Dec 22, 2019

From The Desk of Fernando Guzmán Cavero

                                                            Dear Friends

Wish you Peace in your hearts in this coming of Nativity and that your objectives be reality in 2020.

See you on January the 2nd, 2020.

                                                                             All the Best 

                                                                    Fernando Guzmán Cavero/.                                           

Dec 19, 2019

The FTC Alleges Post Holdings, Inc.’s Proposed Acquisition of TreeHouse Foods, Inc.’s Private Label Ready-to-Eat Cereal Business Will Harm Competition

3-4 minutes - Source: FTC

Today the Federal Trade Commission filed an administrative complaint (a public version of which will be available and linked to this news release as soon as possible) challenging Post Holdings, Inc.’s proposed $110 million acquisition of TreeHouse Foods, Inc.’s private label ready-to-eat cereal business. Post and TreeHouse are two of only three significant manufacturers and distributors of private label ready-to-eat cereal in the United States. The acquisition would give Post more than a 60 percent share of an already highly concentrated market and eliminate the vigorous competition between them to serve grocers across the country. The proposed merger would remove the competitive pressure that has driven higher quality and lower priced cereals for American families.
Ready-to-eat cereals are a staple of American breakfasts. These cereals do not require any preparation before consumption. Nearly every grocer offers a selection of ready-to-eat cereals in their stores. In addition to carrying national brands of ready-to-eat cereals, many stores offer private label ready-to-eat cereals, with the retailer’s own trade name.
“Households nationwide benefit from the robust competition between Post and TreeHouse, and a merger between these companies would likely lead to higher prices and reduced quality of the store-brand cereals that consumers enjoy today,” said Ian Conner, Deputy Director of the FTC’s Bureau of Competition.
The Commission also authorized FTC staff to seek a temporary restraining order and a preliminary injunction in federal court, if necessary, to prevent the parties from consummating the merger, and to maintain the status quo pending the conclusion of the administrative proceeding.
The Commission votes to issue the administrative complaint and to authorize staff to seek a temporary restraining order and preliminary injunction were both 5-0.  The administrative trial is scheduled to begin on May 27, 2020.
NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The issuance of the administrative complaint marks the beginning of a proceeding in which the allegations will be tried in a formal hearing before an administrative law judge.
The Federal Trade Commission works to promote competition, and protect and educate consumers. You can learn more about how competition benefits consumers or file an antitrust complaint. Like the FTC on Facebook, follow us on Twitter, read our blogs, and subscribe to press releases for the latest FTC news and resources.

Putin echoes Trump impeachment criticism, says reasons have been 'completely fabricated'

David Reid

Annual news conference by Russia's President Vladimir Putin
A screen shows Russia’s President Vladimir Putin during the 15th annual end-of-year news conference at the World Trade Centre in Moscow.
Valery Sharifulin
Russian President Vladimir Putin said Thursday he expects President Donald Trump to survive impeachment proceedings and that the legal move against him was a Democratic Party trying to get results “using other methods and means.”
Late Wednesday, Trump became only the third president in history to be impeached by the House of Representatives. In a largely party-line vote, the House impeached Trump for abuse of power and obstruction of Congress over his attempt to pressure Ukraine’s president into opening up investigations into his political rivals, including former Vice President Joe Biden, a leading contender to face Trump in the November election.
This sets up a trial in the Senate that will decide whether Trump remains in office.
At his annual year-end press conference in Moscow, Putin said he didn’t expect to see Trump’s reign to end via impeachment as his Republican Party would save him.
“It’s unlikely they will want to remove from power a representative of their party based on what are, in my opinion, completely fabricated reasons,” Putin said, according to a Reuters translation.
Putin said the Democratic Party is attempting to remove Trump because it had failed in the 2016 election.
“This is simply a continuation of the (U.S.) intra-political battle where one party that lost an election, the Democratic Party, is trying to achieve results using other methods and means,” Putin said.
Putin added that the Democrats had accused Russia of election interference and collusion at high levels. This had been proven untrue, he said, and now the U.S. opposition had moved on to allegations surrounding Ukraine.
Allegations of Russian interference prompted a near two-year long investigation led by Robert Mueller. The inquiry concluded that Putin’s government interfered in the 2016 presidential election in “sweeping and systematic fashion” and had been designed to favor Trump and harm Hillary Clinton’s campaign.
Trump is accused of pressuring Ukraine to announce investigations into his Democratic political rival Joe Biden and into a debunked theory that Ukraine intervened in the 2016 on behalf of Clinton. Trump is also charged with obstruction of Congress for allegedly refusing to cooperate with the impeachment inquiry.

Unfriendly move

A fresh bill to impose more Russian sanctions is making its way through the U.S. system.
Titled the “Defending American Security from Kremlin Aggression Act of 2019” (DASKA), the law would level new sanctions against sovereign debt, banks and Russian oligarchs.
It is backed by Senate Democrats and some senior Republicans, although it is understood the White House, via the State Department, “strongly opposes” it.
Putin said Thursday the decisions by the U.S. against Russia were obviously not coming from the executive branch — Trump — but were being pushed by the legislative.
He said fresh sanctions would have some impact on ties between the U.S. and Russia. “There is nothing good about it, this is an unfriendly move,” Putin said, according to a separate translation.
—CNBC’s Holly Ellyatt contributed to this article.

Joe Biden picks up support from influential Wall Street fundraisers Marc Lasry and Blair Effron, who backed Obama and Clinton

Brian Schwartz

RT: Joe Biden - 106305197
U.S. Democratic presidential candidate and former U.S. Vice President Joe Biden.
Steve Marcus | Reuters
Joe Biden’s fundraising network is about to get a big boost just in time for 2020.
Marc Lasry and Blair Effron, two of the most influential and prolific Wall Street Democratic fundraisers, are lining up behind the former vice president in the presidential primary race now that Sen. Kamala Harris has dropped out.
Lasry, a longtime investor and a part owner of the NBA’s Milwaukee Bucks, is opening up his donor network to Biden just weeks after Harris withdrew from the Democratic primary for president, according to people with direct knowledge of the matter.
Effron, who is the co-founder of investment firm Centerview Partners, has also indicated to allies that he is going to put his fundraising connections to help Biden, these people added.
Lasry and Effron were members of Harris’ finance committee, which included other Wall Street players such as Frank Baker, co-founder of Siris Capital Group. Effron and the Lasry family hosted several fundraising events for Harris before she dropped out.
Lasry and Effron are the latest Wall Street figures to back Biden. Alan Patricof, the founder and managing director of venture capitalist firm Greycroft, is also assisting the former vice president in the fundraising game.
The support of Lasry and Effron comes at a crucial time for Biden. He continues to lead in national poll averages among Democrats, while state polls indicate he is in for a tough battle during the first nominating contests of the 2020 season. The Iowa and Nevada caucuses, along with the New Hampshire and South Carolina primaries, take place in February. And Biden is looking to bolster his fundraising numbers after lagging rivals Sens. Bernie Sanders and Elizabeth Warren and Mayor Pete Buttigieg during the third quarter.
Lasry and Effron were marquee fundraisers for former President Barack Obama and Democratic candidate Hillary Clinton. In 2012, Lasry, according to data compiled by the nonpartisan Center for Responsive Politics, bundled over $500,000 for Obama. Four years later, he helped bring in over $100,000 for Clinton.
Effron bundled similar amounts for Obama and Clinton.
Lasry and Effron have each contributed $2,800 to Biden’s campaign, according to a Federal Election Commission filing.
Other top Harris supporters are being courted by allies close to various primary candidates, including associates of Biden, Buttigieg and Sens. Amy Klobuchar and Cory Booker.
Even with other moderate Democrats in the race, including new candidates former New York Mayor Mike Bloomberg and former Massachusetts Gov. Deval Patrick, Biden has remained the most prominent alternative to progressive candidates Warren and Sanders. Lasry has been critical of Warren, a Wall Street critic who has proposed a wealth tax, saying that the stock market would decline 20% to 30% if she were to win the presidency.
Lasry, Effron and a spokesman for Biden did not return a request for comment.
Biden’s campaign has already signaled that it improved its fundraising efforts since a sluggish third quarter, when they only finished raising $15 million. Biden went into the fourth quarter with only $9 million on hand.
The Associated Press reported that Biden’s fourth quarter fundraising efforts have far surpassed his previous haul, but the campaign has yet to disclose how much cash he will have on hand going into 2020.

Kitco News Video: Gerald Celente gives his 2020 financial forecast and it’s not pretty folks

U.S. International Transactions, Third Quarter 2019 | U.S. Bureau of Economic Analysis (BEA)

6-8 minutes - Source: BEA

Current Account Deficit Narrows by 0.9 Percent in Third Quarter
Current Account Balance
The U.S. current account deficit, which reflects the combined balances on trade in goods and services and income flows between U.S. residents and residents of other countries, narrowed by $1.1 billion, or 0.9 percent, to $124.1 billion in the third quarter of 2019, according to statistics from the U.S. Bureau of Economic Analysis (BEA). The revised second quarter deficit was $125.2 billion.
The third quarter deficit was 2.3 percent of current dollar gross domestic product, down less than 0.1 percent from the second quarter.
The $1.1 billion narrowing of the current account deficit in the third quarter mainly reflected a reduced deficit on goods and an expanded surplus on primary income.
Quarterly U.S. Current Account and Component Balances
Current Account Transactions (tables 1-5)
Exports of goods and services to, and income received from, foreign residents decreased $4.3 billion, to $944.4 billion, in the third quarter. Imports of goods and services from, and income paid to, foreign residents decreased $5.4 billion, to $1.07 trillion.
Quarterly U.S. Current Account Transactions

Trade in Goods (table 2)

Exports of goods decreased $0.9 billion, to $413.8 billion, and imports of goods decreased $4.5 billion, to $633.4 billion. The decreases in both exports and imports mainly reflected decreases in industrial supplies and materials, primarily petroleum and products.

Trade in Services (table 3)

Exports of services decreased $0.3 billion, to $212.0 billion, reflecting partly offsetting changes across major categories. Decreases were led by travel, mainly other personal travel, and increases were led by other business services, mainly professional and management consulting services. Imports of services increased $1.6 billion, to $149.8 billion, reflecting increases in nearly all major categories. Increases were led by insurance services, mainly reinsurance.

Primary Income (table 4)

Receipts of primary income decreased $4.1 billion, to $282.0 billion, and payments of primary income decreased $6.2 billion, to $213.3 billion. The decreases in both receipts and payments mainly reflected decreases in direct investment income and in other investment income. Within direct investment income receipts, dividends increased $24.9 billion, to $95.3 billion, in the third quarter and remain elevated since the passage of the 2017 Tax Cuts and Jobs Act, which generally eliminated taxes on repatriated earnings beginning in 2018. For more information, see “How do the effects of the 2017 Tax Cuts and Jobs Act appear in BEA’s direct investment statistics?” The decreases in other investment income receipts and payments mainly reflected decreases in interest on loans and deposits.

Secondary Income (table 5)

Receipts of secondary income increased $1.0 billion, to $36.6 billion, mainly reflecting an increase in private sector fines and penalties, a component of private transfer receipts. Payments of secondary income increased $3.7 billion, to $72.0 billion, mainly reflecting increases in U.S. government grants and in insurance-related transfers, a component of private transfer payments.
Financial Account Transactions (tables 1, 6, 7, and 8)
Net financial account transactions were −$47.9 billion in the third quarter, reflecting net U.S. borrowing from foreign residents.

Financial Assets (tables 1, 6, 7, and 8)

Third quarter transactions increased U.S. residents’ foreign financial assets by $123.5 billion. Transactions increased direct investment assets, primarily equity, by $33.3 billion; portfolio investment assets, mainly debt securities, by $18.5 billion; other investment assets, primarily loans, by $69.9 billion; and reserve assets by $1.9 billion.

Liabilities (tables 1, 6, 7, and 8)

Third quarter transactions increased U.S. liabilities to foreign residents by $164.9 billion. Transactions increased direct investment liabilities, mainly equity, by $37.6 billion; portfolio investment liabilities, mainly debt securities, by $86.5 billion; and other investment liabilities, mainly bank deposits, by $40.8 billion.

Financial Derivatives (table 1)

Net transactions in financial derivatives were −$6.5 billion in the third quarter, reflecting net borrowing from foreign residents.
Updates to Second Quarter 2019 International Transactions Accounts Balances
Billions of dollars, seasonally adjusted
  Preliminary estimate Revised estimate
Current account balance −128.2 −125.2
    Goods balance −223.3 −223.2
    Services balance 60.0 64.1
    Primary income balance 67.6 66.6
    Secondary income balance −32.5 −32.7
Net financial account transactions −155.1 −213.4
Prototype Tables
With the release of the international transactions accounts (ITAs) on September 19, 2019, BEA introduced two new tables that present: (1) geographic detail by type of transaction (ITA table 1.4) and (2) annual trade in goods and services with expanded country and geographic area detail (ITA table 1.5). These tables were released as prototypes, along with prototypes for the other standard ITA tables that reflect changes that will be introduced with the annual update in June 2020. These prototype tables have been updated to incorporate the statistics from this release and continue to be provided alongside the current standard presentation to prepare data users for the upcoming changes. The two sets of tables will be published concurrently until June 2020, when the prototype tables will replace the existing tables as the standard presentation. The prototype tables, published as addenda to the current tables, are available in BEA’s interactive data application. Additional information is available in “Prototype Tables for the International Transactions Accounts.”
*  *  *
Next release: March 19, 2020 at 8:30 A.M. EDT
U.S. International Transactions, Fourth Quarter and Year 2019
*  *  *
U.S. International Transactions Release Dates in 2020
Fourth Quarter and Year 2019 March 19
First Quarter 2020 and Annual Update June 19
Second Quarter 2020 September 18
Third Quarter 2020 December 18

House Impeachment Vote Is Unlikely to Sway Markets

10-13 minutos - Source: NYT

Credit...Leah Millis/Reuters
Voting nearly along party lines, the House approved two articles of impeachment against President Trump, making him the third president in history to face removal by the Senate. But the stock market has been largely unfazed by the news of impeachment proceedings, and that is unlikely to change, reports MarketWatch.
Investors are shrugging at the news because they don’t expect the Republican-controlled Senate to remove the president from office.
Market participants have grown more comfortable with the expectation that Mr. Trump would be impeached but not convicted, according to an investor survey conducted by RBC Capital Markets.
A federal appeals court yesterday struck down the provision of the Affordable Care Act that requires Americans to have health insurance, saying it was unconstitutional, but the future of the decade-old health care law is still in limbo, writes the NYT’s Abby Goodnough.
The decision did not invalidate the rest of the law, and the panel of the U.S. Court of Appeals for the Fifth Circuit in New Orleans sent the case back to a federal district judge in Texas to see which parts of the law could survive without the mandate.
If the law were thrown out, insurers would no longer have to cover people up to age 26 on their parents’ plans, and could refuse coverage for more than 50 million people with pre-existing conditions. About 17 million Americans bought coverage through the A.C.A.
The case could go before the Supreme Court. The California attorney general, Xavier Becerra, said he planned to petition the court to hear the case. He led 21 states that intervened to try to preserve the law.
President Trump, who campaigned on repealing the law, tried to appeal to both opponents of the law and people concerned about losing their health insurance.
He called the ruling “a big win for all Americans,” and said it would not alter the health care system. Mr. Trump also said he wanted to protect people with pre-existing conditions.
The case is unlikely to be resolved before next year’s presidential election.
The Bank of England said today that an audio feed from its news conferences had been leaked to some investors before it was made public. The early access to policymakers’ remarks gave those investors a leg up on the rest of the market, reports the NYT’s Amie Tsang.
The central bank is investigating the source of the leak, an unidentified third-party supplier that has provided sound from news conferences ahead of their video feed since earlier this year.
Investors closely monitor the news conferences to gain insight. “In the world of high-speed trading, just a few seconds’ lead time can offer some investors a trading advantage,” Ms. Tsang reports.
The bank said it had disabled the supplier’s access. “The bank operates the highest standards of information security around the release of the market-sensitive decisions of its policy committees,” it said.
Uber has a resolution on one investigation into its workplace culture: Yesterday, the ride-hailing company agreed to create a $4.4 million fund to compensate employees who had been sexually harassed at work, the NYT’s Kate Conger writes.
The company “permitted a culture of sexual harassment and retaliation,” the Equal Employment Opportunity Commission found. It has been examining workplace issues there since 2017.
Besides creating the fund, the company agreed to three years of monitoring by a former agency commissioner to ensure that it changes its practices.
“This agreement will hopefully empower women in technology to speak up against sexism in the workplace knowing that their voices can yield meaningful change,” a lawyer for the Commission said.
The prevalence of sexual harassment at Uber came to light when a former engineer, Susan Fowler, published an essay describing how the company had allowed inappropriate behavior to fester.
The company has “worked hard to ensure that all employees can thrive at Uber by putting fairness and accountability at the heart of who we are and what we do,” said Tony West, the company’s chief legal officer.
The U.S. job market continues to exceed expectations, but it is on a collision course with a dimming demographic outlook, writes Greg Ip in the WSJ.
Job numbers are growing faster than expected: The current economic expansion has lasted a record 10-plus years. But the U.S. population is smaller than the Census Bureau had predicted.
“The U.S. has had two longstanding demographic advantages over other countries: higher fertility and immigration,” Mr. Ip writes. “Both are eroding.”
• The country’s fertility rate dropped to its lowest on record in 2018.
• And the foreign-born population in the U.S. had a historically low expansion rate last year.
“Job creation is constrained by the number of people of working age,” Mr. Ip writes. And until the trends are reversed, “the U.S. cannot assume it is immune to the demographic downdraft holding back Germany and Japan.”
Boeing buys parts from 600 suppliers around the world to build its 737 Max planes. Those suppliers are now waiting to see how the company’s temporary halt in production will affect their businesses, writes the NYT’s David Yaffe-Bellany.
“We are in a crisis mode,” Philippe, the C.E.O. of Safran, a French company that makes engines for the Max in partnership with General Electric, told L’usine nouvelle, a French newspaper. “Any day we do nothing now costs us money.”
The grounding of the Max has reduced G.E.’s cash flow by $400 million per quarter, company officials said in August. And Spirit AeroSystems, a Kansas company that manufactures the plane’s fuselage, relies on Boeing for 80 percent of its revenue.
Yet “the full reach of Boeing’s production process extends beyond those direct suppliers,” Mr. Yaffe-Bellany writes.
Major suppliers that also manufacture materials for other companies may be equipped to weather the suspension, while smaller operations will struggle. Yet a halt to production that lasts longer than a month could put even those larger companies in peril.
More: President Trump reportedly called Boeing’s C.E.O. on Sunday to discuss the company’s plans to halt production of the 737 Max.
Louis Dreyfus named Patrick Treuer, a former Credit Suisse investment banker, its new finance chief.
Peter Zaffino, the executive overseeing a turnaround effort of A.I.G.’s general insurance unit, was named as the company’s president.
Pearson’s chief executive, John Fallon, will step down next year.
Blythe Masters, the former JPMorgan executive and C.E.O. of the blockchain start-up Digital Asset Holdings, has joined the investment firm Motive Partners.
• Several suitors have reportedly expressed interest in acquiring the Spanish-language broadcaster Univision. (WSJ)
• Now that PSA and Fiat Chrysler are combining, Carlos Tavares has a hefty to-do list. (Bloomberg)
• Broadcom is looking to sell one of its wireless-chip units, a move that would accelerate the company’s shift away from its roots as a semiconductor maker. (WSJ)
• Valence Media, the parent of Billboard magazine, is acquiring Nielsen Music, a transaction that comes as data takes on an increasingly outsize role in the music industry. (WSJ)
• Adyen has sealed a deal to process McDonald’s mobile app payments, expanding the Dutch company’s portfolio of clients in a growing sector. (Bloomberg)
• Short-sellers are betting against companies that they believe are unduly inflated by environmental, social and governance promises. (Reuters)
• Direct lenders, including hedge funds and buyout firms, are preparing to dish out billions at a time to lure borrowers away from the $1.2 trillion leveraged loan market. (Bloomberg)
• The year the markets stopped believing in unicorns. (FT)
Politics and policy
• President Trump has asked advisers for a plan to help ease student loan debt for Americans, according to senior administration officials. (WSJ)
• Mayor Pete Buttigieg, a presidential candidate, cemented his place in the top tier of the Democratic primary after becoming more aggressive. (NYT)
• As his coal mining company was going bankrupt, Robert E. Murray paid himself $14 million, gave his successor a $4 million bonus and earmarked nearly $1 million for casting doubt on human-made climate change. (NYT)
• The special inspector general with the Troubled Asset Relief Program is calling for the U.S. to establish a national financial fraud registry. (WaPo)
• After Prime Minister Boris Johnson’s election victory, activists who wanted Britain to stay in the E.U. have thrown in the towel. (WSJ)
• Amazon is reportedly scouting sites in Ireland for a warehouse to fulfill orders currently shipped from Britain, as the Brexit deadline looms. (Bloomberg)
• Many people don’t hesitate to spend $600 on a cellphone. Here’s another device that money could be spent on: a toaster oven. (NYT)
• Tesla shares hit an all-time high. (CNBC)
• Chancellor Angela Merkel of Germany played down any public threats from China if her government were to bar Huawei from the country’s 5G network. (Bloomberg)
• The Texas authorities say Google is trying to hamstring an antitrust investigation of the company brought by 51 attorneys general. (WaPo)
Best of the rest
• Wall Street analysts are unconvinced that Beyond Meat, the maker of “plant-based meat,” can repeat its stock performance from 2019. (Bloomberg)
• If Prime Minister Boris Johnson of Britain decides to reshape the BBC, he has five ways to pursue it. (FT)
• Edward Snowden is not allowed to profit from his memoir because he didn’t get publication clearance from the C.I.A. and the N.S.A., a judge ruled. (Bloomberg)
• Inflation in Britain remained at a three-year low in November, comfortably below the Bank of England’s 2 percent target before its next interest rate announcement, which is expected today. (Reuters)
• Coca-Cola documents show that the company’s public-relations goals included targeting teenagers, even as childhood obesity rates were rising. (WaPo)
• Renaissance Technologies, which has produced the greatest investment returns of any hedge fund, may be facing a clawback over a tax maneuver. (WSJ)
• Bernie Ebbers, the WorldCom C.E.O. imprisoned in one of the biggest frauds of the 20th century, will soon be free after serving just over half of a 25-year sentence. (NYT)

Bank of England Audio Was Leaked, Giving Some Traders an Edge

By Amie Tsang

Business|Bank of England Audio Was Leaked, Giving Some Traders an Edge
The British central bank says a supplier, without authorization, provided sound from news conferences ahead of the video feed.
Credit...Hannah Mckay/Reuters
Amie Tsang
LONDON — The Bank of England said Thursday that an audio feed from its news conferences had been released to some investors before it had been made public, giving them a leg up on the rest of the market.
The central bank said it was investigating how a third-party supplier had gotten early access to policymakers’ remarks since earlier this year. In the world of high-speed trading, just a few seconds’ lead time can offer some investors a trading advantage.
The Financial Conduct Authority, which regulates Britain’s financial markets, also said it was investigating the leak.
Any trades made on the basis of leaked information or insider dealing would come under the review of the Financial Conduct Authority, which has a mandate to insure that competition in the markets is respected.
A spokeswoman for the agency said in an email that it was looking into the Bank of England leak, but declined to comment on whether any trading had occurred on the basis of the leaked information.
After queries from The Times of London, the bank said the audio feed of its news conferences, which is used as a backup in case the video feed fails, had been “misused by a third-party supplier to the bank since earlier this year to supply services to other external clients.”
The audio feed provides traders a five- to eight-second advantage over the video feed, The Times reported.
Bloomberg said that it was the manager of the video feed and that it made it available to other news providers. The Bank of England did not identify the supplier of the audio feed, but said that it had disabled the supplier’s access. “As a result, the third-party supplier did not have any access to the most recent press conference and will no longer play any part in any of the bank’s future press conferences,” it said in a statement.
“The bank operates the highest standards of information security around the release of the market sensitive decisions of its policy committees,” the statement added. “The issue identified related only to the broadcast of press conferences that follow such statements.”
The disclosure came before the bank’s release of its periodic monetary policy statement on Thursday, in which it announced that it was keeping its benchmark interest rate unchanged at 0.75 percent.
Comments from the Bank of England’s news conferences are closely monitored for indications about the bank’s thinking on interest rates and the state of the economy.
The bank routinely puts reporters through tight precautions to prevent leaks that could prove valuable to traders. Before they are allowed to view policy announcements and forecasts ahead of their release, reporters are locked in a room with a security guard standing by and cellphone connectivity is cut. They are not allowed to leave the room until after the embargo is lifted.
Premature access to potentially market-moving information is a crucial concern to financial regulators around the world. In a 2015 case, prosecutors and regulators in the United States asserted that 32 traders and hackers had reaped more than $100 million in illegal proceeds from a scheme that provided a look at corporate news releases before they were made public.

Elian Peltier contributed reporting.

2019’s top cybersecurity story is still what Russia did in 2016

By Joseph Marks

President Donald Trump, right, shakes hands with Russian President Vladimir Putin. (AP Photo/Susan Walsh)
The historic House vote to impeach President Trump last night also marked the most recent turn in a cybersecurity saga that’s gripped the nation since 2016 and consumed much of the past year.
Russia’s hacking and disinformation operation in 2016 has occupied lawmakers, election officials and cybersecurity pros for three years now as they try to hold the Kremlin accountable and to prevent a repeat in 2020.
It was also Trump’s obsession with poking holes in the official narrative about that operation – by urging Ukraine’s president to investigate a baseless conspiracy theory about Russia's Democratic National Committee hack and the cybersecurity firm CrowdStrike -- that helped spark an impeachment trial that promises to grip the nation for weeks to come.
“This impeachment is, to a great degree, a cyber story,” Jon Bateman, a Cyber Policy Initiative fellow at the Carnegie Endowment for International Peace and a former Pentagon cybersecurity official, told me. “It’s the president’s inability to grasp what really happened in a series of cyber incidents that’s led to our current political crisis.”
Election hacking was a key battleground for lawmakers this year as Democrats demanded Congress provide $600 million for states and localities to secure their voting machines and impose strict mandates to ensure elections are as secure as possible.
They also pummeled Republicans who blocked those efforts, accusing them of being complicit with Russia, and even branding Senate Majority Leader Mitch McConnell (R-Ky.) as “Moscow Mitch” before he relented this week and endorsed sending $425 million to states.
Homeland Security Department officials, meanwhile, crisscrossed the country vetting election equipment and running cybersecurity training for local officials. But they were regularly undermined by the president’s wavering on whether Russia was actually responsible for the 2016 interference, helping spark concern the Kremlin will do it again.
“We really haven’t done enough to deter Russia from doing this again and the message from the White House has been inconsistent at best. At worst, it’s undermining everything else the government is doing,” Chris Painter, the former top cybersecurity official at the State Department, told me.
There’s no question election interference will continue to be a front burner concern throughout 2020 as the campaign heats up and election officials prepare to mount their best defense.
“For people working in cybersecurity before 2016, we never could have imagined how central these issues would become to the functioning of our democracy,” Betsy Cooper, director of the Aspen Institute’s Tech Policy Hub and a former Homeland Security Department cybersecurity official, told me. “You can’t possibly think about 2019 without thinking about the continuing significance of Russian election interference.”
Here are two other big cybersecurity stories that defined 2019.
China’s long-term threat
Government officials and experts have warned for years Chinese hackers are stealing billions of dollars in intellectual property from U.S. companies, but things got far more serious in 2019 when Huawei became a frontrunner to build global 5G wireless Internet networks.
If Beijing inserts backdoors into Huawei systems, it could steal unprecedented levels of business and government data from those next-generation networks, officials at the Commerce and State departments said. And they crisscrossed the globe making that case to allies throughout the year.
Super-fast 5G networks will also power a new generation of Internet-connected devices such as autonomous vehicles and smart factories, raising the danger Beijing could sabotage those systems if there was a military conflict between the United States and China.
Yet, despite a series of U.S. efforts to restrict Huawei's global footprint -- including a not-yet-fully-imposed ban on sales to it from many U.S. companies -- the Chinese firm continues to rack up global contracts. Trump also made things worse by repeatedly wavering on pulling back some Huawei penalties in exchange for Chinese trade concessions -- though there's no indication of a Huawei component in a phase-one deal announced last week.
Huawei has steadfastly denied any involvement in Chinese spying.
The situation is even more precarious because the United States doesn’t have a domestic 5G supplier and is urging allies to contract with companies in friendly nations such as Finland’s Nokia and South Korea’s Samsung instead.
And the Huawei fight could be a harbinger of even more serious problems. 5G is just one of many vital technology fields in which the United States is falling behind China, including artificial intelligence and quantum computing. That could be disastrous for cybersecurity if the nation doesn’t change course and start investing heavily in research and development.
“It’s an ASAP thing,” Robert Silvers, a former top DHS cybersecurity official who’s now an attorney at the law firm Paul Hastings, told me. “China is racing ahead and we need to have done this yesterday."
Hacking hits home
Some of the biggest cybersecurity stories of 2019 were about ransomware attacks against local governments in which hackers locked up computer systems and refused to release them until they got a payout, threatening vital city services.
Baltimore, New Orleans, Pensacola, Fla., and Albany, N.Y., were just a handful of the cities hit with ransomware this year. The Baltimore attack was among the most damaging in history, knocking out some services for more than a month and costing the city at least $18 million.
“More and more cyber incidents are coming home to affect Americans’ daily lives,” Bateman told me. “When you’re part of a data breach, that might spill your personal information and you’ll get free credit monitoring, but that’s very abstract. When the local government is closed for business, that hits home.”
Runners up
The Justice Department revamped its attacks on encrypted messaging apps that cops can't penetrate, focusing on the dangers of child sex trafficking. This time, lawmakers are joining the call.
Commercial hacking tools are helping a new group of national governments spy on their critics. Facebook is pushing back.
The United States is getting more aggressive about punching back in cyberspace. Lawmakers want to make sure it doesn't go too far.
The Cybersecurity 202 is taking a couple weeks off. We'll be back Jan. 6. Have a great holiday and we'll see you in 2019.
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A DJI Drone. (Menlo Park Fire Protection District via AP)
PINGED: A pair of Republican senators wants government flight agencies to stop using Chinese drones that could be passing sensitive information about U.S. airports to Beijing spies.
“We…urge you to immediately restrict the use of this equipment and technology that has the potential to jeopardize the security of critical information and infrastructure,” senators including Tom Cotton (R-Ark.) and Marsha Blackburn (R-Tenn.) wrote to Secretary of Transportation Elaine Chao and Federal Aviation Administrator Stephen Dickson yesterday.
The letter follows the FAA's announcement earlier this month that it would tap Chinese drone maker DJI to help support aircraft inspections, delivery of aircraft parts and airport security.
The letter cites memos from the Army and DHS flagging that the drones could compromise national security. A provision in a recent defense policy bill also banned the military from buying DJI drones.
Sens. Marco Rubio (R-Fla.), Rick Scott (R-Fla.), and John Cornyn (R-Texas) also signed the letter.

 U.S. Department of Homeland Security logo. (Photo by Salwan Georges/The Washington Post)
PATCHED: President Trump formally appointed Bryan Ware to take over as DHS’s new second in command for cybersecurity yesterday. Ware will replace Jeanette Manfra, who announced her resignation last month and is heading to Google.
The job includes helping states and localities secure the 2020 election against hacking and combating digital threats facing government agencies.
Ware currently serves as DHS's assistant secretary for cyber, infrastructure and resilience policy. He joined the department in 2018 as a senior adviser to then-Secretary Kirstjen Nielsen and, before joining DHS, worked on artificial intelligence and mobile technology in the private sector.

A man checks his phone (AP Photo/G-Jun Yam, File)
PWNED: Smart watches worn by tens of millions of children could be leaving their location information and voice messages vulnerable to hackers, Zack Whittaker at TechCrunch reports.
The watches are made by Chinese firm Thinkrace, which manufactures watches for several different companies. The company is storing children's data in computer clouds without adequate security protections to access it, researchers at Pen Test Partners told Zack. As a result, researchers were able to track the location of children just by guessing basic information about their accounts.
The flaws aren't just putting children at risk. In one case, Thinkrace provided 10,000 smartwatches that were also vulnerable to athletes participating in the Special Olympics, Zack reports.
Thinkrace did not respond to a request for comment from TechCrunch.


— New York University's Brennan Center has a new security guide for election official out this morning.
— More cybersecurity news from the public sector:
The warrantless surveillance program is lawful, court says in case involving man convicted of supporting terrorist group.
Ellen Nakashima
The U.S. Senate Foreign Relations Committee approved legislation on Wednesday th...
A British man who prosecutors say was a member of the hacking collective known a...
Michael Horowitz testified before the Senate Homeland Security Committee about his assessment of the FBI’s 2016 investigation into the Trump campaign.
Matt Zapotosky
Some notable names in the security research community have already weighed in on a draft order directing federal agencies to set up their own vulnerability disclosure programs.
Federal Computer Week


— Cybersecurity news from the private sector:
Thirty years ago, Cliff Stoll published The Cuckoo's Egg, a book about his cat-and-mouse game with a KGB-sponsored hacker. Today, the internet is a far darker place—and Stoll has become a cybersecurity icon.


— Cybersecurity news from abroad:
Spanish state-owned broadcaster TVE said on Wednesday that unidentified people seized on an open portal on its website to air a Russia Today show featuring self-exiled Catalan separatist leader Carles Puigdemont last Thursday.
Poland might impose stricter security demands for core elements of its future 5G network than for other areas of the system, the digital minister said, a move that could give telecom operators more choice over suppliers than states with more sweeping rules.
It was released in 2001, and hasn't been updated in 5 years.


Here's some sage advice on the cyber lexicon from John Hopkins professor Thomas Rid:
Pro-tip: if you're tempted to write "cyberwar something something" — just edit out the "cyber" in your draft, and try "war something something." If it reads like nonsense, it probably was nonsense.
Same for "cyberweapon."
Also, it's almost 2020.
— Thomas Rid (@RidT) December 18, 2019
And before we leave you for the year, one last meme to sum up the ongoing election security debate, courtesy of Sen. Ron Wyden (D-Ore.):

Omitted from debate stage, 2020 Democratic hopefuls seek limelight elsewhere

Ginger Gibson

LOS ANGELES (Reuters) - Miles from where seven Democratic presidential hopefuls will take the debate stage on Thursday night in Los Angeles, Julian Castro on Wednesday walked the city’s Skid Row, the largest encampment of homeless people in the United States

Democratic presidential candidate Julian Castro speaks with Chris Smith, a homeless man who lives in the nation's largest encampment of homeless people on Skid Row in Los Angeles, California, U.S. December 18, 2019. REUTERS/Ginger Gibson
Castro, a former U.S. housing secretary, is among a handful of presidential candidates trying to find ways to stay in the conversation, after failing to meet the polling and donor requirements needed to qualify for Thursday night’s televised event.
U.S. Senator Cory Booker, among the 15 Democrats vying to win the right to take on Republican President Donald Trump in November 2020, is launching a new television ad on Thursday that references his omission.
“I won’t be on tonight’s debate stage, but that’s okay because I’m going to win this election anyway,” Booker says in the advertisement, which will air in several states including those holding the first four nominating contests - Iowa, New Hampshire, Nevada and South Carolina.
“This election isn’t about who can spend the most, or who slings the most mud. It’s about the people,” Booker says in the ad.
The Democratic Party has struggled with how to handle a historically large field of candidates. In total, more than 25 people have mounted campaigns, though the field has dwindled as some have bowed out.
The party has ratcheted up the requirements to participate in the debates, which mandate that they demonstrate mettle in fundraising and polling. For Thursday’s debate, candidates must show that they have received donations from at least 200,000 unique donors, as well as meeting polling benchmarks.
Twenty candidates qualified for the first debate back in June. By November that was down to 10. On Thursday, it will be down to seven.
The left-out Democrats have largely focused their ire on the rivals with the most personal wealth - specifically billionaires Tom Steyer, who will be participating in the debate, and Michael Bloomberg, a latecomer to the field who could not qualify for the televised debate because he is not taking any donations.
Bloomberg will campaign in Tennessee on Thursday, where he will unveil his policy proposal on health care.
Castro bemoaned the ability of billionaires who are self-funding their campaign to make the debate stage.
“Our campaign has been speaking up for people who are often left behind,” Castro said after his walk down some of the roughest blocks in Los Angeles. “What we are seeing in this election cycle is that, too often in politics, money still talks, that people can basically buy their way on to the debate stage.”

Reporting by Ginger Gibson, Editing by Soyoung Kim and Leslie Adler

Stocks making the biggest moves premarket: Accenture, Conagra, Rite Aid, TiVo & more

Peter Schacknow

Check out the companies making headlines before the bell:

Accenture (ACN) – The consulting firm reported quarterly profit of $2.09 per share, 9 cents a share above estimates. Revenue also beat forecasts, and Accenture raised the lower end of its 2020 adjusted earnings forecast.
Conagra Brands (CAG) – Conagra beat estimates by 6 cents a share, with adjusted quarterly earnings of 63 cents per share. Revenue topped estimates as well. The maker of food brands like Birds Eye, Healthy Choice, and Vlasic also raised the amount of cost synergies related to its 2018 acquisition of Pinnacle Foods.
Darden Restaurants (DRI) – The parent of Olive Garden and other restaurant chains earned an adjusted $1.12 per share for its latest quarter, 5 cents a share above estimates. Revenue was slightly below forecasts. Sales at restaurants open at least a year rose 2%, in line with analysts’ forecasts.
FactSet (FDS) – FactSet beat estimates by 16 cents a share, with quarterly profit of $2.58 per share. The provider of financial information services saw revenue miss forecasts. The bottom line was helped by an increase in profit margins.
Rite Aid (RAD) – The drugstore chain reported quarterly profit of 54 cents per share, compared with a consensus estimate of 9 cents a share. Revenue also beat forecasts, with results boosted by better expense control and increased prescription business at Rite Aid pharmacies.
Micron Technology (MU) – Micron reported adjusted quarterly earnings of 48 cents per share, a penny a share above estimates. The chip maker’s revenue came in above Wall Street forecasts as well. Micron said the current-quarter would represent the bottom of what’s been a difficult period for the memory chip market. The news is also giving a boost to other chip stocks like Western Digital (WDC) and Nvidia (NVDA).
Boeing (BA) – Boeing’s debt rating was cut one notch by Moody’s, as the grounding of the jet maker’s 737 Max aircraft continues. Moody’s said it sees long term risk to Boeing’s reputation following its move to suspend production of the jet in January.
Seattle Genetics (SGEN) – The drugmaker and Japan’s Astellas Pharma won U.S. approval for their experimental drug to treat advanced bladder cancer, the first such drug to win Food and Drug Administration approval.
TiVo (TIVO) – TiVo will merge with technology licensor Xperi (XPER) in a stock-swap deal. TiVo shareholders will own about 53.5% of the combined company.
Freddie Mac (FMCC) – Freddie Mac is offering early retirement to 25% of its workers, according to a Reuters report. The move is said to be part of an effort to reform the housing finance agency.
Green Dot (GDOT) – Green Dot announced the retirement of Chief Executive Officer and founder Steve Streit, as well as Chief Financial Officer Mark Shifke. The financial technology company’s chairman, William Jacobs, will serve as interim CEO.
Herman Miller (MLHR) – Herman Miller beat estimates by a penny a share, with quarterly profit of 88 cents per share. The office furniture maker’s revenue came in below analysts’ forecasts. The company said its results were impacted by lower-thananticipated order levels in an uncertain economic environment, although it added that profit came in at the higher end of its forecasts despite those difficulties.

Novartis plans to give away world's costliest therapy to some patients

John Miller

ZURICH (Reuters) - Novartis aims to give away 100 doses of its $2.1 million-per-patient Zolgensma for spinal muscular atrophy (SMA) in 2020 in a free-drug program that one patient group worried was a “health lottery” that could neglect some babies.
FILE PHOTO: The company's logo is seen at the new cell and gene therapy factory of Swiss drugmaker Novartis in Stein, Switzerland, November 28, 2019. REUTERS/Arnd Wiegmann/File Photo

Starting Jan. 2, Novartis’s AveXis unit which developed Zolgensma will allocate 50 doses of the world’s costliest single-dose treatment through June for babies under 2 years old, Novartis said on Thursday, with up to 100 total doses to be distributed through 2020.
The program applies to countries where the medicine is not yet approved for the rare genetic disorder affecting 1 in 10,000 live births, but which can lead to death and profound physical disabilities.
Zolgensma, with sales of $175 million through September, won U.S. approval in May and has been touted as potentially curative for babies treated before symptoms begin.
But regulatory decisions in Europe and Japan have been delayed until 2020, curbing access Novartis hopes to partially address with free Zolgensma where such giveaways are allowed.
Families in Belgium, Hungary and Israel have launched crowd-funding programs for treatment.
“AveXis’ intention is for this to be a long-term commitment,” a Novartis spokesman said. “AveXis designed a program anchored in principles of fairness, clinical need and global accessibility to best determine the equitable global distribution of a finite number of doses that doesn’t favor one child or country over another.”
Novartis said manufacturing constraints — it has one licensed U.S. facility, with two plants due to come on line in 2020 — necessitated a focus on providing treatment to countries where the medicine is approved or pending approval.
Zolgensma, hit by turmoil including data manipulation allegations and suspension of a trial over safety concerns, is the second SMA treatment, after Biogen’s Spinraza.
Swiss drugmaker Roche is expecting approval for its medicine risdiplam by May.
TreatSMA, a British SMA advocacy group, applauded Novartis’s free Zolgensma initiative but had reservations about the program in which an independent commission would conduct bi-weekly draws of eligible babies. “Unlucky” patients not chosen would be entered into subsequent draws until eligibility expired, the group said.
“Given the lack of access to any SMA treatment in many places, we are yet to be convinced that a health lottery is an appropriate way of meeting the unmet medical needs,” TreatSMA said, adding it is gathering feedback before formulating a formal position.
TreatSMA added it was unlikely British rules would let patients participate in Novartis’s program.
Roche’s risdiplam is also set for a free drug program, including in India, helping extend SMA therapies to developing countries where high prices — Spinraza runs $750,000 in the first year and $375,000 thereafter — limit access.
Roche’s program for risdiplam, the price of which has not been disclosed, would initially target patients with type 1 SMA, the most severe form.
“The program will be expanded to patients with Type 2 SMA at the moment of filing of the regulatory application for risdiplam in each country,” Roche told Reuters, adding “not every country will initiate a program”.

Reporting by John Miller; editing by Jason Neely

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