Regretting It Already

Last Sunday, I wrote a fun little something for this platform called “Jerome Powell May Live To Regret These Statements“, in which I flagged a series of comments the newly appointed Fed chair made at an IMF/SNB event earlier this month.

Here, for anyone who missed it, is what Powell said about the likely resilience of emerging markets (EEM) as the Fed normalizes policy:

Monetary stimulus by the Fed and other advanced economies played a relatively limited role in the surge of capital flows to (emerging market economies) in recent years.

There is good reason to think that the normalization of monetary policy in advanced economies should continue to prove manageable for EMEs. Markets should not be surprised by our actions if the economy evolves in line with expectations.

In the first piece linked above, I gently suggested that while rising U.S. rates and the ongoing rally in the dollar (UUP) needn’t necessarily lead to a broad-based unwind in EM, past a certain point it won’t be possible to contend that the only real issues here are a recalcitrant Erdogan in Turkey and a crisis of confidence with regard to the Argentine peso.

In other words, there’s only so long you can lean on the idiosyncratic, country-specific stories excuse when the pain is spilling over to other locales amid a continual rise in U.S. rates and still more dollar strength. Although it’s really only possible to know this in hindsight, often (and this doesn’t just apply to emerging markets) we discover that what we thought were “idiosyncratic” stories were in fact coal mine canaries or, to mix metaphors, the wobbliest dominoes.

As I noted last Sunday, “what you’ve seen recently in the Brazilian real and also in Indonesia is evidence of contagion.” I started talking at length about the Indonesia story weeks ago and around the same time, BofAML’s Michael Hartnett (he’s the guy who told you to sell based on his “perfect” indicator back on January 26, a week before things got dicey), said this about the Brazilian real:

EM FX never lies and a plunge in Brazilian real toward 4 versus US dollar is likely to cause deleveraging and contagion across credit portfolios.

Well, this week, Indonesia hiked rates for the first time since 2014 and Brazil’s central bank eschewed what would have been a 13th consecutive rate cut in an effort to put the brakes on the currency pressure.

Neither effort was effective. In Indonesia’s case, the rupiah plunged to its lowest since October 2015 on Friday:

(Heisenberg)

Have a look at the selloff in bonds (benchmark yields for Indonesia are up some 65 bps this quarter, that would be the largest quarterly jump since late 2016):

(Heisenberg)

In short, the rate hike is not going to be enough. Capital flight is accelerating.

As for Brazil, the “hawkish” decision to forgo another rate cut similarly failed to assuage concerns and worse, it deep-sixed Brazilian equities. The real continued to fall, hitting a two-year low on Friday and I think you’ll agree that what you see in the following chart looks like trouble:

(Heisenberg)

And look, if you’re in the camp that’s predisposed to suggesting none of this matters until it spills over into developed markets, do your friends who hold the popular iShares MSCI Brazil Capped ETF (EWZ) a favor and don’t feed them that line, ok? Have a heart. Empathize. Because they just had their worst week since the circuit breakers were tripping last May:

(Heisenberg)

When it comes to Brazil there’s probably no need to panic just yet. There’s some electoral uncertainty, but nothing that should justify what you see in the currency.

“BRL is slightly weak but not too devalued. This is not an overshooting,” Goldman’s Alberto Ramos told Bloomberg in an e-mail, adding that this is a reflection of external shocks (think: stronger dollar and rising U.S. rates) that “are common to other EM currencies.”

He did go on to note that we could see 4.00 on the BRL, but that “would require the intensification of global EM FX pressures and more concern about the October election.”

Right. Well when it comes to “the intensification of global EM FX pressures” (i.e., when it comes to the kind of 30,000 foot view), the MSCI EM FX index has fallen for six of the past seven weeks:

(Heisenberg)

It was down every day this week.

The iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB) has also fallen for six of the last seven weeks:

(Heisenberg)

And how about the iShares JP Morgan EM Local Government Bond UCITS ETF? Well, it’s down handily, has seen some $550 million in outflows this month alone, and as Bloomberg notes, hasn’t seen a net inflow since March:

(Heisenberg, Bloomberg)

Look at the slide in its market cap just over the past two months:

(Bloomberg)

Now, let me take a moment to remind you that I have been persistently warning about Turkish President Recep Tayyip Erdoğan’s penchant for pushing a laughably unorthodox “theory” about how higher interest rates cause inflation and currency depreciation. If you follow Turkey, you know all about this. Here’s what I said in the post linked here at the outset:

In case you were under the impression that Erdoğan is going to be inclined to moderating his stance on interest rates (which, in his bizarre version of economics, cause inflation if they’re too high), he is going out of his way to ratchet up the rhetoric and disabuse you of that idea on a daily basis.

Well, do you know what he did this week? He went on Bloomberg TV and all but confirmed that once next month’s election is out of the way, he’s going to effectively commandeer monetary policy. You can watch that interview for yourself here and/or read my longer commentary here, but suffice to say it pushed the beleaguered lira to a fresh all-time low and confirmed everyone’s worst fears about what’s going to happen once he officially consolidates power:

(Heisenberg)

As an amusing aside, if you’re following along on Twitter, you knew that Bloomberg interview was bound to cause trouble:

All of this played out in a week that saw 10Y yields (TLT) in the U.S. hit their highest since 2011 and 30Y yields touch 3.25%.

Oh, and remember how the dollar rally stalled last week? Yeah, well it resumed this week, rising for the fourth week in five:

(Heisenberg)

What you’re seeing here is not only notable, but extremely important for what it says about how the environment is shifting as the Fed normalizes. As I’ve been keen on noting for at least a year, everything became one trade as QE drove everyone down the quality ladder in a relentless hunt for yield and as dovish forward guidance kept rates vol. anchored. That’s now reversing.

How violent that reversal will ultimately be is debatable. Some folks think it wouldn’t be the worst thing to just let emerging markets go. The following excerpts are from the latest by former trader turned Bloomberg columnist Richard Breslow:

These positions can be put to the test without necessarily having negative implications for the broader asset classes. In fact, it may represent a very positive development. A big chunk of these trades weren’t originally done because people were feeling chuffed. They were just desperately searching for yield and following the bidding of the central banks.

But if you’re fascinated by big names, then you might note that Carmen Reinhart is concerned. Here’s what she said this week about emerging markets:

The overall shape they’re in has a lot more cracks now than it did five years ago and certainly at the time of the global financial crisis. It’s both external and internal conditions. This is not gloom-and-doom, but there are a lot of internal and external vulnerabilities now that were not there during the taper tantrum.

And then there was this from El-Erian (via Twitter):

Now look, if what you want to do is pretend as though this is all immaterial for developed market investors, then by all means, but just know that this is one of those scenarios where the old adage about being “entitled to your own opinions but not your own facts” applies. As Heisenberg readers know, I generally despise old adages, but that one is apt here.

This is absolutely material for all investors and the whole point of documenting the spillover from Turkey and Argentina into other locales and charting the decline in various indices and funds is to demonstrate that rising U.S. rates and the stronger dollar are the proximate cause of the problem.

This is all a consequence of the buildup of imbalances in the QE era. It was always a matter of how smoothly the unwind of all the trades that are part and parcel of the global hunt for yield would be and the verdict from emerging markets right now is: “not smoothly”.

Trade accordingly. Or don’t. It’s up to you. But don’t say you don’t have the information you need to make an informed decision.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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

Elon Musk brings technology charm offensive to Los Angeles tunnel plan

LOS ANGELES (Reuters) – Billionaire entrepreneur Elon Musk is bringing his technology charm offensive to an attempt at digging a tunnel beneath part of Los Angeles to test designs for a high-speed subterranean transportation network he envisions for the city.

SpaceX founder Elon Musk smiles at a press conference following the first launch of a SpaceX Falcon Heavy rocket at the Kennedy Space Center in Cape Canaveral, Florida, U.S., February 6, 2018. REUTERS/Joe Skipper

Musk, the Silicon Valley high-tech tycoon best known for his Tesla Inc electric car manufacturer, planned to make a rare personal appearance at a public event in Los Angeles on Thursday night to answer questions from residents about his tunneling plans.

Efforts by Musk’s aptly named underground transit venture, the Boring Company, to win fast-track city approval of the proposed tunnel has drawn a court challenge from two neighborhood organizations.

The venue for his town hall-style meeting is the Leo Baeck Temple, a synagogue in the city’s affluent Bel-Air district, where Musk owns a residence, about 10 miles (16 km) north of the would-be tunnel site.

Plans call for excavating a 2.7-mile (4.4-km) passage below a stretch of the congested Sepulveda Boulevard corridor on the West Side of Los Angeles and the adjacent town of Culver City.

The Los Angeles City Council’s public works committee last month approved Boring’s request to exempt the tunnel from a lengthy environmental impact review that would otherwise be required under state law.

Boring says the tunnel would serve as an experimental proof-of-concept site to demonstrate ideas for a traffic-easing system Musk wants to build to rapidly whisk individual cars and small groups of pedestrians from place to place beneath the surface.

But two neighborhood advocacy groups have filed suit to block the excavation, arguing the project is really intended as the first segment for a much larger tunnel system planned by Musk. They say he is trying to obtain a waiver to evade environmental regulations that forbid piecemeal fast-track permitting of big-scope projects.

Musk launched his foray into public transit after complaining on Twitter in December 2016 that clogged traffic was “driving me nuts,” vowing to “build a boring machine and just start digging.”

The Boring expansion comes as Musk wrestles with production problems for the rollout of the Model 3 sedan at Tesla, his electric car and energy-storage business. He also is chief executive of rocket builder Space Exploration Technologies, or SpaceX, and the profusion of leadership roles has concerned some investors that he is spread too thin.

The West L.A. tunnel is the latest project Boring has undertaken after quietly digging a slightly shorter tunnel underneath tiny neighboring municipality of Hawthorne, where SpaceX and Boring are both headquartered.

Reporting by Steve Gorman; Editing by Peter Cooney

White House Cuts Top Cybersecurity Role as Threats Loom

A little over a month ago, the White House forced out Tom Bossert, its cybersecurity czar. A week later, cybersecurity coordinator Rob Joyce said he would depart as well. And now, rather than replace either, the Trump administration will do without anyone at the helm of its cybersecurity policy. It couldn’t have picked a worse time.

The news that the newly appointed national security adviser John Bolton has decided to phase out the cybersecurity coordinator role was first reported by Politico. In place of a single point person in charge of guiding and shaping US cyber policy, the task will now fall instead to two National Security Council senior directors. The NSC did not respond to a request for comment.

“At a minimum, this decision and the way that it’s being communicated send the wrong signal,” says J. Michael Daniel, who served as cybersecurity coordinator under President Barack Obama and currently heads up the Cyber Threat Alliance nonprofit. “Certainly I think that our adversaries could interpret that as a signal that this administration doesn’t take the issue as seriously, regardless of if that’s actually their intent.”

In fairness, there’s nothing sacred about the cybercoordinator role, specifically. It didn’t exist before the Obama administration, and other corners of the NSC get along fine with a similar leadership structure to what Bolton has imposed. But the nature of cyberthreats, and the broad responsibilities Bossert and Joyce took on, seem particularly in need of centralized command.

“I think it’s probably fair that there’s more policy work to be done right now on cyber than in certain other areas, because it is in a formative stage,” says Joshua Geltzer, former senior director for counterterrorism at the NSC and executive director of Georgetown Law School’s Institute for Constitutional Advocacy and Protection. “You’re at a point where you’re seeing new sorts of cyberthreats materialize.”

While US intelligence agencies are responsible for responding to those threats specifically, the cyberczar role has been in charge of organizing the political responses to those incidents, such as the March sanctions imposed against Russia for its destructive NotPetya ransomware and other online malfeasance. The position has also spearheaded cybersecurity policy, hardening both federal networks and infrastructure against attacks. It’s a lot of hats—and easier for one person to keep track of them all.

“There’s a reason why you wanted to have a focal point for cybersecurity policy in one position. I think that’s a very valuable thing to have,” says Daniel.

Political leaders have expressed their concerns over the move as well. “It’s frankly mindboggling that the Trump Administration has eliminated the top White House official responsible for a whole-of-government cyber strategy, at a time when the cyber threat to our nation is greater than ever,” says senator Mark Warner (D – Virginia), the ranking member of the Senate Intelligence Committee, in a statement. “Our adversaries are investing heavily in 21st century cyber warfare capabilities, and if we only view national security through a conventional 20th century lens, we’re going to find ourselves unable to respond to increasingly asymmetric cyber threats down the road.”

If anything, the cyberthreats from around the world have only increased. In a Congressional briefing in February, the heads of the NSA, CIA, FBI, and ODNI all testified that Russia would continue its attempts to interfere in US democracy. North Korea unleashed WannaCry ransomware on the world a year ago, and has been continually emboldened online. And with the US withdrawal from the Iran nuclear deal, cybersecurity experts warn that the country could once again target its sophisticated cyberattacks at the US.

“If anything, our enemies are only going to do more, not less,” says Daniel.

To face those challenges—as well as those from independent criminal actors—without a coherent cybersecurity policy in place invites unease.

“Big picture, it certainly seems to send a strange message as to how this White House is prioritizing something most of us think the government needs to prioritize more, when it comes to cyberpolicy,” says Geltzer.

The true impact of the move may not become apparent for some time. In response, House Democrats Tuesday introduced a bill that would create a National Office for Cyberspace, with a director confirmed by the Senate. It’s unclear what chance it might have of passing. And for now, either way, fewer capable people will be focused on big-picture cybersecurity issues at the highest level of government than there were before. It’s hard to see how that makes for an improvement.

More Great WIRED Stories

U.S. investigating Cambridge Analytica: New York Times

WASHINGTON (Reuters) – The U.S. Justice Department and the FBI are investigating Cambridge Analytica, a now-defunct political data firm embroiled in a scandal over its handling of Facebook Inc user information, the New York Times reported on Tuesday.

A person works on a laptop in the empty offices of Cambridge Analytica in Washington, D.C., U.S., May 2, 2018. REUTERS/Leah Millis

Prosecutors have sought to question former Cambridge Analytica employees and banks that handled its business, the newspaper said, citing an American official and others familiar with the inquiry,

Cambridge Analytica said earlier this month it was shutting down after losing clients and facing mounting legal fees resulting from reports the company harvested personal data about millions of Facebook users beginning in 2014.

Allegations of the improper use of data for 87 million Facebook users by Cambridge Analytica, which was hired by President Donald Trump’s 2016 U.S. election campaign, have prompted multiple investigations in the United States and Europe.

FILE PHOTO: Window cleaners work outside the offices of Cambridge Analytica in central London, Britain, March 24, 2018. REUTERS/Peter Nicholls/File Photo

The investigation by the Justice Department and FBI appears to focus on the company’s financial dealings and how it acquired and used personal data pulled from Facebook and other sources, the Times said.

Investigators have contacted Facebook, according to the newspaper.

The FBI, the Justice Department and Facebook declined to comment to Reuters. Former officials with Cambridge Analytica was not immediately available to comment.

Cambridge Analytica was created around 2013, initially with a focus on U.S. elections, with $15 million in backing from billionaire Republican donor Robert Mercer and a name chosen by future Trump White House adviser Steve Bannon, the New York Times has reported. Bannon left the White House on August 2017.

Reporting by Eric Beech; Editing by Peter Cooney

4 Reasons Elon Musk and Grimes Make a Perfect Couple

Early last week, news that Tesla CEO Elon Musk was dating the musician Grimes took the internet by storm—and just hours later, they showed up together at the Met Gala. Some onlookers more focused on the business world might have been a bit puzzled —despite a passionate fanbase, Grimes (whose real name is Claire Boucher) is hardly a household name.

But the two have a lot in common, and even if you don’t care about gossip or music, the relationship offers some insight into one of the greatest technological visionaries of our age. Here’s why.

They Built Their Careers One Step At A Time

Musk’s first company, started after he dropped out of graduate school for physics, was an online city guide called Zip2. Selling Zip2 to Compaq allowed him to build Paypal, whose sale in turn funded Tesla and SpaceX.

Grimes, similarly, expanded her palette bit by bit, starting with the very lo-fi album Geidi Primes, which was so obscure its first release was on cassette—part of a nostalgic revival of the format. That built to the slightly more polished album Visions, then onward towards even bigger things.

They’re The Star of Their Own Show

Though Musk occasionally nods to the huge staff of engineers and execs that have helped him accomplish so much, his public profile is so immense that they mostly stay in the shadows. Grimes is more literally a one-person-band: her early works were recorded in her bedroom and uploaded to MySpace. She has even toured extensively by herself, using electronics to recreate her songs live.

They Come From the Future

Elon and Grimes are both preoccupied (or maybe obsessed) with technology and outer space. According to reports, they connected in part through an obscure joke about artificial intelligence. Boucher’s Geidi Primes album was named after a fictional planet in Frank Herbert’s classic Dune novels, and Musk named SpaceX’s two drone ships in honor of sci-fi novelist Iain M. Banks, arguably Herbert’s most worthy successor. And Grimes’ echoey, electronic sound would fit right in at a dance club on Mars—where Musk wants to build a colony.

They’re Not Afraid to Fail—And Then Talk About It

Musk is notorious for setting goals so ambitious that, even when he falls short, he winds up somewhere pretty cool. Lately, that has gotten him in apparently serious trouble for badly missing production goals for Tesla’s Model 3, which he admits was largely his fault. But the same ambition led to a landmark moment for SpaceX last Friday with the launch and recovery of the Block 5 Falcon 9 rocket—during which it appears Boucher was hanging out in the SpaceX control room.

Grimes seems to be made of similar stuff. In 2014, when fans were disappointed by an early song from the album that was going to follow Visions, Boucher scrapped the work she’d done and took the whole project in a new direction. What she wound up with was 2015’s Art Angels, an album that hewed closer to her offbeat roots while still pushing into pop territory—and won her almost universal acclaim.

It’s unclear how serious the Boucher-Musk pairing is, or where it might be headed (and Musk doesn’t have the best record with relationships). But they’ve got a lot going for them, including, last but not least, Musk’s obvious fondness for offbeat music, from David Bowie to mariachi.

What your provider won’t tell you about cloud security

Everyone loves insider tips. In the case of cloud computing, the tips that matter are mostly about cloud security approaches and technology.

Here are three cloud security tips that your cloud provider won’t want to tell you. But I will.

Tip 1: Cloud security should be decoupled from specific cloud providers

While the cloud-native security services are handy and work well, you limit yourself when your security services come from a single provider.

It’s a multicloud world, and security needs to rise above the cloud providers you use now or in the future. If you use cloud-native security services from each provider, you’ll have security around a single cloud instance, but you won’t get holistic cloud security. That means your security services will be much more complex, which increases cost and the risk of a gap or that a cloud security service will fail.

CEO Stewart Butterfield Wants Slack to Be Google for the Office

Slack is not just a messaging tool anymore–and, for the record, it’s not trying to “kill” email.

Over 8 million users log into Slack every day, according to founder and CEO Stewart Butterfield at The Wall Street Journal‘s Future of Everything festival Tuesday. The company, which also counts 3 million paid users, saw its numbers increase by 33 percent from last September. The company reportedly brings in a revenue of around $300 million–and plans on only getting bigger.

Now five-years-old, Slack is moving beyond being a searchable log for communication. If Google is a giant search engine for the world’s information, Slack wants to be a “Google for the office.” “What Google is doing for the web, we’re trying to structure by channel,” said Butterfield. “Team-first, organization-first approach to messages as opposed to individual first.”

Similar to social media platforms like Google or Facebook, many third parties bring their software onto Slack. The company has about 1,500 apps in its app directory including Google Docs, Github, marketing management tools, and contract development tools. As such, Butterfield said the future of Slack will be one in which work tasks increasingly integrate directly into the platform.

For example, software engineers used to perform a command in the terminal and then go into a messaging system to communicate to the team what they did. But now, an engineer can go to a Slack team channel–where there’s “high degree of visibility and the cost of communication goes down”–and simply write the code for all to see without navigating to a different web page.

Butterfield also described how Slack is the ideal tool, given how productivity has changed over time. In the early days of the internet, you didn’t have to juggle many things at once. A recruiter now, for instance, uses LinkedIn, email, tools for evaluating resumes, and tools for writing more effective job descriptions.

“As individual productivity increases, it’s the handoff between people that gets more complicated,” he said. “The talking to other people is the actual work.” If all of that can happen in one place, the simpler our jobs will be.

While Slack continues to evolve the workplace, Butterfield said there’s one thing the tool isn’t aiming to do: “Our job isn’t to eliminate emails. We don’t get anything out of that. Email is the lowest common denominator of communication–you can guarantee everyone has an email address. Email is going to be around for awhile.”

Indeed–Butterfield admits he still spends up to two hours a day on email.

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Tencent's WeDoctor closes fund-raising round, valued at $5.5 billion

SHANGHAI (Reuters) – Chinese online healthcare solutions platform WeDoctor, which is backed by tech giant Tencent Holdings Ltd (0700.HK), said on Wednesday it had raised $500 million at a valuation of $5.5 billion ahead of a listing this year.

The investment round was led by AIA Company Ltd, part of Hong Kong-listed insurer AIA Group Ltd (1299.HK), and infrastructure and services group NWS Holdings Ltd (0659.HK).

Founded in 2010, WeDoctor provides diagnosis and online appointment booking. Users can also consult doctors through the platform.

The pre-IPO fund raising comes after rival Ping An Good Doctor, formally known as Ping An Healthcare and Technology Co Ltd (1833.HK), raised $1.1 billion in an IPO this month but saw its shares tumble soon after as investors worried about its high valuation.

WeDoctor is among a spate of technology-driven firms looking to shake up China’s overburdened public healthcare market, with increasingly affluent consumers eager for ways to get more convenient access to doctors and health services.

The firm said it would use the funds to accelerate its expansion plans, helping it better tap into the country’s “flourishing and enormous market”.

WeDoctor, which has four main units focused on healthcare, cloud, insurance and pharmaceuticals, said it has on its platform over 2,700 hospitals, 220,000 doctors, 15,000 pharmacies and 27 million monthly active users.

Reporting by Adam Jourdan; Editing by Edwina Gibbs

A 66-Year-Old Woman’s Brain Implant Was Shut Off By a Lightning Strike

A doctor in Slovenia has reported on a case with a lesson you might want to remember. If you wind up with a brain implant at some point down the road—including the kind that might someday allow you to control computers with your mind—be sure you don’t try and charge it during a thunderstorm.

According to the report, published earlier this month and spotted by Ars Technica, a 66-year-old patient with a brain implant was in her apartment when it was struck by lightning. The strike was strong enough to “burn and destroy” electrical appliances in the apartment, including a television and air conditioner.

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It was also strong enough to trigger a failsafe that shut off the woman’s brain implant, even though it wasn’t connected to the home’s wiring. The patient was being treated for involuntary neck spasms using a procedure called Deep Brain Stimulation, or DBS. It’s a well-established therapy that has been used for Parkinson’s disease for more than two decades, and was approved to treat severe obsessive-compulsive disorder in 2009. DBS treatment relies on an implant called a neurostimulator, in this case a unit from Medtronic, that sends electrical impulses to electrodes implanted in the brain.

The patient didn’t notice anything was wrong until an hour after the storm, when her spasms returned. She was able to get her implant reactivated and her tremors back under control quickly, and no damage to the implant was found.

But that outcome, according to the reporting doctor, could have been much worse if the implant had been plugged in to recharge during the lightning strike. Though the report doesn’t speculate on just how badly the patient could have been harmed, it does refer to “serious brain injury” in cases where patients with implants were exposed to strong electromagnetic fields. Electrical implants can be shut off or damaged when they get too close to generators, arc welders, or even medical equipment like MRI machines.

A medical neurostimulator isn’t precisely analogous to the kind of brain implants that entrepreneurs including Elon Musk want to develop. In fact, simple brain-computer interfaces have already been shown to work without any implant at all. But more sensitive versions of the technology probably will involve implants, so if you ever decide to literally hack your brain, be careful when you plug it in.

Chinese-American Elites Lament a Brewing Trade War

It’s not easy to promote closer US-China ties these days. The countries are moving toward a trade war; a US delegation left Beijing Friday reporting little progress on resolving disputes. US executives accuse China of stealing their intellectual property. The US government is imposing ever tighter restrictions on Chinese telecommunications firms.

That made an uncomfortable backdrop for the annual conference of the Committee of 100, a group of influential Chinese-Americans, in Silicon Valley over the weekend. The group billed the event as a “Bridge Between the US and China.” But speakers and attendees lamented deteriorating relations, heaped scorn on the Trump administration, and expressed concern that nativism could lead to discrimination against Chinese-Americans.

“It does not take a very stable genius to understand that the US relationship with China is now under severe stress,” Chas Freeman, a senior fellow at Brown University’s Watson Institute, told several hundred guests. In 1972, Freeman was an interpreter for President Nixon during his first visit to China. More than four decades later, Freeman noted the growing hostility between the leaders of the world’s two largest economies, even as their nations remain interdependent. “The US and China are each too globalized, too successful, and entangled to divorce,” he said.

Freeman and others said Trump administration policies risk weakening the US or exacerbating tensions between the countries. The tax cut approved by Congress last year will lead the government to issue more debt, much of which will be bought by the Chinese, he said. Blocking Chinese telecom company ZTE from buying US-made components could backfire by encouraging China to buttress its domestic suppliers; those firms could eventually displace US components in other products.

Not all the blame went toward Washington. Susan Shirk, chair of the 21st Century China Center at the University of California, San Diego, said China is engaged in a “massive government-organized and lavishly funded drive to acquire foreign technology to make itself into a high-tech superpower.” After decades of movement toward a market-based economy, Shirk said the Chinese government is increasing its involvement in the economy, and re-emphasizing its socialist ideology. “What’s happening in China is not your normal industrial policy,” Shirk said. “These are efforts to reduce integration with the rest of the global economy.”

Shirk said executives and political leaders in other developed economies share concerns about China’s path. “This is a much broader and deeper concern than just Trump,” she said. Gary Locke, a former US ambassador to China, echoed that sentiment, saying China limits foreign ownership of Chinese businesses, prodding many US firms into uncomfortable joint ventures with Chinese companies that are, or could be, rivals.

Technology executives find the growing tensions unsettling. “As a tech person, I love to think that technology has no boundaries,” said Paul Yeh, who runs a Palo Alto, California venture capital fund that invests in both the US and China. But Yeh said he’s not naive, and thinks the tech industry ultimately will suffer from the hostility. One potential warning sign: Three-fourths of respondents to a recent survey by the American Chamber of Commerce in China said foreign businesses are less welcome in China than previously.

Beneath the rhetoric, China has emerged as a legitimate tech power. Locke, the former ambassador, noted that Chinese inventors filed more patents than those from any other nation last year, and the country is home to the world’s fastest supercomputer. China has been particularly aggressive in artificial intelligence, with a national goal to catch the US by 2020. China’s SenseTime, which makes image-analysis software, is now the world’s most valuable AI startup.

Fei-Fei Li, Google’s chief scientist for artificial intelligence and machine learning, offered a more personal perspective on the rivalry between the two countries. Li was born in China and came to the US during high school. She earned a bachelor’s degree in physics before moving into computer science and ultimately, AI. She noted that the discoveries that revolutionized physics in the early 20th century came from scientists in several countries. “No company or country owned modern physics,” she said, drawing a parallel to artificial intelligence. “We all benefit.”

In some areas, the two countries are so interconnected that it’s hard to distinguish what is American and what is Chinese. Several startups pursuing self-driving technology include people from both countries and technology from both countries, said Jonathan Woetzel, the Asia-based director of the McKinsey Global Institute. “Business is what happens while politicians are talking,” he said.

Rising Tension

How to secure SaaS: Understanding the cloud’s security layers

When you address security in the cloud for your enterprise use, you need to think of it in several layers:

  • Layer 0 is the primary IaaS cloud on which everything else runs; typically, Amazon Web Services, Microsoft Azure, Google Cloud Platform, IBM Cloud, or Alibaba.
  • Layer 1 is the SaaS provider for your applications and servers. The SaaS offerings typically run on (someone else’s) Layer 0 provider, or come from a Layer 0 provider that also offers SaaS. Your own cloud-delivered apps are in this layer as well.
  • Layer 2 is the specific application and its user.

What can be confusing is understanding what layers reside where. For example, there are more than 3,000 SaaS providers out there—CRM and accounting systems, health care portals, bail-bond management, you name it—that run on someone else’s IaaS cloud, such as AWS. You often won’t know what IaaS Layer 0 providers they use, or if they use several.

Furthernore, within the SaaS Layer 1, SaaS providers group users into “macrotenants,” which typically typically are composed of users (more importantly, departments) from the same enterprise customer. 

Then there’s the user in Layer 2, who has credentials to specific applications and services and is using computers, browsers, and network typically not managed by either the IaaS or SaaS provider. In other words, Layer 0 is within the IaaS provider’s cotrol, and Layer 1 is within the SaaS provider’s control. Layer 2 is not.

The price of Musk cutting off analysts? For Tesla, it's $2 billion

SAN FRANCISCO (Reuters) – Ducking analysts’ questions has a price: $2 billion.

Tesla Inc investors gave a rare rebuke to iconoclastic Chief Executive Elon Musk on Wednesday after he cut off analysts asking about profit potential, sending shares down 5 percent despite promises that production of the troubled Model 3 electric car was on track.

Tesla’s future depends on the Model 3 and the company said that it had largely overcome production bottlenecks, with Musk vowing a dramatic turnaround that would reverse losses and generate positive cash flow in just a few months.

Musk plans to shut down its Fremont, California factory for 10 days in the second quarter but said Tesla will meet the production target of 5,000 Model 3s per day by the end of June, as planned, and will turn a profit in the second half of the year.

To achieve profitability, Musk will have to reverse what today amounts to a $22,584 pre-tax loss per vehicle built by the Silicon Valley company. Tesla posted its biggest-ever quarterly loss when it announced first-quarter results on Wednesday.

Tesla stock was little changed after the earnings announcement but fell during a conference call, when Musk began cutting analysts’ questions short, costing Tesla over $2 billion in market capitalization.

“These questions are so dry. They’re killing me,” Musk said after an analyst asked what percentage of Tesla 3 reservation holders have started to configure options for their cars, an indicator of how much profit Tesla will be able to wring from the vehicles. Another analyst asked about a capital requirement before being cut off.

He then took several questions in a row about plans for a self-driving car network and other long-term projects from the host of a YouTube channel focused on investing, praising the questions as not boring.

(For a graphic on Tesla earnings click tmsnrt.rs/2p6EbiR)

5,000 MODEL 3s PER WEEK

Musk’s ability to run Tesla is crucial as the company strives to efficiently and profitably build its first vehicle intended to be produced at high volume, the Model 3.

Musk acknowledged error recently in over-automating the Model 3 assembly-line, which has resulted in production delays, but it is still unclear how long and costly it will be to unwind this mistake.

Delayed Model 3 production also comes as a slew of competitors bring new electric vehicle models to market.

The company stood by a previously announced target of building 5,000 Model 3s per week by the end of June.

Tesla’s capital expenditures declined in the quarter and the company cut its spending forecasts for 2018, saying it would spend less than $3 billion. Tesla spent $3.4 billion in 2017. (bit.ly/2jn15SB)

FILE PHOTO: Tesla Chief Executive Elon Musk introduces one of the first Model 3 cars off the Fremont factory’s production line during an event at the company’s facilities in Fremont, California, U.S., July 28, 2017. REUTERS/Alexandria Sage/File Photo

Investing.com analyst Clement Thibault said the reduction was noteworthy, “but in the long run given challenges that lay ahead of Tesla, I don’t think it is going to make or break the company.”

Tesla “is definitely not in a minimizing cost stage,” Thibault said.

Free cash flow, a key metric of financial health, widened to negative $1 billion in the first quarter from negative $277 million in the fourth quarter, excluding costs of systems for its solar business. Analysts had not expected so much spending, predicting hundreds of millions of dollars less in so-called cash burn, according to Thomson Reuters data.

Tesla did not break out a cash flow calculation that it had included in previous quarters.

The niche carmaker, which two years ago vowed to build 500,000 vehicles annually in 2018, has attracted legions of fans for its advanced technology and design. But the company rushed its Model 3 to market, making mistakes in manufacturing whose effects are now being felt, and investor skepticism has risen.

Questions over Tesla’s finances are top of mind, and many analysts anticipate a capital raise in 2018 despite Musk’s statements that it will not be necessary due to profitability and positive cash flow in the third or fourth quarters.

Tesla said gross margins on the Model 3, which today are slightly negative, would be close to flat in the second quarter and grow to “highly positive” in the second half of the year.

Tesla said it produced 2,270 Model 3s per week in the last week of April. It said net reservations for the Model 3, including configured orders not yet delivered, exceeded 450,000 at the end of the first quarter.

Automotive revenue rose only 1 percent from the prior quarter to $2.74 billion.

RECORD LOSS

Tesla reported a record loss of $709.6 million, or $4.19 per share, for the first quarter ended March 31, compared with a loss of $330.3 million, or $2.04 per share, a year earlier.

Excluding items, Tesla had a loss of $3.35 per share. Analysts had expected a loss of $3.58 per share, according to Thomson Reuters I/B/E/S.

The company said it ended the quarter with $3.2 billion in cash after spending $655.7 million in quarterly capital expenses.

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The lack of Model 3 revenue has exacerbated Tesla’s cash burn as the company continues to spend on its assembly line and prepares for new investments on multiple projects in the pipeline, such as the Model Y crossover and its Gigafactory.

The Model Y is just one of many projects in the pipeline for Tesla, which also launched a Tesla Semi and a new Roadster in recent months.

Reporting by Alexandria Sage in San Francisco and Sonam Rai in Bengaluru; Editing by Peter Henderson, Matthew Lewis and Lisa Shumaker

Fitbit Strikes Deal With Google That Could Lead to Wearables Collaboration

Fitbit has teamed up with Google in an effort to get more deeply involved in the healthcare sector.

The fitness tracker maker announced on Monday that it would use Google’s recently announced health data standards for apps, known as the Google Healthcare API, to connect its wearable devices to the electronic medical records systems used by doctors and hospitals. The aim eventually is to allow doctors to get health data straight from Fitbits on their patients’ wrists.

Fitbit will also move to Google’s (googl) cloud data storage platform, much of which is already certified as complying with the federal Health Insurance Portability and Accountability Act, or HIPPA, which regulates the use of medical records. That could free Fitbit from having to build its own similar systems that comply with the law.

“Working with Google gives us an opportunity to transform how we scale our business, allowing us to reach more people around the world faster, while also enhancing the experience we offer to our users and the healthcare system,” Fitbit CEO James Park said in a statement. “This collaboration will accelerate the pace of innovation to define the next generation of healthcare and wearables.”

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Both companies have struggled somewhat in the wearables market lately. Fitbit was the market leader a few years ago when fitness trackers were all the rage but it has slipped as consumers have looked more to smartwatches from Apple, Samsung, and others to track their travels and run apps, too.

Plunging sales two years ago sent Fitbit’s shares into a tailspin—they’re down more than 70% from their 2015 initial public offering price—although it has unveiled a well-reviewed watch of its own called Versa. To turn things around, Fitbit has been shifting its focus from just weekend athletes to healthcare and in February acquired healthcare data service Twine, which helps connect people with chronic conditions like diabetes and hypertension with coaches and doctors.

Meanwhile, Google’s Android Wear software failed to catch on for several years and was recently renamed Wear OS. The company largely relied on other gadget makers to build smartwatches running its software, but as it did with phones, may have to step in and make its own products.

With both companies looking for a boost in wearables, the announcement of the new partnership also hinted at possible deeper product cooperation in the future. “Finally, Fitbit and Google are collaborating to bring together the strengths of both companies to innovate and transform the future of wearables,” the companies said in a statement, without mentioning any specifics.

Shares of Fitbit (fit) gained 5% on Monday to close at $5.55 on the news of the deal.

Qualcomm's patent deals aim to ease Apple, regulator tensions, executive says

(Reuters) – Qualcomm Inc has broadened its use of a lower-cost licensing model for the next generation of mobile data networks, a move that could help in contentious talks with two customers including iPhone maker Apple Inc, the wireless tech company’s patent licensing chief said on Monday.

FILE PHOTO: A sign on the Qualcomm campus is seen in San Diego, California, U.S. November 6, 2017. REUTERS/Mike Blake/File Photo

The patent business traditionally has supplied much of Qualcomm’s profit but has also spurred conflict with Apple, Samsung Electronics Ltd and Huawei Technologies Co Ltd as well as regulators in China, South Korea and the United States.

New deals could lower the licensing rate that Qualcomm receives while making the business more dependable if regulators view the terms favourably and two major customers – Apple and a company widely believed to be Huawei – resolve their disputes and resume paying Qualcomm.

“It’s a good context for dealing with the two licensee issues we have now,” Alex Rogers, the head of Qualcomm’s licensing division, told Reuters in an interview, naming Apple but leaving Huawei unnamed as is the company’s policy when a dispute hasn’t become public through a court proceeding.

Rogers did not comment directly on the likelihood of resolving either customer dispute. Apple and Huawei did not immediately respond to requests for comment.

Qualcomm sells chips for mobile phones but has a second, much older business licensing technology for wireless networks. The licensing business has generated global controversy and resulted in billions of dollars in regulatory fines, some of which remain on appeal.

Handset makers can licence one of two sets of Qualcomm patents: The full suite that costs makers about 5 percent of the cost of a handset or a smaller set of so-called “standard essential patents” for 3.25 percent, which includes only the patents needed for gear to work on mobile data networks.

In the past, most of Qualcomm’s customers licensed both sets of patents to avoid lawsuits. But Qualcomm has been defusing tensions by making it easier for customers to licence just the smaller, lower-cost set of standard patents and by adding patents for the next generation 5G wireless network to the suite at no additional cost.

That essentially extends a 2015 settlement with China’s chief antitrust regulator. Qualcomm began to licence only its standard patents for 3G and 4G networks to Chinese handset makers for a rate of 3.25 percent. More than 100 device makers have signed on for such deals.

“We have not lowered the rate. What we’re doing is including more technology, more (intellectual property) in the offering without increasing the price,” Rogers added.

Qualcomm also announced last week that it would assess its patent fees against only the first $400 (£291) of a phone’s net selling price. Rogers said the previous price cap was $500, a figure that was well known among industry insiders but that Qualcomm did not make public.

“What we’re doing here is creating a foundation for stability going forward,” Rogers said, describing Qualcomm’s 5G licensing moves as “regulator friendly”.

The question now is whether more handset makers will opt for Qualcomm’s lower-cost standard patents rather than its pricier full portfolio.

“What we perceive here is there will be more of a mix than there was in the past of companies opting for (standard essential patents) only,” Rogers said. “How much more, depends on each individual company.”

While Qualcomm has made no public disclosures about the status of talks with the two major customers in licence disputes, the company’s approach to licensing patents for upcoming 5G networks will look different than its initial approaches for 3G and 4G networks of years past.

“Both of those issues (disputes) are essentially now being handled within the framework of the current programme we’re offering,” Rogers said.

Reporting by Stephen Nellis; Editing by Peter Henderson and Cynthia Osterman

Report: Apple Headset Running Both Augmented Reality and Virtual Reality Scheduled for 2020

Apple’s long-rumored augmented reality headset will have virtual reality capabilities built in, too. It’s codenamed T288, and it’s currently scheduled to be released in 2020. While Augmented Reality, or AR, maps digital objects onto the real world, Virtual Reality, or VR, immerses users entirely in a digitally-generated environment.

The new detail came in a Friday report from CNET, which also included some very ambitious technical details of the project. The new information, if true, would be a major leak for the secretive company, with CNET citing unnamed sources and Apple so far declining to comment on the news. But, aside from the addition of VR, it seems to confirm similar reports dating back at least to November of last year.

Some commenters with insight on hardware development have said creating a device with the specs laid out in the report would require Apple to push the limits of its engineering capabilities. Those specs include dual screens running at 8K resolution, connected wirelessly to a box with processors well ahead of anything on the market today.

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Those details, and the release timeline itself, are subject to change even if they’re true to Apple’s current plans. But it seems nearly certain there will be an Apple AR headset sometime, since Apple has made its move into AR about as clear as the reticent company makes anything. On an earnings call in November, for instance, CEO Tim Cook referred to AR as a technology that “will transform the way you work, play, connect, and learn.”

That seems in part to be a reference to AR’s potential to enhance productivity by transforming a wearer’s entire field of view into a virtual workspace. Such engaged, creative applications may help make AR more successful than VR, which, despite raves from dedicated gamers, hasn’t turned into a huge consumer category. AR, even in primitive forms such as the mobile phone game Pokemon Go, has had much broader adoption, pointing to even bigger potential as hardware advances. And since AR and VR have substantial technical overlap, combining them might add up to a more appealing product with little extra overhead.

Outrage breaks out after Whole Foods partners with Yellow Fever eatery

LOS ANGELES (Reuters) – Amazon.com’s Whole Foods Market sparked social media outrage after its newest store in its 365 grocery chain partnered with an Asian restaurant with the racially charged name of Yellow Fever.

A Whole Foods Market store is seen in Santa Monica, California, U.S. March 19, 2018. REUTERS/Lucy Nicholson

The independently owned and operated eatery – whose name is taken from the slang term for a white man’s sexual attraction to Asian women – is located in the 365 store that opened in Long Beach, California, on Wednesday.

“An Asian ‘bowl’ resto called YELLOW FEVER in the middle of whitest Whole Foods — is this taking back of a racist image or colonized mind?” Columbia University professor and author Marie Myung-Ok Lee, wrote on Twitter.

Whole Foods, which has eight stores in its 365 chain that was launched with a no-frills concept to win over millennials, declined comment.

“Yellow Fever celebrates all things Asian: the food, the culture and the people and our menu reflects that featuring cuisine from Korea, Japan, China, Vietnam, Thailand and Hawaii,” said Kelly Kim, executive chef and co-founder of Yellow Fever, which also operates two Los Angeles-area restaurants.

“We have been a proud Asian, female-owned business since our founding over four and a half years ago in Torrance, California.”

Kim, who is Korean-American, in previous interviews said she was aware that the name choice would be attention-getting and controversial.

“One night, we just said ‘Yellow Fever!’ and it worked. It’s tongue-in-cheek, kind of shocking, and it’s not exclusive — you can fit all Asian cultures under one roof with a name like this. We just decided to go for it,” Kim told Asian American news site NextShark six months ago.

A year ago she told the Argonaut, a local Los Angeles news outlet, that Yellow Fever means “love of all things Asian” and that public push back over the name had not been as drastic as expected.

Some people on social media defended the news of the partnership with Whole Foods as part of a broader cultural trend.

“This is no more offensive than @abc naming an Asian sitcom Fresh of the Boat or FOB- which is considered racists [sic],” wrote Lorin Hart, who uses the Twitter handle @CubeProMH.

Reporting by Lisa Baertlein in Los Angeles; Editing by Marguerita Choy

Amazon Will Jack Up the Price of Its Prime Program Next Month

Amazon will charge U.S. customers $119 per year to join its free delivery Prime program starting May 11, a 20% price hike in the popular offering that also includes access to a growing library of video programming.

CFO Brian Olsavsky announced the coming price hike on a quarterly call with analysts to discuss Amazon’s financial results. The company said its first quarter sales increased 43% from a year ago to $51 billion, with some of the growth coming from the acquisition of the Whole Foods supermarket chain in August. Profit more than doubled to $1.6 billion.

The price hike, which will hit renewing customers starting on June 16, is the first for U.S. annual Prime members in four years, the CFO noted. “There’s all kinds of new features that we’ve continually added to the Prime program, it’s much different than it was in 2014,” Olsavsky explained. “This is a reflection of that.”

The hike comes amid several other increases from big tech companies over the past six months. In October, Netflix (nflx) raised the monthly price of its standard plan to $11 from $10. And Google (googl) raised the price of its YouTube Internet TV service to $40 a month from $35 in March, though while adding some new channels as well.

Amazon CEO Jeff Bezos recently disclosed that the Prime program reached 100 million members worldwide.

Shares of Amazon (amzn), already up 30% so far this year, jumped another 7% in afterhours trading.

Amazon Just Announced a Surprising $1.6 Billion in Profits. Why Is It Raising Prime to $119 a Year?

Amazon just announced that it made more money than anyone ever expected in the first three months of 2018–and that it’s raising its subscription price for Prime members from $99 to $119. If you don’t want to pay the new price, you do have other choices.

Amazon’s anticipated quarterly report contained good news and bad news. There’s good news for the company: Its earnings beat all expectations, with revenues of $51 billion and profits of $1.6 billion in the first three months of the year. And then there was bad news for Amazon customers, at least those of us in the United States: The company is increasing the annual price of a Prime subscription from $99 a year to $119 a year. The new pricing takes effect next month for new subscribers and the month after that for existing ones. As you likely already know, Prime is Amazon’s subscription service that offers free two-day shipping on many items as well as access to much of Amazon’s streaming video content and some books as well.

If you own or run a business, when do you raise prices? Usually it’s when you need to because your costs are going up and your profits are slipping–not on the same day that you announced you made more money than anyone ever imagined you could. But apparently if you’re Jeff Bezos, just because your company is doing extraordinarily well is no reason to give its most loyal customers a break.

What’s Amazon’s reasoning for announcing a Prime price hike on the same day it released amazingly high profits? There are a few. First, the program in itself is unprofitable–shipping things for free can get expensive–and Wall Street analysts have criticized the company for losing money on Prime. Second, Amazon can argue that we’re getting more for our money now since the number of items available with free shipping to Prime members has grown from 20 million items to 100 million items. And lastly, the company has been pouring a lot of money into original programming that Prime members can watch for free, although I personally have never found an Amazon original show that I thought was worth my time. Prime members who are Thursday night football fans and don’t have access to broadcast TV will be glad to know that the company has renewed its deal with the NFL and will stream those games again this fall, however.

Amazon’s real reason for raising Prime prices is probably simply because it can. For the first time, it has released the number of Prime subscribers worldwide, which Amazon says now is over 100 million. Interestingly, though, by at least one popular estimate, that number is a lot lower than it should be.

The real question for Prime members is this: If you don’t want to pay an extra $20 a year to a company that’s already getting very rich off your purchases, is there a viable alternative? The answer, surprisingly, is yes. Walmart, perhaps the only retailer with a varied enough inventory to compete meaningfully with Amazon has been going after Prime members, and Amazon customers in general in a big way, providing not only two-day shipping (previously by membership, now free on any order over $35), as well as upping its grocery game to compete with Amazon/Whole Foods in the grocery space.

As far as streaming content is concerned, consider Netflix, Hulu, Spotify, or perhaps the new combined Hulu/Spotify Premium service announced this month. At $12.99 a month it admittedly costs more per year than even the new higher-priced Prime subscription, but the vastly wider selection of both video and music content, and the fact that you’ll be able to watch network shows one day after they air (while shopping online at Walmart.com) should more than make up for that. Plus Hulu/Spotify is offering subscribers to the combined service three months for $.99. That will make it slightly less costly than a Prime subscription for the first year.

Microsoft Becomes Second Most Valuable Company For First Time Since 2015

Microsoft may not be a favorite in the race to a becoming the country’s first trillion-dollar public company. But recently, after its younger tech peers whizzed past in valuation, Microsoft has become the second most valuable firm—albeit intermittently—for the first time since 2015.

On Tuesday, Microsoft was valued at $714 billion, about $3 billion above Alphabet and Amazon. Only Apple, valued at $838 billion, is higher.

Microsoft had briefly ascended to No. 2 on April 12 and then again on April 16. But it hasn’t been able to maintain its position for long.

On Tuesday, amid worries about higher U.S. Treasury yields and disappointing earnings by other companies that sent the S&P 500 down1.3%, Microsoft rose to No. 2 by virtue of its shares falling less—2.3%—than those of its rivals.

Shares in Google parent company Alphabet closed down nearly 5% on Tuesday, amid concerns about the earnings it reported a day earlier. Meanwhile shares of e-commerce giant Amazon sank 3.8%.

Investors are concerned that tech company earnings over the next couple of weeks will fail to meet lofty expectations. Tech firms were among the best performers of 2017, but they have hit a wall this year as investors rethink their enthusiasm.

Microsoft’s stock has gained momentum under CEO Satya Nadella, who has beefed up the company’s corporate-focused business. The uptick harkens back to a time when the software giant was the most valuable company. At the height of the dot-com boom in 2000, Microsoft was valued at $533.4 billion—about $777 billion in today’s dollars—followed by firms like Cisco Systems and General Electric. But when the bubble burst, Microsoft’s shares took a beating.

The distraction of an antitrust lawsuit by the Justice Department along with missed opportunities in search and mobile didn’t help.

An American Airlines Passenger Was Stuck Next to a 'Screaming and Kicking' Toddler. His Stunning Reaction Went Viral

Imagine your happy place. Now, imagine that in order to get to your happy place, you first have to sit next to a screaming toddler in economy on American Airlines for a few hours.

(Related: We Took Our 2-Year-Old on United and JetBlue. Here’s What We Learned)

We’ve seen this kind of thing happen a lot lately–with bad results and viral videos. There’s the New York state employee who reportedly yelled at a baby on a Delta flight and lost her job (at least temporarily) as a result. There’s the flight attendant who simply kicked a passenger and a fussy toddler off a plane.

And there’s the guy whose response was to record a video of a screaming child on a flightpost it to YouTube, and bask in the social media notoriety.

But perhaps there’s another way to respond. And a passenger on American Airlines who made that choice recently, went viral himself as a result.

Meet Todd Walker, a father of two who just celebrated 30 years with his employer, and who flies as often as four times a month from Kansas City to North Carolina for work.

He’d boarded an American Airlines flight recently on that route, getting seat 33A toward the back of the plane, only to find that the passengers sitting next to him were a mom named Jessica Rudeen, and her two kids: four-month-old Alexander on her lap, and three-year-old Caroline.  

After some chaos in the boarding area, Rudeen hadn’t had a chance to feed the four-month-old–and he started reacting the way hungry four-year-olds are known to do. Then, her three-year-old daughter changed her mind about the whole idea of flying.

That meant Walker was about to get what we might call, “whole toddler experience.” I’ll let Rudeen herself describe the maelstrom, as she did in a post (embedded at the end of this article):

My 3 year old, who was excited before boarding the plane, lost her nerve and began screaming and kicking, ‘I want to get off the plane! I don’t want to go!’ I honestly thought we’d get kicked off the plane. So with two kids losing their minds, I was desperately trying to calm the situation. 

Walker responded in a way that seemed completely unremarkable to him, he told me in a phone conversation this weekend. He just decided to help. As Rudeen explained further, Walker…

reached for the baby and held him while I forced a seatbelt on Caroline, got her tablet and started her movie. Once she was settled and relatively calmed, he distracted her so that I could feed Alexander. Finally, while we were taxiing, the back of the plane no longer had screams. During the flight, he colored and watched a movie with Caroline, he engaged in conversation and showed her all the things outside.

By the end of the flight, he was Caroline’s best friend. I’m not sure if he caught the kiss she landed on his shoulder while they were looking out the window.

Walker also was on the same connecting flight in Charlotte that Rudeen planned to take. He walked her daughter through the terminal to the new gate, and then asked to have his seat reassigned to he could sit next to the family and help out on the second flight, too.

I talked with both Walker and Rudeen this weekend, after Rudeen’s Instagram/Facebook post–which she originally put up because she hadn’t gotten Walker’s last name or contact information, and wanted to connect with him again–got so much traction. As of this writing it has more than 5,000 shares, and it’s been featured in media around the world.

The Walker and Rudeen families say they think their meeting was a result of divine intervention, and that they plan to meet again next month.

“I wasn’t expecting it to get to places like Brazil or Ireland or Australia or the U.K.,” Rudeen told me. “I’m just a stay-at-home mom in northwest Arkansas. But, I’m glad that it highlights the importance of what it means to be kind.”

Walker said he hadn’t thought his conduct had been a big deal, either, and but he welcomed the attention if it inspires other people to offer help, or to notice kindness around them.

“When I walked away in Wilmington, I never thought I’d hear from or see them again,” he said, reiterating that it hadn’t seemed like a big deal to him to respond to the family with kindness.

He also praised Rudeen for being willing to admit she could use the assistance, even in a world where people often have good reason to be wary of strangers. “Part of the reason this worked is that Jessica was willing to accept the help. That’s not always the case today, and I get it.” 

Here’s Jessica Rudeen’s Facebook post:

How Some New College Graduates Are Pulling Over $1 Million a Year (Courtesy of Elon Musk)

Artificial intelligence experts can command huge salaries and bonuses–even at a nonprofit.

OpenAI, a nonprofit research lab started by Tesla founder and CEO Elon Musk released the salary details of it’s employees–and they are striking. The organization’s top researcher was paid more than $1.9 million in 2016, and another leading researcher who was only recruited in March was paid $800,000 that year, according to a recent article in the New York Times.

Salaries for top A.I. researchers have skyrocketed because there is high demand for the skills–thousands of companies want to work with the technology–and few people have them. So even researchers at a nonprofit can make big money.

It likely has more to do with competition than interest in the field itself, however. The Times points out that both of the researchers employed by OpenAI used to work at Google. At DeepMind, a Google-owned A.I. lab in London, $138 million was spent on the salaries of 400 employees, translating to $345,000 per employee including researchers and other staff, the Times reports. 

OpenAI was started by Musk who recruited several engineers from Google and Facebook, two companies pushing the industry into artificial intelligence. People who work at major companies told the Times that while top names can expect compensation packages in the millions, even A.I. specialists with no industry experience can expect to make between $300,000 and $500,000 in salary and stock as demand for the skills continues to outstrip supply. 

Amazon Has Over 100 Million Prime Members

Amazon Prime has over 100 million subscribers worldwide, Amazon CEO Jeff Bezos said on Wednesday, marking the first time that the company has disclosed such detailed information about its increasingly important subscription service.

The online retail giant debuted Prime 13 years ago as a way for people to get free two-day shipping and access to the company’s video streaming library.

In the past, Amazon has only disclosed vague information about the number of Prime subscribers, such as it having “tens of millions of members.” The updated number highlights the growth of the company’s subscription service, which Amazon has pushed heavily over the years as a way to retain customers that in turn fuel its core retail business with each purchase. Still, Amazon stopped short of full disclosure of its Prime subscriber service, like how much revenue it generates.

In addition to membership numbers, Bezos said in a letter to shareholders that the company had shipped over 5 billion items in 2017 as part of its Prime service and that “more new members joined Prime than in any previous year.” However, he didn’t say how many people signed up in past years.

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Bezos also bragged about Amazon’s recent marketing campaigns, including its Prime Day event in July. He said that the company’s Prime Day for 2017 was its “biggest global shopping event ever” until it was soon eclipsed by Cyber Monday, the day of online shopping deals following the Thanksgiving holiday weekend.

“Prime Day 2017 was our biggest global shopping event ever (until surpassed by Cyber Monday), with more new Prime members joining Prime than any other day in our history,” he said.

As for sales of some of Amazon’s other heavily promoted products and services, Bezos remained typically vague.

Amazon sold “tens of millions” of its Internet-connected Echo speaker; its online streaming music service “Amazon Music” now “has tens of millions of paid customers;” and its “Amazon Fashion” online retail portal now “has become the destination for tens of millions of customers.”

From Bezos’ shareholder letter:

Congratulations and thank you to the now over 560,000 Amazonians who come to work every day with unrelenting customer obsession, ingenuity, and commitment to operational excellence. And on behalf of Amazonians everywhere, I want to extend a huge thank you to customers. It’s incredibly energizing for us to see your responses to these surveys.

One thing I love about customers is that they are divinely discontent. Their expectations are never static – they go up. It’s human nature. We didn’t ascend from our hunter-gatherer days by being satisfied. People have a voracious appetite for a better way, and yesterday’s ‘wow’ quickly becomes today’s ‘ordinary’. I see that cycle of improvement happening at a faster rate than ever before. It may be because customers have such easy access to more information than ever before – in only a few seconds and with a couple taps on their phones, customers can read reviews, compare prices from multiple retailers, see whether something’s in stock, find out how fast it will ship or be available for pick-up, and more. These examples are from retail, but I sense that the same customer empowerment phenomenon is happening broadly across everything we do at Amazon and most other industries as well. You cannot rest on your laurels in this world. Customers won’t have it.

Exclusive: Facebook to put 1.5 billion users out of reach of new EU privacy law

SAN FRANCISCO (Reuters) – If a new European law restricting what companies can do with people’s online data went into effect tomorrow, almost 1.9 billion Facebook Inc users around the world would be protected by it. The online social network is making changes that ensure the number will be much smaller.

Facebook members outside the United States and Canada, whether they know it or not, are currently governed by terms of service agreed with the company’s international headquarters in Ireland.

Next month, Facebook is planning to make that the case for only European users, meaning 1.5 billion members in Africa, Asia, Australia and Latin America will not fall under the European Union’s General Data Protection Regulation (GDPR), which takes effect on May 25.

The previously unreported move, which Facebook confirmed to Reuters on Tuesday, shows the world’s largest online social network is keen to reduce its exposure to GDPR, which allows European regulators to fine companies for collecting or using personal data without users’ consent.

That removes a huge potential liability for Facebook, as the new EU law allows for fines of up to 4 percent of global annual revenue for infractions, which in Facebook’s case could mean billions of dollars.

The change comes as Facebook is under scrutiny from regulators and lawmakers around the world since disclosing last month that the personal information of millions of users wrongly ended up in the hands of political consultancy Cambridge Analytica, setting off wider concerns about how it handles user data.

The change affects more than 70 percent of Facebook’s 2 billion-plus members. As of December, Facebook had 239 million users in the United States and Canada, 370 million in Europe and 1.52 billion users elsewhere.

Facebook, like many other U.S. technology companies, established an Irish subsidiary in 2008 and took advantage of the country’s low corporate tax rates, routing through it revenue from some advertisers outside North America. The unit is subject to regulations applied by the 28-nation European Union.

Facebook said the latest change does not have tax implications.

‘IN SPIRIT’

In a statement given to Reuters, Facebook played down the importance of the terms of service change, saying it plans to make the privacy controls and settings that Europe will get under GDPR available to the rest of the world.

“We apply the same privacy protections everywhere, regardless of whether your agreement is with Facebook Inc or Facebook Ireland,” the company said.

Earlier this month, Facebook Chief Executive Mark Zuckerberg told Reuters in an interview that his company would apply the EU law globally “in spirit,” but stopped short of committing to it as the standard for the social network across the world.

In practice, the change means the 1.5 billion affected users will not be able to file complaints with Ireland’s Data Protection Commissioner or in Irish courts. Instead they will be governed by more lenient U.S. privacy laws, said Michael Veale, a technology policy researcher at University College London.

Facebook will have more leeway in how it handles data about those users, Veale said. Certain types of data such as browsing history, for instance, are considered personal data under EU law but are not as protected in the United States, he said.

The company said its rationale for the change was related to the European Union’s mandated privacy notices, “because EU law requires specific language.” For example, the company said, the new EU law requires specific legal terminology about the legal basis for processing data which does not exist in U.S. law.

NO WARNING

Ireland was unaware of the change. One Irish official, speaking on condition of anonymity, said he did not know of any plans by Facebook to transfer responsibilities wholesale to the United States or to decrease Facebook’s presence in Ireland, where the social network is seeking to recruit more than 100 new staff.

Facebook released a revised terms of service in draft form two weeks ago, and they are scheduled to take effect next month.

Other multinational companies are also planning changes. LinkedIn, a unit of Microsoft Corp, tells users in its existing terms of service that if they are outside the United States, they have a contract with LinkedIn Ireland. New terms that take effect May 8 move non-Europeans to contracts with U.S.-based LinkedIn Corp.

LinkedIn said in a statement on Wednesday that all users are entitled to the same privacy protections. “We’ve simply streamlined the contract location to ensure all members understand the LinkedIn entity responsible for their personal data,” the company said.

FILE PHOTO: Silhouettes of mobile users are seen next to a screen projection of Facebook logo in this picture illustration taken March 28, 2018. REUTERS/Dado Ruvic/Illustration/File photo

Reporting by David Ingram in San Francisco; Additional reporting by Joseph Menn in San Francisco, Padraic Halpin and Conor Humphries in Dublin and Douglas Busvine in Frankfurt; Editing by Greg Mitchell and Bill Rigby

Why Netflix Stock Jumped as Much as 8% to an (Almost) All-Time High

Growth at big companies chasing mature markets is supposed to slow down. Think about wireless phones or cable TV. But that rule doesn’t seem to apply to Netflix, at least not yet.

Even after more than 20 years in business, the world’s biggest streaming video service experienced some of its fastest growth ever in the first quarter, helping to give its stock a big lift.

Netflix shares, which hit an all-time high of $333.98 last month before selling off in the recent stock market decline, jumped as much as 8% in after hours trading on Monday. That put the stock price just pennies below the all-time high. But as CEO Reed Hastings and other executives answered an analysts’ questions on one of Netflix’s famously dull quarterly calls for investors, the after hours gain shrunk to a 5% gain to $324.32.

Netflix’s overall revenue increased 40% to $3.7 billion in the quarter, but excluding the aging DVD rental business, streaming video service revenue rose 43% to $3.6 billion, the company’s fastest quarterly growth rate ever, Netflix said. That was due to the combination of adding 7.4 million new subscribers, the most ever for Netflix in a first quarter, plus the price hikes the company pushed through last year, leading to a 14% increase in the average monthly subscription price.

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Investors and analysts were most impressed by the subscriber gains, which came in well ahead of the company’s own forecasts. Netflix added 1.96 million new members in the United States, after forecasting a gain of 1.45 million, and another 5.46 million in other countries, after forecasting 4.9 million. Netflix’s forecasts for the second quarter for subscriber and revenue growth were also better than analysts expected.

“We think investors will likely push NFLX stock higher after this earnings report,” UBS analyst Eric Sheridan wrote after the results came out. “We see investors focused on the widening moat that NFLX is creating with its business (faster subscriber growth on the back of original content push).”

Netflix’s head of programming, Ted Sarandos, did use the call Monday evening to shoot down one frequent rumor about the company, while declining to address another.

“Our move into news has been misreported over and over again and we’re not looking to expand into news beyond the work that we’re doing in short form and long form feature documentaries,” he said, when asked about rumors of a bigger push into news.

Recent talk shows from the likes of David Letterman should be considered entertainment, not news, he stressed. “David Letterman is a great talk show host—not a newscaster,” Sarandos said.

And about those rumors that former president Barack Obama or his wife Michelle is in talks to host such a show?

“I can’t comment on the Obamas or any other deals that would be in various states of negotiation right now,” he replied.

CEO Hastings was also asked whether the data privacy problems hounding Facebook (fb) and other tech companies could hurt Netflix (nflx), particularly if new laws limited data collection. Last week, some members of Congress raised the possibility during hearings in which Facebook CEO Mark Zuckerberg testified about his company’s data collection and data sharing practices.

“Well, I’m very glad that we built the business not to be ad-supported,” he said. “I think we’re substantially inoculated from the other issues that are happening in the industry…Just objectively, we’re much more of a media company in that way than pure tech. Of course we want to be great at both but, again, we’re really pretty different from the pure tech companies.”

The Airline Whose Planes Are Said to Break Down In Mid-Air More Often Than Anyone's Is About To Have a Big PR Problem

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

They say you should get out ahead of a bad story.

Present your version before the story hits, so that people can have good feelings about you before aspersions are cast.

I wonder, therefore, what Allegiant Air might do this weekend.

I wrote about this airline a couple of years ago, after it had been accused of having planes that break down four times more often than those of other airlines.

In mid-air, that is.

Of the airline’s 86 planes, it was said that 42 of them had broken down in mid-air the previous year.

The airline fought back and claimed that the accusations were “incendiary.” Indeed, its stock went up 24 percent soon after the original Tampa Bay Times article was published.

Now, though, Allegiant might have a bigger PR problem. 

On Sunday, it’ll be featured in a 60 Minutes segment, one that CBS teases will be twice the usual length.

Here’s the teaser.

Just those 48 seconds suggest that Allegiant should brace for something of calm, considered skewering.

I asked the budget airline what it thought of the upcoming exposé. A spokeswoman told me Allegiant would wait until the segment airs before offering a rebuttal.

One of the main issues with Allegiant’s record of breakdowns is that it flies old planes. Very old planes, some 22 years of age.

Recently, though, it has begun to replace these planes with Airbuses. Indeed, last May was the first time that Allegiant enjoyed the experience of fitting out a new(ish) plane.

The question, then, is how much Sunday’s 60 Minutes piece will reflect the whole current scenario.

The problem for the airline’s PR department, though, is that Allegiant will surely come out looking not so good on one of the most respected news programs in America, one that’s watched by 12 million people.

It’s inevitable, then, that it will instantly be associated with the sort of bad reputation that plagued United Airlines over the last year. 

Worse, perhaps, is the idea that instead of a brutal lack of customer sensitivity — as in the United case — Allegiant might be tarred with the notion that it’s simply an unsafe airline.

On Friday, the airline’s stock began to drop. What might happen to it on Monday?

China lays out self-driving rules in global race: China Daily

SHANGHAI (Reuters) – China has laid out national guidelines for testing self-driving cars as it looks to keep pace with the United States in a global race to develop autonomous vehicles, the China Daily newspaper reported on Friday, citing the country’s industry ministry.

FILE PHOTO: A Baidu’s Apollo autonomous car is seen during a public road test for self-driving vehicles in Beijing, China March 22, 2018. REUTERS/Stringer

The rules lay out requirements that vehicles must first be tested in non-public zones, that road tests can only be on designated streets and that a qualified person must always sit in the driver’s position, ready to take over control.

China is making a major push into autonomous smart vehicles, keen to have its own national champions in self-driving to compete with global leaders such as Waymo, the self-driving arm of Google parent Alphabet Inc, and Tesla Inc.

Xin Guobin, the country’s vice industry minister, said China would slip behind rivals like the United States if it did not “firmly seize” initiative in the sector, which he called a key plank of Beijing “Made in China 2025” push.

“We will accelerate to build a strong manufacturing country, a strong country in science and technology with strong networks and transportation,” he said in comments posed on the Ministry of Industry of Information Technology website.

Chinese cities including Beijing and Shanghai have previously announced local guidelines for self-driving tests, while internet giant Baidu Inc already has approval to test self-driving vehicles on city streets.

In the wake of two high-profile crashes in the United States involving Uber Technologies [UBER.UL] and Tesla, MIIT vice minister Xin said China would emphasize safety as the “top priority” in testing for autonomous vehicles.

“To ensure the safety of road tests, we will not only not only require that road tests take place on prescribed streets, but also that the test driver sits in the driver position throughout, monitoring the car and the surrounding environment and ready to take control of the car at any time,” he added.

“This is a lesson that we have learned from the accidents faced by Uber and Tesla.”

Fatal crashes last month involving the two U.S. firms have raised scrutiny on self-driving globally and ramped up pressure on the industry to prove its software and sensors are safe.

Xin added China should also push forward other technologies needed to support smart vehicles, including next-generation 5G communications networks and intelligent roads.

Reporting by Adam Jourdan; Editing by Shri Navaratnam

AT&T economist argues Time Warner merger is good for consumers

WASHINGTON (Reuters) – AT&T’s (T.N) proposed merger with Time Warner Inc (TWX.N) would save consumers money because the marriage of a pay-TV provider with a movie and TV giant would create a more efficient company, an economist testifying for AT&T said in court on Thursday

FILE PHOTO – An AT&T logo is seen at a AT&T building in New York City, October 23, 2016. REUTERS/Stephanie Keith/File Photo

Dennis Carlton, from the University of Chicago, sought to rebut testimony on Wednesday from an economist for the government, Carl Shapiro of the University of California at Berkeley, who said the $84.5 billion deal would cost American consumers some $286 annually in higher prices.

The government filed a lawsuit in November to block the deal, citing antitrust concerns. U.S. District Judge Richard Leon will order the deal stopped if he determines it would raise prices for pay TV consumers or threaten the development of online video.

Shapiro had argued that the proposed deal would spur AT&T, which owns DirecTV, to charge its pay TV rivals more for Time Warner content, in particular the Turner family of news and sports shows.

He also said the combined company would have an incentive to decline to offer content to cheaper online video services.

Carlton attacked the assumptions in Shapiro’s testimony and used newer data to show that by his tally, the deal would provide a net benefit to consumers of 52 cents per pay TV subscriber a month.

“There is an efficiency from vertical integration,” argued Carlton. The proposed transaction is considered a vertical deal since AT&T, which owns satellite television company DirecTV, is buying a content supplier, Time Warner.

Carlton said Shapiro underestimated how many people were dropping pay TV altogether and overestimated how many people would leave their pay TV provider if they lost access to Turner’s channels.

On cross-examination, government attorney Craig Conrath sought unsuccessfully to push Carlton to concede that a previous vertical deal, Comcast’s purchase of NBCU, led to more expensive TV shows and movies when NBCU negotiated new contracts with other pay TV companies.

The trial, which began in mid-March in U.S. District Court in Washington, is expected to wrap up this month.

In a sign of the high stakes of the trial, the head of the Justice Department’s antitrust division, Makan Delrahim, sat at the government counsel’s table on Thursday, prompting a reaction from Leon, who said: “My goodness gracious,” when Delrahim introduced himself.

Reporting by Diane Bartz; Additional reporting by David Shepardson; Editing by Peter Cooney

Facebook CEO Mark Zuckerberg Wins Would-Be Congressional Grilling

Facebook CEO Mark Zuckerberg remained calm under pressure during five hours of questioning by U.S. senators about a series of recent crises culminating with the latest involving Cambridge Analytica, a political consulting firm that gained access to data about up to 87 million Facebook users.

Overall, Zuckerberg appeared to win the day by avoiding any major stumbles and appearing open to the idea of limited privacy regulation. For their part, the senators were generally gentler with Zuckerberg than expected during the hearing, which risked being a dramatic grilling broadcast live to millions of people at home.

Zuckerberg, wearing a suit and tie instead of his signature grey t-shirt, and looking somber throughout, responded to lawmakers without becoming flustered. He readily apologized for the privacy dust up, saying “It was my mistake. I’m sorry,” and that Facebook had failed to take a “broad enough view” of the possible misuse of its service and developer tools by bad actors.

Much of what Zuckerberg reiterated was what he and his lieutenants have been explaining for the past couple weeks of intense criticism and a falling stock price. But saying it on a national stage, under scrutiny of lawmakers, raised the stakes for the CEO, who had never previously given testimony in Congress.

Zuckerberg’s performance stood in sharp contrast to some public appearances earlier in his career, during which he stumbled with answers while perspiration glistened on his forehead. Since then, he’s grown more polished on stage and able to respond at length to questions as if he’s gone through a crash course in public speaking.

When Zuckerberg didn’t know the answer—and that was often—he told senators that his staff would provide more details later. It had the effect of diffusing some more detailed questions that could have opened Facebook to further scrutiny.

Several times during Tuesday’s hearing, Zuckerberg explained that an academic, Aleksandr Kogan, had misled Facebook about his true intentions in creating a personality quiz app on the social network that harvested user data. Kogan then sold that data to Cambridge Analytica, in violation of Facebook policies.

A few years ago, Facebook changed its terms of its service so that developers could no longer access as much data as before. But for many critics, it was too little, too late.

During the hearing, Zuckerberg directed blame away from Facebook to Cambridge Analytica, saying that his employees had been duped. Indeed, several senators questioning Zuckerberg seemed to take his side and expressed more anger at Cambridge Analytica than Facebook, which had such lax data sharing policies that it’s developer platform essentially operated on an honor system.

A few questions caught Zuckerberg off guard, including one by Sen. Maria Cantwell of Washington, who asked him if data analytics company Palantir scraped Facebook user data to allegedly aid Cambridge Analytica. Zuckerberg seem flustered by Cantwell bringing up Palantir, whose co-founder Peter Thiel is a Facebook board member, and responded, “I’m really not that familiar with what Palantir does.”

Ultimately, Zuckerberg apologized repeatedly for failing to foresee the Cambridge Analytica scandal, and promised that his company is working to prevent similar problems.

Investors appeared to be pleased with Zuckerberg’s performance on Capitol Hill after sending its shares down 15% over the past few weeks for its missteps. On Tuesday, the company’s shares rose 4.5% to $165.04.

Zuckerberg helped his case by reassuring senators that he’s willing to work with them on relatively low-impact legislation that would regulate how online companies handle user data and privacy. Tech companies are notorious for their opposition to regulation, but a small dose would give the industry cover while letting it avoid harsher oversight. Facebook has friends in several Republican senators, who repeated their party mantra that too much regulation would hamstring the next Facebook.

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If anything concrete comes out of Tuesday’s hearing, it may be that Facebook trims its terms of service, which a number of senators complained is too long and confusing. Zuckerberg replied that Facebook tries “to be exhaustive in the legal documents,” but that the company doesn’t “expect that most people want to read a full legal document.”

On Wednesday, Zuckerberg has another appointment with a House committee, where he will likely answer many of the same questions. If Tuesday was any guide, he’ll be able to avoid any major blows unless the representatives come armed with sharper questions and demand answers from him instead of his staff.

​How many Linux users are there anyway?

I was talking to a friend the other day when he said there were no more than 0.0001 percent Linux users. So, so wrong.

True, desktop Linux has never taken off. But, even so, Linux has millions of desktop users. Don’t believe me? Let’s look at the numbers.

There are over 250 million PCs sold every year. Of all the PCs connected to the internet, NetMarketShare reports 1.84 percent were running Linux. Chrome OS, which is a Linux variant, has 0.29 percent. Late last year, NetMarketShare admitted it had been overestimating the number of Linux desktops, but they’ve corrected their analysis.

You see, NetMarketShare doesn’t simply count PCs, which connect to its network of over 40,000 websites using HitsLink Analytics and SharePost. Its methodology is to “collect data from the browsers of site visitors and it then weights the data by country. “We compare our traffic to the CIA Internet Traffic by Country table, and weight our data accordingly. For example, if our global data shows that Brazil represents 2% of our traffic, and the CIA table shows Brazil to represent 4% of global internet traffic, we will count each unique visitor from Brazil twice.”

Another analysis company, which is frequently cited for operating system numbers, is StatCounter. By its count desktop Linux has 1.48 percent, with Chrome OS coming in at 1.03 percent. StatCounter claims its numbers are derived from raw browser hits from racking code, which is installed on more than 2 million sites.

Perhaps the most unbiased numbers are from the federal government’s Digital Analytics Program (DAP). DAP’s numbers come from the billion visits over the past 90 days to over 400 US executive branch government domains. That’s about 5,000 total websites. These visitors appear to be largely US citizens. You can see this from the most popular websites: The US Postal Service, the IRS, and Medline Plus.

By DAP’s count, Linux is bundled in with 0.6 percent other. Chrome OS, according to DAP, has more users: 1.3 percent.

Still, while desktop Linux is a minority desktop operating system, it still has millions of users, and that’s a lot more than a mere fraction of 1 percent.

And, when it comes to overall end-user operating system, Linux-based Android has 70.96 percent of the mobile market by NetMarketShare’s count. By DAP’s reckoning, Android has 19.9 percent of all end-user systems, while StatCounter shows Android as even more popular than Windows by 39.49 percent to 36.62 percent.

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Zuckerberg to meet with U.S. lawmakers Monday: sources

WASHINGTON (Reuters) – Facebook Inc Chief Executive Officer Mark Zuckerberg will hold meetings with some U.S. lawmakers on Monday, a day before he is due to appear at Congressional hearings over a political consultancy’s use of customer data, two congressional aides said on Sunday.

FILE PHOTO – Facebook Founder and CEO Mark Zuckerberg speaks on stage during the annual Facebook F8 developers conference in San Jose, California, U.S., April 18, 2017. REUTERS/Stephen Lam

The planned meetings at Capitol Hill are expected to continue through Monday afternoon and include some lawmakers from committees before whom Zuckerberg is due to testify, said the aides, who asked not to be identified because the meetings have not been made public.

Facebook declined to comment.

Zuckerberg is scheduled to appear before a joint hearing of the U.S. Senate Judiciary and Commerce committees on Tuesday and the U.S. House Energy and Commerce Committee on Wednesday.

Facebook has come under fire in recent weeks after it said that the personal information of up to 87 million users, mostly in the United States, may have been improperly shared with political consultancy Cambridge Analytica.

A Facebook spokesman said on Sunday that the company plans to begin telling affected users on Monday.

London-based Cambridge Analytica, which has counted U.S. President Donald Trump’s 2016 campaign among its clients, has disputed Facebook’s estimate of the number of affected users.

Zuckerberg is expected in his testimony to recognize a need to take responsibility and acknowledge an initial failure to understand how many people were affected, a person briefed on the matter, who asked for anonymity, said on Sunday.

Zuckerberg said in a conference call with reporters last week that he accepted blame for the data leak, which has angered users, advertisers and lawmakers, while also saying he was still the right person to head the company he founded.

On Friday, Facebook backed proposed legislation requiring social media sites to disclose the identities of buyers of online political campaign ads and introduced a new verification process for people buying “issue” ads.

The steps are designed to deter the kind of election meddling and online information warfare that U.S. authorities have accused Russia of pursuing, Zuckerberg said on Friday. Moscow has denied the allegations.

In February, U.S. Special Counsel Robert Mueller charged 13 Russians and three Russian companies with interfering in the 2016 U.S. presidential election by sowing discord on social media.

Zuckerberg, on the call with reporters, said Facebook should have done more to audit and oversee third-party app developers like the one hired by Cambridge Analytica in 2014.

Reporting by David Shepardson, Editing by Rosalba O’Brien