Monthly Archives: August 2022

Instagram and Facebook posts rejecting the Biden administrations new definition of recession have been flagged as false information, which causes massive censorship of those posts.

The standard definition of recession is a negative GDP growth in two consecutive fiscal quarters. However, in an attempt to deny that the US has entered a recession, The White House published an online article with a new definition of recession.

Related: Sly fact-checking tactics that lead to social media censorship

Both official determinations of recessions and economists assessment of economic activity are based on a holistic look at the dataincluding the labor market, consumer and business spending, industrial production, and incomes, wrote the White House.

Based on these data, it is unlikely that the decline in GDP in the first quarter of this year even if followed by another GDP decline in the second quarter indicates a recession.

The post has been criticized on social media, and Meta platforms are flagging the criticism as false information.

Instagram personality Graham Allen posted a video where he asked Siri for the definition of recession. The iPhone assistant defined it as two consecutive quarters of negative economic growth.

The video is available, but to watch it users have to click past a disclaimer that says false information reviewed by independent fact-checkers. The same label is appearing on some posts on Facebook that reject the White Houses definition of recession.

The third-party fact-checker that flagged the posts is Politifact. The fact-checker claims that it is false to say that the White House is now trying to protect Joe Biden by changing the definition of the word recession.

Read more from the original source:

Big Tech fact-checkers flag Biden "recession" definition change ...

The tech industry and Wall Street beefed up bonuses last year to keep employees during an especially tight labor market. But, this year, that trend may see a huge reversal.

At Twitter, based on Q2 performance, the 2022 total bonus pool is now tracking to 50%, the company said. Twitter reported a net loss of $270 million, or 35 cents per share. This is down from a profit of $65.6 million, or 8 cents per share, a year earlier. The companys adjusted 8-cent loss is far short of consensus estimates of a 14-cent adjusted profit. Revenue in the second quarter totaled $1.18 billion, a decrease of 1% year over year. Twitter said its bonus pool is calculated based on its performance against annual, board-approved revenue and profitability goals. Twitter CFO Ned Segals warning to staff about typical bonuses potentially being decreased was first reported by the New York Times on Friday.

When it comes to the potential for a decline in bonuses this year, its more visible in tech, in particular, and financial services, Alan Johnson of the compensation consultancy Johnson Associates, told me. Both industries are coming off last years historic highs in bonuses, Johnson says.

Johnson Associates August report projected that after the second quarter we would see a year-end decrease in incentive compensation across financial services. Investment banking underwriters will most likely see a decrease in bonuses by as much as 45%, according to the report. Meanwhile, asset management professionals and corporate staff might see a decline of 15% to 20%. Depending on the size of their firm, private equity professionals might receive up to a 10% bonus cut.

Its a volatile business, Johnson explains. Some of those did terrific in 2021. But the revenues have just gone off the cliff in terms of, for example, M&A or underwriting. Bonuses were abnormally high in 2021; and this year, its going to be abnormally low, he says. The firm calculated the projected year-end incentives on a headcount-adjusted basis based on publicly available data and direct conversations with clients, Johnson says.

I asked him when financial services companies typically conclude they have to start cutting back on bonuses. It varies, he says. As you get into August and September, youve got a pretty good idea how the year is looking, Johnson explains. Usually right after Labor Day, firms will very aggressively start to think about how big the aggregate pools might be, and also begin to pencil what [bonuses] would be for individuals.

Are there areas where bonuses will go up? Fixed income has benefited significantly from the volatility in the market, Johnson says. So, bond traders would be the leading candidate to go up, he says. They will go up, but probably much less than they would have if the results of other areas have been better.

Are layoffs in financial services on the horizon? Unfortunately, I think so, Johnson says. I think most firms feel theyre a little overstaffed. Theyve already started to restrain their recruiting, and theyre going to look at voluntary turnover. But if that doesnt get them to the numbers theyre looking for, theyre certainly going to have layoffs. By February or March of next year, I think most firms want to be at what they perceive as their right headcount and composition.

See you tomorrow.

Sheryl Estradasheryl.estrada@fortune.com

Upcoming events:In September, theFortuneCFO community will meet in person in Chicago and Dallas for two in-depth dinner conversations. I will be joined byFortuneCEO Alan Murray and leading CFOs as we delve into the new leadership strategies CFOs must embrace. If you are a CFO in the Chicago area,click here to applyto join us at Sepia on September 22, orclick here to applyto join us on September 29 at The Mansion Turtle Creek in Dallas. Please note that attendance is complimentary and subject to approval.

Persistent inflation may be deterring people from leaving their jobs. Eighty percent of respondents of FlexJobs Career Pulse 2022 Survey said the decision about whether to look for a new job with a higher salary or negotiate with their employer for a higher salary has been impacted by inflation. Job seeker confidence is trending down, according to the report. When asked how confident they are The majority (45%) are only somewhat confident in their ability to find a new job right now. Just 12% are extremely confident, 26% are very confident, and 17% are not confident at all. The findings are based on a survey of 4,000 professionals.

"The Great Resignation is starting to slow down, but bosses should pay attention to what employees are doing instead," a new Fortune report by Megan Leonhardt,explains thatthe number of U.S. workers leaving their employer dropped to 4.1% in July, down from 5.9% a year ago. However, while the number of workers actually moving to new jobs has decreased, that hasnt stopped Americans from continuing to look around for better jobs.

Brad Littlewas named CFO atDIRTT, an industrialized construction company (Nasdaq: DRTT, TSX: DRT), effective August 23. Little will lead the finance team as DIRTT continues to realign the organization, according to the company. He brings over 20 years of experience in finance with companies including Black Mountain Sand, Cornerstone Building Brands, Willbros, Technip, and PwC. Little is also a published author and co-founder of 84 Phoenix, a non-profit that supports education in underdeveloped areas.

Andrew Steinbergwas named CFO atHonor Technology, Inc., a home care network for older adults and technology platform. The announcement comes a year after Honors acquisition of Home Instead and Series E funding. Steinberg was previously a managing director at Evercore, where he was focused on M&A and capital markets advisory in the software, AI/ML, medtech, and travel tech markets. Before Evercore, he worked in a global strategy role at Google and as a consultant at Booz Allen Hamilton.

Expectations of an ongoing surge in inflation in Europe along with the sentiment that central banks will pursue aggressive tightening is making investors extremely anxious.

Greg Daco, EY-Parthenons chief economist, believes the markets will remain in a highly volatile environment for the foreseeable future," as reported by Fortune.

This is the web version of CFO Daily, a newsletter on the trends and individuals shaping corporate finance. Sign up to get it delivered free to your inbox.

Read more here:

Wall Street and Big Tech brace for much lower bonuses this year - Fortune

In late July, after finalizing plans to break itself up last year, General Electric announced that the new companies would be called GE Aerospace, GE Vernova, and GE Healthcare. A few months earlier, cereal manufacturer Kellogg Co. announced it would also be splitting itself into three companiesfor cereals, snacks, and plant-based foods. Just a few years ago, Dow Chemical and DuPont merged, but with the plan of reorganizing and then spinning off three separate companies: Dow for commodity chemicals, DuPont for specialty chemicals, and Corteva for agricultural chemicals.

Its not just American companies either. Recently, British pharmaceutical giant GSK completed a spinoff of its consumer healthcare business to create an entirely new company, Haleon PLC.

Corporate breakups are a routine part of capitalism. So why is it deemed an irreparable interference in markets when regulators break up companies, instead of CEOs or activist investors?

When we think of breaking up companies, famous examples such as Standard Oil in 1911 or AT&T in 1982 come to mind. In these cases, trustbusters in the government split the company to restore competition or to rein in the power of one dominant firm.

Less known is that when the U.S. Supreme Court broke it up into 33 separate companies, it became worth more to investors in pieces than it was together. Rockefeller was on the golf course when he heard the news. Buy Standard Oil was his response, which proved an excellent stock tip. Today, some investors make similar arguments in favor of breaking up Facebook and Alphabet.

Not a death sentence

While antitrust breakups are rare by comparison, they are conductedin theoryfor reasons of public benefit. Public figures like Elizabeth Warren and Zephyr Teachout have advocated for them, but antitrust breakups are often painted as radical, ineffective, or impractical. Fiona Scott Morten, a professor of economics at Yale, has written that Just break them up is an oversimplified sound bite, not a real policy that would restore competition in digital markets and benefit consumers. Other tech journalists have called them a messy proposition and even a nuclear option.

As federal and state antitrust investigations ramp up against Google, Facebook, and Amazon by the Federal Trade Commission, the Department of Justice, and state attorneys general, narrative resistance also builds.

When it comes to breakup rulings, defenders of free markets and corporate sovereignty usually rely on a few key claims. First is the omelette argument: Just as it is impossible to unscramble an egg, it is impossible to unwind companies. Proponents of this view claim that it is a technical nightmare to separate internal functions and infrastructure, organizational arrangements, and technical specifications for products that have been built together. The American Action Forum, a conservative public policy think tank, has said that for highly integrated tech firms, breakups are a death sentence.

However, as investors and corporate executives regularly show us, where there is a willand a balance-sheet incentivethere is a way. Painting the breakup of companies as radical not only ignores the fact that this is regularly (and voluntarily) done by corporate executives but also flouts the legal remit of the Federal Trade Commission and the Department of Justice to administer these remedies.

In 1961, Justice Brennan of the Supreme Court observed in a DuPont case, Divestiture has been called the most important of antitrust remedies. It is simple, relatively easy to administer, andit should always be in the forefront of a courts mind when [an anticompetitive merger] has been found.

Other arguments against breakups include the notion that investors are better market watchdogs than governments or that markets will self-correct in favor of competition. Government action is seen as a slow, cumbersome, and blunt toola boulder thrown into the otherwise smooth waters of market efficiency.

Proponents of this view also argue that governments respond to the whims of popular political sentiments, politically charged talking points, and the electoral pressures of whichever politician happens to be in power. Current FTC commissioner Christine Wilson has previously tweeted about her need to fight for the integrity of [The FTC], sound (not subjective and politicized) antitrust enforcement; the rule of law and due process; and free markets, which beget free people, because command & control economies fail.

However, markets are not abstract forces guiding companies to better and more efficient business decisions. They are public creations that are governed by politically determined rules. Right now, we have markets governed by one set of rules that allows constant mergers and acquisitions, which has resulted in one of the most concentrated economies in American history.

Only recently, under the leadership of Chair Lina Khan, has the FTC begun challenging mergers, like the recent attempt to block Metas acquisition of app creator Within. Over the previous decade, the FTC did not block a single Amazon, Google, or Facebook merger, as tech companies amassed unprecedented market power.

A different set of rules could lead to fairer markets, a more level playing field, and better outcomes for consumers.Breakups are routine for business and should be similarly routine for antitrust enforcers. Breaking up companies is not a baseless interference in markets, the politicization of legal precedent, or a Herculean task. When warranted, breakups are just good commercial governance, as investors regularly show us.

While tech companies and their networks of paid academics and advisors will try to color breakups as a radical last resort, enforcers should take courage from private sector precedent. They can look to the vast literature on voluntary corporate divestitures to guide them.

Breaking up companies can be good for consumers, workers, small businesses, and even investors. Breakups may be a rare example of a true win-win scenario. As the FTC takes on an aggressive campaign to rein in big tech, the agency aligns itself with capitalists the world over who regularly break up companies to keep markets competitive.

Denise Hearn is a senior fellow at theAmerican Economic Liberties Projectand co-lead of theAccess to MarketsInitiative. She is co-author ofThe Myth of Capitalism: Monopolies and the Death of Competitionand writes theEmbodied Economicsnewsletter.

The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not reflect the opinions and beliefs ofFortune.

Sign up for theFortune Features email list so you dont miss our biggest features, exclusive interviews, and investigations.

See the rest here:

Corporations break themselves up all the time. So why shouldnt regulators break up Big Tech? - Fortune

The bombshell allegations by Twitters former head of cybersecurity, who accused the company of being lax with user data and lying to the feds about it could give regulators an opening to crack down on large tech firms, experts told The Post.

Peiter Mudge Zatko, a famed hacker who was hired by then-CEO Jack Dorsey to overhaul Twitters porous cybersecurity infrastructure two years ago, told the Securities and Exchange Commission that he was fired after company executives told him to downplay his safety concerns.

Zatko alleged that Twitter executives also allowed low- and mid-level employees to gain access to sensitive controls making the system vulnerable to potential espionage.

Zatkos allegations were first reported by the Washington Post and CNN.

Industry analysts told The Post that Zatkos claims appear to have merit and that he deserves credit for coming forward.

The whistleblower is doing the right thing here, Bryan Hornung, CEO and founder of Xact IT Solutions, told The Post.

Everything Zatko points out is exactly why companies get hacked at the level they do today.

Hornung said it is common for American companies to overlook the importance of cybersecurity. Those that do are playing with fire.

Businesses big and small think it will never happen to them, he said.

CEOs like to gamble with their data security and, ultimately, their business.

Cybersecurity experts and legal analysts told The Post that Zatkos claims will likely prompt more intense regulatory scrutiny of Twitter.

Prof. Steve Stransky, a business litigation expert who teaches at Case Western Reserve University in Cleveland, told The Post that the Federal Trade Commission could find Twitter in violation of its consent decree obligations again.

Earlier this year, Twitter was ordered to pay a $150 million fine and to install new safeguards after the company was found to have violated a 2011 agreement with the FTC to protect user data.

Twitter could facenewscrutiny from various state regulatory authorities who may view Zatkos allegations as evidence that Twitter is violating the representations it has affirmatively made to its consumers with respect to how it collects, uses, and safeguards consumer data, Stransky told The Post.

In recent years, we have seen state regulatory authorities more willing to investigate social media companies over consumer protection issues, and Zatkos allegations may be a catalyst for further investigation in this area.

Aron Solomon, the chief legal analyst for the digital marketing firm Esquire Digital, thinks Zatko could give government regulators a pretext to impose restrictions on Twitter as well as other powerful tech companies.

The danger here for Twitter is real, Solomon said.

There is a potential for fines, but the greatest risk is that Twitter themselves could be empowering legislators looking for reasonsto create new laws to limit what Big Tech (particularly social media companies) can and cant do.

New government regulations could potentially be a nightmare for large tech firms since they may strike right at the social media companies business model because an overly-regulated platform is far more difficult to monetize.

Zatko was critical of his former boss, Twitter CEO Parag Agrawal, particularly over his allegedly lax attitude toward securing user data and the proliferation of bots and spam accounts.

Art Shaikh, the founder and CEO of Chicago-based software company CircleIt, says spam and bot accounts a major bone of contention between Twitter and Elon Musk are prevalent throughout social media.

Tech firms have financial incentive to maximize user engagement, though spam and bots are also created for more nefarious reasons, such as scamming people, according to Shaikh.

Agrawal is a fine CEO, Shaikh told The Post.

However, this is a problem throughout the social media landscape, so it is unfair to single him out.

Shaikh thinks Twitter could land in even more hot water over Zatkos claims that the company is a prime target for foreign spies due to its lack of a stringent security apparatus.

Earlier this month, Ahmad Abouammo, a former Twitter manager who holds dual US-Lebanese citizenship, was convicted of acting as an agent of Saudi Arabia, according to CNN.

Abouammo was accused of accepting Saudi money in order to provide the government in Riyadh with information about Twitter accounts belonging to Saudi dissidents and critics of the regime.

Zatko also alleges that the government of India forced Twitter to put one of its agents on the company payroll this at a time when the authorities in New Delhi have been accused of curbing civil liberties and public protests.

[T]here could be national security implications, Shaikh said.

It is appalling to me, as someone that has been advocating for security and data privacy and have built my company with those principles at their core, that any company could be flippant toward these issues.

Go here to see the original:

Here's how the Twitter whistleblower may impact Big Tech: 'The danger is real' - New York Post

You already know most traders are on cruise control as they wait to hear what Fed Chairman Jay Powell says on Friday at the Jackson Hole symposium. That aside, the bulls managed to hold their ground on Wednesday with the Invesco QQQ Trust (QQQ) , SPDR S&P 500 ETF (SPY) and iShares Russell 2000 ETF (IWM) spending most of the regular session above the day's volume-weighted average price (VWAP). Unfortunately, such a weak response from buyers, with the ETFs trading at or beneath their short-term moving averages, makes it look increasingly likely that SPY, QQQ and IWM all have a date with their 50-day simple moving averages even if a bounce is in the cards following the Jackson Hole event.

Away from the indexes, Wednesday's after-hour session was as busy with tech earnings. Nvidia (NVDA) , Salesforce (CRM) and Splunk (SPLK) disappointed, while Snowflake (SNOW) and Autodesk (ADSK) delivered decent results. On the stock side of things, NVDA, CRM and SPLK all crashed through their 50-day SMAs during the after-hours session, with CRM falling especially hard. On the upside, SNOW came through with a monster after-hours gain of more than 7%.

It is a rare occurrence that we can say something positive about the cannabis space, so let's focus on that for a moment.

On Aug. 15, I mentioned that if you pulled out your magnifying glass you would see the AdvisorShares Pure US Cannabis ETF (MSOS) had finally started closing above its 50-day SMA. Much to my surprise, buyers finally showed up during Wednesday's session and drove the stock above its downtrend line on halfway decent volume.

If I'm going to complain about anything, it's that giant area of supply between $13.50 and $14.75. Barring an incredible surge of buying, I suspect it will take quite a bit of work to chew through that supply zone from May.

From a trading perspective, we don't want to see much trading under $12.25, and from a proper breakout perspective, we need to see demand surge -- again -- above $13.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Go here to read the rest:

Big Tech Produces a Mixed Earnings Bag, but This Cannabis ETF Finally Perks Up - RealMoney

August 24, 2022 The Federal Communications Commission said it in a notice on Monday that it is extending the term of the Intergovernmental Advisory Committee, which provides guidance and recommendations on communications issues to the commission.

The IACs term was set to expire on September 22, but was extended by two months to November 22, according to a public notice.

The IAC has been an important source of information and guidance to the Commission over the past 20 years and the extension will provide additional time to further its contributions to the FCC, the notice said.

Low-earth orbit satellite provider E-Space announced Wednesday the addition of two new executives to its ranks.

Gunjan Murarka was named chief financial officer and Dalibor Djuran was hired as the chief satellite systems engineer.

The addition of these two valuable positions will enable E-Space to accelerate its novel LEO network, which will be both the safest satellite constellation ever, and make space affordable and accessible for everyone to solve problems on Earth, a press release said.

Murarka previously worked as a CFO with aerospace company LeoStella, while Djuran previously held the role of director of satellite manufacturing at earth imaging company Planets Labs.

The news comes as the LEO space heats up. As SpaceXs Starlink constellation has thousands of satellites in the sky, Amazon is preparing its own constellation of over 3,000 satellites under the Project Kuiper moniker.

The Free State Foundation has reiterated a recommendation Tuesday that Congress allow the Federal Communications Commission to expand the contribution base to include big technology companies for a fund that provides basic telecommunications services to rural and low-income areas.

The think tank had previously recommended in a submission to the FCC that it should expand the contribution base of the Universal Service Fund, a nearly $10-billion fund that relies on dwindling voice service revenues, to include big technology companies that rely on the internet, such as Amazon, Facebook, and Google.

Since that submission, which was part of the commissions proceeding on the future of the USF, the FCC released its report on the matter last week, recommending that Congress institute changes to its mandate that would allow it to make the necessary changes to the contribution base. That included the possibility to expand the base to include those big technology companies.

Requiring Internet companies like Amazon, Apple, Facebook, Google, Microsoft, Netflix, and Twitter to pay into the USF may be the best way to ensure future universal broadband service for Americans who have low incomes or live in areas that are difficult and more costly to serve, the FSF said in a blog post on Tuesday.

One way it suggests is for Congress to pass legislation that authorizes the Commission to require universal service contributions from online companies that generate the most Internet traffic as well as the most revenues via universally-accessible broadband networks.

Another approach, it suggested, is a bill that would require the FCC to report to Congress on the feasibility of requiring contributions from online services like search engines, social media platforms, streaming media content, app stores, cloud computing, and e-commerce platforms.

Read more:

FCC Advisory Committee Gets Extension, E-Space Adds to Ranks, Think Tank Wants Big Tech in USF - BroadbandBreakfast.com