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Jan 30, 2020

China trade deficit has cost the US 3.7 million jobs this century, report says

Jeff Cox




RT: Containers China trade port 190806
Containers sit at the Yangshan Port in Shanghai, China, Aug. 6, 2019.
Aly Song | Reuters

The U.S. has lost 3.7 million jobs since 2001 due to its trade imbalance with China, with most of the damage done to manufacturing, according to a report released Thursday.
As the deficit has continued to swell, American workers have suffered, according to the Economic Policy Institute, a nonpartisan think tank in Washington, D.C. generally considered to be left-leaning.
Among the study’s findings: Some 1.7 million jobs have disappeared since the beginning of the financial crisis in 2008; of the total losses, 2.8 million, or about three-quarters, have come from manufacturing; and the deficit continues to grow, with employment taking a hit across all 50 states even as nonfarm payrolls have continued to grow.
President Donald Trump has made closing the gap a priority of his administration.
Along those lines, he has instituted billions of tariffs, though tensions between the sides have eased somewhat following an agreement on a phase-one deal.
The report cites a variety of factors used to calculate the job losses.
One of the big issues it cites is the admission of China into the World Trade Organization, a move that was supposed to boost U.S. exports to China but instead resulted in a flood of dumped goods and a wave of outsourcing that has hit manufacturing and technology particularly hard. The authors also were critical of China’s previous moves to devalue its currency, which benefits exports.
“We’ve lost nearly five million manufacturing jobs in the last 20 years. At least half of these job losses are explained by the growth in the China trade deficit,” said Robert Scott, director of trade and manufacturing policy research at the EPI. Scott said the results have been “devastating for Main Street America.”
The authors of the report said Trump was right in going after China on trade but said the efforts should be strengthened.
Despite the tariffs and emphasis on shifting the balance, the U.S. still had a $320.8 billion deficit with China in 2019. But that was a sharp decline from 2018, which saw a record $419.5 billion shortfall.

Bank of England opts against a rate cut but warns of slow growth after Brexit

Elliot Smith




GP: Mark Carney Bank of England Financial Stability Report Press Conference
Mark Carney, the outgoing Governor of the Bank of England.
Matt Dunham | WPA Pool | Getty Images
The Bank of England (BOE) on Thursday held interest rates following Governor Mark Carney’s final monetary policy meeting.
Sterling jumped 0.5% against the dollar to trade at around $1.3084 after the central bank’s Monetary Policy Committee (MPC) voted 7-2 to keep the base rate at 0.75%.
Weak GDP (gross domestic product) figures had led several members to mull a rate cut, but with January data showing an uptick in confidence and activity following the December 12 general election, expectations of an imminent cut had dampened.
The decision comes at a crucial time for the British economy, with the U.K. set to leave the European Union at 11 p.m. London time on Friday. British and European leaders will now enter pivotal negotiations in a bid to secure a free trade agreement before the end of 2020.
Despite faltering growth of late, the BOE had been one of the few central banks to diverge from the global precautionary easing trend from central banks, with 131 rate cuts implemented by central banks worldwide in 2019.
The BOE issued a downbeat forecast on the eve of Brexit, with uncertainty around the departure continuing to hurt business investment, reduce immigration and weigh on growth. The central bank forecast growth of just 0.8% in 2020, down from 1.3% in 2019 but rising to around 1.5% in 2021.
Thursday’s report further downgraded the 2019 fourth-quarter U.K. GDP growth estimate to zero. In its last monetary policy meeting in December, the bank’s forecast for growth in the fourth quarter of 2019 was cut to +0.1% from the November projection of +0.2%.
CPI (Consumer Price Index) inflation declined to a rate of 1.3% in December, core CPI inflation fell to 1.4% and core services inflation remains below its target-consistent range. However, the bank suggested that as the outcome of Brexit becomes clearer, growth and inflation are likely to pick up, with inflation expected to advance toward the 2% target late in 2021.
“Monetary policy will be set to ensure a sustainable return of inflation to the 2% target. Policy may need to reinforce the expected recovery in U.K. GDP growth should the more positive signals from recent indicators of global and domestic activity not be sustained or should indicators of domestic prices remain relatively weak,” the BOE’s Monetary Policy Report said.

‘So far, good enough’

In a press conference following the decision, Carney pointed to survey data since the December U.K. election as suggesting growth will pick up to around 0.2% in the first quarter, with businesses reporting a rise in investment intentions, a resilient labor market, and the highest household economic confidence readings for a year and a half, as reasons to maintain policy.
“These are still early days, and it is less of a case of so far so good than so far good enough. It will be important for the hard data on activity to follow through on the recent pickup in surveys and for domestic price inflation to strengthen,” he said, adding that recoveries in growth and inflation were not yet assured and that a renewal of trade tensions or other external headwinds could reverse recent progress.
Carney will now step aside to be replaced by Andrew Bailey, formerly chief executive of U.K. regulator the Financial Conduct Authority (FCA).

Deutsche Bank posts net loss of 5.3 billion euros for 2019 amid major restructuring

Elliot Smith



Deutsche Bank on Thursday posted a full-year net loss of 5.3 billion euros ($5.8 billion) amid a huge transformation project, the cost of which the German lender said is now 70% complete.
Analysts had expected a 5.1 billion euro loss for the year, according to a Reuters poll, while the fourth-quarter net loss came in at 1.5 billion euros against expectations of 1 billion euros.
The German lender announced in July that it would pull out of its global equities sales and trading operations, scale back its investment banking division and cut 18,000 jobs in a bid to trim its adjusted cost base by 20% by 2022.
The bank’s common equity tier 1 (CET1) ratio came in at 13.6%, unchanged from the fourth quarter of 2018 and up from 13.4% in the previous quarter, with Deutsche citing “ahead-of-target risk weighted asset reduction by the Capital Release Unit.”
Deutsche Bank Chief Financial Officer James von Moltke told CNBC Thursday that the lender was pleased with the momentum seen in the fourth quarter during the early stages of restructuring.
“It was gratifying to see that momentum support our businesses and clients come back to the franchise,” he told CNBC’s Annette Weisbach.
“Our revenues in the investment bank were up 22% year-on-year excluding specific items, which demonstrates that we also participated in the generally better conditions in the fourth quarter.”
In its earnings report Thursday morning, Deutsche Bank said the full-year net loss was “entirely driven by transformation-related effects.”
CEO Christian Sewing said in a statement Thursday that the CET1 ratio, stabilizing revenues and “cost discipline” meant the bank was confident that it can finance its transition with its own resources and “return to growth.”
2016A statue is seen next to the logo of Germany’s Deutsche Bank in Frankfurt, Germany.
Kai Pfaffenbach | Reuters
The bank attributed a 2.6 billion pre-tax loss to the absorption of transformation charges of 1.1 billion euros, goodwill impairments of 1.0 billion euros and restructuring and severance expenses of 805 million euros. The full-year loss additionally included transformation-related deferred tax asset valuation adjustments of 2.8 billion euros.
Fixed income and currency (FIC) sales and trading revenues made a tentative comeback in the fourth quarter, posting revenues of 1.2 billion euros, up 31%.

Cost reduction

Deutsche said it had “recognized 70%” of the anticipated cumulative costs to achieve its transformation strategy between 2019 and 2022.
It also reported that it had achieved the 2019 full-year adjusted cost target of 21.5 billion euros, excluding transformation charges and the fourth-quarter expenses incurred by the transfer of the bank’s Prime Finance platform to BNP Paribas.
Group headcount was reduced by over 4,100 in 2019.

Market Insider | Biggest Moves Premarket: Stocks making the biggest moves premarket: Verizon, Coca-Cola, Altria, DuPont, UPS & more

Peter Schacknow



Check out the companies making headlines before the bell:

Coca-Cola (KO) – The beverage giant matched estimates with quarterly earnings of 44 cents per share, with revenue above Street forecasts. Coca-Cola also said it had its largest market share gain – as measured by value – in nearly a decade.
Verizon (VZ) – Verizon missed estimates by a penny a share, with quarterly profit of $1.13 per share. Revenue beat forecasts, however, and Verizon saw 852,000 wireless retail postpaid net additions during the quarter.
Altria (MO) – The tobacco producer reported in-line adjusted earnings of $1.02 per share, but revenue came in below estimates. Altria took a fourth-quarter impairment charge of $4.1 billion related to its investment in e-cigarette maker Juul.
DuPont (DD) – The life sciences company matched estimates with quarterly earnings of 95 cents per share. Revenue came in below estimates, however, and its earnings outlook for 2020 below consensus. The company said full-year results will be negatively impacted by nylon pricing declines, among other factors.
Blackstone (BX) – Blackstone reported distributable earnings of 72 cents per share, 5 cents a share above estimates. The private-equity firm said its assets under management increased 21% during 2019 to a record $571 billion.
Eli Lilly (LLY) – The drugmaker beat estimates by 21 cents a share, with quarterly earnings of $1.73 per share. Revenue also came in above forecasts, driven by stronger sales of newer products introduced over the past five years.
Hershey (HSY) – The chocolate maker reported quarterly earnings of $1.28 per share, 4 cents a share above estimates. Revenue also topped estimates and the company gave an upbeat 2020 forecast, helped by price increases and investments in new products.
United Parcel Service  (UPS) – UPS matched estimates with quarterly profit of $2.11 per share, but the package delivery company’s revenue missed forecasts.
Tesla (TSLA) – Tesla reported quarterly earnings of $2.14 per share, beating the consensus estimate of $1.72. Revenue also beat projections and the company said full-year 2020 deliveries should exceed 500,000.
Facebook (FB) – Facebook beat estimates by 3 cents a share, with quarterly profit of $2.56 per share. The company beat on the top line as well. The stock is under pressure, however, on concerns about profit margins and a sharp rise in expenses.
Microsoft (MSFT) – Microsoft earned $1.51 per share for its latest quarter, topping estimates by 19 cents a share. Revenue also beat forecasts, boosted by continued growth in its cloud business.
Align Technology (ALGN) – Align is expecting a $35 million hit to revenue due to virus-related business disruptions in China. That news is weighing on the stock, even though the maker of the Invisalign teeth straightening system beat Wall Street forecasts on the top and bottom lines for its latest quarter.
Mondelez (MDLZ) – Mondelez came in a penny a share ahead of analysts’ forecasts, with quarterly earnings of 61 cents per share. The maker of Oreo cookies and other snacks also saw revenue beat estimates, however Mondelez said it expects current-quarter revenue to take a hit from the coronavirus outbreak.
PayPal (PYPL) – PayPal reported quarterly profit of 86 cents per share, 3 cents a share above estimates. Revenue was slightly above forecasts, however the payment service gave a weaker-than-expected outlook for the current quarter and the full year.
Unilever (UL) – Unilever is beginning a strategic review of its tea business, which includes the Lipton and PG Tips brands. The consumer products company decided on the review as sales of traditional black tea slow in favor of herbal tea.
Lyft (LYFT) – Lyft cut 90 jobs, about 1.6% of its workforce, impacting the ride-hailing company’s sales and marketing departments.

Facebook to Pay $550 Million to Settle Facial Recognition Suit

By Natasha Singer and Mike Isaac



Technology|Facebook to Pay $550 Million to Settle Facial Recognition Suit


It was another black mark on the privacy record of the social network, which also reported its quarterly earnings.

Credit...Jason Henry for The New York Times
Facebook said on Wednesday that it had agreed to pay $550 million to settle a class-action lawsuit over its use of facial recognition technology in Illinois, giving privacy groups a major victory that again raised questions about the social network’s data-mining practices.
The case stemmed from Facebook’s photo-labeling service, Tag Suggestions, which uses face-matching software to suggest the names of people in users’ photos. The suit said the Silicon Valley company violated an Illinois biometric privacy law by harvesting facial data for Tag Suggestions from the photos of millions of users in the state without their permission and without telling them how long the data would be kept. Facebook has said the allegations have no merit.
Under the agreement, Facebook will pay $550 million to eligible Illinois users and for the plaintiffs’ legal fees. The sum dwarfs the $380.5 million that the Equifax credit reporting agency agreed this month to pay to settle a class-action case over a 2017 consumer data breach.
Facebook disclosed the settlement as part of its quarterly financial results, in which it took a charge on the case. The sum amounted to a rounding error for Facebook, which reported that revenue rose 25 percent to $21 billion in the fourth quarter, compared with a year earlier, while profit increased 7 percent to $7.3 billion.
David Wehner, Facebook’s chief financial officer, noted in an earnings call with investors that the settlement added to the social network’s rising general and administrative costs, which increased 87 percent from a year ago.
“We decided to pursue a settlement as it was in the best interest of our community and our shareholders to move past this matter,” a Facebook spokesman said in a statement.
Jay Edelson, a lawyer whose firm represented Facebook users in the facial recognition suit, said the settlement underscored the importance of strong privacy legislation.
“From people who are passionate about gun rights to those who care about women’s reproductive issues, the right to participate in society anonymously is something that we cannot afford to lose,” Mr. Edelson said.
The privacy settlement coincides with heightened public concern over the spread of powerful surveillance technology like facial recognition. Companies like Amazon and Clearview AI are marketing face-matching software to law enforcement agencies to help them identify unknown suspects. The American Civil Liberties Union and other groups have warned that the spread of such services could end people’s ability to remain anonymous in public.
The case also illustrates the protections that strong state laws may offer consumers. Of the three states that have stand-alone biometric privacy laws, Illinois has the most comprehensive one. It requires companies to obtain written permission before collecting a person’s fingerprints, facial scans or other identifying biological characteristics. The law also gives residents the right to sue companies for up to $5,000 per violation, which could add up to billions of dollars in payouts for tech giants that lose such class-action suits.
“The Illinois law has real teeth. It pretty much stopped Facebook in its tracks,” said Marc Rotenberg, the executive director of the Electronic Privacy Information Center, a nonprofit group that filed a brief in the Facebook case. “Tech firms and other companies that collect biometric data must be very nervous right now.”
Since the Illinois law was enacted in 2008, it has vexed companies that market voice assistants, doorbell cameras, photo labeling and other technology that may collect biometric details from people without their knowledge or consent.
Many of the companies have argued that people should not be able to sue over violations of a consumer privacy law if they cannot prove they suffered concrete harms like financial losses. Facebook made similar claims in the facial recognition lawsuit, including in a petition in December asking the United States Supreme Court to review the case. The Supreme Court last week denied Facebook’s appeal.
But last January, in a case against an amusement park that had collected and stored a child’s fingerprints, the Illinois Supreme Court ruled that violating a person’s biometric privacy could constitute a harm in and of itself, enabling consumers to pursue privacy claims. An appeals court judge later issued a similar ruling in the Facebook case, denying the company’s bid to have the lawsuit dismissed.
“Courts have recognized that the very loss of control over this highly sensitive, highly personal information itself causes harm to people,” said Nathan Wessler, a staff attorney at the American Civil Liberties Union, which also filed a brief in the Facebook case.
Facebook has been dogged by complaints over its use of facial recognition since 2010, when it rolled out Tag Suggestions as the default option for users. People could turn it off, but privacy experts said the company had neither obtained users’ opt-in consent for the technology nor explicitly informed them that it could benefit by, for instance, using scans of their photos to improve its face-matching technology.
In 2012, Facebook deactivated the technology in Europe after regulators there raised questions about its consent system. Last year, as part of a $5 billion settlement with the Federal Trade Commission over privacy violations, Facebook agreed to provide “clear and conspicuous notice” about its face-matching software and obtain additional permission from people before using it for new purposes they had not agreed to.
In 2018, Facebook reintroduced facial recognition as an option for users in Europe. Last year, Facebook updated its facial recognition notices and settings for certain users, providing more details on how it uses the technology.

Biden Push for Labor Support Is Burdened by Obama-Era Baggage

By Noam Scheiber



Supporters of the former vice president say he can win back union members who rejected Hillary Clinton. But he must overcome some hard feelings first.
Credit...Daniel Acker for The New York Times
Noam Scheiber
On the campaign trail, former Vice President Joseph R. Biden Jr. has highlighted the first two years of the Obama administration as a time when he helped enact sweeping legislation to widen access to health care and revive the economy, accomplishments most Democrats revere.
But to many union officials, those years were a disappointment — a time when the administration failed to pass a labor rights bill that was their top priority and imposed a tax that would affect many union members’ health plans. And they partly blame Mr. Biden.
“They were in the driver’s seat for the first two years, and what did they get done from a labor perspective?” said Chris Laursen, the president of a United Automobile Workers local in Ottumwa, Iowa, with nearly 600 members. “Joe Biden is complete status quo.”
Since Mr. Biden began his third campaign for the presidency last April, his supporters have portrayed him as the Democrat best positioned to win back union members who deserted the party in 2016 in crucial industrial states.
There is some basis for that claim. Mr. Biden, who has longstanding ties to many labor leaders, quickly gained an endorsement from the politically powerful firefighters’ union, and just won an endorsement from the ironworkers’ union. Polls frequently show him leading other Democratic candidates in battleground-state matchups against President Trump.
But for many labor voters — even white, blue-collar union members whose votes skewed toward Mr. Trump — the reaction to the former vice president has been more mixed. They frequently cite his policy centrism, which many associate with his time in President Barack Obama’s White House.
A mid-January poll by SurveyUSA showed Senator Bernie Sanders of Vermont surging to within three points of Mr. Biden among union households nationally. The combined support of Mr. Sanders and Senator Elizabeth Warren of Massachusetts has generally outpaced Mr. Biden’s among union households since August.
The Biden campaign declined to comment, as did a spokesman for Mr. Obama. A campaign surrogate, former Labor Secretary Hilda L. Solis, called Mr. Biden “a champion for organized labor” and said, “It’s easy to take more extreme positions on issues when no one holds you accountable for actually enacting them.”
The reservations of union members could be a bigger problem for Mr. Biden than they were for Hillary Clinton during her 2016 Democratic race against Mr. Sanders. Some large unions, including the American Federation of Teachers, endorsed Mrs. Clinton, though many members later supported Mr. Sanders.
In the current cycle, many of these unions have skipped an early endorsement, making it easier for individual members and in some cases locals to support their own candidates. The teachers’ union in Los Angeles has endorsed Mr. Sanders, as has the Ottumwa local of the United Food and Commercial Workers, whose 1.3-million-member international endorsed Mrs. Clinton before the 2016 Iowa caucuses. A large Pennsylvania local of the food workers’ union has endorsed Mr. Biden.
While the Labor Department recently reported that union membership last year fell to a record low — 10.3 percent of the work force — labor endorsements can still be critical because of the role of unions in educating members about candidates and canvassing for them on the ground.
Mr. Laursen, the U.A.W. local leader in Ottumwa, estimates that more than half his members — who are primarily workers at a John Deere plant — backed Mr. Trump in 2016. But he says many of those who oppose the president’s re-election are supporting Mr. Sanders over Mr. Biden.
And the skepticism toward Mr. Biden may be even more pronounced in the less white, less male parts of the labor force.
Nicole McCormick, a West Virginia music teacher who helped organize a statewide walkout that made national headlines in 2018, said she worried that Mr. Biden wasn’t “willing to push for the things that we as Americans look at as radical, but the rest of the world looks at and is like, ‘We did that 50 years ago.’” She cited expanded access to unions, universal health care and paid parental leave as examples.
(Mr. Biden has proposed wide-ranging labor-law reforms, though his plan isn’t as ambitious as Mr. Sanders’s or Ms. Warren’s in some respects. He supports paid family leave.)
Keon Liberato, the president of a Philadelphia-based local of more than 200 workers who maintain and construct railroad tracks, said many of his members preferred Mr. Sanders. Mr. Liberato said his members, both African-American and white, knew Mr. Biden as a friend to railroad workers, but tended to believe that taking health care off the bargaining table under Mr. Sanders’s Medicare for All plan “would be huge for the American people.”
In voicing their concerns about Mr. Biden, union officials frequently cite dismay over the Obama years. They acknowledge a number of accomplishments, including the economic stimulus, the rescue of Chrysler and General Motors, and elements of the Affordable Care Act, as well as a variety of pro-labor appointments and regulations. But they express reservations about the administration’s focus on deficit reduction, its ties to Wall Street, and especially its efforts to lower barriers to foreign competition.
“I was really disappointed with his trade policies,” said Nick Diveley, a U.A.W. member in Ottumwa, who supported Mr. Obama in 2008. “That’s what pushed me to Trump.” Mr. Diveley said he was open to voting for someone other than Mr. Trump in the fall but called Mr. Biden “just another established Washington guy.”
Union members and leaders also grumble about the so-called Cadillac tax on expensive health care plans that the Obama administration sought as a way to rein in wasteful spending. “It was an egghead Ivy League idea, that people overuse health care,” said D. Taylor, the president of the hospitality and casino workers union UNITE HERE, which helped lead the unsuccessful fight against the tax.
(The union was supportive of the law and the administration over all; the tax was recently repealed.)
And some complain that the Obama administration delayed action on labor’s top priority — a bill that could have expanded their ranks by making it easier to unionize through a sign-up process called card check, rather than a secret ballot — partly so that it could focus on health care.
“He failed to fight for our priorities and stand up for the main reason we endorsed him — card check,” said Norwood Orrick, a telecom technician and member of the International Brotherhood of Electrical Workers in Tampa, Fla. “It was discussed a lot in my immediate circles of activists.”
Beyond any single policy, there are complaints that the Obama administration sometimes treated labor as an interest group to be managed rather than a partner in making policy. Ana Avendaño, a former senior official at the A.F.L.-C.I.O., recalled a White House meeting on immigration that the federation’s president, Richard Trumka, attended.
“They sat him at one of the corners of the table,” squeezed between two other people, Ms. Avendaño said. “He couldn’t even open his pad. In D.C. terms, it was a show of disrespect.”
A spokesman for Mr. Trumka said: “While President Trumka worked with and respected President Obama, he felt there were times when the president tried to split the difference between Main Street and Wall Street. That did not serve him or us well.”
Some labor officials and union members see the more pragmatic approach of the Obama years, and Mr. Biden’s moderate reputation, as a selling point. “Our guys lean 55 percent Republican,” said Thomas Hanify, president of the Indiana firefighters’ union. “Over all for my members, Warren and Bernie Sanders are a little extreme.”
And many prefer Mr. Biden’s approach to health care, voicing concern that Mr. Sanders would do away with insurance plans that unions have worked hard to negotiate.
Other labor leaders, while citing shortcomings of the Obama presidency, say Mr. Biden was an advocate for their interests within the administration. Teachers’ unions were furious after Mr. Obama publicly embraced the firing of the entire faculty of an underperforming school in Rhode Island in 2010. But Randi Weingarten, the president of the American Federation of Teachers, said Mr. Biden helped resolve the situation.
“We started having a fairly heated argument, me and the vice president, at an A.F.L. meeting,” Ms. Weingarten said. “But he heard what I was saying.”
Jared Bernstein, an economic adviser to Mr. Biden during his vice presidency, said the same was often true on trade and other issues, including labor-law reform, which faced a complicated path in the Senate. “I know for a fact where Biden is on these things,” Mr. Bernstein said. “But he was part of an administration that at times very much pleased the unions, and at other times very much pissed them off.”
(As a senator, Mr. Biden supported some free-trade legislation, like the North American Free Trade Agreement.)
But many labor officials regard Mr. Biden as essentially a sympathetic face for unfriendly policies he was either powerless to reverse or personally advanced. One cited Mr. Biden’s role in leading the negotiations with Republicans over a long-term deficit-cutting deal that could have led to cuts in programs like Social Security and Medicare.
Mr. Biden, whose record on Social Security has been a subject of sparring with the Sanders campaign, says he supports an expansion of benefits for many retirees.
Frank Flanders, the political director of the food workers’ local in Ottumwa, said that he was skeptical of Mr. Biden’s views on trade and his more hawkish foreign policy views, and that he regarded Mr. Biden as a “corporate Democrat.”
“I think we had a lot of Trump voters in the general, for the most part it’s because he wasn’t Hillary,” said Mr. Flanders, describing how his members voted in 2016. “It’s also a concern I have about a Biden candidacy.”

Analysis | The Cybersecurity 202: There’s a new cross-country effort to train election and campaign pros on digital security

By Joseph Marks




A woman votes in Sandy Springs, Ga. (AP Photo/John Bazemore, File)
THE KEY
A team from the University of Southern California has embarked on a 50-state tour to give cybersecurity training to poll workers and state and local campaign staffers who will be the last line of defense against Russian hacking in 2020.
The group, called the Election Cybersecurity Initiative, views itself as a bottom-up, grass-roots counterpart to national-level election security efforts led by the Department of Homeland Security in the wake of Russia’s election interference in 2016.
It's hoping to advise local election officials, Election Day volunteers, ground-level campaign door-knockers and even interns in both political parties who national officials are unlikely to reach. The group also wants to build a network of cybersecurity experts at universities across the nation who can help secure local races and polling sites.
“There are incredible grass-roots resources and folks who are highly educated,” Justin Griffin, the group’s managing director, told me. “We’re really going to the states to touch those folks who could never take the time or have the budget to come to Washington for a session like this.”
The cross-country effort, which launched in Maryland this week, is yet another example of how the threat of hacking and disinformation is affecting every part of the elections and campaign process. The group, which is funded with a grant from Google, is modeling itself after an election campaign and using the tagline: “Our candidate is democracy.”
Along with protecting against hacking and disinformation, the group is also focusing on crisis communications — basically how campaigns should respond if they’re targeted with an online disinformation campaign or if hackers post campaign emails online to embarrass a candidate as Russian hackers did to Hillary Clinton in 2016.
“Campaigns prepare for the worst-case scenario from a [bad] press perspective on a daily basis, but they don’t prepare for the worst-case scenario of a cyberattack,” said Griffin, who formerly worked as a political director for the Massachusetts Republican Party.
One big goal is to tailor training sessions for each state and fill them with local experts.
Tuesday’s session in Maryland, for example, was held at a research facility in the Washington suburbs associated with U.S. Cyber Command and relied heavily on expert speakers from there and the National Security Agency as well as from cybersecurity programs at University of Maryland at Baltimore County and Morgan State University in Baltimore.
The next program, scheduled for Feb. 10 in the Ohio state capitol building in Columbus, will focus more on the needs of political campaigns, the group's executive director Adam Clayton Powell III told me.
The group plans to hold five to six events per month until Election Day, drawing experts from state universities, National Guard components and regional DHS offices and elsewhere. They’re planning at least one event in every state and two or more in larger states including California, Texas and Florida.
“We are there to share best practices, to bring some resources to bear and also to introduce people…We’re creating a national community,” Powell said.
The group isn’t saying how much funding Google gave it but said it will last only through the 2020 election. After that, the group is hoping to find new funders who can allow it to keep doing trainings across the country into the next election cycle.
“We've been approached by some major prospective funders saying we want to come talk to you after you've done 10 or 20 states and talk about 2021 and 2022,” Powell said.

PINGED, PATCHED, PWNED


Democratic presidential candidate Sen. Elizabeth Warren (D-Mass.) speaks during a campaign event on Sunday in Cedar Rapids, Iowa. (Matt Rourke/AP)
PINGED: Democratic presidential candidate Elizabeth Warren pledged to reinstate the White House cybersecurity coordinator position that President Trump eliminated in 2018, a move that puts her in line with cybersecurity hawks in Congress. 
She called the position critical to defenses against disinformation and cybersecurity threats. 
The call came as part of a plan Warren released yesterday outlining how she'd crack down as president on disinformation aimed at duping voters. Warren would push for civil and criminal penalties against social media users who intentionally spread disinformation about where and when to vote behavior that most tech platforms already forbid. She also said she would consider sanctions against countries that engage in election interference through disinformation.
Disinformation erodes our democracy, and Democrats must have a plan to address it, the senator from Massachusetts wrote. The stakes of this election are too high — we need to fight the spread of false information that disempowers voters and undermines democracy,”

A DJI drone. (Dave Zajac/Record-Journal/AP)
PATCHED: The Interior Department ordered the grounding of all non-emergency drones to assess whether the department's Chinese-made unmanned aircraft are too vulnerable to spying by Beijing, Shannon Vavra at Cyberscoop reports
The order doesn't mention China by name, but it formalizes and expands the department's decision to ground nearly 800 Chinese-made drones in the fall. The military has already largely banned Chinese-made drones, and a bipartisan group of lawmakers has pushed for legislation that would bar all federal agencies from buying them.
The U.S. Department of Homeland Security first raised warning flags about the issue in 2017 when it accused Chinese drone manufacturer DJI of vying for government contracts to exploit U.S. data.
DJI has denied those claims and called yesterday's order “politically motivated.”

Three European Union flags fly outside the Berlaymont building, headquarters of the European Commission in Brussels. Photographer: Geert Vanden Wijngaert/Bloomberg
PWNED: The European Union declined to recommend that any of its members ban Huawei from their next-generation 5G telecom networks, dealing yet another blow to the United States’s efforts to persuade foreign allies that the Chinese telecom giant creates an outsize risk of spying. 
The decision comes just one day after British Prime Minister Boris Johnson announced that the U.K. would allow Huawei to build some portions of its 5G network.
The E.U. advised members to limit “high-risk” vendors but did not single out any companies.
The decision doesn't bar E.U. member states from implementing their own bans. A German newspaper reported yesterday that the German government, which is still weighing a ban, had received intelligence from U.S. officials allegedly providing evidence of Huawei's spying. Huawei denied the claims, Reuters reports.

PUBLIC KEY

The House Committee on Homeland Security passed a bill yesterday that would grant DHS's cybersecurity division legal authority to subpoena information from Internet service providers about energy and financial firms and other critical infrastructure providers that are vulnerable to cyberattacks. The subpoenas would only give DHS basic information such as the company's name, address and telephone number. The bill is a major legislative priority for DHS.
—A newly leaked internal report revealed that skilled hackers compromised dozens of servers at the United Nations, including at an office that collects sensitive data about human rights abuses, Jamey Keaten and Frank Bajak at the Associated Press report. The hackers' identities and how much they stole remains unclear, but multiple cybersecurity experts say the attack resembles state-sponsored espionage.
— More cybersecurity news from the public sector:

The U.S. Census Bureau’s decennial count is raising concerns that its new digital systems are vulnerable to attacks or malfunctions that could unfairly rejigger congressional seats or shuffle federal resources.
Bloomberg Government

Republicans on the House Administration Committee on Wednesday introduced legislation that would seek to update a long-standing federal election law and secure voter registration databases from foreign hacking attempts.
The Hill

Chris Murphy urges FBI and DNI to look into whether message from Saudi prince triggered hacking of Amazon founder’s phone
The Guardian

PRIVATE KEY

--Two of the nation's most advanced cybersecurity organizations are planning to team up on sharing digital threat intelligence and responding to hacks, the groups announced this morning. The Cyber Threat Alliance, and the Financial Services Information Sharing and Analysis Center will also work together on cybersecurity training and war games.
CTA is a coalition of top technology and cybersecurity companies and the FS-ISAC works as a conduit to share threat intelligence between the government and the financial sector.
— More cybersecurity news from the private sector:

Twitter is giving users the ability to flag tweets that they believe contain misleading information about how to vote in this year’s U.S. presidential election, underscoring efforts to show it is trying to safeguard the process.
Wall Street Journal

Security researchers say Apple’s secretive stance on bugs may prove to be an Achilles’ heel.
Reed Albergotti, Craig Timberg and Jay Greene

Marketing giant LiveRamp has privileged access to advertising accounts on the social network. Hackers took notice.
CNET

THE NEW WILD WEST

— Cybersecurity news from abroad:

Israel’s energy infrastructure has had to defend itself against several serious cyber attacks, the most recent only a few months ago, Energy Minister Yuval Steinitz said on Wednesday.
Bloomberg

ZERO DAYBOOK

Today
  • The National Association of Secretaries of State convention will take place Thursday through Sunday in Washington.

US futures tumble as coronavirus death toll in China continues to rise

Elliot Smith





U.S. stock index futures fell sharply on Thursday morning.
Around 5:45 a.m. ET, Dow futures implied a negative open of more than 150 points, while futures on the S&P 500 and Nasdaq were also lower.
Market focus is largely attuned to the spread of the coronavirus outbreak, with China’s National Health Commission confirming on Thursday that the death toll has hit 170, with confirmed cases of the virus surpassing 7,700.
U.S. stocks closed little changed on Wednesday even as the Federal Reserve kept interest rates steady in the 1.5% to 1.75% range and struck an optimistic tone on the health of the U.S. economy.
Investors will have an eye on U.S. fourth-quarter GDP figures set for release at 8:30 a.m. ET, along with weekly jobless claims.
Corporate earnings remain in focus, with Facebook warning on Wednesday that growth could continue to slow as the business matured, and reporting a sharp rise in quarterly expenses associated with improving privacy.
Tesla enjoyed a second consecutive quarterly profit on record vehicle deliveries and vowed to produce over 500,000 units this year, sending the stock surging.
Microsoft beat Wall Street expectations on fourth-quarter sales and profit on the back of strong cloud revenue, while Boeing posted its first annual loss since 1997 as the grounded 737 Max continued to weigh.
Altria, UPS, Verizon, and Coca-Cola are among those reporting earnings before the bell on Thursday, while Amazon, Visa, EA, Levi Strauss, and U.S. Steel are all due to report after the close of trading.