OOH-Smih-Kuh

MARKETS

  • Fed: The U.S. central bank will announce its interest rate decision today. Markets are expecting a nothingburger for rate cuts this year, but we could learn more about what's in store for 2020.
  • Trade: Chinese officials expect President Trump to delay another round of tariffs that is set to take effect this Sunday, Bloomberg reports.

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TECH

Can Facebook and Apple Keep a Secret?

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Like The Crown periodically reminds us of the oddities of the British monarchy, government officials periodically remind us of the ethical dilemma of encryption when they drag tech leaders into their mahogany halls.

Cut to yesterday

First, Facebook denied Attorney General Bill Barr's proposal to add "back doors" for law enforcement to access encrypted messages.

  • FB is planning to add end-to-end encryption to services like Messenger (WhatsApp is already encrypted).
  • In October, Barr sent a letter asking the company to delay those plans. It was cosigned by the U.K.'s and Australia's top law enforcement officials.

Also yesterday, Facebook and Apple privacy execs defended their encryption practices before the Senate Judiciary Committee.

Big picture: Encryption makes communications more private and secure...but that presents major hurdles for law enforcement looking for evidence. Both Democratic and Republican senators threatened to pass legislation mandating back doors if the tech giants don't develop them on their own.

  • Some U.S. senators and Barr argued that Facebook and Apple are aiding criminals by allowing private communications that can't be accessed with a warrant.
  • With 1.5 billion users, WhatsApp may be the world's most widely used encrypted messenger.

Even Manhattan District Attorney Cy Vance Jr. took the Northeast Regional down to D.C. to join the pile-on. He said encryption "effectively upended centuries of American jurisprudence."

Tech's side of the story

Facebook responded to Barr by claiming his proposal would be a "gift to criminals, hackers, and repressive regimes." Apple's manager for user privacy said there's no way to create back doors that "only work for the good guys," adding, "They will be exploited by nefarious entities as well."

Zoom out: Both companies have clashed with lawmakers over privacy before, but for different reasons. Apple encountered a similar encryption dilemma when it tried to deny the FBI access to the San Bernardino shooter's iPhone in 2016. Facebook has been criticized for its slip-ups in keeping private user info private.

TRADE

It's Pronounced OOH-Smih-Kuh

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The same morning House Democrats announced two articles of impeachment against President Trump, they also reached an agreement with the White House to push forward with USMCA, the North American trade deal replacing Nafta. That's like hugging someone right as you knee them in the crotch.

Why do Democrats support USMCA? Because...it almost looks like a Democrat wrote it, especially the sections that enforce tougher labor standards.

  • Even the AFL-CIO, a leading federation of unions that initially held its nose at the deal, came around following recent revisions: "There is no denying that the trade rules will now be fairer," President Richard Trumka said.

The backstory: The OG Nafta was a landmark 1994 free trade deal signed by the U.S., Canada, and Mexico. It had critics and defenders, but lawmakers on both sides of the aisle agreed it was time for a 21st century paint job.

That time came yesterday afternoon when representatives from Canada, Mexico, and the Trump administration signed the new agreement.

Looking ahead...Congress will vote on the deal starting next week.

+ Pop quiz: What does USMCA stand for? (Answer at bottom.)

CLIMATE

Exxon Legal Team Breaks for Holiday R&R

A New York judge cleared ExxonMobil of claims it downplayed climate change risks to investors and cost them up to $1.6 billion. We give John Grisham 'til February.

Judge Barry Ostrager said the court was not absolving Exxon of contributing to climate change. But under the scope of a securities fraud case, the New York attorney general couldn't meet the burden of proof.

Why it's a big deal: This was the second climate change lawsuit to reach trial in the U.S. and was viewed as a bellwether for future attempts to hold oil and gas companies accountable.

After the holidays, it's back to business

Fossil fuel companies are bracing for a wave of climate change litigation. Exxon's already facing similar claims from the Massachusetts AG.

Cities in Maryland, Rhode Island, Colorado, and more are trying to leverage "public nuisance" lawsuits, while other localities are seeking compensation for mitigation costs tied to climate change.

Big picture: Many states and activists are hoping for a 1998 Master Settlement Agreement moment, when Big Tobacco agreed to pay $206+ billion to states.

TOURISM

Not the Blast You Want on Vacation

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Some tourists like flirting with danger. But the fatal eruption of a New Zealand volcano has set off a debate over whether tour operators need more limits.

What happened: A volcano on White Island erupted Monday with an estimated 47 tourists on its shores. Early reports confirmed six deaths and 30 injuries. Fear of another eruption has slowed the efforts of first responders.

The gray area: White Island is privately owned by a family trust that gives tour companies and visitors permission to take volcano selfies. More than 10,000 people visit annually.

Could this have been prevented?

White Island visitors generally sign waivers acknowledging the risks, but some legal experts question whether that paperwork absolves tour companies of their obligations to the safety of employees and clients.

  • Tourism businesses are incentivized to boost foot traffic above all else. Overcrowding has led to fatal accidents at popular sites like Mount Everest and the Danube river.
  • At White Island, tours were happening even after the volcano's alert level was raised last month.

Looking ahead...New Zealand police and workplace safety authorities are looking into the incident.

TRANSPORTATION

Wheels Wants People to Stop Using Their Heads

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The micromobility company Wheels has redesigned its e-bikes to include a shareable helmet that riders can access for free. For those concerned about the hygienic implications of communal headgear, each helmet comes equipped with a removable liner.

The problem: Most urban commuters are more worried about their hairdo than being turned into skull soup.

  • In a study of e-scooter injuries in Austin, TX, the U.S. Centers for Disease Control and Prevention found that 48% were head injuries. And how many of the 190 injured riders were wearing a helmet? Just one.
  • Another study reported that head injuries accounted for over 40% of e-scooter-related ER visits.
    The backstory on Wheels: 1) It was started earlier this year by the brothers who cofounded the dog-walking startup Wag 2) it operates bike-shares in six U.S. cities and Stockholm, Sweden, and 3) it's raised almost $100 million since launching.

Bottom line: Shared bikes and e-scooters are jumping in popularity. But to become a mainstay in cities, companies will have to address safety concerns.

WHAT ELSE IS BREWING

  • Peloton stock fell almost 6% after a short seller said the company would face more competition from rivals.
  • Boeing orders fell by more than half in the first 11 months of 2019 compared to last year.
  • Macy's now has roughly the same market cap as Beyond Meat.
  • Mike Bloomberg's presidential campaign has already spent over $100 million on advertising.
  • NBCUniversal said it's secured more than $1 billion in national ad commitments for the 2020 Tokyo Olympics, none from Bloomberg.

WHAT'S THE WORD?

Yesterday, Merriam-Webster released its Word of the Year for 2019. We're not going to tell you what it is. Instead, we'll give you three clues from its blog describing the word, then you can tell us what it is. Here we go.

  • "It reflects a surprising fact: Even a basic term-a personal pronoun-can rise to the top of our data."
  • "English famously lacks a gender-neutral singular pronoun to correspond neatly with singular pronouns like everyone or someone."
  • "More recently, though, _______ has also been used to refer to one person whose gender identity is nonbinary."
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    Answers


    What's the word? They.

    Pop quiz: USMCA = United States-Mexico-Canada Agreement

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