Did Big Tech lie to Congress about Russian interference?

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New discoveries on Russia and the tech giants

The Senate Intelligence Committee released two huge reports on Monday that it had commissioned on Russian use of social media to disrupt the 2016 election and more. One is by New Knowledge, a cybersecurity company; the other by Oxford University researchers. Here are some highlights, both about the Russian campaign and about how tech companies have behaved toward the Senate:

African-Americans were targeted with relentless propaganda. We’ve heard plenty about Russian attempts to sway Facebook users who were on the political right, led by the Internet Research Agency in St. Petersburg. But the effort directed at black Americans was actually larger.

Facebook and Twitter were just the tip of the iceberg. Russian operatives on Instagram may have been as effective, or more effective, than on Facebook. They were also on Reddit, Google+, Vine, Gab, Meetup, Pinterest, Tumblr and even SoundCloud.

Tech companies did not fully cooperate with Senate investigations. Facebook withheld its users’ responses to Russian-generated content; Twitter provided only scattered details about Russian-controlled accounts; and Google gave data in hard-to-analyze formats.

The disinformation campaign didn’t end with the election. Facebook’s ad volume from the Internet Research Agency peaked in April 2017; misleading Russian posts on Instagram in 2017 were double what they were in 2016. Renée DiResta, New Knowledge’s director of research, writes that interference is “a chronic, widespread and identifiable condition that we must now aggressively manage.”

Robert Mueller is now a popular theme. “The Russian operatives unloaded on Mueller through fake accounts on Facebook, Twitter and beyond, falsely claiming that the former F.B.I. director was corrupt and that the allegations of Russian interference in the 2016 election were crackpot conspiracies,” writes the WaPo.

Big Tech should expect more questions. “The platforms may have misrepresented or evaded in some of their statements to Congress,” the New Knowledge report says. “It is unclear whether these answers were the result of faulty or lacking analysis, or a more deliberate evasion.”

Bonus: See the Russians’ most popular posts and memes.

The markets hit a low for 2018

The S&P 500 fell 2 percent on Monday, reaching its lowest point since October 2017 as concerns about growth and interest rates continued to rattle investors.

How bad is it? The sell-off, which began in early October, has now wiped out nearly 50 percent of the index’s gains since President Trump was elected in November 2016. The S&P 500 is on pace for its worst annual performance since the financial crisis, and its worst December in 80 years.

Some perspective, from Matt Phillips of the NYT: “This year’s sell-off is nothing like the collapse of stocks a decade ago, when the S&P fell more than 38 percent. But in its own way, 2018 is emerging as a remarkable year for financial markets, with almost every type of investment and asset class — stocks, bonds, commodities, even supersafe Treasurys — posting negative or minuscule returns.”

And some consolation for wounded investors, from Bloomberg: “Not even hindsight could have helped you make money this year.”

What’s behind the plunge? Several indicators have hinted that the economy may be slowing, and investors are particularly worried that the Fed will raise interest rates tomorrow (see below). Global markets have followed Wall Street’s lead, and futures tracking U.S. stocks certainly don’t indicate a sudden recovery.

More on the markets: Until recently, health care shares were outperforming the wider market. Not now. Small-cap stocks fell into bear market territory. U.S. credit markets have dried up. Still, some investors see an opportunity.

CBS isn’t giving Les Moonves $120 million

The company said yesterday that after reviewing information gathered by outside lawyers about allegations of sexual misconduct against Mr. Moonves, its former chief executive, he won’t receive his severance package. But that’s not the end of the story.

What CBS said: “We have determined that there are grounds to terminate for cause, including his willful and material misfeasance, violation of company policies and breach of his employment contract, as well as his willful failure to cooperate fully with the company’s investigation.”

What Mr. Moonves can do. “He could still contest the CBS board’s ruling and fight for his severance through arbitration,” write Edmund Lee and Rachel Abrams of the NYT. “He could argue the company violated the confidentiality terms of his exit agreement when the internal investigation became public.”

And CBS isn’t done cleaning up the mess. “It shouldn’t have taken a media spotlight to remove a leader who had so grossly abused his power for years,” writes Tara Lachapelle of Bloomberg Opinion. “As CBS tries to repair its own culture and image, it has the power to influence society for the better.”

Goldman’s 1MDB troubles are getting deeper

Goldman Sachs’s efforts to build a reputation for scrupulous ethics arebeing undone by 1MDB scandal, write Matthew Goldstein and Alexandra Stevenson of the NYT.

Malaysia hit the bank with criminal charges yesterday. The government accused Goldman of defrauding investors by raising more than $6 billion for the 1MDB fund, which was supposed to benefit the country’s residents but wound up enriching the company and others instead.

That could just be the start. “The biggest threat to Goldman comes from the United States,” Mr. Goldstein and Ms. Stevenson write. “Goldman recently received subpoenas from New York regulators, held talks with federal prosecutors and is likely to incur billions of dollars in penalties. It is one of the most serious crises in the bank’s 149-year history.”

Investors are watching. “The bank’s shares fell 2.7 percent on Monday, after news of the charges broke. Its shares are down by more than one-third since last year, reflecting both its troubles and the overall souring sentiment on Wall Street.”

Xi Jinping addresses two crowds

The Chinese president gave a well-rehearsed speech this morning to mark the 40th anniversary of some major economic reforms. It showed just how delicate a diplomatic position he’s in.

For a domestic audience, he talked tough: “No one is in a position to dictate to the Chinese people what should or should not be done. We must resolutely reform what should and can be changed, we must resolutely not reform what shouldn’t and can’t be changed.”

But while he’s seeking a U.S. trade deal, not too tough: “China’s development does not pose a threat to any country. No matter how far China develops, it will never seek hegemony.”

And he wasn’t committing himself on details. “There will be a sense of disappointment, among both local and international investors, that Xi did not give clearer signals about the direction of future economic reform at a time when the Chinese government’s commitment to market liberalization is seen to have waned,” Tom Rafferty from the Economist Intelligence Unit told the Guardian.

Trump isn’t the only one scared of rate rises

The Federal Reserve is likely to raise interest rates at the conclusion of a meeting of its policy-setting committee this week, despite resistance that is no longer confined to the White House.

The president’s take: “It is incredible,” Mr. Trump wrote in a tweet yesterday, that “the Fed is even considering yet another interest rate hike” with “the outside world blowing up around us.”

An economist’s take: “I do think that there are more risks of overtightening than there are of undertightening right now,” Lawrence Summers, who served as President Barack Obama’s chief economic adviser, told Fox Business Network yesterday.

The big fear: “As the Fed drives up borrowing costs, there is increasing concern that the central bank is risking a return to recession, and may be preventing workers from claiming a larger share of the American pie,” writes Binyamin Appelbaum of the NYT.

Meanwhile, the Fed is looking ahead. It’s wrestling with how to say that future rate rises aren’t guaranteed, the WSJ notes, without implying that they’re done.

Theresa May bought herself time for Brexit 

But the reprieve might not be that useful.

Mrs. May gave herself four weeks to save her Brexit deal. She rescheduled a parliamentary vote on her proposal, originally planned on Dec. 11, for the week of Jan. 14. That gives her time to seek help from E.U. leaders, in the hope of swaying lawmakers at home.

The E.U. may not play along. “No further meetings with the U.K. are foreseen,” Margaritis Schinas, a European Commission spokesman said, told reporters on Monday. “On the E.U. side, we have started the process of ratification.” That’s one reason preparations for a so-called no-deal exit are reportedly being increased.

Revolving door 

• Channing Dungey, who left ABC as head of entertainment, will join Netflix as a vice president of original content.
• Whirlpool’s C.E.O., Marc Bitzer, will also be its chairman.
• The London Stock Exchange Group also named a new chairman: Don Robert of Experian.
• Andreas Goss, the head of Thyssenkrupp’s steel division, will be the C.E.O. of a new joint venture with Tata Steel.
• Barclays named 85 new managing directors.

The speed read

Deals

• Hitachi officially agreed to acquire a power-grid unit from the Swiss engineering company ABB for $6.4 billion. (WSJ)
• T-Mobile won approval from the Committee on Foreign Investment in the U.S. for its planned takeover of Sprint. (NYT)
• The burger chain Jack in the Box said it was exploring a potential sale. (Reuters)
• Carlyle Group is said to be close to buying the aviation services company StandardAero Aviation for about $5 billion, including debt. (Reuters)

Politics and policy

• The Trump administration is removing an alcohol tax break. (WSJ)
• President Trump still makes money from his properties. Is that constitutional? (NYT)
• Two former business associates of Michael Flynn, Mr. Trump’s former national security adviser, have been indicted over covert Turkish lobbying. (NYT)
• Saudi Arabia denounced the U.S. Senate’s response to Jamal Khashoggi’s murder. (NYT)

Trade

• President Trump approved a second tranche of trade aid for farmers. (Reuters)
• Japan urged the Group of 20 to settle global trade woes multilaterally. (Reuters)
• The trade war is already hurting Asia, according to the I.M.F. (Reuters)
• How China became a trade super power. (WSJ)
• America has a cheese mountain, and can’t shift it. (WSJ)

Tech

• Elon Musk’s Boring Company is facing questions about its financial ties to his rocket company SpaceX. (WSJ)
• Huawei reportedly hopes that legal standoffs in Washington will help it defend its reputation on security. (WSJ)
• Qualcomm says a software update from Apple wasn’t enough to get around a Chinese court order banning the sale of some iPhones. (CNBC)
• Google reportedly stopped collecting data for a planned censored Chinese search engine after an internal backlash. (Intercept)
• Facebook still hasn’t launched a major privacy feature it promised seven months ago. (Recode)
• France expedited a push to collect a new tax from large tech companies. The policy will now be enforced from January. (FT)

Best of the rest

• “Women are on track to earn the same as men — in 202 years.” (Bloomberg)
• Relatedly: “Female politicians and journalists were abused on Twitter every 30 seconds in 2017.” (FT)
• Violent protests in Paris have hurt its luxury retailers. And Europe’s general retail malaise is starting to creep online.
• Two new government-requested reports say the U.K.’s big accounting firms need a shake-up. (Reuters)
• Renault and Nissan are struggling to work out how to fill their shared power vacuum. (NYT)
• Tired of reading? Look at Bloomberg’s Year in Pictures. (Bloomberg)

Thanks for reading! We’ll see you tomorrow.

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