

    FDA Risks Sacrificing Its Standards for Speed

    (Bloomberg Opinion) -- Today’s Food and Drug Administration moves much faster than it used to. That may not always be a good thing. A review of drug approvals by the agency from researchers at Harvard Medical School released Tuesday found that the FDA is approving drugs more rapidly with weaker evidence than it did in the past. That can be beneficial when it leads to needed medicines getting to market quickly, and I believe that’s the agency’s intent. As the study’s authors highlight, however, this emphasis on speed and flexibility could be eroding standards. It may be time for a gut check.The gold standard for demonstrating efficacy — and the surest way of winning drug approval — is to demonstrate success in large, well-controlled studies that result in a hard outcome. But there are faster ways to get to market. In 1992, Congress created the accelerated approval program, which can green light medicines based on “surrogate” endpoints that predict rather than confirm benefit for patients, or those that have shown a shorter-term benefit. It’s one of several initiatives that have changed how the agency works. According to the study, 80.6% of approvals between 1995 and 1997 were supported by at least two pivotal trials. That number dropped to 52.8% between 2005 and 2017. Companies that get accelerated approval have to prove their drug works with a confirmatory trial in order to gain full approval, but there’s no hard timetable no when that must be done. Thus, drugmakers often don't hurry to conduct those tests. This is problematic at best, dangerous at worst.Here’s just one case: In 2016, Sarepta Therapeutics Inc. sought approval of a medicine to treat a rare muscle-wasting disease in young boys based on weak evidence from a tiny trial. In the face of significant public pressure, the FDA approved Exondys 51 even though one of its scientists called the treatment “an elegant placebo” in a report. Sarepta is selling the drug for over $300,000 a year but has continually delayed a confirmatory trial. It’s now years away from completion, and there have been no real consequences for the delay.When companies do complete post-approval trials, it sometimes reveals a mistake. Eli Lilly & Co.’s cancer drug Lartruvo got accelerated approval in 2016. Lilly then pulled the medicine from the market last year after a larger trial found no benefit. That’s a rare outcome, but there are many expensive drugs on the market that have never moved beyond surrogate endpoints. A study of 93 accelerated cancer drug approvals between 1992 and 2017 found that only 19 had proved to help patients live longer in a followup trial. There are some good reasons for faster approvals, as former FDA Commissioner Scott Gottlieb outlined in a Twitter response this week to a critical New York Times editorial penned on Jan. 11. Scientists are better at evaluating the safety of medicines and trial design has improved, for example. And advances have made it easier to create drugs that target small populations and have dramatic effects, Gottlieb wrote.He makes good points. But the agency arguably hasn’t found the right balance between embracing advances and maintaining a high bar. It certainly has a ways to go on post-approval follow up. America is entirely unable to control the price of new medicines; the approval of marginal drugs has financial consequences. The FDA will soon face one of its most important and controversial decisions yet. Biogen Inc. is seeking approval for the first purportedly disease-modifying Alzheimer’s drug — a medicine that could be used by millions of people and cost billions — without good evidence that it works. The agency often uses unmet need as a justification for shifting standards, and there’s no bigger unmet need than Alzheimer’s. That doesn’t justify an approval based on one failed trial and another that is a questionable success at best.The agency will have to decide whether to review or approve the medicine in the next year or so. This choice is an opportunity to resist public pressure and move back toward demanding firmer proof of efficacy before drugs hit the market. To contact the author of this story: Max Nisen at mnisen@bloomberg.netTo contact the editor responsible for this story: Beth Williams at bewilliams@bloomberg.netThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Max Nisen is a Bloomberg Opinion columnist covering biotech, pharma and health care. He previously wrote about management and corporate strategy for Quartz and Business Insider.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Bloomberg

    #NeverWarren Was Trending on Twitter. Thank Her Supporters

    (Bloomberg) -- An online feud between two of the top Democratic presidential candidates took an odd turn Wednesday morning when defenders of Senator Elizabeth Warren helped promote a hashtag ostensibly attacking her. It was an instructive moment in the mechanics of online political discourse as passions around the 2020 election season rise.The situation began Tuesday at the Democratic presidential debate. Some of the most dramatic moments of the night were exchanges between Warren and Senator Bernie Sanders, in the wake of reports that he had told Warren a woman could not be elected president, which she confirmed and he denied.After the debate, a video circulated appearing to show Warren refusing to shake Sanders’ hand, followed by a sharp exchange ending with Sanders turning and walking away abruptly. Warren said to Sanders, “I think you called me a liar on national TV.”On Wednesday morning, the hashtag NeverWarren appeared at the top of Twitter’s trending topics. As of late Wednesday afternoon it had been mentioned more than 80,000 times, according to Ben Nimmo, director of investigations for social media monitoring company Graphika. “It looks like it started off among some long-standing Sanders supporters,” he wrote in an email, “but the most striking thing is that all the most-retweeted posts are of people criticizing the hashtag and the mentality behind it, and/or calling for unity.”The hashtag fit into a long-running narrative about Sanders supporters, who some Democrats criticized in 2016 for being insufficiently supportive of Hillary Clinton in the general election. Even before the debate Tuesday a faction of his fans had signaled they might not vote for any other Democratic nominee. This faction was clearly somewhat responsible for pushing the anti-Warren hashtags Wednesday.The Sanders campaign itself didn’t seem to be involved. His spokeswoman, Briahna Gray, repeatedly Tweeted the hashtag WomenForBernie, but did not use the NeverWarren hashtag. Some pro-Sanders activists discouraged others from using it.A significant amount of the NeverWarren activity actually came from those trying to rebut its message. NBC News reporter Ben Collins used a disinformation identification tool to determine that the three most popular tweets using the hashtag were all denouncing it. Mehdi Hasan, a columnist at the Intercept, tweeted, “Yep, let’s be clear: if you’re tweeting in support of this ludicrous NeverWarren hashtag, you’re not only dumb but you’re also telling the world that you’re ok with kids in cages and bans on Muslims.” That message has received more than 1,700 retweets.Britt Julious, a Chicago Tribune columnist, posted a tweet attacking the hashtag (while still deploying it). She received more than 1,200 retweets.“I thought it was odd that it was trending when I woke up this morning. When I looked through the hashtag, I saw that it was a lot of Warren supporters who seemed upset that it was trending,” Julious wrote in an email, saying she remembered a similar dynamic during the 2016 campaign. “Twitter tends to have that echo effect. Like one person will say something weird and then someone else finds it, replies back trying to shoot it down, and the pileup begins.”There has been evidence of significant manipulation of trending topics for years, including numerous media reports exposing coordinated activity pursuing commercial and political ends.Nor is this the first example in the 2020 Democratic primary. Late last year, a comedy troupe managed to get the hashtag DropOutBloomberg onto the list of trending topics, after members pretended the Michael Bloomberg presidential campaign had fired an intern for tweeting a bizarre (and fictional) Bloomberg campaign staff dance video. Some of the people tweeting the hashtag were clearly in on the joke. Others didn’t seem to be. (Bloomberg is the founder and majority owner of Bloomberg LP, the parent company of Bloomberg News.)A major reason things like this happen is that Twitter has automated its trending topics. The company’s algorithms look for hashtags that are included in large numbers of tweets, not necessarily the underlying message of the tweets. A Twitter spokeswoman wrote in an email that “people can choose to Tweet with a hashtag they might disagree with, and our Trends product neutrally represents their behavior in the form of a trending topic.“Alex Stamos, a disinformation expert and former Facebook executive, said many Twitter users don’t realize that by quote tweeting a message that they disagree with, they’re only fueling the underlying hashtag. “Some of these hashtags, it’s like a ten-to-one ratio of people criticizing the hashtag do to people pushing it,” Stamos said in a phone interview.Activity on Twitter can inspire news coverage that fails to interpret the context. The Hill and the Daily Wire wrote about the NeverWarren hashtag. CNN’s Chris Cillizza also mentioned it without explaining that much of the engagement came from Warren’s defenders.Stamos cautioned that Twitter isn’t representative of actual public sentiment and that some of the accounts tweeting about Warren have racked up thousands of tweets within a few days of creation, a suspicious sign. “There’s empirical evidence over and over again that Twitter does not reflect political reality in the United States.”Meanwhile, pro-Sanders accounts flooded Warren’s Twitter mentions with images and emojis of snakes--an icon typically lobbed at women accused of being dishonest.In a tweet, Stamos encouraged users to change their behavior to avoid accidentally promoting that which they oppose. He wrote, “1) Don’t use a hashtag to criticize that hashtag. 2) Stop quote-tweeting small-follower accounts as criticism. 3) Don’t believe that the population of ‘people’ on Twitter is reflective of anything, including ‘candidate X’s followers.’”(Updates third paragraph with Warren’s post-debate remarks)To contact the reporter on this story: Eric Newcomer in San Francisco at enewcomer@bloomberg.netTo contact the editors responsible for this story: Mark Milian at mmilian@bloomberg.net, Joshua BrusteinFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Bloomberg

    Republicans Should Fear the Unknown on Trump Impeachment

    (Bloomberg Opinion) -- Get Jonathan Bernstein’s newsletter every morning in your inbox. Click here to subscribe.It’s not yet clear how much of what Rudy Giuliani’s associate Lev Parnas told Rachel Maddow on MSNBC and the New York Times in an interview will turn out to be true. Parnas, a Soviet-born businessman under indictment for campaign-finance violations, may have strong incentives to make things up. On the other hand, he’s also turned over a considerable amount of supporting evidence that he worked closely with Giuliani, President Donald Trump’s personal lawyer. And what he alleges — that Trump was fully informed all along of a plot to pressure Ukraine to help Trump’s re-election by throwing dirt at Joe Biden — is generally consistent with the evidence that the House considered when it drew up and voted on impeachment. Still, the legal analyst Susan Hennessey was correct Wednesday when she cautioned on Twitter that everyone should be duly cautious about the Parnas allegations. There’s danger here for those building the case against Trump; false accusations based on the word of a criminal could be damaging. But the danger for Republicans is pretty obvious, too. As someone said Wednesday evening on Twitter, Republican senators don’t even know what they’re covering up for, or at least what they would be covering up for if they follow the White House’s preference to rush through the Senate impeachment trial that starts next week and refuse to hear from relevant witnesses and collect relevant documents. Some of those senators, to be sure, just don’t care. They’ve decided they can live with (both politically and ethically) any revelations that may come down the road — that no one who they care about will hold them accountable for burying important evidence, no matter what it turns out to be. Others may really be so fully inside the conservative information-feedback loop that they sincerely think that Trump is an honest, innocent man being railroaded by partisans; they may not even be aware of the considerable evidence to the contrary.But for anyone else? As I said just 24 hours and a couple rounds of ugly revelations ago: “If new ugly details are still emerging, who’s to say that more won’t turn up later?”Of course, that doesn’t make decision-making easy for Republicans who are worried — that is, Republicans who are comfortable voting to acquit on the current evidence, but are concerned that they’ll be abetting a coverup if they try to cut the trial short and then will be exposed as more evidence comes out anyway. It’s easy to say that they should just demand a thorough trial. But that, too, has real costs for them; it means voting against the leader of their party on procedural issues, and therefore winning the wrath of the White House and some of their strongest supporters. That’s not something that any politician does lightly. And even a thorough trial could end up producing no new significant reasons to vote to remove Trump, either because that evidence doesn’t exist or because the House Democratic impeachment managers can’t produce it.It’s easy to say that the political side of those considerations should be irrelevant and that Republican senators should care only about justice. To that I’ll only say: Good luck getting politicians to ignore politics.A better argument might be that those Republican senators should factor into their considerations the institutional and personal self-interest they have in keeping constraints on the presidency in general and this president in particular. Allow him to treat impeachment as a joke, and both he and all future presidents will be more likely to treat the threat of future impeachments as minor inconveniences. That would be true in any case. It’s especially true if they suspect that Trump really is trying to get away with something, even if they think the proof isn't there or that it doesn’t quite rise to the level of removal from office.1\. David M. Edelstein at the Monkey Cage on the U.S., Iran, China and Russia.2\. Matt Grossmann talks with Justin Grimmer, Will Marble, John Sides, and Lynn Vavreck about bigotry and Trump voters.3. I really like Paul Waldman’s item on Trump and dishwashers. 4\. Charles Gaba on the individual mandate.5\. S.V. Date on Trump and the truth.6\. My Bloomberg Opinion colleague Conor Sen looks back on a great decade for the wealthy.7\. And Alyssa Rosenberg on what a woman in the Oval Office would face.Get Early Returns every morning in your inbox. Click here to subscribe. Also subscribe to Bloomberg All Access and get much, much more. You’ll receive our unmatched global news coverage and two in-depth daily newsletters, the Bloomberg Open and the Bloomberg Close.To contact the author of this story: Jonathan Bernstein at jbernstein62@bloomberg.netTo contact the editor responsible for this story: Jonathan Landman at jlandman4@bloomberg.netThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Jonathan Bernstein is a Bloomberg Opinion columnist covering politics and policy. He taught political science at the University of Texas at San Antonio and DePauw University and wrote A Plain Blog About Politics.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Influencers Transcript: Robert F. Kennedy, Jr., January 16, 2020
    Yahoo Finance

    Influencers Transcript: Robert F. Kennedy, Jr., January 16, 2020

    Yahoo Finance Editor-in-Chief Andy Serwer sits down with Chairman of the Children’s Health Defense, and President of the Waterkeeper Alliance, Robert F. Kennedy, Jr.

  • Jury Still Out As U.S. China Trade War Throws Up Winners, Losers
    Bloomberg

    Jury Still Out As U.S. China Trade War Throws Up Winners, Losers

    (Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here. Donald Trump famously declared that trade wars are easy to win.With the phase one trade agreement between the U.S. and China now inked, observers are hesitant to declare a winner. While most welcomed the truce they also cautioned that the toughest negotiations are yet to come.For now, obvious beneficiaries include America’s farmers, refiners, crude and gas exporters who could see Chinese demand soar. U.S. finance firms including investment banks, credit card companies and ratings firms won allowances that will hasten their ambitions to grab a bigger slice of China’s $45 trillion financial industry.On the Chinese side, the truce offers relief for a slowing economy and gives breathing space for the government to meet its growth targets.Potential losers include Brazilian soy bean farmers and Australian suppliers of liquefied natural gas amid stiffer competition for their Chinese order book. The World Trade Organization has been left on the sidelines as globalization gives way to managed trade.Even with the deal, Chinese goods remain levied with stinging U.S tariffs while American firms still face heavily subsidized Chinese competitors.Trump hailed the agreement as “remarkable” and Xi Jinping described it as “good for China, the U.S. and the whole world.”Here’s a sample of some other reaction:Steve Schwarzman, chief executive officer of Blackstone Group Inc:“You have to remember that the U.S. and China, other than the WTO deal in 2001, fundamentally haven’t had a trade agreement since the 1940s so what has been achieved is very, very significant. It provides a base line for a better world economy.”Charles Freeman, Senior Vice President for Asia, U.S. Chamber of Commerce“Let’s celebrate while we can and then we will regroup and move on. The enforcement tools are there and I believe both sides are sincere. This is one of those agreements where both sides could agree to do these things and get them done. With the best of intentions we can bank this and hope it goes forward and we can begin the hard work of negotiating on subsidies.”Chinese state mediaThe deal’s signing received almost 20 minutes of live airtime on Chinese state television in the middle of the night. CCTV published a commentary on its app arguing the deal has two salient features: balance and equality and is a “win-win”.The People’s Daily made a similar argument in an article published via WeChat, a social-media platform.Hu Xijin, editor-in-chief of the Communist Party-backed Global Times, welcomed the deal in a tweet.Joerg Wuttke, head of the European Union Chamber of Commerce in China:“The good news is the downward spiral has been stopped for business, that means more predictability but unfortunately for the likes of EU business and others such as Brazil it means that for the next two years $200 billion will be traded between two nations without competition.”Timothy Stratford, managing partner in Covington & Burling LLP and a former Assistant U.S. Trade Representative“It is a fairly fragile truce. There are going to be a lot of challenges implementing the agreement.”Tom Orlik, Bloomberg Economics“China -- the main loser from the trade war -- is the main beneficiary of the truce. Our China team have raised its forecast for the country’s 2020 GDP growth to 5.9% from 5.7%. The composition of growth will also be a little more balanced, with less need for state investment to offset weak exports and private-sector capex.”Former U.S. Treasury officials had a mixed response on what the deal will mean for the yuan’s stability.Here’s Brad Setser, who worked at Treasury during the Obama administration and is now at the Council on Foreign RelationsAnd here’s Mark Sobel, a former Treasury and International Monetary Fund officialWendy Cutler, a veteran trade negotiator now at the Asia Society Policy Institute“It is a solid deal and the administration should get credit for achieving this deal, that said, it falls way below the expectations they set out at the beginning of this negotiation when they were going to address all the issues that are keeping U.S. companies out of the Chinese market. This negotiation proved a lot tougher than they thought.”Andy Rothman, a former U.S. diplomat in Beijing who’s now an investment strategist at Matthews Asia.“I have two serious concerns about the deal. First, the targets for increases in China’s imports from the U.S. appear to be unrealistically high, which could set up the deal to fail, leading to additional tariffs or even a full-blown trade war. Second, Lighthizer acknowledged today that “This deal will work if China wants it to work.” Over the long term, will the Chinese government want it to work if the Trump administration continues to pursue confrontational policies on almost every issue aside from this deal?”Hubert Tse, partner at Boss & Young law firm in Shanghai, who advises global banks, insurers and financial institutions in China.“The U.S. financial firms are clear winners, it’s a major step-forward for them in China. It’s unimaginable 10 years ago for Wall Street banks and financial institutions to have majority control in China ventures, let alone outright ownership.”Michael Hirson, New York-based practice head for China and northeast Asia at Eurasia Group“If serious frictions do arise – we see this as all but inevitable – will Trump once again raise tariffs on Chinese goods? The president will be somewhat cautious about taking actions that derail phase one, especially ahead of elections. However, his restraint has limits: criticism that he is failing to live up to the enforcement provisions of his deal could sting.”Arthur Kroeber, a founding partner and managing director at research firm Gavekal Dragonomics“Leaving aside the continuing risk to the tech sector, the implausibly high targets for increased U.S. exports to China leave open another source of risk. Under the terms of the deal, if China fails to live up to its commitments, the U.S. is free to reimpose tariffs. If, as is likely, it proves impossible to double U.S. exports to China within the next two years, a renewed trade war could well be a feature of a Trump second term. For the moment, though, it is probably best to enjoy the calm of the storm’s eye for as long as it lasts.”\--With assistance from Kismet Singh, Sharon Cho, Stephen Stapczynski, Miao Han, Jun Luo and Zhang Dingmin.To contact the reporter on this story: Enda Curran in hong kong at ecurran8@bloomberg.netTo contact the editors responsible for this story: Malcolm Scott at mscott23@bloomberg.net, Jeffrey BlackFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Bloomberg

    Turkey Removes Ban on Wikipedia After Almost Three Years

    (Bloomberg) -- Wikipedia is available in Turkey again after a nearly three-year ban.The Turkish government agency in charge of internet technologies lifted the ban after the nation’s top court ruled last month that the restriction violated free speech.A detailed explanation of the court’s ruling was published in the Official Gazette on Wednesday, prompting regulators to restore access to the website.“As access to Wikipedia is still actively being restored across Turkey, some users in Turkey may experience restored access sooner or later than others,'’ the website said in a statementThe site was blocked in April 2017 after Wikipedia refused to remove entries that accused the government of cooperating with terrorist organizations.The Turkish government has blocked access to other popular websites such as Twitter, YouTube and Facebook in the past, for allegedly promoting terrorist propaganda or insults against Turkish political figures.The limits on free speech have been denounced by opposition parties as well as the European Union and human rights groups.To contact the reporter on this story: Asli Kandemir in Istanbul at akandemir@bloomberg.netTo contact the editors responsible for this story: Stefania Bianchi at sbianchi10@bloomberg.net, ;Onur Ant at oant@bloomberg.net, Amy TeibelFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • The FBI Can Unlock Florida Terrorist’s iPhones Without Apple
    Bloomberg

    The FBI Can Unlock Florida Terrorist’s iPhones Without Apple

    (Bloomberg) -- The FBI is pressing Apple Inc. to help it break into a terrorist’s iPhones, but the government can hack into the devices without the technology giant, according to experts in cybersecurity and digital forensics.Investigators can exploit a range of security vulnerabilities -- available directly or through providers such as Cellebrite and Grayshift -- to break into the phones, the security experts said.Mohammed Saeed Alshamrani, the perpetrator of a Dec. 6 terrorist attack at a Navy base in Florida, had an iPhone 5 and iPhone 7, models that were first released in 2012 and 2016, respectively. Alshamrani died and the handsets were locked, leaving the FBI looking for ways to hack into the devices.“A 5 and a 7? You can absolutely get into that,” said Will Strafach, a well-known iPhone hacker who now runs the security company Guardian Firewall. “I wouldn’t call it child’s play, but it’s not super difficult.”That counters the U.S. government’s stance. Attorney General William Barr slammed Apple on Monday, saying the company hasn’t done enough to help the FBI break into the iPhones.Apple in New Clash With U.S. Over Access to Terrorist’s IPhones“We are helping Apple all of the time on TRADE and so many other issues, and yet they refuse to unlock phones used by killers, drug dealers and other violent criminal elements,” President Donald Trump wrote on Twitter Tuesday.The comments add to pressure on Apple to create special ways for the authorities to access iPhones. Apple has refused to build such backdoors, saying they would be used by bad actors, too.Indeed, Strafach and other security experts said Apple wouldn’t need to create a backdoor for the FBI to access the iPhones that belonged to Alshamrani.Neil Broom, who works with law enforcement agencies to unlock devices, warned that the software version running on the iPhone 5 and iPhone 7 could make it more difficult to break into the handsets. But it would still be possible.“If the particular phones were at a particular iOS version, it might be as easy as an hour and boom, they are in. But they could be at an iOS version that doesn’t have a vulnerability,” he said.On Tuesday, a Department of Justice spokesman said he didn’t have any update on the government’s efforts to unlock the device. Apple referred to comments it made on Monday.Apple Says It’s Helping FBI Investigate Florida Terrorist AttackStill, new vulnerabilities and exploits are uncovered all the time. Apple and security firms such as Cellebrite play a cat-and-mouse game nowadays. The iPhone maker releases a new device or a new version of its iOS operating system that locks everything down. Then security firms and researchers start probing, and often find ways to hack into the handsets after several months. Those exploits sometimes turn into tools that the FBI and police can use to access data on iPhones.Broom said U.S. agencies work with security firms, including Cellebrite, that would “bend over backwards” to help the government in hopes of winning big contracts.“Our technology is used by thousands of organizations globally to lawfully access and analyze very specific digital data as part of ongoing investigations,” Cellebrite, owned by Japan-based Sun Corp., said in a statement. “As a matter of company policy we do not comment on any ongoing investigations.” In 2016, Bloomberg News reported that Cellebrite helped the FBI break into an iPhone belonging to a shooter behind an attack in San Bernardino, California. The company has declined to confirm its participation.The Behind-the-Scenes Fight Between Apple and the FBIGrayKey is offered by Grayshift, a firm based in Atlanta that counts former Apple software security engineer Braden Thomas among its staff. Grayshift didn’t respond to a request for comment on Tuesday.A new security flaw known as “Checkm8” affects chips in iPhones released between 2011 and 2017, according to Strafach and other researchers. That includes the iPhone 5 and iPhone 7.“With the Checkm8 vulnerability, you should be able to get a forensically sound image of the file system, unless they had a crazy long passphrase,“ Strafach said.The iPhone 7 includes the Secure Enclave, a dedicated chip for storing fingerprint data and other sensitive information on the device, but even that could be breakable, he said.“It’s simply a question of whether the government will pay a contractor to get into these phones,” Strafach added. “If it can’t be done with the Checkm8 vulnerability, they can pay a contractor to do it.”The Checkm8 flaw may support updated hacking tools from Cellebrite. The Israel-based company offers a “UFED Physical Analyzer,” a special “Touch2” tablet and software for PCs called “4PC” to law enforcement agencies and other customers. That all costs about $15,000, according to Broom. There’s often an annual maintenance fee of more than $4,000, too, Broom said.The FBI would likely also need other tools to unlock the iPhones, such as Grayshift’s GrayKey or Cellebrite Premium, a special on-premise service for law enforcement agencies. Those could cost $100,000 to $150,000, according to Broom.“They already have these tools around the country. So they wouldn’t be paying anything more to break into these phones, they could just be waiting for a certain exploit like Checkm8 to become available,” Broom said.Japanese Pinball Maker Tied to IPhone Hack Set for Terror FightOn Monday, Apple said it has provided “all of the information” it has related to the device, via internet-based services such as iCloud.However, some data of potential interest to the FBI would only be available on the iPhones. For instance, iMessage texts are encrypted when stored in the cloud, but they are often readable on the devices.This won’t end the standoff between the FBI and Apple, though.It is becoming more difficult for firms like Cellebrite to hack into iPhones as the devices get more sophisticated, said Yotam Gutman, marketing director at cybersecurity company SentinelOne.Breaking into an iPhone 11, the latest Apple smartphone, would be a lot harder, if not impossible, Strafach said.(Updates with Cellebrite comment in 14th paragraph)\--With assistance from Gwen Ackerman and Amy Thomson.To contact the reporter on this story: Mark Gurman in Los Angeles at mgurman1@bloomberg.netTo contact the editors responsible for this story: Tom Giles at tgiles5@bloomberg.net, Alistair Barr, Jillian WardFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Twitter’s Top Lawyer Is Final Word on Blocking Tweets—Even Donald Trump’s
    Bloomberg

    Twitter’s Top Lawyer Is Final Word on Blocking Tweets—Even Donald Trump’s

    (Bloomberg) -- Whenever somebody on Twitter takes issue with the network’s rules or content policies, they almost always resort to the same strategy: They send a tweet to @jack.A quick scan of Chief Executive Officer Jack Dorsey’s mentions show just how often he’s called upon to lay down the law for the service he helped create. But what users don’t know is that they’re imploring the wrong Twitter Inc. executive. While Dorsey is the company’s public face, and the final word on all things product and strategy, the taxing job of creating and enforcing Twitter’s rules don’t actually land on the CEO’s shoulders. Instead, that falls to Twitter’s top lawyer, Vijaya Gadde.As Twitter’s head of legal and policy issues, Gadde has one of the most difficult jobs in technology: Her teams write and enforce the rules for hundreds of millions of internet users. If people break the rules, the offending tweets can be removed, users can be suspended, or in extreme cases booted off Twitter altogether. Dorsey may have to answer for Twitter’s decisions, but he’s taken a hands-off approach to creating and enforcing its content policies.“He rarely weighs in on an individual enforcement decision,” Gadde said in a recent interview. “I can’t even think of a time. I usually go to him and say, ‘this is what’s going to happen.’”That leaves Gadde, 45, as the end of the line when it comes to account enforcement -- a delicate position in a world where Twitter’s rules are both an affront to free speech and an invitation to racists and bigots, depending on who’s tweeting at you. “No matter what we do we’ve been accused of bias,” Gadde said. “Leaving content up, taking content down -- that’s become pretty much background noise.”Like most corporate lawyers, Gadde generally operates in the background herself, though her influence has helped shape Twitter for most of the past decade. A graduate of Cornell University and New York University Law School, Gadde spent almost a decade at a Bay Area-based law firm working with tech startups before she joined the social-media company in 2011. Her eight-plus years at Twitter are about equal to the amount of time Dorsey has worked there over the years.But as Twitter’s role in global politics has increased, so has Gadde’s visibility. She was in the Oval Office when Dorsey met with U.S. President Donald Trump last year, and joined the CEO when he met Indian Prime Minister Narendra Modi in November 2018. When Dorsey posted a photo with the Dalai Lama from that trip, Gadde stood between the two men, holding the Dalai Lama’s hand. InStyle just put her on “The Badass 50,” an annual list of women changing the world. “Vijaya defines the word,” tweeted Twitter Chief Marketing Officer Leslie Berland.When Gadde first joined Twitter, the internet was a different place. At the time, a lot of politicians were just getting familiar with the platform. Trump primarily used his Twitter to share announcements about his TV appearances (though this would quickly change). The official presidential account, @POTUS, wouldn’t even come into existence until 2015, under then-President Barack Obama.When Gadde took over as general counsel in 2013, the social-media service had an “everything goes” mentality. A year prior, one of Twitter’s product managers in the U.K. famously said that Twitter viewed itself as “the free speech wing of the free speech party,” a label later repeated by then-CEO Dick Costolo. The company simply “let the tweets flow,” said one former employee.That freedom is part of what drew Gadde to Twitter in the first place. An immigrant from India, Gadde moved to the U.S. as a child and grew up in east Texas, where her dad worked as a chemical engineer on oil refineries in the Gulf of Mexico, before moving to New Jersey in middle school. “I was the only Indian child most of my education until I went to college,” she says now. “You feel voiceless. And I think that that’s kind of what drew me to Twitter -- this platform that gives you a voice, and gives you a community and gives you power.”Twitter’s commitment to giving everyone a voice, though, has also come with a general reluctance to take it away. Twitter’s decisions in recent years to ban certain users, including conspiracy theorist Alex Jones and far-right media troll Milo Yiannopoulos, were news in part because Twitter’s decisions to act were so uncharacteristic. Gadde acknowledges the change, saying that the company has come to realize in recent years the responsibility it has to protect the safety of its users, including when they’re not using the product. “I would say that the company has shifted its approach dramatically [since I started],” she said.Perhaps no user presents a bigger quagmire for Gadde and her team than Trump, the platform’s most famous user, whose tweets often push the boundaries of Twitter’s rules. The president’s habit of blasting messages to his 70.9 million followers has taken on a new vigor thanks to a looming impeachment trial and re-election bid. Following the U.S. drone strike in early January that killed a top Iranian general, Trump threatened Iran with military force in a number of tweets, including the targeting of cultural sites. That prompted many observers, including some former Twitter employees, to ask why he hadn’t been suspended -- a cycle that has played out several times following other Trump tirades.Last month, Trump attacked his Democratic rivals, blasted Congress over impeachment proceedings, and even mocked teenage climate activist Greta Thunberg from his @realDonaldTrump Twitter account. According to a USA Today analysis, his tweets contain more negative language than ever. The study looked at whether Trump tweeted words with positive or negative connotations, and found he “is posting fewer tweets with words that convey joy, anticipation and trust, and more that convey anger.” Trump sent or retweeted more than 1,050 messages in December, according to Hootsuite -- more than any other month since taking office.“The way he uses social media is a reflection of just how unusual a candidate, and now a president, Trump is. A big part of that is that he breaks all the rules,” said Patrick Egan, a professor of politics and public policy at New York University. “Something that a lot of people really like about him is that he says the kind of things he’s not supposed to say, and of course that’s exactly the kind of thing that can get you into trouble on social media.”Inside Twitter, Trump’s tweets are a frequent topic of conversation among employees, and Gadde’s authority also means that she has the unique job of punishing the world’s most famous tweeter -- should it ever come to that. “My team has the responsibility to do that with every single individual who uses Twitter, whether it’s the president of a country or it’s an activist or it’s somebody we don’t know,” she said. “I honestly do my best to treat everyone with that same degree of respect.”Twitter has so far decided that Trump hasn’t crossed any lines, but the company is prepared for such a scenario. While it’s unlikely that Twitter would ever suspend a well-known politician – the company also has a newsworthiness policy, which means it’s less likely to take action on tweets from elected officials -- it’s devised another penalty for world leaders: A warning screen unveiled last summer that hides a tweet from public view and limits its distribution, but still allows people to view the tweet with the click of a button. It’s a way to publicly acknowledge that a politician has violated Twitter’s rules while admitting what they said is too newsworthy to be taken down. “It’s preserving a record of what is said in the public interest,” Gadde explained.The process is designed like this: A content moderator, who may be a third-party contractor, reviews a tweet that has been flagged and determines whether it violates Twitter’s rules. If they decide that it does, moderators can usually enforce punishment at this stage, but Twitter requires a second layer of review for offenders who are considered public figures -- in this case, a verified politician with more than 100,000 followers, Gadde said.The tweet is then sent to Twitter’s trust and safety team, and if they also agree that the post violates the rules, Twitter convenes a special group of employees from across the company to review it. This group, about a half-dozen people from various teams, is meant to bring in a diverse set of perspectives, Gadde explained. That panel then makes a recommendation to Del Harvey, Twitter’s head of trust and safety, and her boss, Gadde, for a final decision.Barring some kind of emergency, using the label will ultimately be Gadde’s call. “Vijaya has a young kid still, so she’s very used to being woken up any hour, which is helpful,” Harvey joked to a group of reporters last summer.Gadde won’t go so far as to say the new warning label was created with Trump in mind -- “We try to think of these things globally and not just about the United States,” she said -- but added that even though the screen, referred to internally as the Public Interest Interstitial, hasn’t been used since its debut last June, it will eventually make an appearance. Gadde said Twitter has used the newsworthiness policy a “handful” of times in the past as justification for leaving offending tweets up. But the company didn’t have the warning label back then, so the general public didn’t know anything had even been discussed behind the scenes, she said. “We know it happens, and that it will happen.”Twitter actually pointed to this policy in September 2017 when answering questions about the decision to leave up a tweet from Trump that appeared to threaten North Korea with nuclear war. Twitter also has a policy against threats of violence. A White House spokesman, Steven Groves, declined to answer questions about Trump’s use of Twitter.Historically, Twitter’s rules around free speech have been so lax that a number of celebrities and journalists, including singer Lizzo, actress Millie Bobby Brown and New York Times writer Maggie Haberman, have stepped away from the service -- at least temporarily -- with many citing bullying and harassment. U.S. Senator Kamala Harris, a former Democratic candidate for president, thought Twitter’s enforcement weak enough that she implored the company to suspend Trump in a letter in October, saying he uses his account to obstruct justice and intimidate people, including the whistle-blower whose report ultimately led to his impeachment. Twitter responded that Trump’s tweets didn’t break the rules.The newsworthiness exemption gives Twitter a lot of wiggle room when it comes to removing high-profile tweets, but Gadde said the point of the warning label, and the company’s attempt to explain it, are part of a broader effort to be more transparent about how and why the company makes decisions -- something she admits hasn’t always been clear. As Twitter has grown, so has the company’s understanding that it can’t simply sit by and let people tweet whatever they want, Gadde said. It’s one of the many ways her job has evolved over the years.“We’re trying to do so much more of our work in public,” she said. “I want people to trust this platform.”\--With assistance from Jordan Fabian.To contact the reporter on this story: Kurt Wagner in San Francisco at kwagner71@bloomberg.netTo contact the editors responsible for this story: Jillian Ward at jward56@bloomberg.net, Andrew PollackFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Jeff Bezos’s India Visit Marked by Probe and Protests
    Bloomberg

    Jeff Bezos’s India Visit Marked by Probe and Protests

    (Bloomberg) -- Amazon.com Inc. Chief Executive Officer Jeff Bezos got a bitter reception during his India visit this week after the country’s antitrust regulator initiated a formal investigation hours before his arrival and infuriated small store owners demonstrated in the streets.Bezos is in New Delhi for the Smbhav summit, an Amazon India gathering for small and medium businesses, where he announced Amazon will invest a fresh $1 billion to help bring such companies online. He also committed the retail giant to exporting a total of $10 billion of made-in-India goods by 2025.“The 21st century is going to be the Indian century,” the Amazon founder said. “This country has something special: its dynamism. I also predict that the most important alliance in the 21st century will be between India and the United States.”Dressed in blue jeans and a vest echoing Indian Prime Minister Narendra Modi’s favorite garment, Bezos lit a ceremonial lamp to inaugurate the summit. A day earlier, he put out a rare tweet to publicize his visit to the Mahatma Gandhi memorial, where he wore a white tunic and a rust-colored Indian vest.Inside Jeff Bezos’s $5 Billion Bet That Amazon Can Win IndiaIndia is arguably Amazon’s most important overseas market and a key growth driver, however the small businesses that the CEO is hoping to endear himself to are organizing in opposition. The Confederation of All India Traders announced that members of its affiliate bodies across the country would stage sit-ins and public rallies in 300 cities to raise a war cry against the world’s largest online retailer.In a letter to Modi last week, the confederation’s Secretary General Praveen Khandelwal alleged that Amazon, much like Walmart Inc.-owned Flipkart, was an “economic terrorist” who engaged in predatory pricing that deprived the government of tax revenue and “compelled the closure of thousands of small traders.”Priyadarshini Durairaj, digital marketing officer at Chennai-based Naga Ltd., said she was at Smbhav with an open mind. “Brands like ours,” she said of Naga, which makes and sells pasta on Amazon and other online and offline outlets, “need to understand platforms’ plans and offerings for sellers like us.”India’s e-commerce market is projected to grow to $150 billion by 2022, according to a 2018 report by software industry group Nasscom and consulting firm PwC India. Competition for this rapidly expanding sector is intensifying as Asia’s richest man, Mukesh Ambani, prepares to go live with JioMart, an online shopping platform challenging Amazon and Walmart directly. The latter’s Flipkart Online Services Pvt is also delving deeper into the countryside in its pursuit for more customers. Amazon, for its part, opened a huge office complex in the southern city of Hyderabad in September, underscoring its commitment to the country.India Opens Antitrust Probe Into Amazon, Flipkart Amid ProtestsThe Competition Commission of India said it would probe the deep discounts, preferential listings and exclusionary tactics that Amazon and Flipkart are alleged to have used as anti-competitive levers. India’s trader bodies have long argued that both retail giants were flouting rules by promoting sales and discounts through their favored sellers, many of whom they have preexisting commercial arrangements with. The regulator has ordered for the investigation to be completed within two months.“India needs to address the traders’ protests in a responsible manner,” said Durairaj, “They cannot counter deep discount models.”Bezos last visited India in 2014 under starkly different circumstances. During that trip, the Amazon founder wore local festive garb, rode atop a festooned truck for a photo opp and presented Amazon’s Indian unit with a giant check for $2 billion. Since then, Amazon has pledged a further $3.5 billion to expand in the country before today’s announcement of an additional $1 billion, taking the cumulative total to $6.5 billion.(Updates with details of new investment. A previous version of this story misstated the location of Amazon’s office complex, which has been corrected.)To contact the reporter on this story: Saritha Rai in Bangalore at srai33@bloomberg.netTo contact the editors responsible for this story: Edwin Chan at echan273@bloomberg.net, Vlad Savov, Peter ElstromFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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