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BEIJING (AP) -- President Xi Jinping called Wednesday for the ruling Communist Party to lead development of Chinese technology industries, an area fraught with trade tensions and complaints that Beijing encourages theft of foreign know-how....

SYDNEY (Reuters) - After Australian internet company Vocus Telecommunications Ltd gave its second profit warning in seven months, fund manager David Pace received an email from a law firm asking him to join a shareholder class action.

LOS ANGELES (Reuters) - Harvey Weinstein has resigned from the board of The Weinstein Company, it said on Tuesday, as he faces allegations that he sexually harassed or assaulted a number of women over three decades in the film business.

Party conclave likely to cement president’s status as a transformative leader

TOKYO (AP) -- A top Department of Energy official says the U.S. is keen to work with Japan in expanding exports of U.S. liquefied natural gas in Asia....

TOKYO (AP) -- Asian shares were mixed on Wednesday, as some indexes got a boost from overnight gains on Wall Street. Japan's benchmark held steady as expectations grew that a likely ruling party win in Sunday's Japanese parliamentary elections will help stability and growth. The Shanghai Composite index advanced as China's ruling communists began a congress that is due to give President Xi Jinping a second, five-year term....

BEIJING (AP) -- Chinese President Xi Jinping on Wednesday urged a reinvigorated Communist Party to take on a more forceful role in society and economic development to better address "grim" challenges facing the country as he opened a twice-a-decade national congress....

MENLO PARK, Calif. (AP) -- Twitter vowed to crack down further on hate speech and sexual harassment, days after CEO Jack Dorsey said in a tweet-storm that the company was "still" not doing enough to protect its users....

Series of deals delayed before Cfius raise questions about foreign investment approvals

07:01 AI takes the tedium out of auditing (Financial Times)
End to 1980s-style stock-takes in stuffy rooms as Big Four reshape the future of work

Legislative elections will be a referendum on the reformist president, who is aiming for an improved mandate to satisfy investors and citizens

Retail banks used to envy its glamour but now it needs to mimic them

Harris rejects bulk of activist case but warms to idea of investment bank shift to US

QE could be scaled back from €60bn a month to €20bn, but extended until late 2018

WASHINGTON (AP) -- Republican and Democratic senators joined in announcing a plan Tuesday aimed at stabilizing America's health insurance markets in the wake of President Donald Trump's order to terminate "Obamacare" subsidies. The president, at first, spoke approvingly of the deal, but as conservatives rebelled, the White House insisted Trump actually opposed the plan as a bailout of insurance companies....

SYDNEY (Reuters) - Asian shares consolidated recent gains and currencies kept to tight ranges on Wednesday as investors waited to see what policies might emerge from China's Communist Party conference.

Miner, and Albanese and Elliott, face action over Africa coal unit as UK also fines group

(Reuters) - Amazon Studios chief Roy Price has resigned, a company spokeswoman said on Tuesday, following allegations that he harassed a producer and took no action when an actress told him she was sexually assaulted by producer Harvey Weinstein.

Alleged graft claims 18 of 205 members in group of Chinese political elite

Jack Dorsey, 2015

Twitter will take a tougher stance on moderating "non-consensual" nudity, hate symbols, and threats of violence, according to an internal email obtained by Wired that details the forthcoming changes.

The changes to Twitter's policy rules follow recent backlash the company received for temporarily banning the account of actress Rose McGowan after she accused Ben Affleck of lying about his knowledge of producer Harvey Weinstein's alleged sexual harassment.

While Twitter later said that McGowan's account was locked due to her posting a personal phone number, thousands of women tweeted the hashtag #WomenBoycottTwitter in protest of her account suspension. Twitter has faced sharp criticism in recent months for not doing enough to curb abuse and harassment on its platform.

In a series of tweets late last Friday, Twitter CEO Jack Dorsey said that the company had decided to "take a more aggressive stance in our rules and how we enforce them."

In an email detailing some of the changes to the company's Trust and Safety Council, Twitter said it would place stricter rules around so-called revenge porn, hate symbols, and tweets that "glorify" violence.

"Although we planned on sharing these updates later this week, we hope our approach and upcoming changes, as well as our collaboration with the Trust and Safety Council, show how seriously we are rethinking our rules and how quickly we’re moving to update our policies and how we enforce them," a Twitter spokesperson said in a statement.

You can read the full email, which was first published by Wired and confirmed by Twitter to Business Insider, below:

"Dear Trust & Safety Council members,

I’d like to follow up on Jack’s Friday night Tweetstorm about upcoming policy and enforcement changes. Some of these have already been discussed with you via previous conversations about the Twitter Rules update. Others are the result of internal conversations that we had throughout last week.

Here’s some more information about the policies Jack mentioned as well as a few other updates that we’ll be rolling out in the weeks ahead.

Non-consensual nudity

Current approach

  • We treat people who are the original, malicious posters of non-consensual nudity the same as we do people who may unknowingly Tweet the content. In both instances, people are required to delete the Tweet(s) in question and are temporarily locked out of their accounts. They are permanently suspended if they post non-consensual nudity again.

Updated approach

  • We will immediately and permanently suspend any account we identify as the original poster/source of non-consensual nudity and/or if a user makes it clear they are intentionally posting said content to harass their target.
  • We will do a full account review whenever we receive a Tweet-level report about non-consensual nudity. If the account appears to be dedicated to posting non-consensual nudity then we will suspend the entire account immediately.
  • Our definition of “non-consensual nudity” is expanding to more broadly include content like upskirt imagery, “creep shots,” and hidden camera content. Given that people appearing in this content often do not know the material exists, we will not require a report from a target in order to remove it. While we recognize there’s an entire genre of pornography dedicated to this type of content, it’s nearly impossible for us to distinguish when this content may/may not have been produced and distributed consensually. We would rather error on the side of protecting victims and removing this type of content when we become aware of it.

Unwanted sexual advances

Current approach

  • Pornographic content is generally permitted on Twitter, and it’s challenging to know whether or not sexually charged conversations and/or the exchange of sexual media may be wanted. To help infer whether or not a conversation is consensual, we currently rely on and take enforcement action only if/when we receive a report from a participant in the conversation.

Updated approach

  • We are going to update the Twitter Rules to make it clear that this type of behavior is unacceptable. We will continue taking enforcement action when we receive a report from someone directly involved in the conversation. Once our improvements to bystander reporting go live, we will also leverage past interaction signals (eg things like block, mute, etc) to help determine whether something may be unwanted and action the content accordingly.

Hate symbols and imagery (new)

  • We are still defining the exact scope of what will be covered by this policy. At a high level, hateful imagery, hate symbols, etc will now be considered sensitive media (similar to how we handle and enforce adult content and graphic violence).
  • More details to come.

Violent groups (new)

  • We are still defining the exact scope of what will be covered by this policy. At a high level, we will take enforcement action against organizations that use/have historically used violence as a means to advance their cause.
  • More details to come here as well (including insight into the factors we will consider to identify such groups).

Tweets that glorify violence (new)

  • We already take enforcement action against direct violent threats (“I’m going to kill you”), vague violent threats (“Someone should kill you”) and wishes/hopes of serious physical harm, death, or disease (“I hope someone kills you”). Moving forward, we will also take action against content that glorifies (“Praise be to <terrorist name> for shooting up <event>. He’s a hero!”) and/or condones (“Murdering <x group of people> makes sense. That way they won’t be a drain on social services”).
  • More details to come.

We realize that a more aggressive policy and enforcement approach will result in the removal of more content from our service. We are comfortable making this decision, assuming that we will only be removing abusive content that violates our Rules. To help ensure this is the case, our product and operational teams will be investing heavily in improving our appeals process and turnaround times for their reviews.

In addition to launching new policies, updating enforcement processes and improving our appeals process, we have to do a better job explaining our policies and setting expectations for acceptable behavior on our service. In the coming weeks, we will be:

  • updating the Twitter Rules as we previously discussed (+ adding in these new policies)
  • updating the Twitter media policy to explain what we consider to be adult content, graphic violence, and hate symbols.
  • launching a standalone Help Center page to explain the factors we consider when making enforcement decisions and describe our range of enforcement options
  • launching new policy-specific Help Center pages to describe each policy in greater detail, provide examples of what crosses the line, and set expectations for enforcement consequences
  • Updating outbound language to people who violate our policies (what we say when accounts are locked, suspended, appealed, etc).

We have a lot of work ahead of us and will definitely be turning to you all for guidance in the weeks ahead. We will do our best to keep you looped in on our progress.

All the best, Head of Safety Policy"

SEE ALSO: Disney confirms that it looked at buying Twitter last year but went with BAMTech instead

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NOW WATCH: Watch LeBron James defend calling Trump a bum on Twitter

NEW YORK (AP) -- Amazon Studios says it has accepted the resignation of its top executive, Roy Price, following sexual harassment allegations made by a producer on the Amazon series &quot;Man in the High Castle.&quot;...

WASHINGTON (Reuters) - The top U.S. and Canadian and trade officials on Tuesday accused each other of sabotaging efforts to renegotiate the North American Free Trade Agreement, even as they and Mexico agreed to extend talks into the first quarter of 2018.

02:41 Wine on the edge (BBC News)
How Canadian winemaker Norman Hardie is able to make award-winning wines, despite winter temperatures so cold it can kill his vines.

How the wines of Canadian winemaker Norman Hardie are winning a growing number of fans around the world.

US trade chief Lighthizer urges Canada and Mexico to ‘give up a little bit of candy’

WASHINGTON (AP) -- Talks to rewrite the North American Free Trade Agreement have stalled over tough American demands, dashing hopes that a deal can be reached this year....

Economic growth data will come as Communist party begins leadership transition

(Reuters) - International Business Machines Corp's shift to newer businesses such as cloud and security services helped it beat analysts' quarterly revenue estimates, and the technology major hinted at sales growth after nearly six years of declines.

02:24 Health risks (BBC News)
Health risks and job losses are among the harms many in China face in the push for economic change.

Chinese president Xi Jinping will be confirmed for a second five-year term this month.

MONTREAL/TOULOUSE, France (Reuters) - Boeing Co said on Tuesday that Bombardier Inc's CSeries jets could still be hit with high U.S. import duties, even if they are assembled in Alabama through an industry-changing deal with Airbus.

NEW YORK (Reuters) - Investor George Soros has transferred about $18 billion, the majority of his estimated fortune, to his Open Society Foundations, making them the second largest philanthropic grant-making group in the United States, according to media reports on Tuesday.

donald trump

President Donald Trump laid the blame at Democrats' feet for an increase in the cost of health insurance premiums on the Obamacare markets on Tuesday.

Trump's comments come less than a week after he made a move that insurance companies already attributed to rising premiums.

"Any increase in ObamaCare premiums is the fault of the Democrats for giving us a 'product' that never had a chance of working," Trump tweeted.

The tweets follow Trump's move on Friday to stop the cost sharing reduction (CSR) payments, which help defray the cost to insurers for providing low-income Americans plans with cheaper out-of-pocket costs.

Various insurers have said that without the CSR payments, they are forced to increase premiums on the Obamacare exchanges to make up for the funding drop. According to the Congressional Budget Office, premiums will likely increase around 20% for 2018 due to the end of CSRs.

In fact, the Pennsylvania Department of Insurance said Monday insurers would have to increase Obamacare premiums more than four times the amount they originally proposed due to Trump's discontinuation of the CSR payments.

Most of this cost will not fall on consumers, however, as a large majority of Obamacare marketplace enrollees receive subsidies to help with premiums. Instead, most of the burden will fall on the federal government. The CBO estimated the federal deficit will increase by $194 billion over 10 years without CSR payments due to the increase subsides.

The tweet also comes just hours after Sens. Lamar Alexander and Patty Murray, a Republican and Democrat respectively, came to an agreement on an Obamacare stabilization package that included funding the CSR payments through 2019.

At a press conference Tuesday, Trump indicated his support for the plan.

SEE ALSO: Key senators just reached a deal to save the Obamacare payments Trump just killed

Join the conversation about this story »

NOW WATCH: Tom Price resigns after controversy over private flights — here are the casualties of the Trump administration so far

Big Blue revenues slipped again, but by less than feared, sparking share price bounce

WASHINGTON (AP) -- President Donald Trump said Tuesday that he is likely to make his selection for the next Federal Reserve chairman from five candidates, a group that includes current Chair Janet Yellen....

Plans for technology-enabled environment raise privacy concerns

Financial pundit thanks God black people did not settle America in newsletter

Goldman and Morgan Stanley benefit from financing of corporate takeovers

Steph Curry

Steph Curry's new shoe hasn't even officially hit shelves yet, but Randal Konik, an analyst at Jefferies, is already calling it.

"Our calls, store visits, social media analysis and review of StockX pricing of Curry 4 soft launches (official launch 10/27) points to very strong buzz in the market," Konik wrote in a note to clients. "With competitor products aging, we believe Curry 4 will become the #1 sneaker in basketball this year which should also help Under Armour shares rebound."

The Curry 4 is Steph Curry's follow up to his somewhat disappointing Curry 3 sneakers. The new shoes still aren't available for general purchase, but they were released in a "More Rings Championship Pack" on Tuesday to coincide with the start of the NBA regular season.

Konik says the long lines and already frenetic social media activity around the new shoes is evidence of its coming popularity. Curry has been promoting his new shoes since last season's NBA finals, and some of the lucky few that have nabbed a pair are reselling the shoes for an 80%-100% markup, according to Konik.

Konik even went as far as to count the number of Instagram hashtags for the new shoes to try and predict its popularity at launch. Curry4 has been used more than 5,000 times, which is impressive, according to Konik, as the Curry3 hashtag has been used a total of 28,000 times since that shoe was released.

For Under Armour, the maker of the shoe and sponsor of Curry, the hype is all good news. The company's Curry 3 shoe was a bit of a disappointment and forced the company to play catch-up with its rivals. The popularity of the Curry 4 could change that.

"After a very unsuccessful Curry 3 launch which caused the Curry line to lose share in basketball, the Curry 4 buzz combined with intel of slowing competitor products gives us conviction that Curry 4 can regain the #1 share in bball this year," Konik wrote.

Konik rates Under Armour as a buy with a price target of $28, about 85% higher than the company's current price of $15.11. Konik's rating is by far the most bullish on Wall Street, which has an average price target of $19.85.

Under Armour has been hit by a sector-wide decline in retail, and is down 41.32% this year.

Read more about what teens think of Under Armour's brand here.

under armour

SEE ALSO: Teens say that Under Armour isn't cool anymore — and it's a huge crisis (UA)

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NOW WATCH: A $1 trillion money manager says the Trump Trade is back

Mark Fields

  • Fields will become a Senior Advisor at TPG Capital, a private equity firm.
  • The former Ford CEO will work in TPG's industrials group.
  • TPG has over $73 billion under management.

Mark Fields, the former CEO of Ford who was ousted earlier this year after 28 years at the automaker, will join TPG Capital as a Senior Advisor, Business Insider has learned.

TPG is a private-equity and alternative asset giant with over $73 billion in assets under management and was started as the Texas Pacific Group in 1992 by David BondermanJames Coulter, and William S. Price III. TPG has grown substantially from its first offices in Northern California to locations worldwide. Over the decades, it has invested in numerous companies and participated in high-profile leveraged buyouts.

Fields, 56, will focus on expanding the firm's industrials practice. Investments in this sector have included airlines and private-jet companies; going forward, TPG wants to invest in logistics, packaging, and mobility. TPG's first major investment was in bankrupt Continental Airlines in 1993, which according to firm resulted in a 1,000% return.

"New technology is driving change and creating opportunities for growth and value creation throughout business operations. That gives us the opportunity to rethink traditional industrial applications, such as supply chains, like never before," Fields said.

"Having spent my career in an industry that was, and continues to be, on the leading edge of technology and disruption, I look forward to working with TPG to find new opportunities to create change and innovate throughout the industrial sector," he added.

A long career at Ford

Mark FieldsAt Ford, Fields followed Alan Mulally, who saw the automaker through the financial crisis without suffering the government bailouts and bankruptcies of General Motors and Chrysler. Fields had developed Ford's "Way Forward" strategic framework prior to Mulally's arrival in 2006, and later Fields took over Mulally's unifying "One Ford" vision when Mulally retired in 2014.

Ford was steadily profitable under Fields, made several investments and acquisitions in the tech sector, and in 2016, the company returned to the 24 Hours of Le Mans endurance race in France with its GT race car and won on the 50th anniversary of its legendary 1966 victory.

But the carmaker's stock price lagged the markets during his tenure, and in May of 2016 Fields stepped down and was replaced by former Steelcase CEO Jim Hackett, who had been overseeing Ford's Smart Mobility division and had served on Ford's board.

Hackett recently concluded a 100-day review of Ford's operations and is attempting to balance the company's legacy business against the disruption posed by the likes of Tesla and Uber.

Fields, a Harvard Business School graduate, will be tackling some of the same challenges and opportunities he saw at Ford, but from the perspective of an investor and as someone who likes to dig into companies and improve them.

"Mark is an invaluable addition to our team as we pursue this sector and look to build growth-oriented, technology-enabled businesses," Jack Daly, a Partner at TPG, said. 

FOLLOW US : on Facebook for more car and transportation content!

SEE ALSO: Ousted Ford CEO Mark Fields had the impossible job of pleasing two masters

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NOW WATCH: Ford replacing its CEO points to the short-termism on Wall Street

Ginny Rometty

IBM benefitted from new and old businesses in the third quarter, as its cloud computing offerings as well as sales of its heavy-duty mainframe systems helped the company beat Wall Street revenue targets.

Shares of IBM were up nearly 5% in after hours trading on Tuesday, following the earnings release.

IBM's overall revenue declined slightly on a year-over-year basis, marking the company's 22nd consecutive quarter of declining revenue. But IBM appears to be growing where it counts, with revenue from "strategic imperatives" increasing 11%, thanks to cloud computing and software-as-a-service offerings. 

The company's recently released System Z mainframe computers also bolstered the top line, with total systems revenue growing 10% year-on-year to $1.7 billion.

Here's what the company reported:

  • Revenues (GAAP): $19.15 billion, down from $19.23 billion in the year ago period, but above analyst estimates of $18.59 billion.
  • Earnings per share (non-GAAP):  $3.30, compared to analyst estimates of $3.28.
  • Projected earnings for fiscal 2017 (non-GAAP):  $13.80, compared to analyst estimates of $13.75. 

Cloud services — one of the company's key areas of focus — saw revenues of $4.1 billion for the quarter, up 20% from the third quarter last year. Last quarter, cloud revenues were at $3.9 billion, up 15% from the second quarter last year. 

SEE ALSO: IBM is using the technology behind bitcoin to help businesses in countries with weak banking systems

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NOW WATCH: Trump once won a lawsuit against the NFL — but the result was an embarrassment

hot air balloon inflating inflation

Earnings season is officially in full swing.

Netflix hit an all-time high on Tuesday after reporting after the bell on Monday. Morgan Stanley and Goldman Sachs both crushed their earnings estimates before the bell on Tuesday.

The Dow Jones industrial average crossed 23,000 today but closed just below the milestone. It was the first time the index closed below a 1,000 point milestone it hit on the same day since it hit 16,000. It's still a record-high close.

Here's the scoreboard:

  1. MORGAN STANLEY: A stock market correction is 'looking more likely.' The correction could stretch beyond 5%, according to the bank.
  2. Financial networks and businesses are distancing themselves from Marc Faber after a racist investor letter. Faber wrote, "thank god white people populated America, and not the blacks" in his October newsletter.
  3. New York City yellow cabs have taken a back seat to Uber. People took more Ubers than yellow cabs for the first time ever in June.
  4. Wall Street found a parasite growing in the US economy that could spur the next recession. Wall Street's short sellers are beginning to talk about healthcare as the next major threat to the US economy.
  5. Key senators just reached a deal to save the Obamacare payments Trump just killed. The payments help to defray costs to insurers that are mandated to provide plans with low out-of-pocket costs to poorer Americans.

Other headlines

Traders can't stop betting against battered Blue Apron

Dow hits 23,000 for the first time

Wilbur Ross told Forbes he hid $2 billion from the government and then took it back

Netflix CEO Reed Hastings joins Forbes list of richest Americans with net worth of $2.3 billion

JEFFERIES: Amazon is adding 1 million square feet of warehouse space a week — and not slowing down anytime soon

Goldman Sachs just let slip how badly a key business is performing

SEE ALSO: What you need to know on Wall Street today

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NOW WATCH: Is bitcoin a bubble or the future of everything?

patty murray lamar alexander

Healthcare stocks rose after a bipartisan deal was struck that would save Obamacare's cost sharing reduction (CSR) payments from President Donald Trump's axe.

Less than a week after Trump said his administration would put an end to these payments, Republican and Democratic lawmakers moved to formally appropriate the payments to insurers, which helps cover insurers' costs for the mandated plans it provides to poorer Americans.

The preliminary plan would keep CSR payments flowing through 2019 and would restore $106 million devoted to outreach to get people to sign up for Obamacare plans.

Here's a look at how the biggest healthcare companies are trading on Tuesday:

SEE ALSO: Trump just ignited a battle within the Republican Party about whether to save Obamacare

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NOW WATCH: A $1 trillion money manager says the Trump Trade is back

artificial intelligence ai alibaba

If you've used Siri, Google's Assistant or Amazon's Alexa, then you've interacted with an artificial intelligence.

As an example of the innovation in artificial intelligence going on now, Google is working on technology to classify street signs, identify objects in photos and translate speech between two languages in real time. The company, in a product event showing off these technologies recently, admitted that this is just the beginning.

Stephen Chin, an analyst at UBS, agrees with Google and sees huge potential growth in the sector, especially in the silicon that makes it possible.

"The democratization of AI now underway could drive a new phase of growth in Semis that our new proprietary model estimates could represent a $35B revenue total addressable market by 2021 (ex-memory), or a 41% compound annual growth rate from current levels," Chin said.

The AI that currently exists is relatively rudimentary compared to its future potential, but even so, it requires huge amounts of computing power. Computer chip makers have realized this, and are currently in a race to provide the chips that can power current and future AI systems.

Graphics processing units, like those made by AMD and Nvidia, will make up 54% of the total AI market in 2021, according to Chin, while central processing units, like those from Intel and AMD, will make up about 40% of the markets. Chin said that data centers will make up a majority of the demand for AI-focused chips in the future, as smaller consumer computers won't have the power to train AI systems in a reasonable time frame. 

With that in mind, Chin says that Nvidia is the company to beat in the space.

"We estimate Nvidia has a time to market advantage of 1+ year and should be able to sustain this lead," Chin said.

Nvidia has been on a world tour in recent weeks, announcing new AI-themed partnerships with drone makers, car companies and more. The company was crowned the smartest company in the world by MIT this year, in part, because of its dominance in the AI space.

NVIDIA autonomous driving self-driving

Nvidia is also focusing on providing the tech necessary to power autonomous cars, another AI growth area, according to Chin. The company's "Drive" series of chips are already being used by a large number of car manufacturers.

Tesla, one of the biggest names in self-driving cars, is reportedly working with Nvidia's competitor AMD to produce a custom self-driving car chip, though. The autonomous car space could be a huge market for chip makers, coming in just behind data centers, said Chin. 

Nvidia and Intel are the only two companies Chin sees as having a solution for every part of the current AI market. Most of the other companies, like AMD, Qualcomm, Samsung and even Google, fail to capture the entire breadth of that market.

This is an important advantage for the two companies, though it's not everything.

The computing ability of these chips is important, as the faster a chip is, the faster it can crunch through the huge data sets required to create artificial intelligence systems. AMD is working on CPUs that can rival Intel's and GPUs that can compete with Nvidia's. Chin said it could start to gain market share because of this.

In 2017, Chin estimates the total market for machine learning and artificial intelligence to be about $8.2 billion. By 2021, Chin thinks it could be worth upwards of $35 billion. The companies that can provide the best chips for that growing market stand to benefit from the sector's explosive growth.

Here's how much each of the chip makers is up this year, and their share prices as of about 3 p.m. ET Tuesday:

Read more about what you need to know before investing in AI here...

SEE ALSO: Artificial intelligence is going to change every aspect of your life — here's how to invest in it

Join the conversation about this story »

NOW WATCH: THE BOTTOM LINE: The 'Trump trade' is back and Ray Dalio breaks down the bitcoin bubble

(Reuters) - Johnson & Johnson posted better-than-expected third-quarter earnings, raising its full-year forecast due to growth from new cancer drugs and high-margin treatments picked up in its $30 billion acquisition of Actelion earlier this year.

doctor face mask

  • Wall Street's short sellers are beginning to talk about healthcare as the next major threat to the US economy.
  • Costs are so high that the market will have to correct sooner rather than later.
  • Left unchecked, a market-led correction will be brutal.

Imagine a parasite living in the US economy, siphoning off the cash that has powered the middle class for decades. We know it's there, but no one — on the right or the left — is talking seriously about how to slow its growth.

This parasite is our healthcare system. It is already causing more damage to the economy than you know, and at least one group of people seems to have this figured out: the same Wall Street doomsayers who predicted the financial crisis.

Here's what they know, in the broadest terms. Healthcare spending took up 4.8% of consumer spending in 1984, hit 8% in 2014, and then surged to 10% by 2016, according to the Bureau of Labor Statistics.

consumer spending changes

Now of course there are some on Wall Street who see this as a reason to go long, with some companies poised to rake it in as baby boomers age and costly diseases like cancer proliferate.

But the crowd I'm talking about is focusing instead on what inefficiencies in pricing are doing to American wallets. They're looking at the bad actors in this healthcare system, the drug companies that are taking a 60-year-old medicine and jacking up the price, the middlemen that inflate costs by inserting themselves between patients and providers. This crowd has noticed that these bad actors are pervasive in our system.

So the bet here is simple: America, one way or another, will be forced to confront the parasite that is its healthcare system, and the companies that are using the sleaziest tactics will be picked off first — by prosecutors, lawmakers, insurance companies, or the press — leaving sick customers in the lurch.

Short sellers (investors who bet that stocks will go down) are talking about this thesis at conferences and sending it around in their email newsletters. They're learning about scams and picking off weak companies to bet against. They see rising costs as a bubble that will be either gently deflated through federal-government intervention or violently popped by the merciless hand of the market — with a savvy investor making money either way.

We have three options for dealing with this problem going forward:

  1. We can handle rising cost with good policy and change the way we think about paying for healthcare.
  2. We can handle this with bad policy and deliberately shift rising costs to consumers while the government abdicates its responsibility for the health of not only the American people but also the American economy.
  3. Or we can do nothing, which would result in more rising costs, more corporate rent-seeking behavior, and ultimately a recession as household resources go toward medicine and treatment instead of new cars, homes, clothes, or toys.

The US is hurtling at full speed toward the third option. That's because, at least realistically, the government has no plan to rein in costs. Healthcare costs today make up a sixth of the economy; the Centers for Medicare and Medicaid Services estimate that the share will grow to a fifth in just eight years.

Blame Bill and Mike

There's an origin story for how Wall Street became aware of the gravity of this situation: Valeant Pharmaceuticals. The company's stock plunged 90% starting in October 2015 after the Street (and prosecutors) became aware of how Valeant was abusing the system to shove expensive drugs down the throat of insurance companies.

In other words, Valeant — then under the guidance of CEO Michael Pearson — was the poster child for big pharma's even bigger greed. What's more, no one could ignore it because Wall Street's loudest megaphone, the hedge fund billionaire Bill Ackman, was telling everyone and their mother what a great stock it was. He got in himself, and, like a lot of his peers, he lost his shirt.

Now that the dust has settled we know what Ackman, who joined Valeant's board, should have known:

  • Valeant was handing fat rebates to any middleman that stood in the way of getting an insurer to pay for expensive Valeant drugs.
  • It was spending tons of money acquiring and marketing old drugs instead of developing new ones.
  • It used its own pharmacy to push out Valeant drugs at a mind-bending rate as long as insurers would continue to foot the bill.
  • It was finding ways to make copays disappear so customers would never know how much their drugs were costing insurers.

These are just some of the games Wall Street learned how to sniff out in big pharma, and once the short sellers on Wall Street could see it, they started to see it everywhere.

A few weeks ago I spoke with Andy Slavitt, the man who ran the Affordable Care Act — also known as Obamacare — during the Obama administration, and he briefly touched on how to improve price transparency in healthcare.

"It's going to take more than a few tweets from the president to bring real reform," Slavitt said, just before he hung up the phone. "Once pharmaceutical costs reach 25% of Medicare, we're not going to like the choices we'll have to make."

We can handle this well

First things first: Just because we're not ready to tackle this doesn't mean the market isn't.

Wall Street has noticed that the market is pushing payers in a different direction. For one, more costs have shifted to consumers (part of why everyone is so outraged), and instead of our outdated fee-for-service model that pays the industry only when people are very sick, payers are experimenting with bundled payments — structuring payment on the basis of expected costs — and selective points of care. They're also trying to avoid expensive hospitals, sending patients to lower-cost outpatient facilities for common treatments.

But this is happening unevenly, and a lot can go wrong. When sick people are involved, the collateral damage of bankrupted companies and panicked executives eyeing falling stock prices can be death.

So we should handle this correctly. On top of changing the way we pay for care (and thus incentivize care) we should make drug pricing transparent. We should allow Medicare to negotiate drug prices. We shouldn't allow drug companies to charge Americans a premium and pretend that it's going to research and development (it's not).

We should change regulations for marketing pharmaceuticals. We should curb the pharma lobby's power.

There are glimmers of hope. Twenty-one states have passed laws addressing balance billing — when an out-of-network healthcare provider charges you for whatever your insurer didn't pay for. California and other states are trying to bring transparency to middlemen called pharmacy benefit managers; such companies often take a cut from drug companies and manage plans for insurers, but neither party knows the deal a PBM has cut with the other. It's secret, and it's stupid.

Stocks, by the way, are starting to fall on this news:

  • Express Scripts, the largest PBM, has seen its stock price decline by 17% over the past year. (This after one of its biggest clients, the insurer Anthem, sued it in a 2016 lawsuit accusing it of overcharging.)
  • Stock prices for the largest for-profit hospital managers, Tenet Healthcare and Lifepoint, have fallen by 30% and 6% over the past year.
  • The Food and Drug Administration has sped up generic-drug approval, putting pressure on prices.

Unfortunately, none of this is enough. It's barely a start. Corruption still abounds, and we've done little to save ourselves from the chaos that could result from more dramatic, disorganized, market-led change.

We can handle it badly

So far, the healthcare debate in the US has centered on Obamacare — a program that covers about 10% of Americans — and doesn't go far enough in addressing the larger system's incentives.

We're embarrassing ourselves.

At least, I was embarrassed while watching a meeting of the Senate Health, Education, Labor, and Pensions Committee during the second (or maybe third) attempt to repeal Obamacare. The meeting was about curbing the rising cost of prescription drugs, and most of the Republicans were off doing something useless in secret that eventually they would have to undo clumsily in public.

It was a frustrating session. Powerless Democrats listened as experts outlined ways to control costs that seemed fairly simple but are actually fairly insurmountable in our current system in which pharma money talks louder than any congressional expert witness. Sen. Sheldon Whitehouse, a Rhode Island Democrat, sounded exasperated. He said the Senate could solve drug pricing "in a week" if it weren't for the Supreme Court's Citizens United ruling on campaign spending — the pharmaceutical industry has spent billions of dollars lobbying Congress to keep this system opaque.

Whitehouse thinks billions might be overkill. "We tend to come cheaper than that," he said, disgusted.

top lobbying expenditures

Now, perhaps you're saying to yourself, "Linette, Bernie Sanders has a plan."

Let me stop you right there. Bernie Sanders has a political pipe dream at best (a political litmus test at worse) that won't pass one chamber of Congress, let alone two. There is no plan.

We can do nothing

When I say Wall Street has caught wind of this, I don't mean the whole of it. Some money managers in this market are still howling at the moon, shaking their fists at the Federal Reserve, blaming the distortions caused by low-interest rates for our economy's slow growth.

But the economy is weak, in part, because of bad policy in healthcare — policy that has allowed healthcare expenditures to choke the life out of middle-class wallets.

On Monday the Federal Reserve Bank of New York released a report saying discretionary consumer spending had finally reached the place it was in 2007. In other words, Americans are finally spending as much on things like dining out and going on vacation as they did in 2007.

It's about time. As the New York Fed points out, discretionary spending recovered more slowly than it did in past downturns.

discretionary spending downturns

One of the reasons for this, we can extrapolate, is the rising cost of nondiscretionary spending in healthcare. In a previous report, the New York Fed noted that unlike "discretionary services, nondiscretionary services expenditures ... fell less during the recent recession than they did in the early 1980s recession, primarily because real health care expenditures held up better in this recession."

In other words, healthcare is gobbling up more and more of our paychecks. Even if the government stopped paying for stuff (i.e., we get rid of assistance through programs like Obamacare) someone has to pay for our country's sick.

In a service-based economy like the US this matters a lot. The New York Fed thinks that Americans aren't spending because they're saving and that they're saving because they're worried about slow growth going forward. That could be true. But it could also be true that Americans simply don't have the money they used to because out-of-pocket healthcare costs are rising.

America is nothing without a growing class of people who buy school supplies for their kids, take vacations to national parks, eat out at restaurants, and do all the things middle-class Americans have done since the 1950s. That's happening less and less, and Wall Street is starting to pinpoint one inescapable, intractable reason — and there's no plan to stop it.

When the next recession comes, don't be surprised if healthcare costs are what delivers it.

SEE ALSO: The ugly truth about the American economy in four words

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janet yellen

It’s official: The Federal Reserve has decided to separate conventional interest rate policy from its recession-driven bond purchases, which it now intends to begin winding down more or less independently of economic conditions. 

While Fed officials, including Janet Yellen, often stress that they are "data-dependent" in their outlook for monetary policy, their announcement about starting to unwind the central bank’s $4.4 trillion balance sheet came with an important caveat.

This is how Yellen described it in her September press conference, after announcing that the drawdown would begin this month.

"Changing the target range for the federal funds rate is our primary means of adjusting the stance of monetary policy. Our balance sheet is not intended to be an active tool for monetary policy in normal times," she told reporters.

"We therefore do not plan on making adjustments to our balance sheet normalization program. But, of course, as we stated in June, the Committee would be prepared to resume reinvestments if a material deterioration in the economic outlook were to warrant a sizable reduction in the federal funds rate."

This view represents a distinct departure from earlier discussions of monetary policy within the Fed, with some officials like ex-Fed governor Jeremy Stein advocating a more active use of the balance sheet as an alternative and potentially more targeted lever of policy.

Now, while the central bank does leave the door open to further use of its balance sheet in extreme cases, it makes clear this is something that it would only do in an emergency.

Here’s why that’s a really bad idea: If the Fed’s more dovish policymakers are right, the central bank doesn’t have much further to go in raising interest rates, which are only in a range of 1% to 1.25% currently.

Specifically, St. Louis Fed President James Bullard told Business Insider in an interview last week he wasn’t sure the Fed would need to hike rates much further, if at all, given a still low inflation backdrop and subpar economic growth. 

Yellen herself has acknowledged being surprised by low inflation, though she still sees it as a temporary phenomenon. "The biggest surprise in the US economy this year has been inflation," she told the Group of 30 International Banking Seminar in Washington over the weekend. "Inflation readings over the past several months have been surprisingly soft."

US inflation has undershot the Fed's 2% target for much of the economic recovery, and has been moving lower this year. The central bank's preferred measure stood at 1.4% in August. 

With both official rates and inflation still not far from zero, the Fed will probably have to go back to bond-buying or quantitative easing (QE) the next time the US faces an economic downturn, which is bound to happen in the next few years given we're nine years into an economic expansion. 

The Fed itself, including chair Yellen, has sung the praises of QE. Indeed, the policy, along with a fiscal stimulus and a bailout of the banking system, is credited by many economists, including ex-Fed Chairman Ben Bernanke, with preventing a second Great Depression.

Thus, by painting a tool that will likely become used regularly in monetary policy for the foreseeable future, the Fed risks another round of backlashes against its potential future use, many of which may even have inhibited the full power of monetary policy.

SEE ALSO: The Fed's plan to start shrinking its balance sheet could have unforeseen consequences

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patty murray lamar alexander

Republican Sen. Lamar Alexander told reporters on Tuesday that he and Democratic Sen. Patty Murray had reached a deal that would formally appropriate the cost-sharing-reduction payments introduced by the Affordable Care Act, the healthcare law better known as Obamacare.

Last week, the Trump administration said it would stop the payments because it could not legally continue to do so.

The payments help defray costs to insurers that are mandated to provide plans with low out-of-pocket costs to poorer Americans.

Here's a rundown of what the senators' preliminary plan includes, according to a congressional aide:

  • Fund the payments through 2019.
  • Restore $106 million in outreach to encourage people to sign up for plans on the individual insurance exchanges during the upcoming open-enrollment period.
  • Allow states to implement reinsurance programs, which help mitigate losses for insurers with assistance from the government and are designed to lower costs for consumers.
  • Expedite approvals for what are known as "1332 waivers," which allow states to make changes to their exchanges as long as the changes would lower costs.
  • Allow people over the age of 30 to sign up for catastrophic, or "copper," plans, which do not abide by the ACA's basic-coverage mandates but have cheaper premiums.

"We're ironing out a few of the last details right now, but I'm very optimistic that we'll be able to make an announcement with all the details very soon," Murray said at a press conference.

Alexander said the plan would be introduced to members of both parties on Tuesday and that he and Murray would be "seeking cosponsors of the legislation hopefully to introduce later in the week."

Republican leadership in September quashed the Alexander-Murray talks in favor of an attempt to pass legislation to overhaul the US healthcare system.

Alexander is the chairman of the Senate Health, Education, Labor, and Pensions Committee, and Murray is the ranking member.

At a press conference with Greek Prime Minister Alexis Tsipras on Tuesday, President Donald Trump endorsed the deal and said the White House was "involved" with the talks.

It is unclear whether the deal could succeed in Congress, as House Speaker Paul Ryan has said he will not bring to the floor a bill designed to stabilize the insurance exchanges.

Democratic leadership supports the plan, according to Senate Minority Leader Chuck Schumer.

"First, I want to salute both Lamar Alexander and Patty Murray for working hard on a bipartisan solution," Schumer said at a press conference. "We think it's a good solution, and it got broad support when Patty and I talked about it at the caucus at lunch today."

And Sen. John McCain, who has been a thorn in the side of Republican leadership on past healthcare attempts, praised the deal and said he would vote for it.

"As I have repeatedly stressed, health care reform ought to be the product of regular order in the Senate, and the deal reached today marks a critical step towards that end," he said.

Another GOP hold out, moderate Susan Collins, also praised the package during an appearance on Meet The Press Daily.

"I would have liked to have seen a specific authorization and some seed money for reinsurance pools, which would further help to lower premiums," Collins told host Chuck Todd. "But this is a good package, and I hope it will be passed very quickly so it can have an impact on rates this year."

Eric Assaraf, an analyst at Cowen Washington Research Group, said that with bipartisan support the plan was likely to pass, though he said it could take some time.

"We believe the market stabilization bill would likely garner enough votes for passage and would be signed into law as President Trump has expressed his desire for a short-term fix to Sen. Alexander after moving to end CSR payments last week," Assaraf wrote in a note to clients.

Conservatives have had mixed reactions.

Rep. Mark Walker, the chairman of the Republican Study Committee, said he would not support the package.

"The GOP should focus on repealing & replacing Obamacare, not trying to save it," Walker said via the committee's Twitter account. "This bailout is unacceptable."

But Rep. Mark Meadows, the chairman of the House Freedom Caucus, called it "a good start."

"Not sure it goes far enough to lower premiums, but limited-duration plans and HSA expansion might provide better conservative support," Meadows told reporters. "I certainly applaud the senators for working hard to address premiums."

SEE ALSO: Trump just ignited a battle within the Republican Party about whether to save Obamacare

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bigraphics thumb6 (1)

Sales and trading are not easy businesses to be in.

They take quick decision making, skill, and determination to get ahead, as technology makes humans less relevant and profits for the business continue to dwindle. It's tough for folks to get ahead.

But we've gleaned some of the top 35-and-under Wall Streeters in sales and trading who are way ahead.

As part of our rising stars of Wall Street list, Business Insider sifted through hundreds of nominations of some of Wall Street's top talent to find those who have stood out in a crowd of thousands.

We came across many talented people, and this list is by no means comprehensive. To be eligible, we asked that nominees be based in or around the New York area, age 35 or under, and distinguished in some way from the pack.

Their roles range in scope, covering research to sales to trading to market infrastructure. But they all represent the future of an ever-changing industry.

Following are Business Insider's list of the 18 top young Wall Streeters in sales and trading.

Stan Feldman, 28, IEX

At 28, Stan Feldman is the youngest cofounder of IEX, the upstart exchange made famous in Michael Lewis' hit "Flash Boys."

As head of the exchange's business analytics team, Feldman's trading analysis helps guide the exchange's strategic decisions. Before joining IEX in 2012, Feldman was an analyst on RBC Capital Markets' US equities electronic-trading team.

He was also an intern a Nasdaq, a rival of IEX, during the summer of 2009, according to his LinkedIn. Feldman graduated from New York University with a degree in finance, marketing, and mathematics.

Olivia Kelly, 29, OpenDoor

Olivia Kelly, a native of Syracuse, is the VP of Market Support at OpenDoor, a platform for off-the-run US Treasuries and TIPS.

The 29-year-old has spent more than six years working in fixed-income in electronic trading and brokering.

Today she leads a team of six and is responsible for bringing on new clients. Kelly also helped build a new TIPS trading platform, used by nearly a third of OpenDoor's clients.

OpenDoor, which launched in April, raised $10 million from private investors in June.

Vlad Khandros, 29, UBS

Vlad Khandros, 29, can be best thought of as UBS' king of liquidity. As the global head of market structure and liquidity strategy, the Ukraine native wears many hats, leading three global teams based in London, New York, and Hong Kong.

Through research and technology, Khandros helps clients handle their order flows and understand the complexity of the markets.

Khandros got his start at the bank six years ago. He came from Liquidnet, a financial-services firm, in 2011, where he left as global cohead of corporate strategy.

Khandros studied economics and political science at Rutgers University.

UBS has a strong equities business, ranking in the top six globally for the first half of 2017, according to data from Coalition. It generated $1.9 billion in equities revenues in the first half. up slightly from the same period a year earlier.

See the rest of the story at Business Insider

Stock traders can't stop kicking Blue Apron while it's down.

The company's stock is already trading at roughly half of its $10 initial public offering price, but apparently that isn't low enough for the bearish speculators adding to wagers.

They've grown bets against Blue Apron to $69.3 million this month, up 12% since the end of September, according to data compiled by financial-analytics firm S3 Partners.

Apparently those short sellers, who have already made a mark-to-market profit of $24.9 million since the company's June 29 IPO, are hoping to pad their bank accounts even more.

And it's not like these wagers are cheap. Amid this recent surge in short interest, borrowing rates have spiked to double where they were just one week ago. In the end, their willingness to pay such a premium shows conviction.

If these traders are right about the direction of Blue Apron's stock, it will be just the latest hit in what's been an extremely tough road for the company since it started the process to go public.

Estimated to be valued at as much as $3 billion during its roadshow, Blue Apron's IPO quest was derailed suddenly when deal-happy retail juggernaut Amazon shelled out $13.7 billion to buy Whole Foods. That proved to be terrible timing for Blue Apron, contributing to its IPO range being cut to $10 to $11 a share from $15 to $17. The eventual price of $10 was 40% below what it originally said.

Blue Apron's problems didn't end there. In addition to the subsequent stock drop to even lower levels, the company announced in August that it had laid off 14 members of its recruitment team and temporarily halted the hiring of salaried employees.

And the competition is only getting more fierce. On Monday, Bloomberg reported that fellow meal-kit startup HelloFresh — which is planning an IPO on the German stock exchange — is marketing its offering by telling investors that it's set to overtake Blue Apron in the US.

What's more, grocery store chain Albertson's acquired Plated — another meal-kit startup — for between $175 million to $200 million.

Amid all of this fervor in the industry, it's looking like traders think no price is too low for Blue Apron's flailing stock. The company's shares rose 0.2% to $5.26 at 1:49 p.m. ET on Tuesday.

10 17 17 blue apron COTD

SEE ALSO: An obscure company is ground zero for the biggest debate in the stock market

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