Huawei CFO seeks bail on health concerns; Canada wants her in jail

TORONTO/BEIJING (Reuters) – A top executive of China’s Huawei Technologies Co Ltd [HWT.UL] argued that she should be released on bail while awaiting an extradition hearing, citing fears for her health while incarcerated in Canada along with other factors, court documents showed on Sunday.

FILE PHOTO: Meng Wanzhou, Executive Board Director of the Chinese technology giant Huawei, attends a session of the VTB Capital Investment Forum “Russia Calling!” in Moscow, Russia October 2, 2014. Picture taken October 2, 2014. REUTERS/Alexander Bibik

Huawei Chief Financial Officer Meng Wanzhou is fighting to be released on bail after she was arrested on Dec. 1 in Vancouver at the request of the United States.

Meng, 46, faces U.S. accusations that she misled multinational banks about Huawei’s control of a company operating in Iran. This deception put the banks at risk of violating U.S. sanctions and incurring severe penalties, court documents said.

China has criticized her detention and demanded her immediate release. The arrest has roiled global markets as investors worried it could torpedo attempts to thaw trade tensions between Washington and Beijing.

In a sworn affidavit, Meng, the daughter of Huawei’s founder, said she is innocent of the allegations and will contest them at trial in the United States if she is surrendered there.

Meng said she was taken to a hospital for treatment for hypertension after being detained. She cited hypertension as a factor in a bail application seeking her release pending an extradition hearing. She also said she has longstanding ties to Vancouver dating back at least 15 years, as well as significant property holdings in the city.

Her family also sought leave to remain in Vancouver if she was granted bail, according to the court documents, with her husband saying he plans to bring the couple’s daughter to Vancouver to attend school during the proceedings.

Earlier on Sunday, China’s foreign ministry summoned the U.S. ambassador to lodge a “strong protest” over the arrest, and said the United States should withdraw its arrest warrant.

Chinese Vice Foreign Minister Le Yucheng told U.S. ambassador Terry Branstad that the United States had made an “unreasonable demand” on Canada to detain Meng while she was passing through Vancouver, China’s Foreign Ministry said.

“The actions of the U.S. seriously violated the lawful and legitimate rights of the Chinese citizen, and by their nature were extremely nasty,” Le told Branstad. He made similar comments to Canada’s ambassador the night before.

China strongly urges the United States to pay attention to China’s solemn and just position and withdraw the arrest warrant on Meng, Le added.

“China will respond further depending on U.S. actions,” he said, without elaborating.

Le also told the Canadian ambassador on Saturday there would be severe consequences if it did not immediately release Meng.

The United States has been looking since at least 2016 into whether Huawei shipped U.S.-origin products to Iran and other countries in violation of U.S. export and sanctions laws, Reuters reported in April.

In the Canadian court documents released on Sunday, Huawei said its Iran operations were “in strict compliance with applicable laws, regulations and sanctions” of the United Nations, United States and European Union.

In a company presentation from 2013 that was released with the Canadian court documents, Huawei said it communicated with U.S. government agencies on a “day-to-day” basis to obtain what it called “professional guidance” on trade compliance.

Companies are barred from using the U.S. financial system to funnel goods and services to sanctioned entities.

U.S. Senator Marco Rubio said on Sunday he would “100 percent absolutely” introduce a measure in the new Congress that would ban Chinese telecom companies from doing business in the United States.

FILE PHOTO: Meng Wanzhou, Huawei Technologies Co Ltd’s chief financial officer (CFO), is seen in this undated handout photo obtained by Reuters December 6, 2018. Huawei/Handout via REUTERS

“We have to understand Chinese companies are not like American companies. OK. We can’t even get Apple to crack an iPhone for us in a terrorist investigation,” he told CBS “Face the Nation.”

“When the Chinese ask a telecom company, we want you to turn over all the data you’ve gathered in the country you’re operating in, they will do it. No court order. Nothing like that. They will just do it. They have to. We need to understand that.”

Rubio was a strong critic of China’s ZTE Corp, which pleaded guilty in 2017 to violating U.S. laws that restrict the sale of American-made technology to Iran.

Reporting by Ben Blanchard in Beijing and Julie Gordon; Additional reporting by Denny Thomas and Anna Mehler Paperny in Toronto, Nick Brown in New York, and Doina Chiacu, Chris Sanders and Karen Freifeld in Washington and Steve Stecklow; Editing by Lisa Shumaker and David Gregorio

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Space Photos of the Week: Do You Want to Land on an Asteroid?

Talk about getting a piece of the rock: NASA’s OSIRIS-REx arrived at the near-Earth asteroid Bennu earlier this week. Bennu, which orbits the Sun, is seen here covered in dirt, smaller rocks, and the occasional boulder. After two years and a journey of 1.2 billion miles, OSIRIS-REx was only 11 miles from the surface when it took this photo that nearly fills up the frame. Eventually the spacecraft will collect a sample of the asteroid to bring back for research into the early solar system. For now, it’s got to map the surface for about a year before selecting which somewhat less rocky spot to go scavenging on.

The Juno spacecraft spotted a dolphin-shaped cloud on the southern temperate belt of Jupiter a few weeks ago. The atmosphere directly below also has the appearance of cresting of waves, making this quite the ocean scene for a giant gaseous planet. Jupiter’s clouds and storms always are something to behold, but this swimming dolphin looks like it was drawn on porpoise.

This image contains multitudes—more than 1,000 galaxies to be specific. The Hubble Space Telescope recently studied a group of globular clusters packed together in what’s called the Coma galaxy cluster. Galaxies in clusters are smaller than regular galaxies, but that doesn’t mean they’re trivial: These objects are better indicators of gravity distortions in the cluster, and such anomalies point to the existence of unseen mass—dark matter—which is not exactly well understood. And even though it’s 300 million light years from Earth, and therefore a blast from the past, this Coma cluster is finally getting examined by scientists thanks to Hubble.

Ever wondered what the violent aftermath of an exploding star looks like? Well, here you go. Hubble captured this photo of a remnant of a supernova called SNR 0454-67.2. These tendrils of gas were likely formed by a type 1a supernova explosion, which occurs when a dead white dwarf star starts stealing material from a nearby star—eventually collecting so much mass that it explodes. What’s left is this swirl of gas and dust.

Astronauts on the International Space Station are fastidious Earth-watchers with front-row seats: They’re in orbit 250 miles up and can see 16 sunrises and sunsets a day. In this angled photo by the European Space Agency’s Alexander Gerst, you can glimpse the telltale lights of civilization on the ground, along with a clear reminder of how unbelievably svelte our life-sustaining atmosphere really is, just a few dozen miles above the surface.

Fun in the Sun: This image is constructed out of data from the European Space Agency’s Proba2 spacecraft, an Earth-orbiting satellite that has been collecting data about the appearance of the poles. Now, this image isn’t exactly symmetrical; that’s because the Sun’s corona is always changing and reshaping. The dark center also reveals the coronal hole over the pole—a large source for solar wind. It’s like looking into the eye of Sauron, but at least with no danger from Orcs.

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S&P 500 Weekly Update: A Good Dose Of Fear And A Void In Common Sense

“The most important consideration when investing in the stock market is the primary trend of the equity markets.”Richard Russell (Dow Theory Letters)

As we enter the final month of 2018, it is a good time to take a peek back at this very unique year. It’s hard to remember a year that started out of the gate so strong only to see a correction of 10% from record highs within weeks. Then, shortly after rebounding all the way back to new all-time highs again, the S&P 500 dropped another 10%.

Bespoke Investment Group tells us that in the S&P 500’s history dating back to 1928, there have only been four other periods where the S&P 500 had two 10%+ corrections from an all-time high within a 12-month stretch. Of those four prior periods, there was only one where the two 10%+ corrections occurred in the same calendar year. That was in 1990.

While 1990 saw the S&P decline by 3% and close the year at 334, there wasn’t another down year until 2000. In the interim, the S&P rallied and closed 1999 at 1,248, some 373% higher. Now I’m not suggesting that will happen this time around. I simply posted that today as a gentle reminder to the Bears that are nipping at the heels of the Bulls, nothing is certain.

I have always stressed the importance of having a strategy, a process, and of course sticking to it. Completing the first part is much easier than the second. The up and down emotional market swings this year have posed unique challenges to investors. Buy these corrective dips, sell these new highs?, or watch and wait. Investment plans were surely tested.

It is one thing when personal situations arise that may change your investment ideas. That is understandable, and when those issues arise, priorities can and will change.

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In the last few years, however, many seasoned investors have altered their plans for no other reason than being caught up in the worries. This year leads the pack in that regard. A run to new highs early in the year met with the first mention of trade issues. A correction that was said to be the start of the next bear market. A run back to new highs and then it’s time to complain that the Fed is on a mission to bring the economy to recession and more trade talk added to that conclusion. The complaining continues now with the chant that nothing seems to be working.

Well, I am not so sure about that. Perhaps for those that make calls for S&P 3,000, then change to S&P 2,200, and now reverse course again, nothing is working. If they actually followed that whipsaw strategy for the first eleven months of the year, it is easy to see their frustration. On the other hand, anyone that has been patient, watched the price action, never getting too high or low with their emotions has survived the extremes.

There is no shortage of strategies and/or indicators to follow. Successful investors should lean to one that will not have leave them prey to emotional swings on every 5-10% move in the indices. It also means they should employ the traits every successful investor possesses. Flexibility in an approach, be open minded and confident. When I see a plan change because of ONE issue or because ONE indicator has changed, it tells me blinders are in place.

The investment community has this penchant for taking the easy way out. That leads to mistakes. Of course, then it becomes routine to blame the issues for their mistakes. That would not happen if their plan was grounded instead of being influenced by every headline and every indicator.

My approach is centered around consistency. Eliminating the tendency to make major changes in investment strategy until the primary trend in place is indeed changing. It avoids extrapolating any issue to an extreme positive or an extreme negative, and there is never any guessing that a trend is about to change. It’s not infallible, but in my view, it beats what many other profess as the “only way to proceed”.

In the last 5 years or so, we have seen many of those pundits disappear. The stock market has a way of neutralizing those that like to flow with the wind.

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Scott Grannis shares his wisdom in his recent article discussing the yield curve and the thought of an impending recession. For years market participant have been hearing about the onset of the next recession. Suffice to say that we will continue to hear warning after warning now about the state of the economy.

In addition to all of the signals that investors have and will continue to hear about the onset of the next recession, we all need to realize that recessions are born to take out the excess that have built up during the expansion that preceded them. Therein lies the issue that the naysayers will have to deal with. There are none. I am of course referring to excesses. Well, none that would suggest a bubble like backdrop, or a feeling that “all is so good what could possibly go wrong” mentality. In fact it is just the opposite, it’s more like what could possibly go right?

No reason at all to jump to any conclusion now. After all the yield curve hasn’t even inverted yet, and I’m not one to listen to the “its inevitable” talk. Sure there could be an imminent inversion, but there are many times in history where the curve stayed flat for months on end. While market participants should not put their heads in the sand, it may be worthwhile to wait until it actually happens before any significant changes to an investment strategy are pursued.

U.S. Markit manufacturing index fell 0.4 points to 55.3 in November for the final reading (55.4 preliminary), after inching up 0.1 point to 55.7 in October. The index has faded from its cyclical high of 56.5 in April, but remains at a robust level.

Chris Williamson, Chief Business Economist at IHS Markit said:

“Despite the headline PMI slipping to a three-month low, November saw manufacturers enjoy another encouragingly solid month of improving business conditions. Dig deeper behind the headline number and the picture brightens further. New orders rose at the fastest rate for six months, prompting manufacturers to continue to expand capacity to meet demand. The pace of job creation remained among the highest seen over the past decade.”

“The survey acts as a reliable guide to the official manufacturing data, and suggests that factory output is growing at an annualized rate of around 1.5% so far in the fourth quarter, providing a material but by no means impressive contribution to GDP. As such, the data corroborate the flash PMI’s signal that the economy will likely see growth slow to a 2.5% rate in the fourth quarter.”

The bounce for ISM Manufacturing to 59.3 in November reversed the October drop to 57.7 from a slightly higher 59.8 in September and a 14-year high of 61.4 in August. Analysts saw a prior 14-year high of 60.8 in February, and a 9-month low of 57.3 in April.

Construction spending was much weaker than expected in October falling 0.1%, with downward revisions to prior months.

U.S. factory data tracked estimates with 0.3% October non-durable increases for shipments and orders after a September trimming to 0.5% from 0.6%.

A flat Michigan sentiment reading at the same 97.5 seen in November left the index still between the 14-year high of 101.4 in March and the 7-month low of 96.2 in August.


Sentiment towards the present is increasing, and feelings about the future in decline, the spread between the two indices remains at extremely high levels. In prior periods when this spread topped 50, it quickly reversed and a recession wasn’t far behind.

Source: Bespoke

The only exception was in the late 1990s/early 2000s where the spread reached stratospheric levels before finally reversing. When this spread starts to reverse in the future, it will be a signal that a recession is likely on the horizon, especially if it is accompanied by a turn lower in the Jobs Plentiful index.

Friday’s headline jobs number missed the mark, and the trend of job creation reported by the BLS is definitely slowing. It’s important to emphasize that slowing job growth does not mean this report was weak. The wage growth story has continued to gather steam, with wage growth for non-managerial positions hitting new cycle highs and another solid month for total private wages. Slower jobs growth combined with higher wage growth is not a sign of a weakening economy.


Bespoke Investment Group reports:

“With housing indicators starting to roll over, it naturally raises concerns that a recession could be around the corner. Throughout history, New Home Sales have typically started to roll over, not right before the onset of a recession, but usually years before. Therefore, as a timing tool, New Home Sales is not a very good recession indicator.”

“Another important point to keep in mind is that at their peaks so far in this recovery, most residential housing indicators barely reached their historical long-term averages, which suggests that the downside is a bit more limited.”

Source: Bespoke

Global Economy


Markit Eurozone Manufacturing PMI showed the weakest growth of the manufacturing economy since August 2016. Final Eurozone Manufacturing PMI at 51.8 in November (Flash: 51.5; October Final: 52.0). Chris Williamson, Chief Business Economist at IHS Markit:

“November’s PMI data underscore the extent to which manufacturing conditions have become more challenging, indicating that production could act as a drag on the eurozone economy in the fourth quarter. Manufacturers reported that demand is now falling in Germany, France and Italy, while only modest growth was recorded in Spain. The darker outlook is linked to trade wars and tariffs as well as intensifying political uncertainty and has led to increased risk aversion and a commensurate cutting back on expenditure, notably for investment. Producers of investment goods such as plant and machinery reported the steepest drop in demand in November, with reduced capital spending by companies compounded by ongoing disruption of business in the autos sector.”


Caixin China General Manufacturing PMI output remains stable in November. The headline seasonally-adjusted Purchasing Managers’ Index, a composite indicator designed to provide a single-figure snapshot of operating conditions in the manufacturing economy, was little changed from October’s reading of 50.1 at 50.2 in November. This signaled a further fractional improvement in the health of China’s manufacturing sector.

Dr. Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group:

“The Caixin China General Manufacturing PMI inched up to 50.2 in November from the previous month. The sub index for new orders continued to rise, pointing to improved demand, which may be due to a recent raft of government policies aiming to support the private sector. The gauge for new export orders dropped further into contraction territory in November, indicating the impact of the Sino-U.S. trade friction on exports.”

“The employment sub index likewise dipped further into negative territory. The output sub index dropped to the dividing line of 50 that separates expansion from contraction, marking its lowest level since June 2016, which implied production was facing a slowing trend. One key reason for the slowdown may be the obvious increase in stocks of finished goods.”

The Caixin China Composite PMI data (which covers both manufacturing and services) pointed to a stronger rise in total business activity across China in November. Notably, the Composite Output Index rose from a 28-month low of 50.5 in October to 51.9 in November to signal a modest rate of expansion.

Rising from 53.0 in October to 54.5 in November, the seasonally-adjusted Nikkei India Composite PMI Output Index pointed to the fastest expansion in private sector activity since October 2016. Growth was stronger in manufacturing than in services, though quicker increases were noted across both sectors. The seasonally-adjusted Nikkei India Services Business Activity Index rose from 52.2 in October to 53.7 in November, signaling a solid upturn in output that was the strongest since July.

Pollyanna De Lima, Principal Economist at IHS Markit:

“Growth in India’s dominant service sector increased to a four-month high in November, thanks to solid increases in new work at home, which in turn led to a continued rise in job numbers. The welcoming news complement similar upbeat results in the manufacturing industry, released earlier in the week, and so far suggest that the private sector economy will provide impetus to Q3 FY18 GDP results.”

“Keeping up with levels of new work and increased activity, additions to the workforce were maintained for the sixteenth month running. So far, 2018 proved to be the strongest year for employment growth for a decade.”


The headline Nikkei Japan Manufacturing Purchasing Managers Index, a composite single figure indicator of manufacturing performance, fell from 52.9 in October to 52.2 in November, therefore pointing to a slower rate of improvement in business conditions. The latest reading for the headline index was the lowest since August 2017. Joe Hayes, Economist at IHS Markit:

“The fall in Japan’s manufacturing PMI tells us that October’s bounce-back was indeed a transitory jump back to normality following weather-related disruptions in September. The underlying picture remains subdued, with momentum tilting towards a slowdown. New orders rose at just a slight pace as goods producers raised concerns about the demand environment. Subdued sales performances reflected fragile conditions both domestically and abroad. According to firms, weak demand from China and parts of Europe hampered export growth.”

“As such, expectations for future growth were reduced, with business confidence towards the year-ahead sliding for a sixth straight month to the lowest in two years.”

Weaker service activity growth in tandem with a slower rise in manufacturing production resulted in the Nikkei Composite Output Index edging slightly lower to 52.4 in November from 52.5 in October.

The slowdown in business activity growth was highlighted by a fall in the headline seasonally adjusted IHS Markit/CIPS UK Services PMI Business Activity Index to 50.4 in November. This was down from 52.2 in October and the lowest reading since July 2016.


Brexit has turned ugly. Another issue is the fact that the UK’s Brexit agreement looks very unlikely to pass Parliament, meaning the UK will be forced to either unilaterally revoke Article 50 and end the current process of exiting the EU, try and negotiate a better deal (unlikely to succeed), re-try the bill under the pressure of collapsing asset markets, or crash out in a hard Brexit

Monday, the EU’s top court released an advisory opinion indicating that Article 50 can be unilaterally revoked, giving the UK a potential emergency out if Parliament is unable to agree on the transition arrangement negotiated by Prime Minister May.

On Tuesday, British House of Commons voted 311 to 293 to hold May’s government in contempt. Theresa May’s government will now have to turn over the legal advice to Parliament. It will then be looked over to make sure that it doesn’t contain any confidential information before being released to the public. Critics of Brexit suspect that these documents must contain predictions that Brexit will not go as well as May’s government has been predicting since they were not released immediately.


Canadian Manufacturing PMI reached the highest level in three months. The index registered 54.9 in November, up from 53.9 in October. Christian Buhagiar, President and CEO at SCMA:

“Canadian manufacturers enjoyed an overall rebound in growth during November, with business conditions improving at the strongest pace for three months. Stronger rises in output and new orders were supported by the fastest upturn in employment numbers since the survey began in October 2010. The latest robust increase in staffing levels was widely linked to capacity pressures and a subsequent rise in investment spending across the manufacturing sector.”

“Survey respondents commented on a boost to sales from improving U.S. economic conditions. However, there were also signs that worldwide trade frictions continued to hold back client demand, with new export order growth still weaker than seen on average in the first half of the year. Canadian manufacturers signaled that business optimism remained close to the lowest seen over the past two years, which many linked to heightened global economic uncertainty.”

Earnings Observations

FactSet Research Weekly Update:

Earnings Scorecard: For Q3 2018, with 99% of the companies in the S&P 500 reporting actual results for the quarter, 77% of S&P 500 companies have reported a positive EPS surprise and 62% have reported a positive sales surprise.

For Q4 2018:

  • Estimated earnings growth rate for the S&P 500 is 13.4%. If 13.4% is the actual growth rate for the quarter, it will mark the fifth straight quarter of double-digit earnings growth for the index.

  • Valuation: The forward 12-month P/E ratio for the S&P 500 is 15.4. This P/E ratio is below the 5-year average (16.4) but above the 10-year average (14.6).

For 2019, the bottom up EPS estimate, which reflects an aggregation of the median EPS estimates for all the companies in the index, is $176.51. If $176.51 is the final number for the year, it will mark a record high EPS result. The question that investors want an answer to, what is the likelihood that $176.51 will be the final EPS number 2019?

Over the past 20 years (1998-2017), the average difference between the bottom up EPS estimate at the beginning of the year (December 31) and the final EPS number for that same year has been 8.3%. In other words, industry analysts on average have overestimated the final EPS number by 8.3% one year in advance. However, during that time period, there have been outliers like the 9/11 tragedy, and of course, the 2008/2009 financial crisis.

If one applies the average overestimation of 8.3% to the current 2019 EPS estimate, the final value for 2019 would be $161.81. If we do exclude those outliers, the average overestimation would be about 3.5%. S&P 500 Earnings would then be in the range of $170. EPS of $170 would reflect a record high EPS for the S&P 500. Simple math using a conservative multiple of 17 yields an S&P value of 2,890, suggesting stocks are fairly valued today.

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The Political Scene

No sooner than the U.S. delegation plane landed back here in the U.S., rumors, innuendos, tweets, etc. became the norm. People wanted details. Apparently they wanted to see how much every item on every grocery shelf in the country was going to increase by.

It has always been common sense that when leaders of their respective countries sit down to talk on ANY topic, it is at the HIGHEST level of discussion. The details are left for later, as is the situation now. Hence the 90-day halt on more trade tariffs until the crux of a deal is forged. The stock market didn’t seem to like that at all. At the moment, common sense is not part of the equation. Market participants threw a tantrum taking down all of the indices this week.

Believing that years of trade issues between China and the U.S. will be solved in a matter of weeks/months is simply not a reasonable approach. The entire trade tariff issue remains overblown. All of the media rhetoric is pure NOISE. Including the arrest of a Chinese national whose company may have been involved in bank fraud and possible violations of sanctions against Iran. Somehow that is being viewed as a negative to the ongoing trade negotiations. It is what it is, and nothing more. An incident that has come to fruition after a long investigation that more than likely started before there was a hint of trade tariffs being imposed.

All of this fits PERFECTLY with a backdrop where every piece of news is extrapolated to the worst possible outcome, and we wonder how and why emotion plays a big part of the trading action. I have NOT HEARD ONE viable news story come out of any news agency on this topic since last week. Instead it is “this means that”, “they said this“, “apparently this means something“, “we don’t have details, so it has to be bad news“, and on and on.

At times it is like listening to a room full of 5-year-old children, that can’t figure out when recess begins, and they start flailing their arms in frustration. The media is feeding into the fear factor with commentary that amounts to complete nonsense.

NOTHING has changed on the trade front since the end of the G20 meeting. That is unless one is buying into the pundits hammering innuendo, their personal agendas, and rampant speculation. Did anyone actually think we were going to get what the new tariffs will be on each and every item, the day after the high level meeting?

The current state of affairs on trading with China has been in effect for so long, it is NOT about to be figured out in days, weeks, or even months. Here is the bottom line, per the Office of the United States Trade Representative, tariffs will cost the average American family $127 per year.

Now that can be construed as an agenda as well. I suppose we are somewhere between that and the average American eating eat cat food to survive because of the tariffs being imposed. It’s time for a reality check. Investors eagerly await the arrival of the adults entering the room to apply some common sense to the situation.

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The Fed and Interest Rates

The yield curve has flattened, the yield curve has flattened!! The article in the link is a little dated (December 2017) and makes my point that it isn’t necessary to overreact just yet. However, they are words that start many conversations about the state of the financial markets these days.

Wait a minute, I thought the most common sense way to measure a true yield curve inversion was to measure the difference between the 2-year and 10-year yields. That difference now is 12 basis points. That is called a flat yield curve. A flat yield curve does NOT mean lower stock prices. There were many instances during the secular bull market in the 1990s where stocks rose with a flat curve backdrop.

However, today it has been deemed that we all MUST look at the difference between the 2- and the 5-year or the 3- and 5-year Treasury yields primarily because they have indeed inverted and easily makes the Bear case. Prescribing to the 3-year versus 5-year spread as a reason to be concerned is walking out on a ledge. If one wants to use that as their holy grail, be my guest. There have been 73 unique instances of inversion of those two data points in the past 64 years and only 9 recessions.

A yield curve inversion (short rates above long rates) has foreshadowed a recession with near flawless predictive abilities for the past 50 years. Historically, it’s taken about a year to go from current levels to an inverted curve, with the market rallying in the interim on every occasion.

It’s still early to use this one data point to start making portfolio changes. A wait-and-see attitude is what I believe to be the best course of action. First Trust Economics agrees when speaking to the angst over the shape of the yield curve:

“These concerns are overdone. It’s true that an inverted yield curve signals tight money, but inversions typically don’t happen until the Fed pulls enough reserves out of the system to push the federal funds rate above nominal GDP growth. Right now, that’s about 3.5%, which means the Fed is likely at least two years away. And, the banking system is still stuffed with over $2 trillion in excess bank reserves. Monetary policy, by definition, is not tight until those excess reserves are gone.”

Recent history suggests that the greatest risk of recession occurs if the Fed continues to tighten after the initial inversion of the yield curve, which happened prior to the last two recessions. The Fed’s rapid policy reversal in 1995 prevented the tightening cycle from evolving into a recession. What economists will now debate is how much tightening remains before the Fed inverts the yield curve. Please remember by definition the yield curve that is used to measure the possibility of recession has NOT inverted just yet.

Over a year has gone by and we have come full circle, right back to this topic. Every pundit wants to be the person that sniffs out the exact time to be out of stocks, the hero, the genius. Of course, they look at the yield curve and say that will be their signal. But staying invested has actually proven to be the more rewarding approach.

Historically, in the year before yield curve inverts, global stocks have always posted gains and those gains have almost always been in the double digits.

An inverted yield curve is not a sell signal. Recessions aren’t automatically around the corner. And it takes a while for them to arrive after the inversion, during which time stocks often rally.

Moreover, the spread between the federal funds rate and 2-year Treasury yields remains close to 50 basis points, not flat, but rather accommodative.

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Individual investor’s outlook on markets from the AAII survey actually saw a bump in bullish sentiment this week. Bullish sentiment rose for the second week in a row to 37.94% from last week’s 33.88%. This is off of one of the lowest readings of the year from only a few weeks ago.


Crude Oil

Crude oil’s decline over the last 40 trading days has been nothing short of extraordinary.

Source: Bespoke

In the span of just 40 trading days, WTI traded at a multi-year high and then proceeded to lose more than a third of its value in what can only be described as a relentless decline.

The EIA weekly inventory report showed the first decline in inventories in 10 weeks. U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 7.3 million barrels from the previous week. At 443.2 million barrels, U.S. crude oil inventories are about 6%, above the five-year average for this time of year. Total motor gasoline inventories increased by 1.7 million barrels last week and are about 4% above the five-year average for this time of year.

Crude oil dropped initially, then rebounded as OPEC met this past week and decided to cut production. WTI closed the week at $52.64, up $2.00. Traders and investors will continue to look at the $50 level as support.

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The Technical Picture

The week started off in rally mode, then ran into the resistance we spoke about last week, the 2,750-2,760 level. The rally off the lows (6% in 6 trading days) had left the index slightly overbought in the short run.

Chart courtesy of

Half of that rally was corrected in one day with a 90-point drop in the S&P on Tuesday, and most of what was left of that rally wiped out as the week went on. One positive, the sell-off stopped just above the late November lows.

The trading range for the S&P that has been with us since the beginning of the year remains in place, but the index is back to testing the lower end of that range. It feels ugly BUT nothing has changed for the short to intermediate view as far as support or resistance. S&P 2,815 is the level to watch on the upside. A decisive break and close above that level portends good things can follow for the Bulls. The lower support area that is a key remains at S&P 2,603.

The back and forth trading will continue. Investor sentiment is at lows, there is little to no direction in any sector as many are paralyzed by trade discussions, and the over-hyped incorrect talk of an inverted yield curve.

We wait and see, never jumping to conclusions, BUT if the lows that we just saw this past week hold, then I will be leaning to having more conviction on the BUY side. A break below support and we reassess. Stay tuned.

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Individual Stocks and Sectors

I look around and I hear that the semiconductor cycle is over and of course that is a precursor to a slowing economy, then recession. I do wonder then how do we explain the comments that we are hearing from some executives in the industry. For sure, there are pockets of weakness here, but there are also pockets of strength.

Consider the recent earning report this week from Broadcom (AVGO). A beat on both the top and bottom line, a 50% dividend increase, and a $6 billion share repurchase program. Forward yield on the stock is now 4.6%.

Hock Tan, President and CEO of Broadcom Inc.:

“Strong operating performance in the fiscal fourth quarter caps a year of solid results that continues to reinforce the sustainability of our business model. Revenues grew 18% to nearly $21 billion on the back of strong demand for our networking, enterprise storage, wireless and industrial products while operating margin continued to progressively expand to 50%.”

“Looking forward to fiscal year 2019, we expect another year of double digit revenue growth. Sustained demand within our semiconductor segment will be augmented by the newly acquired mainframe and enterprise software businesses to our infrastructure software segment. We also expect operating margin to hit another record in fiscal year 2019 driven by improved operating leverage.”

Tom Krause, CFO of Broadcom Inc.:

“Free cash flow from operations grew 50% in fiscal year 2018 to $8.2 billion. As a result, we are raising our target dividend by 51 percent to $2.65 per share per quarter for fiscal year 2019.”

“Looking ahead for the year, we expect sustained revenue growth and improving operating leverage to accelerate cash generation from operations. Our capital allocation strategy remains unchanged for fiscal year 2019. We plan to return 50% of our prior fiscal year free cash flows to stockholders in the form of dividends and use the balance of our free cash flows to buy back stock and support additional acquisitions, while remaining focused on maintaining our investment grade credit rating.”

Hardly an outlook that presents an industry in decline. Please allow me to add. Intel (INTC) the 800-pound gorilla in the room has beat earnings estimates and raised its forward guidance for THREE straight quarters.

A weakening economy, the semiconductor cycle is dead? I scratch my head. Final Thoughts.jpg

How quickly markets can change these days. Last week, I wrote about a positive tone that started to emerge; this week it is anything but a positive tone in the markets. The rally off the lows has for the most part been taken back. Volatility in times of uncertainty. Now it all depends on how much uncertainty is real and how much is being conjured up. The investors that arrive at the correct answer to that question will wind up reaping rewards in the near term.

With the S&P now 10% from record highs, many will argue that it is time to pull out, and not be an owner of equities. I’m being told there are issues out there that I may be ignoring. Pundits are still calling to ramp up the downside protection. For sure there are “some issues” for an investor to monitor, and then there is the bushel basket of concerns that are simply NOISE. Of course, investors can extrapolate these issues and the technical picture to become a major concern. If an investor decides to base an investment decision based on a “feeling,” they may be in for a rude awakening.

One situation that is very real and has been discussed here for months now is the weakening of global economic data. Before we jump to a conclusion, the period of 2015/2016 was mired in troublesome data. We survived that time period without an “official” bear market. The outcome this time around is still up in the air. One thing we are well aware of, we will need to see the global picture improve if we can expect higher stock prices here in the U.S.

With all of the negativity around, investors need to stay grounded. There are positives and they should also be acknowledged.

  • Inflation remains in check.

  • The Fed is not acting in a hostile manner.

  • Everyone is looking over their shoulder. There is NO euphoria.

  • Earnings growth will slow BUT earnings are still growing.

  • Consumers represent 70% of the economy and they are in good financial shape.

Unless this time is different, these are not signs that appear at the END of a BULL market.

At the end of any bull market, the primary trend will flatten then roll over. The evidence for that is quite obvious in the 2000 and 2008 time periods. No such evidence exists today. A successful investor will monitor, then react, not react then monitor.

A moment to reflect the passing of our 41st president, George H.W. Bush.

I would also like to take a moment and remind all of the readers of an important issue. In these types of forums, readers bring a host of situations and variables to the table when visiting these articles. Therefore, it is impossible to pinpoint what may be right for each situation. Please keep that in mind when forming your investment strategy.

Thank you #2.jpg

to all of the readers that contribute to this forum to make these articles a better experience for everyone.

Best of Luck to All!


My portfolios are ALL positioned to take advantage of the bull market with NO hedges in place.

This article contains my views of the equity market, it reflects the strategy and positioning that is comfortable for me. Of course, it is not suited for everyone, as there are far too many variables. Hopefully it sparks ideas, adds some common sense to the intricate investing process, and makes investors feel more calm, putting them in control.

The opinions rendered here, are just that – opinions – and along with positions can change at any time.

As always I encourage readers to use common sense when it comes to managing any ideas that I decide to share with the community. Nowhere is it implied that any stock should be bought and put away until you die. Periodic reviews are mandatory to adjust to changes in the macro backdrop that will take place over time.


I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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U.S. accuses Huawei CFO of Iran sanctions cover-up

VANCOUVER/LONDON (Reuters) – Huawei Technologies Co Ltd’s chief financial officer faces U.S. accusations that she covered up her company’s links to a firm that tried to sell equipment to Iran despite sanctions, a Canadian prosecutor said on Friday, arguing against giving her bail while she awaits extradition.

The case against Meng Wanzhou, who is also the daughter of the founder of Huawei, stems from a 2013 Reuters report here about the company’s close ties to Hong Kong-based Skycom Tech Co Ltd, which attempted to sell U.S. equipment to Iran despite U.S. and European Union bans, the prosecutor told a Vancouver court.

U.S. prosecutors argue that Meng was not truthful to banks who asked her about links between the two firms, the court heard on Friday. If extradited to the United States, Meng would face charges of conspiracy to defraud multiple financial institutions, the court heard, with a maximum sentence of 30 years for each charge.

Meng, 46, was arrested in Canada on Dec. 1 at the request of the United States. The arrest was on the same day that U.S. President Donald Trump met in Argentina with China’s Xi Jinping to look for ways to resolve an escalating trade war between the world’s two largest economies.

The news of her arrest has roiled stock markets and drawn condemnation from Chinese authorities, although Trump and his top economic advisers have downplayed its importance to trade talks after the two leaders agreed to a truce.

A spokesman for Huawei had no immediate comment on the case against Meng on Friday. The company has said it complies with all applicable export control and sanctions laws and other regulations.

Friday’s court hearing is intended to decide on whether Meng can post bail or if she is a flight risk and should be kept in detention.

The prosecutor opposed bail, arguing that Meng was a high flight risk with few ties to Vancouver and that her family’s wealth would mean than even a multi-million-dollar surety would not weigh heavily should she breach conditions.

Meng’s lawyer, David Martin, said her prominence made it unlikely she would breach any court orders.

“You can trust her,” he said. Fleeing “would humiliate and embarrass her father, whom she loves,” he argued.

Huawei CFO Meng Wanzhou, who was arrested on an extradition warrant, appears at her B.C. Supreme Court bail hearing in a drawing in Vancouver, British Columbia, Canada December 7, 2018. REUTERS/Jane Wolsak

The United States has 60 days to make a formal extradition request, which a Canadian judge will weigh to determine whether the case against Meng is strong enough. Then it is up to Canada’s justice minister to decide whether to extradite her.

Chinese Foreign ministry spokesman Geng Shuang said on Friday that neither Canada nor the United States had provided China any evidence that Meng had broken any law in those two countries, and reiterated Beijing’s demand that she be released.

Chinese state media accused the United States of trying to “stifle” Huawei and curb its global expansion.


The U.S. case against Meng involves Skycom, which had an office in Tehran and which Huawei has described as one of its “major local partners” in Iran.

In January 2013, Reuters reported that Skycom, which tried to sell embargoed Hewlett-Packard computer equipment to Iran’s largest mobile-phone operator, had much closer ties to Huawei and Meng than previously known.

Slideshow (9 Images)

In 2007, a management company controlled by Huawei’s parent company held all of Skycom’s shares. At the time, Meng served as the management firm’s company secretary. Meng also served on Skycom’s board between February 2008 and April 2009, according to Skycom records filed with Hong Kong’s Companies Registry.

Huawei used Skycom’s Tehran office to provide mobile network equipment to several major telecommunications companies in Iran, people familiar with the company’s operations have said. Two of the sources said that technically Skycom was controlled by Iranians to comply with local law but that it effectively was run by Huawei.

Huawei and Skycom were “the same,” a former Huawei employee who worked in Iran said on Friday.

A Huawei spokesman told Reuters in 2013: “Huawei has established a trade compliance system which is in line with industry best practices and our business in Iran is in full compliance with all applicable laws and regulations including those of the U.N. We also require our partners, such as Skycom, to make the same commitments.”


The United States has been looking since at least 2016 into whether Huawei violated U.S. sanctions against Iran, Reuters reported in April.

The case against Meng revolves around her response to banks, who asked her about Huawei’s links to Skycom in the wake of the 2013 Reuters report. U.S. prosecutors argue that Meng fraudulently said there was no link, the court heard on Friday.

U.S. investigators believe the misrepresentations induced the banks to provide services to Huawei despite the fact they were operating in sanctioned countries, Canadian court documents released on Friday showed.

The hearing did not name any banks, but sources told Reuters this week that the probe centered on whether Huawei had used HSBC Holdings (HSBA.L) to conduct illegal transactions. HSBC is not under investigation.

U.S. intelligence agencies have also alleged that Huawei is linked to China’s government and its equipment could contain “backdoors” for use by government spies. No evidence has been produced publicly and the firm has repeatedly denied the claims.

The probe of Huawei is similar to one that threatened the survival of China’s ZTE Corp (0763.HK) (000063.SZ), which pleaded guilty in 2017 to violating U.S. laws that restrict the sale of American-made technology to Iran. ZTE paid a $892 million penalty.

Reporting by Julie Gordon in Vancouver and Steve Stecklow in London; Additional reporting by Anna Mehler Paperny in Toronto, David Ljunggren in Ottawa, Karen Freifeld in New York, Ben Blanchard and Yilei Sun in Beijing, and Sijia Jiang in Hong Kong; Writing by Denny Thomas and Rosalba O’Brien; Editing by Muralikumar Anantharaman, Susan Thomas and Sonya Hepinstall

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3 Ways to Address AI's More Frightening Implications

AI has vast potential. The technology is being touted as a solution to some of humanity’s most vexing problems, and rightly so. In China, where there aren’t enough radiologists to review the 1.4 billion annual CT scans for lung cancer, algorithms can accurately and efficiently diagnose patients.

Around the world, the next generation of automobiles will be driven quite literally by AI, and removing angry, distracted, or drunk humans from behind the wheel will likely make the road a far safer place. Still, for every positive AI implementation, there’s a downside just waiting to be uncovered.

One of the principal concerns about AI stems from its potential to spread misinformation. Social media platforms such as Facebook and Twitter are already having to deal with this practice, and they’ve taken to shutting down bots designed to spread hate speech and inflame public opinion.

According to Greg McBeth, head of revenue at, what’s currently an annoyance will only continue to escalate: “I believe there’s potential for an AI-driven misinformation crisis in our lifetime. AI can already convincingly manipulate images and video,” McBeth noted, citing as an example instances in which some actresses’ faces were superimposed onto inappropriate photos. Unfortunately, fake news is just the beginning.

In addition to faking images and videos, programmers with malicious intentions will use AI to commit other crimes, from the forging of financial documents that impact credit to the fabrication of phony evidence to produce wrongful convictions. In order to combat these efforts, we need to take the following steps.

1. Start the conversation now.

Advancements in AI are accelerating, and the use of the technology for nefarious purposes will as well. While news coverage seems to emphasize the revolutionary possibilities of AI, we must not shy away from the potential consequences. Earlier this year, Facebook’s Mark Zuckerberg warned that it could be a decade before AI is able to recognize the nuances that allow it to red flag hate speech or false information.

AI’s more nefarious uses could greatly outpace AI-based countermeasures. As a business leader, you can help guide this conversation. For instance, you could set up a roundtable discussion at an industry conference to share information and increase awareness of how AI may be used to spread misinformation — and where the tech comes up short in detecting it.

2. Create safeguards for defense.

Science fiction author Isaac Asimov thought up his three laws of robotics with android servants in mind. We still don’t have robots doing our household chores (not counting vacuums), but the laws have withstood the test of time.

To prevent AI from causing harm, the business community needs similar, universally accepted safeguards that apply to AI development. For instance, if you intend to use robots, you may be tempted to simplify the interface required to control them in order to make them more user-friendly for your employees. But be careful to balance those efforts with attention to cybersecurity. It’s imperative to address system vulnerabilities that could make it easier for hackers to gain access to your robot and network.

3. Arm citizens with AI education.

In order to mitigate the damages of misinformation, the business community needs to educate the public about what AI is capable of, both good and bad. Include educational resources on this subject on your blog, website, email newsletter, and social media accounts. Inform your customers about your use of AI and what safeguards or policies you have in place to prevent cyberattacks.

When people are aware of ways AI can be used maliciously, they’re more likely to recognize the red flags. For instance, if someone knows how to recognize signs that a Twitter account is potentially a political bot, they may think twice before retweeting something it shared.

On the other hand, when people are ignorant of AI’s misuse, they won’t hesitate to propagate misinformation. This needs to be a society-wide effort, but you can start by working with your team and your customers so they know what AI can do.

AI is responsible for exciting developments, but it’s a powerful tool that can be used to do harm as well. Ultimately, it’s impossible to prevent bad actors from developing AI for their own ill-intentioned purposes. But by taking these steps, business leaders can help minimize the impact of AI’s downsides.

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This Is the Most Riotously Insane Thing About the Massive Marriott Data Breach You're Likely to Hear

Not to worry, Yahoo, you still had the largest data breach in corporate history, at 3 billion records. But at 500 million, Marriott is a strong second, and maybe should be first.

That’s because of the nature of the data that went out the door for about 327 million of the people who had stayed at a Starwood property on or before September 10, 2018. (And starting in 2014, because that’s how long it’s been since someone first broke into the system.)

The data included some combination of name, mailing address, phone number, email address, Starwood Preferred Guest (“SPG”) account information, birth date, gender, arrival and departure information, reservation date, communication preferences, and passport number.

Passport number? Yup. They kept them on file. And an undisclosed number of encrypted payment card numbers, expirations dates, and maybe–Marriott’s really not quite sure–enough information to let someone crack the encryption.

Yes, this is really, really bad.

Oh, and TechCrunch also noted the the claim that Russian cybercriminals got into the Starwood servers. It can’t keep getting worse, right?

You know the answer.

Marriott’s promised email notifications to affected customers will come from a fake-ish looking email address, as TechCrunch noted, and one that could be easily spoofed by people who want to cause even more damage. In other words, beware of phishing hacks that stand on the back of Marriott’s efforts to address the terrible position it’s put so many customers into.

And now we come around to the latest insanity. As part of its response, Marriott set up a website that ultimately points you to a third party service that “monitors internet sites where personal information is shared and generates an alert to the consumer if evidence of the consumer’s personal information is found.”

The third party running the service, corporate investigations and risk management firm Kroll, of course is going to need information from you to see if it pops up on the dark web. Here is what they might want, directly from their website:

  • name, address, phone number, and e-mail address
  • date of birth, driver’s license number, social security number, passport number, and other similar information
  • copies of government-issued photo identification, Social Security card and/or utility bill(s), where applicable
  • credit card number and other financial account data, including your consumer credit file(s), as applicable
  • your responses to security questions; the information you provide in customer service correspondence; and general feedback

You’re going to have to cough up enough information to see if they can match it to anything on the dark web. You’ll have to trust that everything will be fine. Which is what you did with Marriott in the first place.

Fat lot of good that did almost half the country.

How does this keep happening? As I explained in a piece over at Vice Motherboard, it all comes down to economics. The ultimate penalties big companies pay are so infrequent and small in comparison to their revenues that it becomes something just as easy to ignore. The millions of dollars you may hear about as the cost of a data breach is significantly smaller than a rounding error in accounting to them.

Not that I’m suggesting Marriott is ignoring this. Just a comment on the general treatment of customer data security by large corporations.

The only hope is that government officials take enough heat from voters that they put significant fiscal punishment into place. I’d settle, at least in this case, for Marriott to pay the cost for all the people who might now need to obtain a new passport. That at least would be a start.

But there’s the other factor: consolidation. Marriott is the largest hotel operator in the world. If you’re traveling, there’s a good chance you’ll land in one of its properties. Unless, of course, you remember all this nonsense and intentionally stay elsewhere.

Even if you don’t get more points, you might at least keep your data secure.

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Qualcomm says China comment will not revive NXP deal

(Reuters) – U.S. chipmaker Qualcomm Inc (QCOM.O) said on Monday it was not looking to revive its abandoned $44 billion acquisition of Dutch peer NXP Semiconductors NV (NXPI.O), a day after the White House said China would reconsider clearing a deal if it was attempted again.

Qualcomm, the world’s biggest smartphone-chip maker, walked away from its agreement to buy NXP in July, after failing to secure Chinese regulatory approval. The planned deal was first agreed between the two companies in October 2016.

Qualcomm, headquartered in San Diego, California, and NXP, based in Eindhoven, the Netherlands, needed China’s blessing for their deal because of their presence in that country.

After high-stakes talks on Saturday between U.S. President Donald Trump and Chinese President Xi Jinping in Argentina, the White House said in a statement that China was “open to approving the previously unapproved” deal for Qualcomm to acquire NXP “should it again be presented”.

But Qualcomm said there was no prospect for the acquisition to be revived.

“While we were grateful to learn of President Trump and President Xi’s comments about Qualcomm’s previously proposed acquisition of NXP, the deadline for that transaction has expired, which terminated the contemplated deal,” a Qualcomm representative said via email.

“Qualcomm considers the matter closed.”

NXP declined to comment.

On Monday, White House economic adviser Larry Kudlow told reporters that President Trump put the issue of the acquisition on the table in the talks with the Chinese president.

Kudlow added that the Chinese president’s openness to the deal was a sign of further cooperation on multiple issues, including corporate mergers. Xi’s reported comment could embolden some potential acquirers in the semiconductor space to explore transactions, corporate dealmakers said.

“Although that acquisition cannot be resuscitated, Xi’s comment reveals in plain sight that Chinese antitrust policy is inherently politicized,” said Scott Kennedy, a China expert at the Center for Strategic and International Studies in a blog post.

FILE PHOTO: A sign on the Qualcomm campus is seen, as chip maker Broadcom Ltd announced an unsolicited bid to buy peer Qualcomm Inc for $103 billion, in San Diego, California, U.S. November 6, 2017. REUTERS/Mike Blake

Qualcomm shares closed up 1.5 percent at $59.14 in New York on Monday, while NXP shares ended up 2.75 percent at $85.67.

Qualcomm and NXP did not lobby for the Trump administration to bring up the abandoned deal in its meeting with Xi and other Chinese officials on the sidelines of the G20 summit in Buenos Aires on Saturday, which was dominated by negotiations over trade tariffs, according to sources close to the companies.

The two companies were surprised to see that the terminated deal resurfaced as an issue, the sources added, requesting anonymity to discuss confidential deliberations. Qualcomm was given just an hour’s notice by the Trump administration about Xi’s comment on the NXP deal, and its inclusion in the White House statement, according to two of the sources.

The Trump administration had unsuccessfully lobbied the Chinese government earlier this year to give its blessing to the deal.

China’s foreign ministry declined to comment on Qualcomm during a regular media briefing on Monday.

Qualcomm had sought to purchase NXP because of its market position as a dominant supplier to the automotive market, as car makers add more chips to vehicles each year. Qualcomm is now focused on developing its own chips for the automotive market, according to one of the sources.

Qualcomm had to pay NXP a $2 billion fee to terminate the deal. To appease its shareholders, Qualcomm has also embarked on a $30 billion stock repurchase plan to return to them most of the money that would have been used for the NXP deal. It has spent more than $20 billion in share buybacks in the last 12 months. NXP has also announced its own $5 billion share buyback program.


Several deals by semiconductor companies were put on ice after the Qualcomm/NXP deal fell through, simply because they had a footprint in China and required regulatory approval there. Now, chip companies may be more optimistic about their regulatory chances in China.

One example could be Xilinx Inc (XLNX.O), a U.S. provider of chips used in communications network gear and consumer electronics that has a big presence in China. Xilinx is currently vying to acquire Israeli chip maker Mellanox Technologies Ltd (MLNX.O) after it decided to run an auction to sell itself, according to people familiar with the matter. A successful acquisition of Mellanox could prove an important test of China’s appetite to approve such deals. A representative for Xilinx declined to comment. Mellanox did not immediately respond to requests for comment.

A more near-term test being watched by dealmakers is KLA-Tencor Corp (KLAC.O) pending acquisition of fellow semiconductor equipment maker, Israel’s Orbotech Ltd (ORBK.O). The $3.4 billion deal, announced in March, is still awaiting Chinese regulatory approval. KLA-Tencor’s CEO said on the company’s last earnings call that he expects the deal to close by year end.

Thus far, other high-profile mergers and acquisitions involving U.S. companies in other sectors have received Chinese approval. Last month, China approved United Technologies Corp’s (UTX.N) $30 billion purchase of aircraft parts maker Rockwell Collins Inc and Walt Disney Co’s (DIS.N) $71.3 billion deal to buy most of Twenty-First Century Fox’s (FOXA.O) entertainment assets.

Acquisitions of U.S. companies by Chinese companies, on the other hand, have been few and far between in the last year, after the Committee on Foreign Investment in the United States (CFIUS), a government panel that scrutinizes deals for potential national security risks, shot down more of these deals, such as Ant Financial’s plan to acquire U.S. money transfer company MoneyGram International Inc (MGI.O). U.S. lawmakers also passed reforms earlier this year that increased CFIUS’ scrutiny of deals.

Reporting by Liana B. Baker in New York and Kanishka Singh in Bengaluru; Aditional reporting by Greg Roumeliotis in New York, Michael Martina in Beijing and Jeff Mason in Washington, D.C.; editing by Diane Craft

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China transport ministry fines Didi executives in crackdown on illegal practices

BEIJING (Reuters) – Chinese authorities announced a broad crackdown on China’s ride-hailing industry on Wednesday, targeting market-leader Didi Chuxing with fines following the deaths of two passengers in separate incidents earlier this year.

FILE PHOTO: The company logo of the Didi ride hailing app is seen on a car door at the IEEV New Energy Vehicles Exhibition in Beijing, China October 18, 2018. REUTERS/Thomas Peter

China’s Ministry of Transport said Didi had violated multiple safety rules, presenting a “major safety hazard”, including failing to properly flag high-risk drivers and improperly handling deposits.

“The driver’s qualifications and background checks are not in place. The company’s management of people and vehicles is out of control,” said the ministry in a notice posted on Wednesday morning.

It said it will “severely crack down” on ride-hailing platforms hiring illegal drivers, and will fine Didi’s executives and legal representatives an undisclosed amount of money.

The strong rebuke comes after two women were assaulted and killed earlier this year in separate incidents involving drivers using Didi’s carpool service, Didi Hitch, drawing widespread criticism of the company on social media.

In one of the incidents, the driver was able to circumvent safety controls on Didi’s app to use a relative’s account, despite being previously flagged for harassment.

The carpool service, which was advertised by Didi as a way to meet people, has been suspended, and authorities said on Wednesday the suspension will continue indefinitely.

“As a young company, Didi still needs to work on many shortcomings and imperfections that have brought the public great concern,” said Didi Chief Executive Cheng Wei in a statement on Wednesday.

“Even if the industry might not be able to completely root out criminal behavior or accidents, we will try our upmost best to protect riders and drivers.”

The rebuke also comes as Didi struggles to counter increased waiting times in large cities, where residence restrictions of drivers have slashed the number of available rides.

Authorities also said they will take steps to reduce anti-competitive behavior in the industry.

Since acquiring Uber’s China business in 2016, Didi – backed by Japan’s SoftBank Group Corp – controls close to 90 percent of the country’s ride-hailing market, though new rivals have begun entering the fray, including a service backed by Meituan Dianping.

Reporting by Cate Cadell; Editing by Christopher Cushing

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Chinese transport authorities slam Didi for skirting safety measures

BEIJING (Reuters) – Chinese authorities announced a broad crackdown on China’s ride-hailing industry on Wednesday, targeting market-leader Didi Chuxing with fines following the deaths of two passengers in separate incidents earlier this year.

FILE PHOTO: The company logo of the Didi ride hailing app is seen on a car door at the IEEV New Energy Vehicles Exhibition in Beijing, China October 18, 2018. REUTERS/Thomas Peter

China’s Ministry of Transport said Didi had violated multiple safety rules, presenting a “major safety hazard”, including failing to properly flag high-risk drivers and improperly handling deposits.

“The driver’s qualifications and background checks are not in place. The company’s management of people and vehicles is out of control,” said the ministry in a notice posted on Wednesday morning.

It said it will “severely crack down” on ride-hailing platforms hiring illegal drivers, and will fine Didi’s executives and legal representatives an undisclosed amount of money.

The strong rebuke comes after two women were assaulted and killed earlier this year in separate incidents involving drivers using Didi’s carpool service, Didi Hitch, drawing widespread criticism of the company on social media.

In one of the incidents, the driver was able to circumvent safety controls on Didi’s app to use a relative’s account, despite being previously flagged for harassment.

The carpool service, which was advertised by Didi as a way to meet people, has been suspended, and authorities said on Wednesday the suspension will continue indefinitely.

“As a young company, Didi still needs to work on many shortcomings and imperfections that have brought the public great concern,” said Didi Chief Executive Cheng Wei in a statement on Wednesday.

“Even if the industry might not be able to completely root out criminal behavior or accidents, we will try our upmost best to protect riders and drivers.”

The rebuke also comes as Didi struggles to counter increased waiting times in large cities, where residence restrictions of drivers have slashed the number of available rides.

Authorities also said they will take steps to reduce anti-competitive behavior in the industry.

Since acquiring Uber’s China business in 2016, Didi – backed by Japan’s SoftBank Group Corp – controls close to 90 percent of the country’s ride-hailing market, though new rivals have begun entering the fray, including a service backed by Meituan Dianping.

Reporting by Cate Cadell; Editing by Christopher Cushing

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Fearful of bias, Google blocks gender-based pronouns from new AI tool

SAN FRANCISCO (Reuters) – Alphabet Inc’s (GOOGL.O) Google in May introduced a slick feature for Gmail that automatically completes sentences for users as they type. Tap out “I love” and Gmail might propose “you” or “it.”

FILE PHOTO: The Google name is displayed outside the company’s office in London, Britain, November 1, 2018. REUTERS/Toby Melville/File Photo

But users are out of luck if the object of their affection is “him” or “her.”

Google’s technology will not suggest gender-based pronouns because the risk is too high that its “Smart Compose” technology might predict someone’s sex or gender identity incorrectly and offend users, product leaders revealed to Reuters in interviews.

Gmail product manager Paul Lambert said a company research scientist discovered the problem in January when he typed “I am meeting an investor next week,” and Smart Compose suggested a possible follow-up question: “Do you want to meet him?” instead of “her.”

Consumers have become accustomed to embarrassing gaffes from autocorrect on smartphones. But Google refused to take chances at a time when gender issues are reshaping politics and society, and critics are scrutinizing potential biases in artificial intelligence like never before.

“Not all ‘screw ups’ are equal,” Lambert said. Gender is a “a big, big thing” to get wrong.

Getting Smart Compose right could be good for business. Demonstrating that Google understands the nuances of AI better than competitors is part of the company’s strategy to build affinity for its brand and attract customers to its AI-powered cloud computing tools, advertising services and hardware.

Gmail has 1.5 billion users, and Lambert said Smart Compose assists on 11 percent of messages worldwide sent from, where the feature first launched.

Smart Compose is an example of what AI developers call natural language generation (NLG), in which computers learn to write sentences by studying patterns and relationships between words in literature, emails and web pages.

A system shown billions of human sentences becomes adept at completing common phrases but is limited by generalities. Men have long dominated fields such as finance and science, for example, so the technology would conclude from the data that an investor or engineer is “he” or “him.” The issue trips up nearly every major tech company.

Lambert said the Smart Compose team of about 15 engineers and designers tried several workarounds, but none proved bias-free or worthwhile. They decided the best solution was the strictest one: Limit coverage. The gendered pronoun ban affects fewer than 1 percent of cases where Smart Compose would propose something, Lambert said.

“The only reliable technique we have is to be conservative,” said Prabhakar Raghavan, who oversaw engineering of Gmail and other services until a recent promotion.


Google’s decision to play it safe on gender follows some high-profile embarrassments for the company’s predictive technologies.

The company apologized in 2015 when the image recognition feature of its photo service labeled a black couple as gorillas. In 2016, Google altered its search engine’s autocomplete function after it suggested the anti-Semitic query “are jews evil” when users sought information about Jews.

Google has banned expletives and racial slurs from its predictive technologies, as well as mentions of its business rivals or tragic events.

The company’s new policy banning gendered pronouns also affected the list of possible responses in Google’s Smart Reply. That service allow users to respond instantly to text messages and emails with short phrases such as “sounds good.”

Google uses tests developed by its AI ethics team to uncover new biases. A spam and abuse team pokes at systems, trying to find “juicy” gaffes by thinking as hackers or journalists might, Lambert said.

Workers outside the United States look for local cultural issues. Smart Compose will soon work in four other languages: Spanish, Portuguese, Italian and French.

“You need a lot of human oversight,” said engineering leader Raghavan, because “in each language, the net of inappropriateness has to cover something different.”


Google is not the only tech company wrestling with the gender-based pronoun problem.

Agolo, a New York startup that has received investment from Thomson Reuters, uses AI to summarize business documents.

Its technology cannot reliably determine in some documents which pronoun goes with which name. So the summary pulls several sentences to give users more context, said Mohamed AlTantawy, Agolo’s chief technology officer.

He said longer copy is better than missing details. “The smallest mistakes will make people lose confidence,” AlTantawy said. “People want 100 percent correct.”

Yet, imperfections remain. Predictive keyboard tools developed by Google and Apple Inc (AAPL.O) propose the gendered “policeman” to complete “police” and “salesman” for “sales.”

Type the neutral Turkish phrase “one is a soldier” into Google Translate and it spits out “he’s a soldier” in English. So do translation tools from Alibaba (BABA.N) and Microsoft Corp (MSFT.O). Inc (AMZN.O) opts for “she” for the same phrase on its translation service for cloud computing customers.

AI experts have called on the companies to display a disclaimer and multiple possible translations.

Microsoft’s LinkedIn said it avoids gendered pronouns in its year-old predictive messaging tool, Smart Replies, to ward off potential blunders.

Alibaba and Amazon did not respond to requests to comment.

Warnings and limitations like those in Smart Compose remain the most-used countermeasures in complex systems, said John Hegele, integration engineer at Durham, North Carolina-based Automated Insights Inc, which generates news articles from statistics.

“The end goal is a fully machine-generated system where it magically knows what to write,” Hegele said. “There’s been a ton of advances made but we’re not there yet.”

Reporting by Paresh Dave; Editing by Greg Mitchell and Marla Dickerson

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Elon Musk Says: If You Want to Be Happy, Never Do This 1 Surprising Thing

Inc. This Morning delivers a daily email digest of the news curated for anyone interested in entrepreneurship. Want this email in your inbox every day? Sign up here.

Elon Musk. The name alone inspires passion.

He’s either a generational genius or a misguided maniac. But there’s one thing just about everyone can agree on: he’s a workaholic. Maybe a borderline dangerous one.

It turns out even Musk himself agrees with that characterization. In an interview with Axios on HBO that aired Sunday night, Musk talks about his greatest fears (the “existential threat” of artificial intelligence), and why 2018 has been his hardest year.

It’s not the Securities and Exchange Commission settlement or his Twitter fight over the Thai cave rescue. Instead, despite his sanguine demeanor over Tesla this year, he now now admits that the company came within “single digit weeks” of death this year, during the ramp up to production of the Model 3.

And during that time, he says, he put in insane hours seven days a week, sleeping in the factory, because “if I didn’t do it, then [there was a] good chance Tesla would die.” 

But he doesn’t recommend the experience.

“No one should put this many hours into your work,” Musk said in perhaps the most poignant part of a short but intense interview. “This is not good. People should not work this hard … It hurts my brain and my heart. … There were times when I was working literally 120 hours. This is not recommended for anyone.”

Of course, then he tweeted just 24 hours later: “There are way easier places to work, but nobody ever changed the world on 40 hours a week.”

Here’s what else I’m reading today:

As long as we’re talking about electric car companies…

An electric car startup with $500 million unveiled the first of two new vehicles Monday: a pickup truck that it says can get 400 miles on a single charge. If you haven’t heard of Rivian, of San Jose, California, that makes sense: it’s been in stealth mode for nine years. Today the company says it plans to unveil a second car: an SUV that will go into production in 2020.
Kevin J. Ryan, Inc.

GM slashes jobs

The iconic American car company said Monday it’s going to cut 15,000 jobs, and potentially shut down five North American factories. Company shares jumped on the news, even as President Trump threatened that “they better” replace closed plants in Ohio, a key 2020 election battleground, with other factories in the state.

The Irish investigation of LinkedIn

An Irish government agency says it caught LinkedIn using 18 million email addresses that it wasn’t supposed to have access to, in order to target people with ads on Facebook. Lucky for LinkedIn: the offense allegedly took place before new GDPR rules that could have resulted in a hefty fine.
Ingrid Lunden, TechCrunch

And the British investigation of Facebook

British MPs have tried without success to get Mark Zuckerberg to testify before Parliament, and so now they’ve played a high card. They seized internal Facebook documents allegedly contain “significant revelations” about how Facebook made its decisions about privacy and data controls before the Cambridge Analytica scandal. They way they got the documents is right out of a novel — it involved detaining the head of a small software firm, who had obtained the Facebook documents in the course of a lawsuit against the social media giant. Facebook’s immediate problem: trying to stop them from being released publicly.
Carole Cadwalladr, The Guardian

Black Friday was good. Almost too good.

Online purchases were through the roof on Black Friday even though store traffic was down a bit, but the success caught retailers unprepared. Scores of high demand products, from the Instant Pot to the Nintendo Switch sold out quickly. And 3.26 percent of online product pages displayed out-of-stock messages, which likely cost companies $120 million in sales.
Guadalupe Gonzalez, Inc. and Kate Taylor, Business Insider

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Exclusive: Russia plans stiffer fines for tech firms that break rules – sources

MOSCOW (Reuters) – Russia plans to impose stiffer fines on technology firms that fail to comply with Russian laws, sources familiar with the plans said, raising the stakes in the Kremlin’s fight with global tech giants such as Facebook (FB.O) and Google.

FILE PHOTO: People release paper planes, symbol of the Telegram messenger, during a rally in protest against court decision to block the messenger because it violated Russian regulations, in Moscow, Russia, April 30, 2018. REUTERS/Tatyana Makeyeva

Over the past five years, Russia has introduced tougher internet laws that require search engines to delete some search results, messaging services to share encryption keys with security services and social networks to store Russian users’ personal data on servers within the country.

The plans for harsher fines are contained in a consultation document prepared by the administration of President Vladimir Putin and sent to industry players for feedback, according to three sources familiar with the draft document.

At the moment, the only tools Russia has to enforce its data rules are fines that typically only come to a few thousand dollars or blocking the offending online services, which is an option fraught with technical difficulties.

The proposal is to amend the legislation so a company not complying with the rules is subject to a fine equal to 1 percent of its annual revenue in Russia, according to the sources and a copy of the document seen by Reuters.

The Kremlin did not respond to a request for comment.

A representative of state telecoms regulator Roscomnadzor, Vadim Ampelonsky, said he could not comment because his agency was not involved in drafting laws.

Russian regulator Roscomnadzor has repeatedly accused Facebook and Google of failing to comply with Russian laws. It blocked access to LinkedIn in 2016 and tried to do the same to the Telegram encrypted messenger service in April.

A Google representative in Russia declined to comment on the accusations or the proposal for new fines. Neither Facebook nor Telegram CEO Pavel Durov responded to requests for comment.

One of the sources who told Reuters about the proposal works for a Russian technology firm, one is at a foreign tech company and the third works for an industry lobby group.

They spoke on condition of anonymity because they are not authorized to speak to the media.

Slideshow (2 Images)


Just like lawmakers and officials in the United States and the European Union, Russia is wrestling with the challenge of how to limit the power of tech companies that have accumulated vast wealth and enormous vaults of data.

The proposal to levy companies 1 percent of annual revenue could lead to substantial fines.

Google’s Russian subsidiary, for example, had revenue of 45.2 billion roubles ($687 million) in 2017, according to the SPARK database which aggregates data from business registries.

“For a foreign company, that’s already a significant amount,” the source at the foreign tech firm said, though they added that it was unclear how the fine would be collected given some companies have no legal entity in Russia.

Under the proposed amendments, a fine could also be levied multiple times on the same company for every time it is found to have committed a violation.

By comparison, under current legislation the maximum fine Google in Russia can face in an ongoing case brought against it by Roscomnadzor is 700,000 roubles ($10,595).

That case relates to allegations that Google, which is owned by Alphabet Inc. (GOOGL.O), failed to comply with requests to remove search results for organizations that are banned in Russia. Google has not commented on the allegations.

Facebook has said it is in discussions with the telecoms watchdog about its compliance with the rules. It has not moved servers containing its Russian users’ data to Russia, three years after a law was passed requiring the move.

In addition to stiffer fines, Russian authorities would retain the power to block companies’ online services under the new laws, according to the draft proposal seen by Reuters.

The source in the industry lobby group said companies in the sector could accept higher fines if they were applied fairly and they replaced the practice of blocking sites. But he said firms would oppose rules that allow both fines and blocking.

“But generally speaking anything that brings order to the system of blocking that has sporadically arisen at various times is an excellent idea,” the source said.

Blocking has caused technical problems in the past. When officials tried to block Telegram in April they inadvertently stopped Russian users’ access to voice calls on the Viber messaging service and cloud-based applications for Volvo cars, among other services. Telegram is still accessible in Russia.

Reporting by Maria Kolomychenko; editing by David Clarke

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PNG upholds deal with Huawei to lay internet cable, derides counter-offer

SYDNEY (Reuters) – Papua New Guinea (PNG) will uphold its agreement with China’s Huawei Technologies Co Ltd to build its internet infrastructure, a PNG government minister said on Monday, dismissing offers from Western countries to take on the work.

FILE PHOTO: A billboard advertising Chinese’s Huawei Technologies Co Ltd can be seen next to another billboard displaying an Australian koala and statement declaring Australia’s support for Papua New Guinea, a day after the Asia Pacific Economic Cooperation (APEC) forum ended, in Port Moresby, Papua New Guinea, November 19, 2018. REUTERS/David Gray

The comments from the minister, William Duma, are a blow to Australia, Japan and the United States, which have tried to persuade PNG to dump the Chinese company, amid broad efforts to limit China’s influence across the Pacific.

“We have an existing agreement,” Duma, minister for public enterprise and state investment, told Reuters on the telephone from Port Moresby.

“It’s about honor and integrity, once you enter into a deal and an arrangement you go with it.”

Huawei won a tender to build a network in the South Pacific nation two years ago, but amid deepening concern in the West over the company’s links to China’s government, allies Australia, Japan and the United States recently mounted an 11th-hour counter offer.

But Duma dismissed it.

“It’s a bit patronizing,” he said, adding that Huawei had done about 60 percent of the work on the project.

Huawei said in 2016 it would build a 5,457 km (3,390 mile) network of submarine cables linking 14 coastal towns in the resource-rich nation of 8 million people.

A spokesman for the company declined to comment.

Australia, which has shut Huawei out of contracts to build its own national mobile network on security grounds, blocked the company from laying submarine cable from Sydney to PNG and the Solomon Islands in July.

Western intelligence agencies have said Huawei’s technology could be used for espionage – something the company denies.

Representatives of the Australian, Japanese and United States governments had no immediate comment on Monday.

A spokesman for PNG Prime Minister Peter O’Neill was not immediately available for comment.

Jonathan Pryke, of the Sydney-based Lowy Institute think-tank, said those concerned about China’s influence had been slow to see the inroads Huawei was making.

Slideshow (2 Images)

“We missed the boat on that one,” Pryke he said. “I think you’ll find there’ll be a lot more attention in future to make sure we don’t miss the boat.”

The rivalry over internet infrastructure comes as Papua New Guinea has found itself at the center of a big-power jostle for influence, with China offering cheap loans and development projects and Australia stepping up its own aid contributions.

Australia, the United States, Japan and New Zealand this month announced a A$1.7 billion power grid upgrade for PNG, which includes some internet infrastructure, which would mean they were not being completely locked out of the telecommunications sector, Pryke said.

Reporting by Tom Westbrook; Editing by Robert Birsel

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7 Awesome Cyber Monday 2018 Deals for Millennials and Young Adults

It’s predicted that $23B will be spent online between Thanksgiving Day and Cyber Monday. In fact, Cyber Monday is slated to set a record as the biggest online shopping day of the entire year, up almost 18% from 2017.

Here are 7 excellent Cyber Monday deals (some of which are available from Black Friday all the way through the weekend):

1. A MacBook Air for under $350

Need a new laptop? Walmart is selling a refurbished Apple MacBook Air (11.6-inch) for $319.99.

Apple itself is also doing a Black Friday through Cyber Monday sale. If you buy a MacBook Air for $999, you get a $200 Apple Store Gift Card.

2. Lucky Brand jeans

Wanna get Lucky? Cyber Monday will see 50%-60% off deals, with free shipping on purchases $50 or more. Last year, you could even stack this with another 25% off coupon code for even more savings.

3. A new snowboard

Been thinking of investing in a big-ticket sports item this season? Dick’s Sporting Goods is doing 25% off site-wide for Cyber Monday. Free shipping (or buy online and pick up in store).

4. Cruelty-free makeup and bath products

If you’re into high-quality, ethical makeup and bath products (or shopping for someone who is), this is a very good deal: for Cyber Monday, The Body Shop is expected to offer 50% off its entire line of skincare and body products, with free shipping. This is arguably their best sale of the year.

5. 60-minute massages for $27 or less

Groupon is offering up to 91 percent off everything from physical items to services like massages. In the LA area, for example, you can get a 60-minute massage at Sparadise with aromatherapy and reflexology for $49 (down from $115); or a couples massage with foot reflexology for $49 (down from $100).

6. A $3,100 vacation for $499

If you’ve ever wanted to do a classy, resort-style winter getaway, this is the time to go: Bluegreen Vacations is running a Cyber Monday deal that’s 80 percent off. They’re offering customizable, 7-night resort packages for $499. Pick from 20 properties around the country, including places like the beautiful Wilderness Club in the Ozark Mountains of Missouri (picture snowshoeing followed by a mug of cocoa by the fire).

7. Swarovski earrings for $7

Need a great gift for a lovely lady? These stud earrings with Swarovski elements retail for $79, but you can get them for $6.99 right now.

8. BONUS TIP: Wait until Tuesday to buy airfare

Air travel company Hopper has analyzed flight pricing data over time and says the best airfare sales are on the Tuesday after Thanksgiving (not Cyber Monday).

According to the company’s chief data scientist Patrick Surry, “Last year, we sent more deal notifications on Travel Deal Tuesday than Black Friday and Cyber Monday combined. In 2016, we saw fare sale activity spike by 2X the normal volume.”

A few of their predictions for this Tuesday’s flight deals:

  • Honolulu: 27% off
  • New York: 26% off
  • Rio de Janeiro: 32% off (it’s worth remembering that it’s summer in Rio right now)
  • Aruba: 32% off
  • London: 40% off

Happy hunting.

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A Driver Returned to His Car to Find a Note and An Incredible Lesson on Doing the Right Thing. The Note Was From a 6th Grader

Absurdly Driven looks at the world of business with a skeptical eye and a firmly rooted tongue in cheek. 

A grasp of ethics is becoming slightly more popular in business these days.

Well, we can thank the Valley’s abject disregard for ethics, one that’s finally caught up with many of its companies. Why, even Stanford has begun to discover the concept.

Still, when you run a business you don’t always — often? ever? — expect people to do the right thing.

Which is, perhaps, why the story of Andrew Sipowicz and his car has moved so many this week.

He returned to his car last Monday, parked in Buffalo, New York, to experience a sinking feeling. 

He also experienced something he never expected.

His car, you see, had endured a substantial dent in its front left side. It seemed as if there had been a hit and a run. 

Yet perched inside his windshield wiper was a note. A very detailed note, as it happened, from a 6th grader.

The spelling wasn’t perfect. The sentiment certainly was.

It read: 

If your wondering what happen to your car.

Bus: 449 hit your car It stops here everyday to drop me off.

At 5:00pm.

What happened? She was trying to pull off and hit the car. She hit and run. She tried to vear over and squeeze threw but couldn’t. She actually squeezed threw. She made a dent and I saw what happened.


-Driver seat left door

-A lady in the bus driver seat 499.

-Buffalo Public School bus

-A 6th grader at Houghten Academy

It sets a good example for a lot of students. Not just students, but just people in general.

What resulted is that the bus company is covering the cost of repairs and giving Sipowicz a loaner car. The bus driver, reports CNN, will be fired.

We get wrapped up in the bad deeds of companies because they appear to have such large consequences.

At heart, though, the bad deeds of companies are merely the bad deeds of individuals, written in capital letters and involving large amounts of capital.

Yet simple stories of goodwill also spread around the web, as this one has. 

It’s almost as if people want to be reassured that, in the midst of a world that seems to bathe delightedly in corruption, there still are good people. 

That story led to unexpected consequences and national attention. 

These days, we watch as so many who could say something, end up saying nothing.

We’re told that kids don’t bother with anything but themselves, buried as they are in their phones. 

Here, though, is a simple lesson of a 6th-grader who stopped, looked around and did the right thing. A generous thing.

Perhaps we should all do that a little more often.

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Do These 3 Things Every Morning to Boost Your Productivity and Happiness

You don’t have to change your entire morning or suddenly start training for a marathon when you wake up to create a morning that will nourish the rest of your day. These three simple morning habits are a great place to start if you want to create a morning routine that will enhance your productivity.

1. Get an early start to the day.

As we all know, the early bird gets the worm. Getting an early start to your day allows you to begin your day with the freedom (and time) to own your morning. Instead of hitting the snooze button and running out the door to avoid being late, try waking up 30 or 40 minutes before you normally do. 

Lauren Vanderkam’s book What the Most Successful People Do Before Breakfast shows that almost 50 percent of self-made millionaires start their mornings three hours before their day needs to begin and that 90 percent of all executives prefer to be early rises and wake up before 6A.M. on workdays. 

Waking up early gives you time to get what you want to be done before heading into work. Take this time to make a healthy breakfast, read, meditate, or to do the remaining productive boosting habits on this list. 

2. Say your goals for the day out loud.

No matter how big or small your goal is for the day, week, or year it’s important to keep it at the front of your mind every single day. Creating a pathway to progress on your goals starts with acknowledging them. 

Being an entrepreneur means having to put out a million little fires a day, while still building a company and pushing a product or service. Being in charge of clients, employees, marketing materials X, Y and Z can start to give you whiplash. This is why it’s especially important to state your goal and objective every morning. Staying grounded in this will help you on even your busiest of days. 

Add a massive amount of productivity to your day by reciting your goals at the start of your day. Do so in a positive and affirmative way. Instead of saying “I want my company to earn X amount of revenue by X”, say “My company has a brilliant product, and we will earn X amount of revenue by X day.”. You should also do this with smaller, personal goals. 

Visualize what you want your day to be like, and what aspects of your day will attribute to you getting closers to your goal. Give yourself reassuring affirmations that will stay with you throughout the day–no matter how hectic it gets. 

3. Write a detailed to-do list.

Writing a to-do list every morning is a fantastic way of taking inventory of what you didn’t get accomplished the day before, and what you plan to get done today. Starting your day off by doing this every morning helps you set the tone for the day. 

Use this list in conjunction with your schedule to keep you prepared for what needs to get done that day. Staying aware of what your day should consist of is the easiest way to stay on track. This will boost productivity by allowing you to prepare for your day within the hour you wake up.

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Have You Built a Culture of Creativity?

But before a company can build their business value of design, some critical building blocks must be in place. 

They must first prime the organization to have a culture of creativity that supports design-centric initiatives.  This only happens when companies get really good at leveraging creativity as an innovation resource.  

I’ve written in an earlier article about the significance of “the human quotient” in companies as they grapple with the future of work in the midst of our 4th Industrial Revolution- a time when we are tethered to cloud technology, AI, VR, robotics and data in ubiquitous ways.  Pointing out the business value of design is another way of acknowledging that when a company starts with their customers’ human needs and desired experiences, and builds products and services around those drivers, it is ultimately a more efficient way to run a business.

The human quotient is grounded in creativity.  Creative approaches to business outcomes can positively affect revenue generation, market share diversification, efficiencies and cost reductions.  This has to happen in an inside-out manner.  That is, the creative impact of your products and services on people’s lives will only come to pass when the company builds a culture of creativity.  This is especially true at a time when employee engagement, generative thinking and thought diversity in a company are critical means to innovation.  

Here are three ways companies can build their creative competencies, and thus prime themselves to build the business value of design.

1.     Encourage Curiosity

Leaders need to model that inquiry – versus certainty- gets us to the next level. There are market leader companies- such as Amazon, Whole Foods and Lyft- who would have never anticipated 5 years ago with certainty, where they are today.  There are new alliances they now make based on macro-environmental drivers.  Encouraging people to ask lots of questions and not equate curiosity with appearing ignorant is a crucial first step.

2.     Improvise

Companies that design flexible structures and processes, versus rigid rulebooks, are better off.  Humans respond well to structure – to an extent.  Structure helps us to understand the limits we can push.  This is the very nature of improvisation.  Like jazz music, all improvisational systems have rules.  It’s the ability to stretch and rebound off the rules which allows for adaptive and responsive solutions to customer needs.  

3.     Intuit

While most corporate boardrooms don’t admit out loud the role of intuition in decision making- because of our culture’s leniency on the rational- the truth of the matter is that plans are fiction:  they haven’t happened yet.  Although honing intuition is not something we teach in business school, the majority of successful entrepreneurs can speak to pivotal moments when they followed their heart, paid attention to subtle patterns, and great things happened.  

Companies that implement great design practice linked to positive business outcomes, have also created opportunities for encouraging curiosity, improvising solutions through adaptive structures and acknowledging intuition.  Try experimenting with implementing your own version of these 3 building blocks, one per month over the next quarter.

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?Dell XPS 13: The best Linux laptop of 2018

Usually, when I get review hardware in, it’s not a big deal. It’s like working in a candy shop. At first, it seems great (“All the candy I can eat!”). Then, you quickly get sick of dealing with the extra equipment.

But, every now and again, I get a really fine machine, like Dell’s latest XPS 13 Developer Edition laptop. And I get excited again.

There’s this persistent fake news story that you can’t buy a computer with Linux pre-installed on it. It’s nonsense. Dell has been selling Ubuntu-Linux powered computers since 2007. What’s also true is that, Dell, like Linux-specific desktop companies such as System76, sells high-end systems like its Precision mobile workstations. At the top end of Dell’s Ubuntu Linux line, you’ll find the Dell XPS 13 Developer Edition laptops.

Also: Best Black Friday 2018 deals: Business Bargain Hunter’s top picks

What makes them a “Developer Edition” besides the top-of-the-line hardware is its software configuration. Canonical, Ubuntu‘s parent company, and Dell worked together to certify Ubuntu 18.04 LTS on the XPS 13 9370. This worked flawlessly on my review system.

Now, Ubuntu runs without a hitch on almost any PC, but the XPS 13 was the first one I’d seen that comes with the option to automatically install the Canonical Livepatch Service. This Ubuntu Advantage Support package automatically installs critical kernel patches in such a way you won’t need to reboot your system. With new Spectre and Meltdown bugs still appearing, you can count on more critical updates coming down the road.

The XPS 13’s hardware is, in a word, impressive. My best of breed laptop came with an 8th-generation Intel Coffee Lake Core i7-8550U processor. This eight-core CPU runs at 4Ghz.

The system comes with 16GB of RAM. This isn’t plain-Jane RAM. It’s fast 2133MHz LPDDR3 RAM. It’s backed by a 512GB PCIe solid state drive (SSD).

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To see how all this hardware would really work for a developer, I ran the Phoronix Test Suite. This is a system benchmark, which focuses primarily on Linux. And, this system averaged 461.5 seconds to compile the 4.18 Linux kernel. For a laptop, those are darn good numbers.

When it comes to graphics, the XPS 13 uses an Intel UHD Graphics 620 chipset. This powers up a 13.3-inch 4K Ultra HD 3840 x 2160 InfinityEdge touch display. This is a lovely screen, but it has two annoyances.

First, when you boot-up, the font is tiny. This quickly changes, but it’s still can lead to a few seconds of screen squinting. The terminal font can also be on the small side. My solution to this was upscaling the display by using Settings > Devices > Displays menu and moving the Scale field from its default 200 percent to a more reasonable — for me — 220 percent. Your eyesight may vary.

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The other problem is, while the thin bezels make the screen attractive, putting the video-cam at the bottom of the screen can lead to some rather unattractive, up-nose video-conferencing moments until you get use to this atypical cam positioning.

The keyboard with its large, responsive keys is a pleasure to use. When you’re a programmer, that’s always important. The trackpad is wide and responsive.

Thinking of battery life, when you’re not working on the XPS 13, it’s very aggressive about shutting things down. Even when you are giving it a workout, I saw a real-world battery life of about nine hours.

One neat feature the XPS 13 includes, which I wish all laptops had, is a battery power indicator on the console’s left edge. You press a tiny button with your fingernail and up to five lights let you know how much juice you have left.

For ports, the XPS 13 has a trio of USB-C ports. If you, like me, have a host of older USB sticks and other devices, Dell kindly provides a USB-A to USB-C adaptor. It also has an audio jack and a MicroSD card reader. Two of the USB-C ports support Thunderbolt, while the other one supports PowerShare. The latter enables you to charge devices from your laptops. In my case, I could charge up my Google Pixel 2 phone

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All this comes in a package that weighs in at a smidge over two-and-a-half pounds. This is a full-powered laptop that comparable in size to a small Chromebook.

While my all-time favorite laptop remains my maxed-out Linux-enabled Pixelbook, the new Dell XPS-13 comes a close second. If you want a Great Linux laptop, this one demands your attention.

But it does have one problem: It’s pricey. The model I tried out lists for $1,779.99. If that’s too rich for your blood, the Dell XPS 13 line starts at $889.99. And even that model is pretty sweet.

Besides, don’t you owe yourself a holiday present for next year’s development work? Sure you do!

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Facebook sued by Russian firm linked to woman charged by U.S.

(Reuters) – A Russian company whose accountant was charged by federal prosecutors for attempting to meddle in U.S. elections sued Facebook Inc (FB.O) on Tuesday, claiming it is a legitimate news outlet and its Facebook account should be restored.

FILE PHOTO: A 3D printed Facebook logo is seen in front of a displayed Russian flag in this photo illustration taken on August 3, 2018. REUTERS/Dado Ruvic/Illustration/File Photo

The Federal Agency of News LLC, known as FAN, and its sole shareholder, Evgeniy Zubarev, filed the lawsuit in federal court in the Northern District of California, seeking damages and an injunction to prevent Facebook from blocking its account.

Facebook deleted FAN’s account in April as it purged pages linked to the St. Petersburg-based Internet Research Agency, which was indicted by Special Counsel Robert Mueller earlier this year for flooding social media with false information in a bid to sow discord in the run-up to the 2016 U.S. election.

Facebook did not respond to a request for comment. Peter Carr, a spokesman for Mueller, declined to comment.

FAN and Zubarev said they were improperly swept up in Facebook’s purge, which took down more than 270 Russian language accounts and pages, according to the complaint.

“FAN is an independent, authentic and legitimate news agency which publishes reports that are relevant and of interest to the general public,” the company said in the lawsuit.

The lawsuit argued that Facebook had effectively acted as an arm of the government in improperly impinging on its right to free speech, and cited the Civil Rights Act of 1964 in claiming Facebook discriminated against it due to its Russian origins.

Renato Mariotti, a former federal prosecutor, described those arguments as weak and predicted the plaintiffs would have a hard time gaining any traction in the courts.

“It’s safe to say this lawsuit is not going to be very successful,” he said. “At first glance it seems like a PR stunt to me.”

FAN acknowledged previously sharing the same office building as the Internet Research Agency and said it has employed Elena Alekseevna Khusyaynova, the Russian woman charged by prosecutors last month for attempting to meddle in the 2018 congressional elections, as its chief accountant since August 2016.

But the plaintiffs said Khusyaynova’s role at the company has been limited to overseeing day-to-day bookkeeping, and that she was not an officer and had no discretion over editorial content.

The plaintiffs also said they were not involved in “Project Lakhta,”, a Kremlin-backed information warfare campaign U.S. prosecutors say was started in 2014 and financed by Evgeny Viktorovich Prigozhin, an oligarch close to Russian President Vladimir Putin.

Prigozhin, known as “Putin’s chef” due to his catering company and its ties to the Kremlin, was indicted in February along with the Internet Research Agency, which he controls.

Khusyaynova was the chief accountant for Project Lakhta, according to the charging documents in her case, which is being prosecuted by assistant U.S. attorneys in the Justice Department’s Eastern District of Virginia.

A spokesman for the district did not respond to a request for comment.

Mueller is not handling Khusyaynova’s case because his focus is on the 2016 presidential election and the charges against her relate to the 2018 midterm elections.

Reporting by Nathan Layne and Jonathan Stempel in New York; Editing by Richard Chang

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Fortune Global Tech Forum 2018 Livestream

The Fortune Global Tech Forum taps into the strength of two Fortune powerhouse conferences: the Fortune Global Forum and our Brainstorm Tech conference, which brings together the smartest people in tech, media, entertainment, and finance.

With a theme of “Innovation in the Age of A.I.,” this year’s Global Tech Forum, held from November 29 to 30, will explore the innovation revolution unfolding in China and the rest of the world. The conference will feature some of China’s most promising startups as well as our second-annual Fortune China Innovation Awards.

Can’t join us in Guangzhou? You can watch most of the program right here on this page. (See an abridged version of the agenda below for which sessions we’re streaming.) Our livestream will begin at 8:30 a.m. local time on Thursday, Nov. 29 with introductions from Fortune president and CEO Alan Murray, Guangzhou mayor Wen Guohui, and Zhang Zhihong, director general of the Torch Center at China’s Ministry of Science and Technology.

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Online Shopping: The Complete Wired Guide

Type “cheesecloth” into Google shopping. Hundreds of online shopping options pop up, in more than a dozen shades, at a range of price points. Many of the packages can be shipped to you in two days or less. In other words, shoppers live in a golden age of convenience. We’ve got more access to more stuff than ever before, at cheaper prices and ever-more-instant speeds. And the businesses who hawk us that stuff? They’ve got unprecedented levels of data on us, and they’re using it to target us in ever-more personalized ways.

As Americans, shopping’s in our bones. Patriotic fervor practically elevated consumerism to a religion after World War II, and today, we blur Jesus and Santa, ditch Thanksgiving for Black Friday, and mint new holidays (Cyber Monday) that give way to copycat holidays (Prime Day), all dedicated to buying stuff. Consumer spending on the “goods” portion of goods and services powers roughly one quarter of the economy, so it follows that retail is uber-susceptible to the technological, political, and economic forces that shape our society. Long ago, traveling peddlers were displaced by local merchants, who were supplanted by downtown department stores, which were upended by shopping malls, then big box chains, and now, the internet. And technology has armed today’s retailers with powerful tracking tools: We accept user agreements and pop-ups, trading gobs of valuable personal data in exchange for convenience—a commodity almost as prized as shopping itself.

The History of Online Shopping

The age of internet commerce really kicked off with Sting. Back in 1994, a band of coders led by a 21-year-old Swarthmore grad named Dan Kohn lived together in a two-story Nashua, New Hampshire, house. Fueled by ambition and a roaring Coca-Cola habit, they launched an online marketplace called NetMarket. The site let users make secure purchases by downloading encryption software named PGP, for “Pretty Good Privacy.” At noon on August 11, a Philadelphia man named Phil Brandenberger logged on. Typing in his address and credit card number, he bought a CD of Sting’s “Ten Summoners’ Tales” for $12.48 plus shipping. Champagne corks flew. The New York Times called it the first secure purchase of its kind. “Attention Shoppers,” a headline announced. “The Internet Is Open.”

Years later, Randy Adams, CEO of another online store called the Internet Shopping Network, claimed to have beaten out Kohn’s group by a month. In either case, the ecommerce floodgates didn’t quite fly open. The Unix-based programs required some tech know-how, and computers were a lot slower back then.

While we wait for modem speeds to rev up from bits to megabits, then, let’s review some retail history. Back in the ’80s, shopping largely centered around malls. Post–World War II migration to the ‘burbs had gutted downtown shopping centers and the sprawling department stores that served as their nuclei. Tax breaks and car culture spurred mass development of new big box stores and suburban shopping malls, and these parking-flush spaces recreated sanitized versions of urban retail corridors, writes Vicki Howard in From Main Street to Mall. Giant discount shops devoured local mom and pops. By 1990, Walmart had become the nation’s largest retailer.

Consumers were spoiled for choice, and they could get it on the cheap. But big box shops were laid out to maximize in-store time, turning shopping into a time-gobbling, endurance event. In the 2003 comedy Old School, Will Ferrell’s character Frank the Tank played this suburban ritual for laughs: “Pretty nice little Saturday, actually, We’re going to go to Home Depot…Maybe Bed, Bath, & Beyond, I don’t know. I don’t know if we’ll have enough time!”

Online shopping, by contrast, offered the promise of near-limitless choice at relatively snappy speeds. One of the earliest pre-Internet shopping ventures to test the online waters, CompuServe’s “Electronic Mall,” opened in 1984, offering stuff from more than 100 merchants, from JC Penney to Pepperidge Farms. Next to today’s sleek web pages, CompuServe’s command line interface looks positively primitive. But it worked, and it saved a trip to the mall. (As one early adopter told his local newscaster: “I just don’t like crowds.”) When it opened, only eight percent of US households had a computer, and at dial-up rates starting at around $5 an hour, the mall enjoyed limited success. E-shopping was still a decade away from going mainstream.

In 1988, a CompuServe competitor named Prodigy sprung up, the product of a partnership between Sears and IBM. Alongside news, weather, email, banking, and bulletin boards, the service included a store. Jaunty illustrations accompanied item descriptions, but as Wired noted in 1993, “the service’s cartoon-like graphics proved far less useful to purveyors of items that consumers wanted to see before buying, such as clothing and home furnishings.” A short-lived grocery service folded “because consumers were uncomfortable using a PC to select food.”

Until the World Wide Web debuted publicly in 1991, online shopping remained the province of services like Prodigy. That year, the National Science Foundation, which funded the networks that made up the backbone of the Internet, lifted its ban on commercial activity. Merchants were free to register domains and set up cybershop, but a problem lingered: Shoppers were—rightly—suspicious of handing over credit card data to remote, faceless webmasters. No mechanism existed to verify the sites’ authenticity.

In December 1994, a 23-year-old University of Illinois grad named Marc Andreessen released Netscape 1.0. The web browser featured a protocol called Secure Sockets Layer (SSL), which let both sides of a transaction encrypt personal information. From there, ecommerce began to take off.

Without the cost of maintaining physical stores, online retailers could offer lower prices and larger assortments than their brick and mortar counterparts, and people could by them in less time than it took to gas up the minivan. A “nice little Saturday” no longer had to entail epic marathons to warehouse-style superstores. If Sting knocked on the floodgates, Amazon was the wave that was about to burst them open.

In July 1995, a hedge fund VP named Jeff Bezos opened an online bookstore. He named it after the world’s largest river, after deciding against (The domain still redirects to Amazon.) The site carried a million titles, and Bezos billed it “Earth’s Biggest Bookstore.” Within a month, had sold books to buyers in every US state, plus 45 countries.

Bezos recognized that shopping online at the time carried so-called pain points. Gauging quality could be difficult. Shoppers had to manually enter lines and lines of payment and shipping info each time they wanted to buy a nut sampler. High shipping costs could cancel out savings. Such headaches led shoppers to abandon their carts at distressing rates.

Amazon knew these minor irritations could add up, spelling major revenue losses. From the beginning, “Bezos was maniacally focused on the customer experience,” says retail expert and Wharton professor Barbara Kahn. No more cartoonlike graphics: Books were fully digitized, and shoppers could flip through the pages like they could in a physical store. Books were searchable by title, browsable by category, and readers could post reviews. In 1999, Amazon famously patented one-click ordering. This seemingly minor innovation slashed shopping cart abandonment, convinced customers to fork over their data, and helped cement Amazon as the go-to one-stop-shop for hassle-free shopping. Shipping got faster and cheaper, becoming free for orders above $99 in 2002, then for all Prime members in 2005.

Sites like Amazon and eBay, which also opened in 1995 as “AuctionWeb,” proved you didn’t need a physical store to give customers what they wanted. A lot of what they wanted. In 1999, Zappos (since acquired by Amazon) opened one of the first online-only shoe stores, enticing shoppers with free shipping, a generous (and free) return policy, and legendary customer service (one call famously lasted ten hours). The internet promised riches, and investors exuberantly, sometimes irrationally, supplied the funding.

Not every digital store survived that first boom. Cash-flush e-tailers like and grocery deliverer WebVan poured millions into ad campaigns, expanding rapidly before realizing that customers didn’t always want what they offered. Less than a year after the mascot soared over Macy’s Thanksgiving Day parade, the company learned that plenty of pet owners in the already crowded space didn’t mind picking up dog food and kitty litter from the grocery store, especially if that meant avoiding shipping costs and long waits. The company closed in 2000. Not long after erecting state-of-the-art fulfillment centers in ten cities, WebVan discovered that the cost-conscious shoppers they targeted weren’t ready for what amounted to an upmarket service: Customers didn’t spend enough to subsidize the trips; they preferred coupons and economy sizes, which WebVan didn’t offer; they often weren’t home during the short delivery windows. The grocery business’s paper-thin margins provided little room for error, and the company declared bankruptcy in 2001, near the height of the dot-com crash. These failures, however, would become instructive for the next generation. “Get Big Fast” gave way to “Minimum Viable Product.”

The Latest Shopping Tech

  • Stock Bots
    Walmart partnered with Bossa Nova Robotics to deploy inventory-tracking droids in 50 stores this year.

  • Virtual Showrooms
    Hardware giant Lowe’s debuted its “Holoroom” last year, which guides headset-clad DIYers through home improvement projects in VR.

  • Face Time
    Gourmet confectioner Lolli & Pops recently installed facial recognition cameras in stores to flag regulars and compile customized shopping recommendations.

  • Mirror, Mirror
    Fashion retailer Farfetch unveiled touchscreen mirrors and clothing racks that sense when an item is removed—then beam a virtual version to the shopper’s smartphone.

  • Cinderella Scanners
    New Balance and Fleet Feet Sports recently introduced scanners by Volumental that generate a 3D virtual model of your feet in five seconds. An AI algorithm extracts 10 measurements, from length to arch height, to recommend a perfectly fitting shoe. No disposable sock required.

  • Swipe and Shop
    Through Instagram’s new shopping feature, users can tap stickers on Stories to display merchandise details and shopping links. The Facebook-owned social media platform is reportedly developing a standalone shopping app.

In the late 2000s and early 2010s, “digitally native vertical brands” (DNVBs) like Bonobos (menswear) and Warby Parker (eyewear) spun up their own direct-to-consumer models. By controlling the entire process from factory to sale and reaching consumers directly through websites and social media channels, these brands could keep prices down, collect extensive data on their customers, and test new products. Last year, DNVBs grew three times faster than ecommerce as a whole. The more data companies swallowed up, the better they got at personalizing their recommendations. They burrowed their way into our inboxes and onto our social media pages. Their algorithms knew what we wanted and predicted what we were going to want. It started to seem like brick and mortar didn’t stand a chance.

Indeed, by the mid-2010s, tax breaks and a hunger for growth had led US retailers to build stores at rates that eclipsed Europe and Japan by a factor of six. This “over-storing,” combined with ecommerce competition, set the stage for the so-called “retailpocalypse.” In 2017, an estimated 7,800 US stores shuttered, and 3,600 were forecast to close in 2018.

If big box stores were going to survive, they needed to reinvent themselves. Consumers had grown to expect all the convenience, selection, and low prices of online shopping. To compete, brick and mortars had to act a little more like websites. Hardware giant Home Depot saw its stock price shoot up after integrating its desktop, mobile, and physical stores, introducing options like Buy Online, Pick-up In Store. By 2016, 61 percent of retailers offered some version of the service. Curbside pickup flourished, flying in the face of the old ethos of maximizing in-store-time.

For those that adapted, a retail future exists outside of bits and bytes. The web may know your habits better than any store clerk, but that’s starting to change. IRL stores aren’t headed for the deadstock pile. They’re just going to look a bit different, get a bit smarter. Some may ditch cashiers, or cash registers altogether. Others will employ robots. And those cameras—they’re not just for catching shoplifters anymore, either.

The Future of On- (and Off-) Line Shopping

The retailpocalypse, in fact, has come full circle. In 2015, Amazon opened its first physical bookstore, then followed it up with 17 more (then raised that by a Whole Foods acquisition). The shops aren’t particularly high tech. No holograms, no VR, plenty of good old-fashioned paper. The shops occupy modest footprints, carrying only four star-and-above-rated books. Squint, however, and you can see the future: Prices are not on display, and customers must log onto Amazon’s smartphone app to see them. Prime members get lower prices, of course. “They train you when you go in the store to open your app,” says Kahn. This lets them merge your online and in-store data. More data equals better personalized marketing, tighter inventories, and lower costs.

Of course, Amazon isn’t the only one corralling your digital data to optimize your in-store experience. Personalization companies like AgilOne and Qubit have sprung up to vacuum all our clicks, tweets, and e-communiques and merge them into individual profiles that stores like Vans and Under Armour use to better target their marketing. And some are going a step further.

Earlier this year, gourmet confectioner Lolli & Pops installed facial recognition cameras in its stores’ entryways. The cameras alert clerks when VIPs (who’ve opted in) enter, then call up their profiles and generate recommendations. In the future, face-identifying cameras could track shoppers throughout stores, noting where they linger and where they don’t. Retailers could use this to maximize purchasing by, say, rejiggering floor layouts and product displays. But some businesses fail to disclose cameras, inflaming privacy defenders.

When the ACLU asked 21 of the nation’s largest retailers if they were using facial recognition, presumably for theft prevention, all but two refused to answer. (Lowe’s owned up to it.) The organization warned of “an infrastructure for tracking and control that, once constructed, will have enormous potential for abuse.” Meanwhile, other companies have convinced shoppers to knowingly trade privacy for convenience.

Register-Free Retail

Visitors to the first Amazon Go store in Seattle said it felt like shoplifting: Walk in, grab what you need, and go without ever taking out your wallet. The shop’s balletic system of computer vision, motion sensors, and deep learning renders checkout lines obsolete. Amazon reportedly plans to open another 3,000 cashier-free stores by 2021, but it has some competition.


In April, this San Francisco concept store became the first Amazon Go challenger to open in the States. The company aims to offer its cashierless platform to hotels and gas stations.


This company operates more than 300 RFID-powered human-free convenience stores throughout China, with plans to reach 2,000 locations by 2019.


The supermarket giant’s “Scan, Bag, Go,” model, already used in nearly 400 stores, lets shoppers scan their barcodes on their groceries and pay straight from their smartphones.

Standard Cognition

This San Francisco startup has partnered with Japanese drugstore supplier Paltac to open 3,000 checkout-free shops by 2020.

This year, Amazon opened its first cashierless stores in the US, followed by a handful of smaller startups. Powered by hundreds of super-smart (but not face-recognizing) cameras and an array of weight and motion sensors, stores like Amazon Go and Zippin let shoppers simply grab what they want and leave. (Once again, Amazon customers must use their app, this time to swipe in.) The surveillance offers unprecedented intel about shoppers’ habits and supposedly prevents theft. Investors see the potential. CB Insights reports that over 150 companies are developing checkout-free technology.

In this new blended, digi-physical landscape, brick and mortar stores will leverage their physical advantages, while rendering unto the web that which is better handled digitally. This might mean smaller stores that act more like showrooms than storehouses. When digital-first brand Bonobos (now Walmart-owned) opened physical “guideshops,” they functioned more like fitting rooms-cum-hangout spots. Shoppers arrived by appointment, were offered a beer, tried on clothes, then had their orders shipped directly to them from an offsite warehouse. Other stores are fashioning themselves into tricked-out lounges and event spaces. Some won’t even sell you a darn thing.

It’s called “experiential retail,” In January, Samsung opened a 21,000-square-foot Experience Store in Toronto. Visitors can test out VR headsets and tablets, chat with tech pros, or partake in autumnal smoothie classes and artist demos. The one thing they can’t do? Buy stuff. Restoration Hardware has begun fusing retail with hospitality, outfitting luxurious furniture showrooms with rooftop restaurants, barista bars, and wine vaults. In a history-is-cyclical turn, Apple’s newest DC flagship will host concerts, coding classes, workshops, and art exhibitions, recalling the multipurpose, live-band- and tea-room-appointed department stores of the early 20th century.

The ultimate fusion of convenience and experience could lie in virtual and augmented reality. As with many things VR, it’s too early to predict the impact. You can imagine it though: endless stores featuring infinite inventory, all for zero rent. Walmart filed two patents this summer for a “virtual retail showroom system.” Headset- and sensor-glove-garbed shoppers would browse digital aisles selecting products, which would be packed and shipped from an automated fulfillment center. Ikea launched an AR app last year, letting shoppers “try” out true-to-scale virtual furniture models at home before buying. And Macy’s is already rolling out VR in 69 furniture departments this year. Shoppers can design their own room on a tablet, then traipse through the space in VR.

Some retailers are going all in on the Star Trek vision of shopping. Lowe’s launched its VR Holoroom last year, leading headset-clad in-store shoppers through DIY home improvement tutorials. A month later, fashion retailer Farfetch unveiled their “Store of Future.” Touchscreen dressing room mirrors let shoppers request new sizes, holograms help them customize garments, and smart clothing racks sense when items are removed, then beam virtual versions to a smartphone wishlist.

But much of the evolution is likely to happen behind the scenes. A lot of innovation will happen in logistics, with robot-staffed fulfillment centers and delivery drones, feeding appetites for ever-faster, cheaper shipment. This year, Walmart rolled out robots in 50 stores; the wheeled automatons scan shelves and notify employees when they need to be restocked.

Stores will seek out shoppers where they spend their time, increasingly cozied up to mobile devices and smart speakers. OC&C Strategy Consultants projects voice shopping in the US will reach $40 billion by 2022, up from $2 billion this year. Given that Echos comprise nearly two-thirds of smart speakers, with Google Home racing to catch up, Amazon is once again poised to dominate. Without infinite pages of cheesecloth to browse, voice shoppers will rely heavily on recommended products (a la “Amazon Choice”). And if the smart speaker company doubles as a private label (a la “AmazonBasics”), you can guess which brand they’ll suggest first.

It all adds up to an unnervingly creepy or fantastically convenient and curated world, depending on your vantage point. Or maybe it’s all the above. On the other end of that cart you casually abandon or that data you impatiently fork over sits a business that translates that behavior into real dollars and cents. Multiply that by thousands of shoppers and you’ve got a make-or-break bottom line. Times that by millions of businesses and you’ve got a fat chunk of the economy. No wonder retailers are doing backflips to make shopping as convenient, pleasurable—and quietly invasive—as possible. It’s up to shoppers to decide where to draw the line.

Learn More

Last updated November 19, 2018

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How To Become a Tech Entrepreneur, Never Learn Code, and Keep Your 401k

Innovation does not always come from the top of the organizational chart. Often, employees who have intimate knowledge of a company’s operations are best equipped to spot opportunities for innovation and change. Unfortunately, not all great ideas filter up to the C-suite. And many would-be entrepreneurs at corporations have families, mortgages, and other financial responsibilities that prevent them from leaving to embrace the high-risk, high-reward dynamic of a start-up.

Beyond risk-reward trade-offs, these employees are also loyal to their company and want to see it succeed. Fortunately, by demystifying exactly what innovation is, managers can stay in their positions as they build a low-cost prototype to prove their idea to their company’s leaders – leaders who are likely on the hunt for innovation.

How corporate entrepreneurs differ

Corporate entrepreneurship and innovation have become buzzwords that, through repetition, have warped into meaningless phrases. That’s why a CB Insights article poking fun at corporate innovation is so funny, because anyone who thinks about these issues knows each example rings true. Innovation initiatives often mimic the atmosphere, structure, and vibe of Silicon Valley, but fail to replicate the entrepreneurial spark that inspires a visionary to do difficult, high-risk/high-reward work.

At a corporation, no work will ever truly emulate the high-risk or high-reward environment of a startup, unless the corporation spins out its innovative arm into its own entity. Employees have 401ks and other benefits, HR follows a pay schedule with tiers and caps, and shareholders are wary of diluting stocks.

But that does not mean that a visionary employee can’t become an entrepreneur within their organization. As a corporate entrepreneur, the employee can become an innovation champion simply for the sake of watching their company succeed (while scoring a well-earned promotion). However, to get leadership buy-in, they’ll first need to prove their idea works – and they can without learning a single piece of code.

High tech platforms start with low tech, manual hacks

Part of the mystique surrounding tech startups comes from well-designed platforms that seem to anticipate a user’s every need. When a corporation innovates, its leaders expect sleek prototypes that run seamlessly on the right algorithms and tech. But the truth is that most prototypes are crude, manual, low-tech hacks. Before an entrepreneur builds a platform connecting pet owners to pet sitters, he or she sits behind a computer fielding pet sitting requests in a chat window and calling pet sitters on their phone. In the early days of a platform, entrepreneurs manually facilitate most transactions, thereby validating demand and supply, and building a low-cost prototype. Only once they’ve proven that the business demand is real do they worry about building technology that can scale.

There are many types of platforms, and for each there are unique hacks that can test underlying assumptions before a company invests millions of dollars in developing a platform. With a small budget and a good amount of hustle, a non C-suite manager can test assumptions, tweak the market, and deliver to the C-suite an actionable plan.

Armed with a functioning prototype and a few months worth of data, it’s time to get the idea funded. Luckily, corporations have built in venture capitalists: their board and executive leadership. To be successful in wooing your leadership, it is critically important to capture all data from the manual prototypes and develop a business plan around how the platform would integrate with or expand the company’s core business.

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Instagram Bug Leaves Some User Passwords Exposed

Instagram users have been asking for a way to view all the data the company has on them, but this may be more than they were hoping for. The new Download Your Data tool that allows users to receive that information may have left some users’ passwords exposed.

When using the new feature, some Instagram users’ passwords were displayed in the URL, which was then also stored on Facebook’s servers—a bigger issue for those using a shared computer or compromised network, according to The Information. Facebook already notified users who were affected.

The tool has since been updated and the problem should no longer occur. Those Instagram users affected are encouraged to change their passwords and clear their browser history.

But it’s still a troubling update, as Instagram and parent company Facebook fight back against a seemingly unending stream of scandal and security breaches.

Fortune reached out to Instagram for comment, but did not receive an immediate reply.

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These DNA Startups Want to Put Your Whole Genome on the Blockchain

In 2018, people started using the blockchain to battle deepfakes, track sushi-grade tuna from Fiji to Brooklyn, and even cast a (symbolic) vote. It was only a matter of time before someone figured out how to put all 6 billion bits of your genetic source code on the blockchain too. Starting this week, a startup called Nebula Genomics is doing just that, offering whole-genome sequencing for free, as a way to stock up for its real ploy: a blockchain-based genetic marketplace.

Of course, nothing is free free. But if you’re willing to cough up some health information and refer your friends, you can earn special Nebula tokens that can help pay for a lo-fi sequence, the equivalent of a first draft that someone went over once with a subpar spell-checker. If you don’t want to answer survey questions about your donut and negroni habits or your family’s history of heart disease, you can get the same quick-and-dirty sequence for $99. But if you do answer the questions, and if a researcher or pharmaceutical company finds them interesting, they might pay to upgrade you to the Cadillac of whole genomes (what’s called 30x coverage, in the gene biz). In exchange, you grant them permission to study your data.

This offer comes bundled with all the promises of security, anonymity, and transparency (and money!) at the core of the blockchain’s immutable ledger. Once users have their genome sequenced, they can charge a fee, in tokens, to anyone who wants to access it. In the future, those tokens can be redeemed for additional tests and products that will further interpret your DNA.

Users also retain more control over their data than is typical. Anyone who’s been granted access to an individual’s de-identified DNA can only crunch analyses on that data using Nebula’s own computers. Buyers get to see the results, never the raw data itself. The only person who can download DNA data from the platform is the person whose DNA it is. The goal, says Nebula co-founder and chief scientific officer Dennis Grishin, is to create an environment where users can cheaply learn about their DNA and share it with scientists, while protecting themselves from potential privacy breaches.

The field of DNA testing has long been stuck with a circular problem. With whole genome sequences running about $1,000 each, the tests are so expensive, and the privacy concerns serious enough, that adoption has been slow. Further, only about two percent of people who get sequenced will turn up any information that could help them treat or stave off potential health risks. Your DNA could tell you more, if scientists had more genomes to work with. But the incentives for individuals just aren’t there yet.

This entrenched chicken-and-egg situation is the reason the federal government is spending $4 billion to sequence and study a million people across the US, asking them to donate their blood and spit and, eventually, giving them their results for just the price of participation. Now Nebula is joining the trend with its freemium approach.

Co-founded in 2016 by George Church, one of the field’s OGs (that’s Original Genomicist to you), Nebula is one of a collection of companies trying to speed up the arrival of personalized medicine. Its subsidized whole-genome sequencing services will be provided primarily by nearby Veritas, another Church-founded startup. Together, they want to help people see the value in every bit of their double helix. DNA can be big business, as genetic testing company 23andMe recently made plain with its blockbuster $300 million pharma deal. Marketplaces like Nebula will allow individuals to cash in on the genomics rush themselves while retaining control over who gets to profit from their data.

Using the blockchain to do so is an enticing idea, and Nebula is far from alone. In the last three years, nearly 150 companies building biomedical blockchain applications have raised more than $660 million in the private and cryptocurrency markets. About a quarter of those projects aim to be decentralized clearinghouses for various kinds of health data, according to a recent analysis by researchers at Mount Sinai’s newly formed Center for Biomedical Blockchain Research.

“What’s the closest thing you can come up with to a direct data marketplace?” asks Noah Zimmerman, the center’s director. “I can’t think of one. We’ve always required trusted third-party brokers to make these deals, and the value isn’t accruing to individual participants.”

He likens the current system—where pharma companies pay intermediaries for de-identified health information—to college sports. In the same way unpaid student athletes are told to be grateful for their free education, patients who participate (knowingly or unknowingly) in research are told to be happy there’s now a drug on the market that treats their illness. “I mean, sure,” says Zimmerman. “Be happy. But there’s someone up there making gobs of money on the backs of people that product is built on. Now, there is the potential here for people who are contributing data to be rewarded proportionally to how valuable their data is.”

For that promise to materialize, marketplaces like Nebula’s are going to have to recruit a LOT of customers. That’s one of the reasons it’s offering the free sequencing deal. It’s not unlike when Google debuted Gmail in 2004, offering ample free storage that the search giant monetized through targeted ads—targeting that only became possible once the company had collected bazillions of emails. Zimmerman just hopes they can make it that long.

“My biggest concern from an entrepreneurial standpoint is that these marketplaces are only valuable once they get to huge numbers,” he says. “Anything less than 100,000 genomes probably isn’t going to be useful to anyone.” 23andMe was able to survive some dark times because it had deep pockets. It’s unclear how far Nebula’s $4.3 seed investment will carry it.

The company declined to comment on whether it would be pursuing an ICO—the controversial and increasingly regulated practice among blockchain startups of raising funds through an “initial coin offering.” Like many other medical information-related startups, Nebula’s blockchain is closed, with the company acting as a central authority to award tokens and verify researchers before letting them in. Church hopes to convince people that getting your genome sequenced is just like buckling a seatbelt or not smoking. “Cars, cigarettes, genomes, these are all public health risks,” says Church. “They’re rare, but extremely impactful if they hit you.”

Nebula is joining another genomic data platform, called EncrypGen, which launched the first blockchain-enabled DNA marketplace on November 6. Called Gene-Chain, it allows users to upload the kind of genetic data produced by most direct-to-consumer companies, including 23andMe and Ancestry, and set a price for potential buyers. David Koepsell, the company’s CEO, says it is aiming to attract the 20 percent of 23andMe customers who’ve decided against participating in the testing company’s research program. Encrypgen plans to support whole genome sequences by the end of the year.

It also faces a challenging road forward. In the last week, EncrypGen has seen a couple dozen transactions on its platform, according to Koepsell, and most people are setting the price for a person’s genotype data plus answers to health-related survey questions at less than ten dollars. Potential buyers can search for data by self-reported health conditions or by physical characteristics, such as body-mass index, ethnic background, or age. DNA tokens used to buy any data can be converted to bitcoin or ethereum on a cryptocurrency exchange.

Unlike the Nebula marketplace, once buyers have spent their DNA tokens to purchase genetic data, they’re free to download it to their local machines. Also unlike Nebula, anyone whose computer can do the required math can join to mine and add blocks. “One of the things we’re trying to empower is citizen science,” says Koepsell. “There’s no legal reason to prevent anyone from purchasing de-identified data and doing research with it. We wanted to democratize the process.”

Federal policies for protecting human research subjects do not currently extend to de-identified genetic data. But those laws have come under increasing scrutiny as DNA data combined with information from other databases has exposed individuals’ identities. “Once you give access to your genome data, there’s no magical self-destruct button,” says Zimmerman. Not even a blockchain can prevent that from happening. So you still have to be careful about whom you trust with your DNA.

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Amazon and Google Are Taking Over Cities. The Smartest Startups Are Going Virtual

In the late winter of 2012, Clark Valberg had what he thought was a pretty good startup idea–an app for collaboration on designs across teams and companies–and a nice chunk of seed funding to get it going.

There was just  one problem. In New York City, where he lived, it had recently become prohibitively expensive to hire software engineers, thanks to Google.

After spending $1.9 billion on a Manhattan office building in 2010, the Silicon Valley giant was doing everything in its considerable power to fill it with coders. “I found myself faced with the existential crisis of having countless coffees and cocktails with engineers who were also interviewing with Google,” Valberg says. After weeks of courtship, he might make an offer, only to find out he’d been outbid by a decimal point or two.

Forced to compete with time and money he didn’t have, Valberg asked himself: “What’s the hack? How do I care less about x so I can care more about y?” At his previous company, a creative agency, he had used freelancers in cities like Austin and Phoenix, where the going rate for their services was cheaper. He decided to try staffing his startup, InVision, on the same basis.

It worked. So well that InVision is now valued at $1 billion. Its workforce of 700, up from 200 a year ago, is still all-virtual, and Valberg has no plans to change that.

This sort of thing feeds an endless stream of speculation about which up-and-coming city with an educated workforce, abundant broadband and cheap commercial rents might be “the next Silicon Valley.” Will it be Austin? Detroit? Kansas City? Toronto?  

But there’s a reason Amazon snubbed the other 235 cities that entered the absurd competition to host “HQ2.” They might have software engineers, but they don’t have vast numbers of software engineers–the kind of talent supply that can feed a company that was adding 5,000 jobs per year in Seattle before looking elsewhere.

For now, then, the biggest tech companies will channel their growth into the handful of cities that can accommodate such numbers. Which means those cities will continue to grow ever more inhospitable for startups. 

Early-stage startups can’t compete with profitable goliaths on salary. Historically, they’ve met that challenge by offering generous equity packages that can make early employees spectacularly wealthy. But even the most risk-tolerant people have to sleep somewhere and feed themselves, and doing that in Mountain View or Manhattan or Seattle without a six-figure salary is almost impossible.

“Equity packages don’t pay the rent,” says Wade Foster, CEO of Zapier. “That’s why you’re seeing so many startups starting to talk about what’s our non-Silicon Valley strategy? Is it a second office? Is it remote?”

For Zapier, which automates inter-app workflows, going remote made sense because, when the company was getting started in 2012, one of its founders was living in Missouri while his then-girlfriend finished law school there. Over time, Foster says, they realized being distributed was allowing them to tap into a broader, richer talent market than they ever could by confining hiring to one locale, even a tech hub. “We realized this could be become an advantage for us,” Foster says.

To play up that advantage, in 2017, Zapier began offering a unique perk: a $10,000 “delocation” package for employees looking to leave the San Francisco Bay Area. It was a clever piece of management–it’s hard to quit the company that let you take your Silicon Valley salary with you to Charleston–and an even more brilliant piece of marketing. Job applications for all types of roles at Zapier went up by 50 percent afterward, Foster says.   

Going all-remote does have its complications. To the degree that hiring and–especially– fundraising run on informal networking, it still helps to make the scene in SoHo or SoMa. But with each new megacampus, the math gets clearer: For startups that can make it work, ditching geography altogether is a way to enjoy the best of both worlds: a deeper and cheaper talent pool.

“Back in 2012, I would get emails from people like, ‘That’s weird, that’s different, that’s kind of crazy,'” Foster says. “Now, the emails I get are from founders and VCs asking ‘How do you pull this off?'”

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5 Lessons Raising Kids Can Teach You About Running Your Company

Your employees need your time and attention as they and the business grow. So why not use the lessons you learn at home with your work family. Here are a few key lessons executives can learn from our kids.

Every moment is a new opportunity.

Kids are fully present, always in the moment. They don’t obsess about the past or worry about the future. Children have what Shunryu Suzuki, the master who brought Zen Buddhism to America, calls “beginner’s mind.” In the book Zen Mind, Beginner’s Mind Suzuki writes, “in the beginner’s mind there are many possibilities, but in the expert’s there are few.” Kids bring creativity, openness, and a natural curiosity to everything. Try bringing this fresh perspective to brainstorming with your teams. Challenge them to channel the unselfconscious, no-idea-is-too-silly energy of childhood.

Negotiating means making things work for everybody.

If you’ve ever seen a group of kids working together to make up their own game with their own rules, you’ll see how important it is for them to create something everyone can play together. One kid might try to boss the rest of them around, but if he can’t hold their interest, they will quit and go home. As a result, kids’ homemade games are naturally diverse and inclusive. Don’t be afraid to let your teams make up some of their own rules and find their own ways to bring everyone together.

Prepare for the unexpected.

Everybody loves a best-case scenario, but as any parent who’s ever tried to get a child out the door in a hurry knows, you need to build in enough time for some worst-case reality too. Just as you wouldn’t assume you’ll only need a minute to pack a diaper bag, you also shouldn’t make your product launch date dependent on everything going right. Smart parents will tell you: someone will get an earache, it will snow, plans will be derailed, stuff will always happen. Stay flexible and, above all, realistic about what you can do and how quickly you can do it.

Change is the only constant, so you better embrace it.

With kids, as soon as you’ve figured out how to handle one milestone, you can be pretty sure they will have moved on to the next one. The tactics that worked for a 3-year-old who won’t go to bed are useless with a 13-year-old who sleeps till noon. Just like what worked for your million-dollar company won’t work when you reach 10 or 20 million. And your junior employee won’t be new forever. If raising kids teaches us anything, it’s that we need to constantly adjust our strategies to suit ever-changing needs. Be willing to continually review and refine your company’s processes, and to make changes that keep up with your growth.

Sometimes everybody just needs a snack or a nap.

To avoid meltdowns with little kids, you have to pay attention to the basics: food, sleep, fresh air. It’s the same with your teams. Sometimes big problems are really small ones, but the team dealing with them is burnt and needs a timeout.  Don’t schedule important meetings when people are likely to be cranky and hungry, or anxious to get somewhere. Help your teams to recharge and reset when they need to. Model your own commitment to work-life balance. Employees who feel cared about will work smarter, not harder, and that’s good for everyone.

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Tencent profit beats estimates as investment gains offset gaming weakness

HONG KONG (Reuters) – Tencent Holdings (0700.HK) said on Wednesday its third-quarter net profit rose 30 percent, beating estimates, as investment gains offset a weak performance in the Chinese company’s core gaming business.

FILE PHOTO: Tencent Holdings Chairman and CEO Pony Ma (C) visits the Tencent booth following the opening ceremony of the fifth World Internet Conference (WIC) in Wuzhen, Zhejiang province, China November 7, 2018. REUTERS/Stringer/File Photo

Net profit at China’s biggest gaming and social media group in the July-September quarter rose to 23.3 billion yuan, compared with an average estimate of 19.32 billion yuan, according to 15 analysts polled by to I/B/E/S data from Refinitiv.

Revenue rose 24 percent to 80.6 billion yuan ($11.59 billion), the slowest quarterly growth in more than three years, in-line with estimates.

China, the world’s biggest gaming market, has been imposing tougher rules on the industry, including a halt to new game approvals since March and calls to tackle young people’s gaming addictions.

This contributed to Tencent reporting its first quarterly profit fall in more than a decade in its April-June quarter. The company also cut its gaming marketing budget.

Tencent shares, which more than doubled in 2017, have dropped by about a third so far this year, wiping about $165 billion in value from the group’s market value.

In the third quarter, Tencent benefited mainly from a more-than-doubling in net gains from its investment activities, including the initial public offering of online food delivery to ticketing services company Meituan Dianping.

Douglas Morton, Head of Research, Asia at Northern Trust Capital Markets, said the result beat was a positive surprise even if not counting the investment income.

“What the real surprise is or the real comfort for the market will be that the mobile gaming data which beat expectations,” he said.

Tencent said smartphone games revenues grew 7 percent year-on-year and 11 percent quarter-on-quarter to 19.5 billion yuan, mainly due to contributions from new games. Despite the new approval freeze, Tencent already had 15 approvals and released 10 titles in the quarter, it said in the filing.

PC games revenue dropped 15 percent year-on-year due to continued user migration to mobile games and high base in the same quarter a year ago.

Advertising revenue, which accounts for 20 percent of the company’s total revenue, rose 47 percent, supported by a 61 percent jump in social and other advertising.

Tencent said its cloud services revenues more than doubled year-on-year in the quarter while the number of paying cloud customers grew at a triple-digit percentage rate year-on-year. Cloud revenues for the first three quarters of the year exceeded 6 billion yuan, it said.

Monthly active user number of WeChat, the most popular social network in China, rose incrementally to 1.08 billion.

($1 = 6.9536 Chinese yuan)

Reporting by Sijia Jiang; Editing by Muralikumar Anantharaman and Jane Merriman

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Rest In Peace, Stan Lee. (Here's the Big Break He Told Inc. About in 2009)

The comics world mourned the death Monday of Stan Lee, the man who dreamed up some of the most iconic characters and superheroes of the last 60 years–including Spider-Man, Hulk, the Avengers, the X-Men, the Fantastic Four, Black Panther, and Daredevil. 

Lee was also a reluctant entrepreneur. His creations became the center of an empire that Disney bought for more than $4 billion. But he told Inc. in 2009 that never loved the business side of his business. 

As he remembered, if you had to point to one big break in his life, it was the advice his wife gave him in the early 1960s when he was about to quit the comics business. His boss was his cousin’s husband, Martin Goodman, and Lee was annoyed that he was being pushed relentlessly to copy the competition, and wanted to go out on his own.

I said to my wife, “I don’t think I’m getting anywhere. I think I’d like to quit.” She gave me the best piece of advice in the world.

She said, “Why not write one book the way you’d like to, instead of the way Martin wants you to? Get it out of your system. The worst thing that will happen is he’ll fire you — but you want to quit anyway.”

So in 1961 we did The Fantastic Four. I tried to make the characters different in the sense that they had real emotions and problems. And it caught on. After that, Martin asked me to come up with some other superheroes. That’s when I did the X-Men and The Hulk. And we stopped being a company that imitated.

Lee’s wife died in 2017. They’d been married for 69 years. He leaves a daughter, and a legacy that people won’t soon forget.

Here’s what else I’m reading today:

Do not hire this 1 person

Seth Godin has a new book out. Like most of what he writes, there are some very interesting takeaways. If you take just one point away as an entrepreneur however, here’s his best advice about the one person no startup should ever hire: a chief marketing officer.

Instead, “go to a shelter and get a German shepherd,” he suggests in an interview with Inc.’s Leigh Buchanan, and train it to bite you every time you think about hiring a CMO. 

That’s because Godin thinks most startups fail because of product problems, or customer service problems that need to be addressed. And the person who is in charge of overseeing product and customer service–and yes, marketing and everything else–is called the CEO. Or maybe the founder. The entrepreneur. In other words, you.

It’s the hardest, best job you’ll ever have, and it’s the one you’ve signed on for. Relish it.

Netflix has some truly eye-opening new technology

Oh, there’s nothing dystopian about this at all: Netflix just unveiled a feature it calls EyeNav, in which its iPhone app tracks your eye movements so you can select shows by simply staring at them, and press stop by sticking out your tongue. Once you get past the inherent creepiness, the entertainment giant says it’s excited about how this could make its app more accessible.
–Bill Murphy Jr., Inc.

The war at 7-Eleven

There’s a war going on inside 7-Eleven, at least according to some franchisees who say the company is tipping off Immigrations and Customs Enforcement (ICE), and resulting in raids on stores owned by it least cooperative store owners.
–Laureen Etter and Michael Smith, Bloomberg

A Black Friday prediction

A new study says Americans plan to spend $520 each on average during Black Friday, with over half of U.S. residents making at least one in-person purchase. It’s not exactly a double blind scientific study–online coupon site Slickdeals surveyed 2,000 people. But it’s good news, so we’ll take it.

What on earth was Hasbro thinking?

The game of Monopoly is 83 years old. Hasbro owns the copyright now, and for almost 25 years, they’ve licensed lots of different versions, from Auburn University-themed edition to an X-Men Collector’s Edition. The latest edition to make the rounds, just in time for the holidays: Millennial Monopoly, in which players don’t buy real estate (it’s too expensive), and collect experiences rather than cash.

The rules say the player with the most student loan debt rolls first, and the rules recommend playing in your parents’ basement. Millennials are not amused, which leads to the question: who did they think would buy this?
–Gina Loukareas, Boing-Boing

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Bitcoin: The Calm Before The Storm


Bitcoin: The Calm Before The Storm

Bitcoin (BTC-USD) has been remarkably stable in recent months. In fact, for over two months now Bitcoin has traded in an incredibly narrow range of around $6,000 – $6,800. There doesn’t appear to be much news worthy of moving prices right now. So, Bitcoin remains extremely calm, for now.

Bitcoin 1-Year Chart


Nevertheless, despite the tame atmosphere surrounding Bitcoin for the time being, this is predominantly likely just the calm before the storm, a storm that is likely to lift Bitcoin prices substantially higher over the next several years.

This is not the first-time Bitcoin has seen calm waters. We’ve seen similar periods of modest volatility, and humble price swings. Primarily, similar low volatility phenomenon have occurred in the very late stages of Bitcoin bear markets (the opposite of vertical moves and wild price swings we see at the height of Bitcoin bull markets). Everyone seemingly loses interest, volume dries up, news flow quiets down, and then, when you least expect it, the next Bitcoin bull market begins.

I expect the current “quiet period” to lead to a new Bitcoin bull market soon. So, what will be the catalyst to light a match beneath Bitcoin prices? There are several developments that should begin to improve sentiment, and start to move prices substantially higher going forward.

Bitcoin at $250,000 in 4 years?

Billionaire investor Tim Draper recently reiterated his $250,000 Bitcoin price target by 2022. Draper believes that many of us will be using cryptocurrencies to buy coffee and other everyday things 5 years from now instead of implementing fiats everywhere. Naturally, Draper is not alone in his bullish analysis on Bitcoin. Fundstrat’s Tom Lee, and many other prominent Wall St and non-Wall St figures believe Bitcoin will be worth much more in the future.


Tom Lee even predicted that Bitcoin would be at $25K by the end of this year. Well, that does not appear very likely now, nevertheless, Bitcoin could be worth much more several years from now. The problem with Bitcoin price targets is that they are extremely difficult to pin down, but due to the fundamental factors surrounding Bitcoin the overall trajectory should remain higher long-term.

Jamie Dimon Does Not Care Much for Bitcoin

On the flipside of the bull argument many Wall St insiders like JPMorgan’s (JPM) CEO Jamie Dimon, and even revered investor Warren Buffet have become avid skeptics of Bitcoin. In fact, in a recent interview Mr. Dimon shared just how much he does not care for Bitcoin.

I never changed what I said, I just regret having said it. I didn’t want to be the spokesman against Bitcoin. I don’t really give a sh*t, that’s the point. Blockchainis real, it’s technology, but Bitcoin is not the same as a fiat currency.

Great insight from Jamie right there, which may accurately represent the viewpoint of many longtime banking and Wall St insiders. So, why should Mr. Dimon care about Bitcoin, or like it or dislike it at all?


Well, Mr. Dimon is the head of one of the wealthiest and most powerful banking institutions in the world. Incidentally, JPMorgan, like every other major bank in the U.S. owns part of the Federal Reserve through stock. Additionally, member banks like JPMorgan get to assign 6 of the 9 board members at every regional Federal Reserve Bank.

Some readers may think the Federal Reserve is part of the U.S. government but it is not. It is sanctioned by the U.S. Congress through the Federal Reserve Act, but is ultimately a private enterprise owned by member banks like JPMorgan, Citi (C), Bank of America (BAC) and others. Therefore, it is logical to presume that the same entities who own majority stakes in major U.S. banking institutions by default own and through the appointment of most directors control the Federal Reserve.

It seems convenient that a private organization like the Fed has a monopoly on dollar creation. The organization creates all the dollars “it sees fit”, then lends out these dollars to member banks like JPMorgan at a very low rate, the member banks then create all the credit they want through fractional reserve banking (typically at a rate of 10-1, credit – reserve), and then lend it to the population, small businesses, etc. at a substantially higher interest rate.

This is the system that we live in, the fiat reality. Who do you think a system such as this favors and benefits, the people making the rules, or the general public?

So, of course Jamie Dimon does not care much for Bitcoin. In fact, he should probably fear and despise it, because Bitcoin and cryptocurrencies in general represent a real alternative and thus a true threat to the current status quo fiat finical order.

The Bitcoin/blockchain system essentially assumes control over currency from big banks like JPMorgan, and returns the power over currency into the hands of the population, essentially leveling the financial field for all participants in the market. This takes the potential for predatory manipulation, devaluation, inflation, and other unpleasant factors essentially out of the financial equation.

Don’t Mind the 2,000 Plus Cryptocurrencies

Critics often point to the fact that there are now over 2,000 cryptocurrencies in circulation. Some skeptics claim that the continuous creation of new digital assets delegitimizes the entire space, and will ultimately render most or all cryptocurrencies close to worthless.

However, the cryptocurrency complex has maintained a relatively stable market cap of roughly $200 billion for months now, despite the creation of new coins. This implies that new coins coming online may enjoy very limited success going forward, and the prominent coins of today will likely turn out to be the widely-used coins of tomorrow.


As the segment matures barriers to entry will become higher as there are a number of dominant cryptocurrencies that are likely to retain their leading market positions indefinitely. Aside from specifically designed coins to handle certain functions like Ripple (XRP-USD) Ethereum (ETH-USD) and others, prominent transactional coins like Bitcoin Cash (BCH-USD), Litecoin (LTC-USD), and others will very likely retain extremely high portions of the transactional market.

This suggests that while these coins will increase in value substantially over time, newer coins coming online with similar functions will likely remain largely irrelevant due to the recognition and widespread use of current digital assets, and higher barriers to entry going forward.

Still Waiting on a True Bitcoin ETF

The SEC continues to stall on a Bitcoin ETF. In September, the ruling on 9 Bitcoin ETFs got postponed, but a decision is expected in the near future. The introduction of Bitcoin ETFs will likely open floodgates into the Bitcoin market, and will propel Bitcoin into the main stream as far as conventional investible assets are concerned. This will very likely help ignite the next bull phase in the bitcoin era.

Right now, investors have very limited access to Bitcoin. They can either buy Bitcoin directly through a cryptocurrency exchange, they can trade Bitcoin futures contracts, or they can buy the Grayscale Bitcoin Investment Trust (OTCQX:GBTC), none of which are ideal options for the vast majority of retail and institutional investors. Much easier access will be granted via multiple mainstream Bitcoin ETFs.

Furthermore, even if the SEC postpones its decision again or does not approve an ETF at this time, the path is already set for Bitcoin to be accepted into the investment world on a mass scale. Bitcoin futures already exist and trade freely on the biggest exchanges in the U.S. Furthermore, Bitcoin has been officially classified as a commodity, is receiving increased regulation, and the next logical step is to introduce ETFs. Also, there are many prominent companies now pushing for Bitcoin backed ETFs to be approved.

Institutions Likely to Move In Soon

One very atypical factor about the Bitcoin phenomenon is the extremely limited role traditional investment houses and Wall St in general has played in it. Aside from shorting Bitcoin from the highs, it appears that institutional investors have made very little money in Bitcoin, thus far. This is precisely why the next wave of capital capable of taking Bitcoin substantially higher will likely come from big institutional investors. This could include the creation of Bitcoin backed ETF’s and other asset classes, infrastructure projects, development and funding of supporting companies, direct investment, and so on.

Opportunities in the digital asset space for investment companies are essentially limitless, and this is precisely why Goldman Sachs (GS), and others are starting to venture into the crypto space. I expect that when the next Bitcoin bull market arrives, Wall St will not be sitting it out this time. There is simply too much money to be made, and the space has reached scale capable of attracting many billions in institutional dollars. So, expect prices to go especially high next time around due to excess speculation from the guys on Wall St.

Improving Functionality

Another factor that is likely to propel prices higher is the continuously improving functionality of digital assets. Whether it’s the Lightning Network, transactional coins like Dash (DASH-USD), ZCash (ZEC-USD) and others, big multinational corporations starting to accept Bitcoin, or other developments, it appears that the trend is leading to one outcome, much wider use of digital assets in the future.

The Lightning Network is optimizing Bitcoin’s functionality, alt coins provide safer, or more anonymous modes of conducting commerce, and more and more companies are openly beginning to accept Bitcoin seemingly every day. Moreover, Bitcoin returns the control over money back to the people where it ultimately belongs. I agree with Mr. Draper, 5 years from now we are likely to be using Bitcoin and alt coins much more readily than most people expect, and because of this Bitcoin’s price is likely to be much higher in 2022.

The Bottom Line: The Calm Before The Storm

Bitcoin’s price is extremely calm right now, but we have seen such calm periods before. Most notably, Bitcoin’s price action flattened out in 2012 before a bull run, in 2013, prior to an ascend, and throughout periods in 2015, and 2016, prior to the most recent bull market. One thing that all these calm periods have in common is that they occurred after substantial declines had taken place, and they all preceded significant rallies. I don’t expect this time to be any different.

Bitcoin: Long-Term Logarithmic Chart

Moreover, there are plenty of potential catalysts capable of sparking an explosive rally in Bitcoin as well as in other digital assets. The approval of Bitcoin backed ETFs, increased institutional participation, improved functionality, as well as other bullish elements will likely play an instrumental role in driving the next Bitcoin wave significantly higher. Prices in this wave should go substantially higher from current levels, and could eclipse the prior top of roughly $20K by several factors. So, essentially I am looking for Bitcoin to be at around $50,000 – $100,000 in 3 – 5 years.

Risks Do Exist

Detrimental Government Regulation

In my view, the number one long-term threat Bitcoin faces is detrimental government regulation or an all out Bitcoin ban. If major Bitcoin friendly governments like the U.S., E.U., Japan, South Korea, and others follow the footsteps of China and essentially make Bitcoin use and trading illegal, it could have catastrophic consequences for Bitcoin’s price. Demand would likely plummet and when demand for a commodity decreases so does its price, drastically at times. This seems unlikely due to the progressive steps taken in the U.S., E.U. and other areas concerning Bitcoin, but the threat does exist, especially if Bitcoin ever starts to seriously challenge the current fiat financial status quo.

Continued Functionality Issues

Another risk factor is the concern that Bitcoin may never become a widely used transactional currency due to its issues with speed and scale. Yes, the Lightning Network promises to solve many of the issues associated with speed, cost, and scale, but there is no guarantee that the LN will become widely adopted, even over time.

Therefore, there is the risk that newer and more efficient digital currencies like LiteCoin, Bitcoin Cash and others will make Bitcoin somewhat obsolete as an actual medium of exchange for the masses.

Continued Security Breaches and Fraudulent Activity

Continued security breaches in the Bitcoin world concerning exchanges and individual wallets is a constant concern. If significant breaches continue, investors and users may start to lose confidence in the system and demand could decrease as a result.

Likewise for fraud cases. In an industry that is relatively loosely regulated, substantial fraudulent activity is a persistent risk. Just like with security breaches, when people get ripped off, it reflects poorly on the entire industry and demand along with prices can suffer.

One Million and One Cryptocurrencies

Another concern is the seemingly endless supply of new cryptocurrencies. There are now over 2,000 different cryptocurrencies listed on The risk is that the market may become oversaturated with digital assets which could lead to a crash, or to a devaluation of many digital assets, including Bitcoin.

Loss of Interest Amongst the Masses

There is always the simple risk of loss of interest amongst the masses. There is a chance that Bitcoin will forever remain a niche phenomenon, a novelty, as JPMorgan’s Jamie Dimon puts it. In this case, Bitcoin may not experience substantial demand, and the price would very likely cascade much lower over time.

Bitcoin is Not for Everyone

The bottom line is that Bitcoin is not for everyone. I view it as an investment for people with a relatively high risk tolerance, and even then, maybe only 5-10% of a portfolio’s holdings should be allocated to digital assets.

Bitcoin is still a relatively new phenomenon and no one truly knows exactly how it is going to play out over the long term. The truth is that 10 years from now one Bitcoin could be worth $1 million, or it could be worthless, and given the number of uncertainties, neither outcome should really shock people.

Thank you for taking the time to read my article. If you enjoyed reading my work please hit the “Like” button, and if you’d like to be notified about my future ideas, hit that “Follow” link.

Disclaimer: This article expresses solely my opinions, is produced for informational purposes only, and is not a recommendation to buy or sell any securities. Investing comes with substantial risk to loss of principal. Please conduct your own research, consult a professional, and consider your investment decisions very carefully before putting any capital at risk.

Disclosure: I am/we are long BTC-USD, BCH-USD, LTC-USD, XRP-USD, DASH-USD, ZEC-USD.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Cyber Saturday—Coinbase Loves Hackers, Facebook Election Win, White House Video Fake Out

You’re outta here! Facebook said it removed 115 accounts suspected of engaging in “coordinated inauthentic behavior” from its flagship site as well as Instagram in the lead-up to the midterm elections in the U.S. Nathaniel Gleicher, Facebook’s cybersecurity policy leader, said the company had been tipped off about the allegedly bogus accounts by law enforcement last weekend. Meanwhile, trolls have been struggling to spread their misinformation on Twitter, NBC News reports.

Doctor, doctor, give me the news. The White House appeared to share a doctored video as justification for its ban of CNN reporter Jim Acosta. The video in question, which sped up Acosta’s arm movement to make it appear as though he were karate chopping a White House intern, was first shared online by a known conspiracy theorist.

Iran so far away. Banks are on high alert for attacks by Iranian hackers in the wake of the U.S.’s reinstatement of economic sanctions on Iran. The middle eastern nation “might lash out,” as one top cybersecurity executive put it to CNN, which got a glimpse of a major bank’s cybersecurity defense center.

Cylance of the lambs. BlackBerry is reportedly in talks to gobble up cybersecurity firm Cylance for as much as $1.5 billion, Business Insider reported. The business news site’s sources said the deal could happen as soon as next week—although it could just as easily fall apart.

Fun in the sun. U.S. Cyber Command, a hacking-focused division of the military, began releasing unclassified malware samples to the public as part of a cybersecurity information sharing initiative on Friday. The command posted two code samples to the Google-owned malware research repository VirusTotal, including one sample that it said originated from the suspected Russian espionage group nicknamed “fancy bear,” which was best known for digitally infiltrating the Democratic National Committee in 2016.

Naynay on those n00bes.”

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