Bloomberg

(Bloomberg) — Global chip sales contracted for the first time since early 2020, in a blow to South Korea’s economy which is highly geared to the industry and struggling to adjust to weaker demand.

Worldwide sales of semiconductors declined 3% in September from a year earlier, according to data from the Washington-based Semiconductor Industry Association. In the same month, Korean chipmakers manufactured 3.5% less than a year earlier, deteriorating from a 0.1% fall in August, the national statistics office said separately on Monday.

Semiconductors represent the biggest source of income for the Korean economy, which slowed last quarter as a weakening currency amplified trade deficits and rising interest rates worldwide weighed on consumer demand for the nation’s technology exports.

Chip demand tends to cycle through booms and busts and the latest downturn adds to concerns for Korean policy makers, who are struggling to lessen the economic hit from a credit rout sparked by the default of a local developer. A deadly crowd crush that killed more than 150 people over the weekend is also expected to weigh on consumer sentiment.

On-again, off-again Covid lockdowns in China, Russia’s war on Ukraine and Beijing-Washington trade tensions have overshadowed earnings for Korean chipmakers such as Samsung Electronics Co., whose net profit missed estimates in the third quarter. The company said in its earnings call that it doesn’t expect a demand recovery until at least the second half of 2023.

Other chip data from Statistics Korea showed inventory growth remained elevated, hitting 54.7% in September. Factory shipments of semiconductors showed signs of stabilizing, declining just 0.9% from a year earlier.

Meanwhile, Korea’s overall industrial production rose 0.8% from a year earlier in September, less than economists’ estimate of 1%. From a month before, it contracted 1.8%, deeper than a 0.8% decline forecast by analysts, according to the statistics office.

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(Bloomberg) — Elon Musk plans to begin layoffs at Twitter Inc. as early as Saturday after completing his acquisition of the social media platform, the New York Times reported, citing people with knowledge of the matter. 

Managers have been asked to draw up lists of employees who will be cut, though the number of reductions couldn’t be determined, the newspaper said. The layoffs will take place before Nov. 1, when employees were scheduled to receive stock grants.   

On Sunday, Musk responded to a tweet about reports that he planned to fire workers by Tuesday to avoid paying stock grants, saying it was “false.” He didn’t elaborate.  

Twitter employees have been bracing for layoffs since the deal was announced in April, and Musk floated the idea of cost cuts to banking partners when he was initially fundraising for the deal. 

Some potential investors were told Musk plans to cut 75% of Twitter’s workforce, which now numbers about 7,500, and expects to double revenue within three years, a person familiar with the matter said earlier this month. Still, while visiting Twitter headquarters on Wednesday, Musk told employees that he didn’t plan to cut 75% of the staff when he took over the company, according to people familiar with the matter.

The billionaire has already let go of some top employees. Bloomberg News reported Thursday that Parag Agrawal was fired as chief executive officer, alongside Vijaya Gadde, the head of legal, policy and trust; Chief Financial Officer Ned Segal; and Sean Edgett, who has been general counsel at Twitter since 2012.

–With assistance from Susanne Barton.

(Updates with Musk’s tweet)

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(Bloomberg) — RHB Bank Bhd. plans to introduce its digital banking platform as early as the second half of next year, its top executive said, as Malaysia’s fifth biggest lender looks to hold back a tide of fintech startups.

The bank and its partner Boost, an arm of communications giant Axiata Group Bhd., could invest as much as 1 billion ringgit ($212 million) in the venture, RHB’s Chief Executive Officer Mohd Rashid Mohamad said in an interview at his office in Kuala Lumpur. Boost and RHB were among five groups that won digital bank licenses from Bank Negara Malaysia, the country’s central bank, in April. The others chosen include ventures led by Singaporean tech firms Grab Holdings Ltd. and Sea Ltd.

“We plan to launch the digital bank in the second half of next year or latest by the first quarter of 2024,” said Rashid, who assumed his current role in April. The other four license holders haven’t given a timeline on their rollout.

Established firms like RHB are facing pressure from fintech upstarts that move quickly to embrace new technology and are often more willing to burn through piles of cash to peel away their clients. 

Read More: Banks and Tech Giants Are Losing Skilled Staff to Flexible Fintechs

Asked why the digital bank will have such a long gestation period, Rashid said, “We are building the digital bank from scratch. We need to put up a new core banking system and infrastructure product proposition that are in line with Bank Negara’s requirements.”

Serving the Unbanked

For Malaysia’s central bank, the licenses are an opportunity to encourage lenders to help people outside the traditional banking system to have access to credit and more chances to build wealth.

Through the digital bank, RHB hopes to expand its business to include the “unserved and underserved community” by providing financing as well as a host of banking services. “We will be using more of AI and technologies to assess their credit based on the data points and models that we have put in place.”

RHB is also looking to spread its digitization push beyond Malaysia to the rest of Southeast Asia, home to more than 650 million people. The lender aims to launch a mobile app offering full banking services in Cambodia later this year, pending regulatory approval, as it seeks to position itself among the top 10 banks in the country, Rashid said.

The international business contributed 9% to pretax profit in the first half of this year versus 3% in 2021, Rashid said, adding that RHB aims to have the segment accounting for 15% of pretax earnings by 2024. For Cambodia, Singapore and Indonesia — its three key markets — the group expects to have 1,379 employees by the end of this year, up from 1,230 as of the end of 2021, he said.

In Singapore, RHB plans to expand its corporate and wealth management business while in Indonesia, it will focus on capital market activities and to be in the top 10 stockbroking firms there by 2024, Rashid said.

The lender also has a presence in Thailand, Brunei, Vietnam and Laos.

More from Bloomberg News’s exclusive interview with Rashid:

• RHB will keep its asset management unit for now as the business helps the firm provide a complete proposition to its customers
  • Malaysia’s AMMB Holdings Bhd., Thailand’s Kasikornbank Pcl among regional firms considering selling asset managers, Bloomberg News has reported
• The bank is not actively looking at a merger with another company but if there is an opportunity or offer, the board will evaluate and assess it
• The group made about 11 billion ringgit in ESG loans as of end-September and the plan is to increase that to 20 billion ringgit by 2026
• RHB plans to strengthen its Islamic wealth management business as the segment is under-penetrated; Rashid estimates this sector to be worth 372 billion ringgit and RHB only has a 0.2% market share
• Rashid sees the group’s net interest margin remaining stable or moving slightly higher
• RHB is sticking to a loan growth target of 5% to 5.5% for this year as 4Q is likely to be challenging, even though RHB reported loans growth of 3.2% in the first-half, which suggests growth of 6% to 6.5% on an annualized basis

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(Bloomberg) — Three days after Elon Musk purchased Twitter Inc., the tech billionaire posted and deleted a tweet spreading a baseless anti-LGBTQ conspiracy theory about the recent attack on the husband of House Speaker Nancy Pelosi in San Francisco. 

The episode underscored the pressures that Musk, a self-styled “free speech absolutist,” now faces in running the popular social media website — particularly in how to place limits on misinformation and hate speech on its service. Musk has pledged to advertisers that Twitter won’t become a “free-for-all hellscape” under his leadership, but at the same time pronounced that unfettered speech should be the norm on the site. 

Musk himself appeared to test those limits Sunday, responding to a tweet by Hillary Clinton, the former first lady and 2016 Democratic presidential nominee, in which she assailed the Republican Party for spreading “hate and deranged conspiracy theories” that she said encouraged the man who attacked Pelosi’s husband, Paul, inside the couple’s home Friday.

Musk linked to an article from the Santa Monica Observer, an outlet that has repeatedly spread false information about politics and the coronavirus pandemic. He wrote that “there might be more to this story than meets the eye.” The article presented a version of an unsubstantiated claim that had been circulating in far-right communities online for several days, asserting that Paul Pelosi had been intoxicated and quarelling with a male escort. The Santa Monica Observer’s site was down Sunday but an archived version of the article was reviewed by Bloomberg News. 

“Musk’s chaotic takeover has seen trust and safety dangerously sidelined, even as he spreads dangerous conspiracy theories himself to domestic and international politics, to millions of followers,” said Emma Briant, a fellow at the Center for Media, Data and Society, part of Central European University. “The arbitrary whims of powerful ideologues are one of the greatest threats to democratic discourse today.”

By early Sunday afternoon, Musk had deleted the tweet. Some of his supporters decried the move as a concession to “the leftist mob.”

He later rounded on the New York Times, tweeting a headline from the newspaper that said he’d shared a link to a website known to publish false news. “I did *not* Tweet out a link to the New York Times!” Musk wrote. 

On Friday, Bloomberg reported that hate speech had surged on the platform in the hours after Musk’s deal for Twitter closed. Twitter is forming a content-moderation council and decisions on content and account reinstatement are on hold until the group is convened, Musk has said. 

In a series of tweets Saturday, Yoel Roth, Twitter’s head of safety and integrity, said that Twitter determined “nearly all” of the accounts posting slurs and other derogatory terms were “inauthentic,” and that Twitter had taken action to ban the users involved in the trolling campaign.

But the volume of hate speech on the platform has remained elevated. A racist slur soared 1,700% on the platform on Saturday evening, peaking at 215 mentions every five seconds, according to data from Dataminr, an official Twitter partner that has access to the entire platform.

Twitter didn’t immediately respond to questions from Bloomberg News.

(Updates with Musk’s tweet about the New York Times.)

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(Bloomberg) — Mike Rothenberg, the venture capitalist once described as Silicon Valley’s “party animal,” now is fighting to stay out of prison.

In a criminal trial that begins Monday, Rothenberg faces charges of fraudulent conduct and making false statements that federal prosecutors say helped him misappropriate almost $19 million. He’s accused of lying to banks about his wealth while trying to obtain loans and taking fees beyond what investors agreed to. The government expects his jury trial in Oakland, California, to last at least a week.

Rothenberg was known for throwing lavish bashes:  Hot-air balloon rides during Napa Valley wine tours; a so-called “Founder Field Day” that involved renting out the San Francisco Giants’ baseball stadium for batting practice and free massages each April; “Puppy Hours” that were essentially happy hours where people could cuddle with dogs. His events were fodder for HBO’s show, “Silicon Valley,” which aired a scene inspired by one of his gatherings.  “When you’re doing something different, people will have fun with it,” he told Bloomberg in an interview in 2015.

Rothenberg’s lawyers failed to convince a judge to throw out the government’s claims in 2021 and January of this year. In their requests to dismiss the case, his attorneys had argued that some of the claims inadequately described the charges or weren’t brought in a timely manner.  The lawyers didn’t respond to requests for comment.

Rothenberg has been entangled in other legal battles. Rothenberg and Silicon Valley Bank sued each other in 2018 and 2019 in a California state court.

The bank claimed Rothenberg refused to completely repay a loan of $4.25 million loan in a suit that is set to go to trial in April. The venture capitalist separately accused the bank of fraud and negligence in transferring those funds across his accounts in a complaint that he withdrew last year. He had claimed that the movement of funds made it seem like he was misappropriating investors’ money. 

In 2018, he agreed to settle allegations by the Securities and Exchange Commission that he overcharged investors to fund personal projects.

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(Bloomberg) —

UK cabinet minister Michael Gove defended the reappointment of Suella Braverman as home secretary after a new report cast doubt on her statement that she was quick to disclose a security breach that led to her resignation earlier this month.

Braverman stepped down on Oct. 19 after acknowledging sending sensitive information in an email from her personal account, and said she “rapidly” reported it as soon as she realized the breach. Prime Minister Rishi Sunak re-appointed her six days after her resignation when he replaced Liz Truss, who served only seven weeks in the post.

The BBC reported that prior to acknowledging the breach, Braverman sent an email to the initial recipient of the information asking the person to delete and ignore the message, and it may have been hours before she reported the security breach. The BBC said it had obtained a copy of her email asking for the deletion.

The public and the media shouldn’t rush to judgment and it was appropriate for Braverman to ask the recipient to delete the email, Gove said in an interview with the BBC. It’s “standard practice” to ask erroneous recipients to delete information, he said.

Sunak has come under fire for re-appointing Braverman from both the opposition Labour Party and some Tory allies. Labour has called for the government to make public its review of the security breach and denounced the re-appointment as a “grubby deal” that was payback for supporting Sunak’s bid to replace Truss.

Read More: Sunak’s Uneasy Truce With UK Tory Right Already Exposes Risks

“You can’t have a home secretary who is not trusted by the security service, who is not trusted with important government information,” Yvette Cooper, shadow home secretary, told Sky News.

Gove said that making more details public could itself be a threat to national security, but that he was glad Sunak gave Braverman a second chance and that she was “absolutely” a politician of integrity.

Braverman is also coming under pressure as tensions mount over a jump in the number of migrants crossing the English channel from France, despite the government’s pledge to crackdown on arrivals. A Border Force migrant centre was attacked with fire bombs Sunday. No one was injured, though the attacker killed himself after throwing three fire bombs, Reuters reported.

The attack came a day after almost 1,000 migrants are estimated to have successfully crossed the channel, the highest daily number for weeks. Nearly 40,000 have reached the UK so far this year. Asylum processing centres are overwhelmed, and David Neal, the chief inspector of borders and immigration, told MPs last week that he was left speechless after visiting the Manston centre in Kent where conditions were “wretched.”

Gove also defended Braverman after a report that she had failed to act on the warnings about Manston, but acknowledged in an interview with Sky News that the situation at the centre “is not what it should be.” Braverman, is considered a hardliner on immigration and said earlier this month that was her “dream” to fly asylum seekers to Rwanda for processing, a policy of the Boris Johnson government that got sidetracked by legal challenges. 

There are now 2,800 people being housed at Manston in a facility with a maximum capacity of 1,600. The centres are meant to be for 24-hour stays while initial paperwork for asylum claims are processed before migrants are moved to longer-term facilities. The flood of migrants has strained the immigration system and the government is now spending about £7 million a day to house asylum seekers in hotels, the Home Affairs office said this week.

Gove, who serves as housing and leveling-up secretary, also said he couldn’t comment on details of another report by the Daily Mail saying that Truss had her phone hacked by Russian intelligence when she served as foreign secretary under Johnson, but said the government takes cybersecurity “incredibly seriously.”

(Updates with immigration issue from 8th paragraph.)

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(Bloomberg) — Inflation and the economy are top-of-mind for US voters heading into the midterm elections, with a majority of registered Republicans prioritizing economic issues, according to an ABC News/Ipsos poll.

The numbers, which are in line with similar surveys in recent weeks, “may be welcome news for Republicans as we close in on the midterms,” Ipsos said in a summary of the poll. President Joe Biden’s Democrats are defending an evenly split US Senate and a tight edge in the House in the Nov. 8 election.

A combined 50% of registered voters listed economic issues as their single most important issue, with 28% citing the economy and 22% naming inflation — with 73% of Republicans naming one of the two as their top concern. Among registered Democrats, abortion rights led the list with 29%, essentially tied with the 28% who said the economy or inflation.

Half of independent voters also cited the economy or inflation as their most important issue, according to Ipsos. The Oct. 28-29 poll of 621 registered voters has a margin of error of plus or minus 3.9 percentage points.  

Republicans are blaming Biden and the Democrats for inflation that has reached four-decade highs this year as well as elevated gasoline prices and crime. Biden’s administration is campaigning on a resilient labor market, economic growth that revived in the third quarter and defending abortion rights.

Republican National Committee chairwoman Ronna McDaniel said inflation and a resulting squeeze in purchasing power “has been caused by Democrats pumping so much money into this economy.” Voters will “hold them accountable for this economy, which is a failing economy,” she said on “Fox News Sunday.”

Senator Chris Coons, a Delaware Democrat who is close to Biden, told the same show that Biden is running on his legislative record, including infrastructure investment, boosting US semiconductor production and measures to ease medical costs. 

“You didn’t hear a detailed plan for how Republicans would fight inflation, would bring gas prices down, would make our country stronger,” he said on “Fox News Sunday” in response to McDaniel’s comments.

With campaigning in the final stretch and millions of voters casting early ballots, Biden as well as former presidents Donald Trump and Barack Obama have been fanning out across the country to mobilize voters. 

Republicans are in a good position to win a majority of seats in the House, though anything from a sizable GOP majority to a bare Democratic one remain possible, according to a CBS News battleground tracker poll published Sunday.

About eight in 10 likely voters in that survey said they feel things in the U.S. today are “out of control.” 

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(Bloomberg) — Sam Bankman-Fried may receive up to $100 million from Elon Musk’s purchase of Twitter, The Block reported.

The chief executive officer of crypto exchange FTX owned about $50 million to $100 million worth of Twitter stock before the acquisition closed last week, The Block reported, citing a person with direct knowledge of the matter.

FTX declined to comment to The Block, while Twitter did not respond to a request for comment.

Musk paid $44 billion in the take-private deal, which would put Bankman-Fried’s stake in Twitter at around 0.1% to 0.2%, The Block reported.

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(Bloomberg) — Senator Amy Klobuchar, a leading Democratic voice on tech regulation, said she doesn’t trust Elon Musk to run Twitter and called for legislation stripping tech companies of legal immunity when they “amplify” hate speech or election falsehoods.

In the wake of an assault on Paul Pelosi, the House speaker’s husband, Klobuchar said on NBC’s “Meet the Press” that technology companies are “making money off of this violence.”

Klobuchar, who leads the Senate Judiciary Antitrust Subcommittee and has authored antitrust legislation targeting big technology companies, said Congress should modify immunity from liability that it granted web platforms in 1996 for content others post on the sites.

“I would reduce their immunity,” Klobuchar said, in way “that would allow people to go after them when they are making money off of amplifying election falsehoods and hate speech.”

Klobuchar added that lawmakers from both parties have shown interest in such a change in the immunity provision in Section 230 of the 1996 Communications Decency Act.

Asked if she trusts Musk to run Twitter, which he acquired last week, Klobuchar responded “No, I do not.”

Musk has argued that Twitter should be less aggressive about banning people from the platform over their posts, particularly political leaders such as former President Donald Trump. 

He has delayed restoring access to the platform for people who have been banned from hate speech, bullying or spreading election misinformation while the company sets up a content moderation board.

Klobuchar said Musk’s backing for such a board is “one good sign” but added, “I continue to be concerned.” 

EXPLAINER: Twitter, Trump and How Online Speech Is Moderated: QuickTake

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(Bloomberg) —

UK cabinet minister Michael Gove defended the reappointment of Suella Braverman as home secretary after a new report cast doubt on her statement that she was quick to disclose a security breach that led to her resignation earlier this month.

Braverman stepped down on Oct. 19 after acknowledging sending sensitive information in an email from her personal account, and said she “rapidly” reported it as soon as she realized the breach. Prime Minister Rishi Sunak re-appointed her six days after her resignation when he replaced Liz Truss, who only served seven weeks in the post.

The BBC reported that prior to acknowledging the breach, Braverman sent an email to the initial recipient of the information asking the person to delete and ignore the message, and it may have been hours before she reported the security breach. The BBC said it had obtained a copy of her email asking for the deletion.

The public and the media shouldn’t rush to judgment and it was appropriate for Braverman to ask the recipient to delete the email, Gove said in an interview with the BBC. It’s “quite proper” and “standard practice,” to ask erroneous recipients to delete information, he said.

Sunak has come under fire for re-appointing Braverman from both the opposition Labour Party and some Tory allies. Labour has called for the government to make public its review of the security breach and denounced the re-appointment as a “grubby deal” that was payback for supporting Sunak’s bid to replace Truss.

Read More: Sunak’s Uneasy Truce With UK Tory Right Already Exposes Risks

“You can’t have a home secretary who is not trusted by the security service, who is not trusted with important government information,” Yvette Cooper, shadow home secretary, told Sky News.

Gove said that making more details public could itself be a threat to national security, but that he was glad Sunak gave Braverman a second chance and that she was “absolutely” a politician of integrity.

The housing and leveling-up secretary also said he couldn’t comment on details of another report by the Daily Mail saying that Truss had her phone hacked by Russian intelligence when she served as foreign secretary under former Prime Minister Boris Johnson, but said the government takes cybersecurity “incredibly seriously.”

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