Economy

(Reuters) – The stalling of a Twitter program that was critical for outside researchers studying disinformation campaigns throws into question the company’s strategy to comply with upcoming regulation in Europe, former employees and experts told Reuters.The European Union’s new Digital Services Act (DSA), one of the world’s strictest regulations on internet platforms, has sent tech companies scrambling to meet its requirements on having measures in place against illegal content and explaining the steps they take on content moderation, before the law comes into full effect in early 2024. Twitter signed a voluntary agreement in June with the EU related to the DSA committing to “empowering the research community” through means including sharing datasets about disinformation with researchers. The EU’s goal with the law is to create a safer internet for users and have a mechanism to hold companies accountable.According to Yoel Roth, Twitter’s former head of trust and safety, the Twitter Moderation Research Consortium was a key part of Twitter’s plan to do that, since it compiled data on state-backed manipulation of the platform and provided that to researchers. “Twitter was uniquely well-positioned,” he said.Nearly all of the 10 to 15 employees who worked on the consortium have left the company since Elon Musk’s takeover in October, according to Roth, who resigned in November, and three other former employees who were involved with the program. The EU law would require platforms with over 45 million EU users to respond to EU-vetted researcher proposals.Failure to comply with the DSA once it comes into effect could lead to fines of up to 6% of global revenue or even a ban from operating in the EU, according to the European Commission website. Reuters was unable to determine if Twitter has made alternative plans to comply with the DSA.In an email, Twitter’s head of trust and safety, Ella Irwin, said: “We intend to fully comply with the DSA, have many employees working on DSA compliance internally and have communicated our intent to comply to (EU Commissioner Thierry) Breton and his team.” She did not comment on detailed questions about the status of the consortium, how many employees were working on it, or how Twitter planned to comply with the DSA.Breton has met at least twice with Musk to discuss Twitter’s intent to comply with the upcoming law. In November, Breton said Twitter had “huge work ahead” because the company will have to “tackle disinformation with resolve” and significantly reinforce content moderation. In May, Musk appeared in a video with Breton expressing agreement with the Digital Services Act. Breton’s spokesperson declined to comment for this story. Across the company, at least 5,000 staff (about two thirds of the total before the takeover) have either quit or been fired as Musk overhauls Twitter, hitting the trust and safety and public policy teams particularly hard. “I just don’t see how the absolutely skeletal staff … will be able to readily comply (with the DSA),” said Rebekah Tromble, director of the Institute for Data, Democracy and Politics at George Washington University.THE WORK OF THE CONSORTIUMThe research consortium was formed in response to backlash against Russian interference in the 2016 U.S. presidential election. According to the company’s website, its aim is “to increase transparency around Twitter’s content moderation policies and enforcement decisions.”Twitter prohibits people, organizations or governments from manipulating conversation on the service, such as using multiple or fake accounts to make content appear more popular.Early last year, Twitter launched a pilot version of the consortium to disclose examples of manipulation of the platform to some outside researchers.As Twitter investigated and took down accounts that were suspected of foreign interference, it released data on that to the researchers to help them study the misinformation strategies and where they originated.In September, Twitter opened an application process to expand the consortium and had accepted about 50 researchers by the time of Musk’s acquisition on Oct. 27, two of the former employees said.Twitter had been preparing to disclose at least a dozen new datasets to researchers before then, the former employees said.Of the three former Twitter employees, who asked not to be identified for fear of reprisals, one spoke with current employees recently and was told they do not have the personnel or bandwidth to continue working on the consortium.Five outside researchers told Reuters that without a program like the research consortium, it will be more difficult to study how governments use Twitter to interfere with elections or political events globally.Two of those who are members of the consortium said Twitter has not sent a memo to close the program formally and previously-released data remain available to them, but they had not received data from it in at least two months.The research consortium was an important tool to make the internet safer, according to two U.S. lawmakers who introduced a bill last year that would require social media platforms to provide data access to academic researchers. Their Digital Services Oversight and Safety Act has not been voted on.Rep. Lori Trahan of Massachusetts and Rep. Sean Casten of Illinois also wrote an open letter to Twitter on Nov. 18 asking whether Twitter would maintain the consortium, following layoffs that halved the staff.Asked about the consortium by Reuters this month, Trahan said failure to maintain the program would be “a massive step back.” The Stanford Internet Observatory, a consortium member that studies internet risks, said it has not received any communication from the program since mid-November and no longer has a point of contact at Twitter.The Stanford team has published at least three papers using data from the consortium, including one about Twitter accounts that promoted India’s military activities in Kashmir, and one on U.S.-linked attempts to spread pro-Western narratives abroad.If the research consortium is eliminated, “we will be returning to the 2017 era of limited shared communication about malicious state actor activity,” said Renée DiResta, research manager at Stanford Internet Observatory.Cazadores de Fake News, a Venezuela-based consortium member that fact checks online news, told Reuters the research program “seems to have fallen into a hiatus,” and the organization has not heard from Twitter since Musk’s acquisition. “But we hope that it will resurface at some point, as it is a very valuable initiative,” said spokesperson Adrian Gonzalez. More

WASHINGTON (Reuters) – U.S. Secretary of State Antony Blinken joined with counterparts from across the Americas on Friday seeking to advance efforts to forge a regional economic partnership, building on a framework President Joe Biden announced at a Los Angeles summit in June.Hosting a virtual meeting with 11 other countries, Blinken predicted that the Americas Partnership for Economic Prosperity would help deepen trade ties, strengthen post-pandemic supply chains, enhance good governance and reform regional institutions like the Inter-American Development Bank.Blinken called it “an ambitious high-standards initiative” and said it remained open to other countries willing to meet those standards. But his address to the group was lacking in many specifics for how the partnership could function.Jose Fernandez, U.S. under secretary of state for economic growth, energy and the environment, told reporters that Washington’s aim was to complete an agreement this year.Friday’s meeting was meant to move forward on Biden’s proposal unveiled at the Summit of the Americas as part of an effort to rebuild U.S. influence and counter China’s growing economic inroads in Latin America. The Biden administration also wants to promote economic development among its poorer neighbors to help curb irregular migration at the U.S. southern border.The 2022 summit itself was undermined by discord over the guest list, with Mexican President Andres Manuel Lopez Obrador leading several other countries in boycotting the event due to Biden’s exclusion of Cuba, Venezuela and Nicaragua.Mexico, however, on Friday joined what Blinken described as an event to “officially launch” the partnership. It included Canada, Barbados, Chile, Colombia, Costa Rica, the Dominican Republic, Ecuador, Panama, Peru and Uruguay.“This is just the beginning,” Biden said in a statement. “I look forward to gathering with Americas Partnership leaders to discuss ways we can continue to deepen our economic cooperation and harness our strengths.”Under Secretary Fernandez insisted “this is not necessarily about China.” But other U.S. officials have made clear their concern about China’s growing economic footprint in the region.On Friday, Blinken and several other ministers said the region’s challenges include higher energy prices linked to Russia’s invasion of Ukraine.A White House fact sheet said among the objectives of the partnership will be to build the foundation for greater investment, “including customs procedures, trade facilitation, logistics, good regulatory practices, and non-tariff barriers.”But the plan has stopped short of offering tariff relief and has included a number of countries that already have trade accords with the United States. More

Whatever the conspiracy theorists tell you, no one plugs a microchip in to your brain at the registration desk at the World Economic Forum in Davos to ensure perfect harmony of thought. It is possible the microchips were inserted this year at the Global Collaboration Village — a “purpose-driven metaverse” — just up the main street from the conference centre, but sadly, this correspondent’s schedule did not permit time to find out.Nevertheless, the consensus around the direction of global markets in the comfortably carpeted corridors of power at the annual get-together this month was striking. In short, the thinking among managers of serious money is: Don’t believe the hype.Markets have certainly started 2023 in ebullient form, with a gain of around 6 per cent in the MSCI World stocks index before January is even over. That takes the gain since the lowest point in October to a stonking 20 per cent. Not for the first time, this is fuelled primarily by hopes that inflation appears to have come off the boil and that the US Federal Reserve might therefore be minded to scale back, then stop, then even potentially reverse the interest rate rises that blasted into many fund managers’ returns last year. Futures markets show traders see a near-20 per cent chance of rate cuts by the end of the year.Just because this narrative has been wrong on several occasions since the start of 2022, it is not necessarily wrong now. But it was hard to find anyone in the Swiss Alps who was buying it.Nicolai Tangen, head of Norway’s enormous $1.3tn oil fund, is among the party poopers. With a dash of Nordic straight talking, he told me the fizzing market conditions that stemmed from the global injection of monetary stimulus after the outbreak of Covid had pulled a lot of “crap” on to stock exchanges. He said the oil fund’s 2022 performance — a 14 per cent decline in total — was one of its worst runs since inception, but it would have been worse if it had not decided to avoid some of those new market listings.Now, Tangen said, a good deal of the froth had been blown off the markets, but investors should accept that the Fed may well restart rate rises and that a long, slow grind of low returns lies ahead.Again, with or without the mind-controlling microchip, big money managers agree this is a likely outcome that a lot of investors are reluctant to take on board. Investors broadly know that this time is different, that 2022 taught everyone that they didn’t understand inflation after all, and that the Fed can stay hawkish longer than you can remain solvent. However, they are still struggling to shake off the muscle memory built up from previous cycles.“We think we are shifting from one type of environment that existed for 40-plus years,” said Karen Karniol-Tambour, co-chief investment officer for sustainability at Bridgewater Associates, the hedge fund behemoth. “We think we are moving to an environment where inflation will be more volatile, more entrenched.”That will demand that monetary policy is tighter for longer, even despite the damage this may inflict on the real economy and on jobs.“The market has had a couple of months of saying ‘maybe we’re back to being back to normal, don’t worry about it’,” Karniol-Tambour said. “We don’t think that’s right.”Bridgewater’s flagship Pure Alpha fund churned out a gain of 9.5 per cent last year, roughly in line with its long-run average and a performance that long-only asset managers can only dream of. The rise could have been more if Bridgewater had chosen to jump on board the market rally in the fourth quarter. Instead, it stuck to its view that the impact of already aggressive rate rises has not yet played out and that markets are just too rosy.Jonathan Hausman, senior managing director in global investment strategy at the $250bn Ontario Teachers’ Pension Plan, is relatively optimistic. For OTPP, the answer is to try to look beyond short-term conflicting signals and to hunt for more durable bets in the likes of infrastructure and real estate. It may sound boring and basic, but bonds — both corporate and sovereign — are also more alluring prospects now yields have pushed higher and default risks still seem low.But he also agreed that investors are working hard to convince themselves that markets are in recovery mode. “The mood is schizophrenic,” he said. “Among the cognoscenti, there’s a sense that the institutions — the Fed and the European Central Bank — are really in this for the long haul, not to be the ones that let inflation rip. Your heart says ‘I think this is going to be OK’ but your head says ‘I know these guys are playing for keeps’.” As 2022 wound to a close, the notion that central bankers could quash a markets resurgence this year was seen as a small possibility, high-impact tail risk. But it is clear that the smart money is taking this prospect seriously. If you are rushing headlong in to this rally, this should be enough to give you [email protected] More

Even with another central-bank rate increase expected next week, the so-called breakeven rate on five-year five-year forwards — a proxy for inflation expectations — has risen to about 2.3%, the highest since November, from a recent low on Jan. 18. A similar gauge for 10-year inflation-linked bonds was up to 2.32% on Friday from 2.24% a week prior. It fell below 2.10%, the lowest level in nearly two years, on Jan. 18, the day before an auction of new securities that helped cheapen the market. Month-end rebalancing of bond indexes to include the newly issued Treasury inflation-protected securities has the potential to drive demand for them, an additional factor for breakevens this week. Bloomberg Indices projected a larger-than-average 0.26-year increase in the duration of the US TIPS index.Meanwhile, investors pulled a combined $490 million out of five major bond exchange-traded funds linked to inflation on Thursday, the largest such outflow since early December, according to data compiled by Bloomberg.Economic indicators suggest price pressures are abating. University of Michigan survey respondents recently improved their US short- and long-term inflation expectations. Even the Fed’s preferred inflation measures eased in December to the slowest annual paces in over a year while consumer spending fell, according to data released on Friday. While the economic data paves the way for policymakers to further scale back the pace of hikes, Fed officials have continued to warn against inflation that is still unacceptably higher than the central bank’s 2% target.Read: Bond Traders Hedge Prospect That This May Be Fed’s Last HikeThe following is a series of indicators on how the market views US inflation.Inflation SnapshotInflation News BitesKey Upcoming US Releases©2023 Bloomberg L.P. More

NEW DELHI (Reuters) – India’s Gautam Adani, the school drop-out turned billionaire who rose to become Asia’s richest man, faces possibly the biggest challenge of his career after a U.S. short seller cast doubts on his business practices, hammering shares in his companies and his reputation.Adani, whose home state is Gujarat in western India, built his business empire from scratch after starting as a commodities trader. India’s Prime Minister Narendra Modi hails from the same state and their relationship has come under intense scrutiny by Modi’s opponents for years.Adani’s business empire grew rapidly and his wealth ballooned. His interests span ports, power generation, airports, mining, edible oils, renewable power and more recently media and cement.He rose to become the world’s third-richest person according to Forbes, with a net worth of $127 billion, trailing only Bernard Arnault and Elon Musk. Married to dentist Priti Adani, he has two sons, Karan and Jeet, both of whom are involved in the company businesses.Despite his riches the 60-year-old, who comes from a middle-class textile family, was far lesser known than other billionaires in a country where many inherit their wealth.His business style was described as “very hands on”, according to one person with direct knowledge of his dealings.As Adani’s empire swelled, stocks of his seven listed companies surged – in some cases more than 1,500% in the last three years amid aggressive expansion. He denied allegations by Modi’s opponents that he had benefited from their close ties.In a 2014 interview with Reuters, when asked if he was friends with Modi, Adani said he had friends across the political spectrum, but avoids politics. He has said no one political leader is behind his success and when asked about Modi’s use of Adani corporate planes during the interview, Adani said Modi “pays fully”. In recent years, the $220 billion Adani Group empire has attracted foreign investment – France’s TotalEnergies, for example, partnered with Adani last year to develop the world’s biggest green hydrogen ecosystem. More recently, Adani has taken a pro-active approach to building his public image, giving interviews to local and foreign media.Appearing in a popular Hindi TV show this month called the ‘People’s Court’, Adani sat in a mock witness box inside a courtroom setup and answered questions about his conglomerate – offering an unusual level of scrutiny. He described himself as “a shy person” and credited the rise of his popularity in part to the political attacks he has faced. Modi’s government has denied allegations of favouring Adani.”People got to know who Adani (was) because of constant targeting by Rahul ji during the 2014 elections and after that,” Adani said, during the show, referring to opposition Congress party leader Rahul Gandhi.Three weeks later, shares of his group’s listed companies plunged on Friday, taking their cumulative losses to $48 billion this week. Short seller Hindenburg Research on Wednesday accused Adani’s businesses of improper use of offshore tax havens and flagged concerns about high debt. Adani has called the report baseless, and said he was considering taking action.REPUTATION CHALLENGEAdani Group’s website says its vision is to balance “growth with goodness” as it aims to build assets of national relevance and transform lives through self-reliance and sustainability.Adani is no stranger to controversies. The most recent was months of protest by fishermen against construction of a $900-million port in southern India’s Kerala, in which he sued the state government and fishermen leaders. And in Australia, environmental activists for years protested against Adani’s Carmichael coal mine project in Queensland on concerns of carbon emissions and damage to the Great Barrier Reef.His latest challenge is how to deal with an unprecedented share price rout as the group’s flagship firm Adani Enterprises launched the country’s biggest public secondary share offering this week, aiming to raise $2.5 billion.The stock’s price on Friday fell well below the offer price, casting doubts on its success.Image guru Dilip Cherian told Reuters the Hindenburg Report – and its fallout – could carry reputational risk for Adani but he could take action to limit that damage and reassure investors of the group’s financial and assets strength and ensure the share sale is a success.”In terms of the kind of stellar rise he has had this is a hazard,” Cherian said.Adani told India Today TV in December that people who were raising questions about the group’s debt had not done a deep dive into its financials, without saying who he was referring to.As the market rout played out on Mumbai exchanges, Adani was seen heading to a meeting at the federal power minister’s office in New Delhi. It is not known what was discussed and Adani Group did not respond to a request for comment on Friday.Adani Group’s consolidated gross debt stands at $23.34 billion, Jefferies says. While Hindenburg alleged key listed Adani companies had “substantial debt” which has put the entire group on a “precarious financial footing”, the Adani Group has repeatedly said its borrowings are manageable and no investor has raised any concern. More

Lawrence Summers, the former Treasury Secretary, encouraged the Federal Reserve to pull back on signaling its next move following the expected rate hike next week due to the current uncertain outlook.Summers told Bloomberg Television’s Wall Street Week that he doesn’t believe it is time to be committing to rate hikes as there are indications of softness “that we have seen from a number of quarters.”However, he also doesn’t believe the possibility of rate hikes should be taken off the table.Despite slowing down in recent months, inflation is still elevated and above the Fed’s 2% target.Bloomberg said Summers said the Fed needs to “maintain maximum flexibility in an economy where things could go either way” and that they are “driving the vehicle on a very, very foggy night.”Summers also said the optimism in financial markets over recent months is also the fact that financial conditions have “moved substantially towards easing in the last several months.”Summers also believes that in the longer term, rates will settle at a higher level compared to pre-pandemic.Summers was quoted by Bloomberg as saying he sees “more room for inflation to settle in a bit above 2,” and he sees more room for “real rates to settle in above 0.5 than I do for the error to be in the other direction.” More

UK prime minister Rishi Sunak has mobilised two of his top officials in a final push to resolve the dispute over post-Brexit Northern Ireland trade arrangements, with hopes rising in London after insiders reported significant progress in talks this week.Sir Tim Barrow, Sunak’s national security adviser and former British ambassador to the EU, has been deployed to help with the diplomacy around the highly sensitive discussions.Meanwhile, Simon Case, cabinet secretary, is said by colleagues to be playing an increasingly important role, drawing on his lengthy experience of EU negotiations.Case knows the issue well having led early discussions on solving the Irish border problem thrown up by Brexit. “Simon is playing a key role, particularly on the internal government side of things,” said a government insider.Barrow had been using his wide diplomatic contacts in Europe and the US to prepare the ground for a possible deal with the EU, said two officials close to the negotiations.Joe Biden, the US president, is putting pressure on London and Brussels to settle the disagreement, which has soured relations between Britain and the EU since Brexit took full effect in January 2021.Three people with knowledge of the talks said there had been a significant step forward in discussions and that the outline of a framework agreement was crystallising. But two EU insiders cautioned that converting the outline of a deal into a viable political agreement “depended a lot” on whether Sunak could sell the deal in London.Talks between London and Brussels have intensified in recent weeks to thrash out an agreement to minimise the impact of the Northern Ireland protocol, which created a trade border in the Irish Sea.Under the terms of the deal, Northern Ireland will follow EU rules for goods, VAT and state aid policy, which both Conservative Brexiters and the Democratic Unionist party in Northern Ireland have said impinged unacceptably on UK sovereignty.The DUP has refused to re-enter Northern Ireland’s stalled power-sharing executive until issues over the protocol are resolved. Sir Jeffrey Donaldson, the DUP leader, has repeatedly said any deal must “restore our place in the UK”.

A deal will turn on whether the agreement can reduce the levels of checks at the Irish Sea trade border to manageable levels and resolve the role of the European Court of Justice in enforcing the protocol.A system of “red” and “green” lanes is expected to form the basis of a plan to reduce checks on goods going from Great Britain to Northern Ireland, with products destined to remain in the region being clearly labelled.Marks and Spencer chair Archie Norman wrote to the UK foreign secretary on Wednesday to warn that a Northern Ireland-specific labelling system would create “overbearing and prohibitive costs” for retailers trading with the regions. Insiders said other retailers had also raised concerns about the costs of the disagreement, but UK officials noted that labelling had been part of the solutions to the protocol proposed by Boris Johnson’s government. Retailers, they said, would have to “suck up” the costs.A government spokesperson said: “We have been clear any solutions to the problems caused by the Northern Ireland protocol must work for all communities in Northern Ireland and address the range of issues including governance and the democratic deficit on how new EU laws apply in NI.“Our priority remains to protect the Belfast (Good Friday) Agreement and to preserve political stability in Northern Ireland and the UK internal market.“We continue to work intensively on these issues and discussions with the EU are ongoing.” More

Fresh data offered more detail on how shoppers retrenched at the end of 2022.For more than a year now, the U.S. economy has faced two fundamental, interwoven challenges: Consumers wouldn’t stop spending, and prices wouldn’t stop rising.Both trends are now showing early signs of reversing.Consumer spending fell in both November and December, the Commerce Department said on Friday, as shoppers pulled back amid rising prices, dwindling savings and warnings of a looming recession.Inflation is also easing: Consumer prices rose 5 percent in the year through December, according to the Federal Reserve’s preferred measure. While still much more rapid than normal, that was the slowest pace in more than a year.Taken together, the figures paint a picture of an economy that is, at long last, coming off the boil. From the Fed’s perspective, that is good news: The central bank has spent the past year aggressively raising interest rates in an effort to force consumers and businesses alike to pull back their spending, which should result in slower price increases. Now there is mounting evidence those efforts are bearing fruit.“The medicine is taking,” said Sarah Watt House, senior economist at Wells Fargo. “The economy is on the right path.”That path is an uncertain and narrow one, however. So far, the Fed has managed to cool down the economy without short-circuiting the recovery and causing a big increase in unemployment. But the full effects of its actions have yet to be felt.Policymakers are expected to raise rates by another quarter point at their meeting next week, a move that would put rates in a range of 4.5 to 4.75 percent. Even once they stop raising rates, the central bank has indicated it expects to keep borrowing costs high for a significant period.Inflation F.A.Q.Card 1 of 5What is inflation? More