Bloomberg

(Bloomberg) — After Ye made antisemitic remarks, including declaring his love for Adolf Hitler, Reddit users have repurposed r/Kanye — a tribute to the rapper formerly known as Kanye West — into a record of the Holocaust. 

On Thursday, Ye openly espoused antisemitism and false conspiracy theories about Jewish people in an interview on the far-right talk show InfoWars. His comments prompted widespread condemnation. President Joe Biden noted in a tweet that “Hitler was a demonic figure.” 

Shortly after the interview, a Reddit user posted a plea to turn the r/Kanye subreddit into a “Holocaust remembrance sub.” The user, who said they grew up with the rapper’s music and was a fan, wrote, “I can’t imagine keeping this place going as is.” The r/Kanye subreddit has 711,000 members, ranking it among the top 1% biggest groups on the platform.  

Since then, over 150 people have responded and the comment has almost 5,000 upvotes. 

Some have posted tributes to people who were imprisoned and killed in concentration camps. Another user shared an interview with a woman who survived Auschwitz. Several Redditors have posted photos of Anne Frank, Krystyna Chiger and other children who tried to flee the Nazis. 

This is officially a holocaust awareness sub. from
Kanye

Emily Tamkin, a journalist and the author of the book Bad Jews: A History of American Jewish Politics and Identities, said the phenomenon was heartening. “[These] are people people who love the music or love him, and who decided that was less important than condemning antisemitism and historical revisionism,” she said. 

Elsewhere on the subreddit, a moderator said that they’ve banned users and taken down “dozens and dozens” of posts and comments. “We’ll continue cracking down on clear and obvious hate speech and antisemitism. This is top priority and it has been for a long time now,” one wrote in a post five days ago. 

The topic of closing the page altogether has been broached, but people who run the page have so far opted against it, a moderator told Bloomberg News. The subreddit was created not for the rapper but for fans and former fans, the majority of whom who do not share or endorse his opinions, the moderator said. 

Reddit’s terms of use will ban “communities and people that incite violence or that promote hate based on identity or vulnerability.” 

A representative for Reddit declined to comment. 

The Anti-Defamation League last year counted 2,717 incidents of assault, harassment or vandalism targeting Jewish people — a 34% increase from 2020, and a record since the group first started keeping track over four decades ago. 

Gil Preuss, the chief executive officer of the Jewish Federation of Greater Washington, previously told Bloomberg that “public personalities are increasingly willing to use not even antisemitic tropes but direct antisemitic language.” 

In a Twitter thread after the interview, Ye continued to post antisemitic tropes, including an image that combined the Star of David with a swastika. Twitter took down the tweet and ultimately suspended the account. 

(Updates with comments from page’s moderator.)

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©2022 Bloomberg L.P.

(Bloomberg) — Stocks and bonds faced a lot of instability, with a hot jobs report fueling bets the Federal Reserve will keep tightening even if officials downshift the pace of hikes this month.

A surge in Treasury 10-year yields fizzled out, while two-year rates — which are more sensitive to imminent Fed moves — remained higher. The S&P 500 almost erased a slide that earlier topped 1%. The dollar wavered.

Rather than boosting their bets for the Fed’s December meeting, traders increased their wagers on where rates will top out. Swaps showed a peak of 4.98% before a pullback that still left the contract up eight basis points from where it was before the jobs data. The current range is between 3.75% and 4%.

US employers added more jobs than forecast and wages surged by the most in nearly a year. Nonfarm payrolls increased 263,000 in November, while the unemployment rate held at 3.7%. Average hourly earnings rose twice as much as predicted.

“To have 263,000 jobs added even after policy rates have been raised by some 350 basis points is no joke,” said Seema Shah at Principal Asset Management. “The labor market is hot, hot, hot, heaping pressure on the Fed to continue raising policy rates. What is there in this jobs report to convince them not to take policy rates above 5%?”

That’s why the Fed’s “dot plot”, which the central bank uses to signal its outlook for the path of policy, is in focus at the moment. Anna Wong at Bloomberg Economics says officials may have to boost their terminal-rate forecast from what they wrote down in the September, possibly to 5.25%.

Fed Bank of Chicago President Charles Evans said rates will need to be raised to a higher peak even as the central bank slows the pace of increases. He said policymakers were likely to downshift to 50 basis points, after raising rates by 75 basis points at four straight meeting.

Evans remarks are the latest from a central bank official, including Powell earlier this week, to suggest a half-point hike when they gather Dec. 13-14.

More Comments:

• Steven Blitz at TS Lombard:

In sum, the Fed is far from done – 75 is on the table for the Dec. meeting, although given all the communication around slowing to 50 it will be hard for them to back away at this point. Nevertheless, a long tack for raising rates means a higher terminal rate.

• Callie Cox at eToro:

A strong job market gives the Fed more basis to hold rates higher for longer, even if they start slowing hikes down. A high-rate environment is a challenging one to invest in, and we could be in for a tougher slog to the highs until inflation comes down significantly.

• Ronald Temple at Lazard Asset Management:

Investors need to reassess their optimism regarding the end of policy tightening – both the level of terminal rates, and how long the Fed keeps rates there.

• Chris Zaccarelli at Independent Advisor Alliance:

This jobs report is another example of why the Fed is going to be fighting inflation for a much longer period than many currently expect. Next year is likely to be a volatile one as a weakening economy and tight financial conditions is our base case.

• Krishna Guha at Evercore ISI:

We are confident that the report will have no effect on the decision to slow the pace of Fed rate hikes to 50bp in Dec. But it means the median Fed official will likely write down a peak rate of 5% to 5.25% rather than 4.75% to 5% and the Fed will maintain a hawkish tone at that meeting.

• David Russell at TradeStation Group:

The Fed also has to think about their credibility. After clearly signaling a turn away from 75 basis points, they’re unlikely to change that two weeks from now. Instead, we’ll probably see more hawkish projections on the dot plot.

Stock investors’ optimism around a cooling labor market and a Fed pivot is overdone, according to Bank of America Corp. strategists, who recommend selling the rally ahead of a likely surge in job losses next year. Their note was published before Friday’s jobs data.

“Bears (like us) worry unemployment in 2023 will be as shocking to Main Street consumer sentiment as inflation in 2022,” strategists led by Michael Hartnett wrote in a note showing that global equity funds just had their biggest weekly outflows in three months. “We’re selling risk rallies from here,” he said, reiterating his preference for bonds over equities in the first half of 2023.

Some of the main moves in markets:

Stocks

• The S&P 500 fell 0.1% as of 4 p.m. New York time
• The Nasdaq 100 fell 0.4%
• The Dow Jones Industrial Average was little changed
• The MSCI World index fell 0.2%

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro rose 0.1% to $1.0533
• The British pound rose 0.3% to $1.2281
• The Japanese yen rose 0.8% to 134.31 per dollar

Cryptocurrencies

• Bitcoin rose 0.6% to $17,030.7
• Ether rose 1.2% to $1,291.66

Bonds

• The yield on 10-year Treasuries declined three basis points to 3.48%
• Germany’s 10-year yield advanced four basis points to 1.86%
• Britain’s 10-year yield advanced five basis points to 3.15%

Commodities

• West Texas Intermediate crude fell 1.3% to $80.16 a barrel
• Gold futures fell 0.2% to $1,811.70 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Cecile Gutscher, Isabelle Lee and Edward Bolingbroke.

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.

(Bloomberg) — FBI Director Christopher Wray said US officials are still discussing how to address national-security concerns posed by TikTok, in comments that suggested a deal to keep the video-sharing app operating in the US isn’t a sure thing.

Wray reiterated his concerns that the Chinese-owned app could be used by Beijing to control millions of users’ software, steal information, launch hacking attacks or conduct influence operations. 

“Whether or not there is something that could adequately address those concerns is a product of very much discussion within the interagency,” Wray said at an event at the Gerald R. Ford School of Public Policy at the University of Michigan.  

Wray was referring to the Committee on Foreign Investment in the United States, an interagency body that’s weighing a proposal to allow TikTok to continue to operate in the US under the ownership of Chinese parent ByteDance Ltd. 

The arrangement would include routing US user traffic through servers maintained by Oracle Corp., with the US-based database giant auditing the app’s algorithms.

That effort has been slowed over fears the app would remain a threat, with China hawks on the Hill expected to criticize any agreement that stops short of an outright ban, or the sale of the platform to a US company.

The TikTok comments were part of a broader torrent of criticism Wray had for the Chinese government, including its efforts to suppress dissent in the US. 

He said the Chinese government targeted the parents of a Chinese student at a major university in the US midwest who posted material online in tribute to protesters who were killed during the 1989 Tiananmen Square massacre in Beijing.

“This is a Chinese American student in an American university,” Wray said. “Within 24 hours of him posting this stuff, the Chinese intelligence services back in China paid a visit to his parents threatening them.”

“There is no country, no government, that represents a more serious, more persistent threat to our innovation, our ideas and our economic security than the Chinese Communist Party and the Chinese government,” Wray said.

Wray also defended the FBI’s work during “hyper-politicized” times and pledged that the bureau will not compromise its independence to please critics.

The Federal Bureau of Investigation recently has come under criticism by former President Donald Trump and his conservative allies for investigations into Trump’s conduct, including carrying out a court-authorized search of his Mar-a-Lago resort in Florida in August. House Republicans have pledged to investigate the Justice Department and FBI when they take over the chamber next month. 

“My message to our people is that we are going to follow the facts wherever they lead no matter who likes it,” Wray said. “And I add that last part because what I find increasingly in today’s world is that people, at first, they say ‘Independence, objectivity, go for it, go FBI,’ until they don’t like the result of something that we do.”

“That’s not how independence and objectivity work,” he said.

“If we start worrying too much about who’s going to be angry about something we do then that pretty quickly becomes finger to the wind,” Wray said. “And that pretty quickly becomes the ends justify the means.”

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©2022 Bloomberg L.P.

(Bloomberg) — The work of two key teams that Twitter Inc. relied on to comply with regulators abruptly stopped amid a rash of layoffs, resignations and firings, according to two people familiar with the matter. That puts the social media giant at risk of investigations and hefty fines, the people said.

The latest departures heighten concerns that a staff exodus following Elon Musk’s takeover will undermine the company’s ability to comply with rules intended to protect users’ data.

A data governance committee that had overseen Twitter’s compliance with a Federal Trade Commission consent decree ceased to exist after two of its members were fired and three others resigned, according to the people. Under the consent decree, Twitter agreed to better protect users’ personal data.

The committee was formed in November 2021 and was responsible for overseeing decisions on how user data was collected, accessed and disclosed, according to a post on the company’s website at the time. The committee also managed internal compliance with Twitter’s privacy policy. 

Meanwhile, a board of directors that was responsible for managing Twitter’s compliance with the Europe Union’s General Data Protection Regulation, or GDPR, ceased operating after Musk fired two of its three members: Vijaya Gadde, the company’s top lawyer, and Sinead McSweeney, global vice president for public policy, according to the people. Last month, McSweeney, who is based in Dublin, secured a court injunction preventing Twitter from terminating her employment.

The board of directors carried out a crucial role, reviewing the work of product and engineering teams at Twitter to ensure they didn’t violate Europe’s complex rules on the transfer and processing of data from EU citizens, according to the people. Members of the board — two of whom were based in Dublin — met monthly, the people said. 

Instead, Musk has made new product decisions on an ad-hoc basis with no involvement of the board of directors, the people said. Regulators could determine that Twitter’s Ireland office no longer has effective oversight over EU citizens’ data. If that happened, then any of the 27 EU member states would have the authority to open investigations into Twitter and issue fines, the people said. 

Twitter’s office in Dublin is its EU headquarters and is designated as the “controller” of European citizens’ data for the purposes of GDPR compliance. 

Twitter, Gadde and McSweeney didn’t respond to requests for comment. Last month, the two remaining employees in Twitter’s office in the regulatory hub of Brussels left.

The rash of departures at Twitter has heightened concerns among remaining staff that they could be held liable for FTC violations, prompting a lawyer for Musk, Alex Spiro, to reassure them in a memo that they wouldn’t go to jail if the company was found in violation of the FTC decree. 

Overall, more than 100 people working on security and privacy teams have left the company since Musk took charge at Twitter in October. That has halved the number of personnel who were responsible for protecting Twitter’s infrastructure from cyberattacks and data breaches, according to the people.

Twitter’s main EU privacy watchdog said on Monday that it was “very concerned” about the ability of Twitter to abide by EU laws. The Irish watchdog said that it had been in almost daily contact with Twitter’s Dublin office after the departure of staff in recent weeks sparked safeguarding fears.

Last month, Twitter’s chief information security officer, chief privacy officer and chief compliance officer resigned. Twitter subsequently appointed Renato Monteiro as its interim data protection officer. Monteiro, who is based in Dublin, formerly served as the company’s data protection counsel for Latin America. However, Monteiro has had little involvement with product engineering and development teams in the US since his appointment, according to the people familiar with the matter.

Monteiro didn’t respond to a request for comment. It’s not clear who else, if anyone, may be in charge of Twitter’s compliance with the FTC and GDPR.

The dearth of staff has also meant that the company doesn’t have enough personnel to oversee the maintenance of about 400 different information security standards, known as ISOs. Individual staff at the company were responsible for maintenance of the standards, which, among other things, ensure that the company is correctly encrypting user data to keep it secure. Compliance with the standards is independently assessed on a biannual basis to ensure the company is meeting the requirements of the FTC’s consent decree.

The FTC has said that it was following developments at Twitter with “deep concern.”

Data watchdogs in Europe saw their powers increased overnight in May 2018, when the GDPR took effect and gave them the power to levy fines of as much as 4% of a company’s annual sales.

 

–With assistance from Stephanie Bodoni.

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©2022 Bloomberg L.P.

(Bloomberg) — Retiring Republican Senator Pat Toomey said Donald Trump’s influence on the party is diminishing “rapidly” and the former president has little chance of becoming the GOP presidential nominee in 2024.

Trump has announced he’ll make another run for the presidency. But Republicans fell well short of expectations during last month’s midterm elections and those losses, along with Trump’s 2020 presidential defeat and the GOP’s loss of the House and Senate in 2018, have demonstrated that voters — and the party — have moved past Trump.

“Republicans don’t like losing,” Toomey, 61, told Bloomberg News in an interview on Friday. “I don’t think Donald Trump’s going to be our nominee. And I think that’s going to serve us well.”

Many GOP leaders have moved further away from the former president after a dinner he held with a white supremacist leader last month. 

Senate Republican leader Mitch McConnell said Tuesday anyone who meets with people who espouse antisemitic or White supremacist views was “highly unlikely to ever be elected president of the United States,” stopping short of naming Trump by name. South Dakota’s John Thune, the No. 2 Senate Republican, told a panel of Bloomberg reporters and editors in Washington this week that his party shouldn’t be focused on one person and should welcome a new generation of leaders.

While a growing populist movement in the GOP challenges the traditional conservative values Toomey holds, including free trade and less regulation, he said the 2022 midterms showed that more mainstream conservatives remain the most electable.

“I think one of the important lessons from this past election is how quite well sort of conventional Republicans did, at the very same time that the ultra-pro Trump candidates were getting crushed,” said Toomey, who will leave the Senate in January after two terms. 

He said it’s also evident in the under-performance by Trump-backed candidates like Senator-elect J.D. Vance in Ohio, who won election by 6 percentage points, while Ohio’s GOP Governor Mike DeWine won another term with a 26-point lead. And in his state of Pennsylvania, Toomey said that Republican Senate nominee Oz Mehmet was dragged down significantly by GOP gubernatorial nominee Doug Mastriano, a Trump-backed candidate who questioned the outcome of the 2020 presidential race and who lost his contest by 15 percentage points.

Looking Ahead to 2024

Toomey praised Oz, who also was supported by Trump, saying he campaigned hard but was hobbled by a “brutal primary that drove his negatives through the roof.”

Meanwhile, Toomey touted David McCormick, the former CEO of Bridgewater Associates and Oz’s primary opponent, as a possible candidate to run against incumbent Democratic Senator Bob Casey, who is up for reelection in 2024. 

“I think David McCormick would be a very strong candidate against Bob Casey or in any other statewide race,” Toomey said, stopping short of endorsing him. “David McCormick is a very impressive guy.”

Toomey said he has no plans to pursue politics following his departure from the Senate. He said he’d probably enter the private sector, but that he hasn’t pursued roles in the cryptocurrency industry or other areas. 

Read More: Senator Who ‘Bought the Hype’ on FTX Aims to Pass Crypto Law

The Pennsylvania senator said he won’t back Trump if he’s the 2024 GOP presidential nominee, and that he doesn’t have an early favorite among possible contenders like former UN Ambassador Nikki Haley, Florida Governor Ron DeSantis, former Secretary of State Mike Pompeo and South Carolina Senator Tim Scott. Toomey said he was “very impressed” by Scott, who will replace him next year as the top Republican on the Senate Banking Committee.

Toomey said Republicans should coalesce around a few candidates before primary voting starts to avoid the large slate of Republican candidates that boosted Trump in 2016. 

“My theory is this field is likely to winnow down by the time we’re actually casting votes,” he said.

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(Bloomberg) — Amazon.com Inc.’s top media executive, Jeff Blackburn, plans to retire at the start of 2023, and the division will be overseen by two current executives who will report directly to Chief Executive Officer Andy Jassy.

Mike Hopkins, who is now in charge of Prime Video, Amazon Studios and Metro-Goldwyn-Mayer will continue in his current role. Steve Boom, who leads music and podcasting, will also take command of Audible, Twitch and the games business. The transition will be effective Jan. 1, Amazon said in a memo to staff on Friday. 

Blackburn oversaw high-profile changes at Amazon, helping lead the company into streaming and integrate the storied Hollywood movie studio MGM, which the company acquired for $8.5 billion in the midst of the pandemic. He also took an expensive bet to attract younger customers to Prime Video with the Lord of the Rings: The Rings of Power TV series that aired this year and cost an estimated $1 billion.

“The last 18 months have been a thrill,” Blackburn wrote in an email to staff. “But I’ve decided to spend 2023 differently, giving more time to family, and feel strongly this is the right decision for me.”

Amazon has been in cost-cutting mode due to a sales slowdown. Bloomberg has reported that the company plans about 10,000 job cuts that have already started and will continue into 2023. Investors have been trying to determine which Amazon business units will be prioritized for investments and which will be trimmed. Amazon executives have said they remain committed to video streaming as a way to increase the value of Prime membership and attract new customers.

Blackburn has a long history at Amazon. He joined the company in 1998, a year after its IPO. He worked across different business units, including its third-party marketplace and advertising divisions. He left the company to join a Silicon Valley venture firm Bessemer Venture Partners, working there only five weeks before his May 2021 return.

Analysts have described Blackburn as a seasoned veteran trusted by founder and former CEO Jeff Bezos and Jassy. The media chief had to navigate a brutally competitive streaming business and the collapse of the theatrical business in 2020, when the pandemic paused in-person gathering. The company has spent big to build both units, and venture into other areas. 

It has acquired the rights to live sports programs, including the National Football League’s Thursday games. Amazon also plans to spend $1 billion to produce 12 to 15 movies a year that will first appear exclusively in theaters, people familiar with the matter said last week.

Blackburn joins other long-time Amazon executives to depart following Bezos’s departure as CEO last year, which triggered big shifts in the company’s executive ranks. Amazon’s consumer chief Dave Clark, a long-time executive, left Amazon in June. Clark’s predecessor, Jeff Wilke, announced his retirement from Amazon a few months before Jassy was named to the CEO job. Wilke had been seen as another contender to succeed Bezos.

–With assistance from Matt Day.

(Updates with details on transition starting in second paragraph.)

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©2022 Bloomberg L.P.

(Bloomberg) — The lawyer who represented Bernie Madoff has this advice for Sam Bankman-Fried: shut up.

Enough with this whole media apology tour, says Ira Sorkin, lead defense lawyer for Madoff, late mastermind of one of the greatest Ponzi schemes of all time.

As authorities sift through the wreckage of FTX, Bankman-Fried’s collapsed crypto empire, the man known as SBF, has been talking to everyone from The New York Times to the ABC talk show Good Morning America.

Again and again, he’s denied intentionally commingling client money or trying to swindle anyone. Federal authorities are investigating exactly that. Neither FTX, Alameda Research or any of the former top executives involved have been accused of any wrongdoing by US authorities.

“It was just a f— up,” Bankman-Fried told Bloomberg Businessweek. “A huge f— up.”

Sorkin says Bankman-Fried should listen to his lawyers and stop talking immediately. Anyone who’s watched Law & Order knows that.

“That’s the first order of business: don’t talk,” says Sorkin. “You’re not going to sway the public. The only people that are going to listen to what you have to say are regulators and prosecutors.”

Read more: Inside Sam Bankman-Fried’s Bahamian Penthouse After FTX’s Fall

Bankman-Fried conceded this week that the publicity blitz flew in the face of legal advice but he had a “duty to explain what happened.” Before an hourlong interview with the New York Times DealBook on Wednesday and a Good Morning America segment on Thursday, he agreed to a video interview with Axios and a Twitter conversation published by Vox. “F— regulators,” he wrote. 

“Sometimes clients believe they are smarter than their lawyers. This guy is 30 years old, and he is not smarter than his lawyers,” Sorkin added. “They should be telling him every five minutes to shut up, but sometimes clients don’t listen.”

Representatives for Bankman-Fried and FTX didn’t immediately respond to a request for comment. 

Bankman-Fried, son of law professors, has said he’s speaking against his lawyers’ advice. Earlier today, FTX sought to clarify that Bankman-Fried does not speak on its behalf. Legal experts have said he may simply be testing out an it-was-all-a-big-mistake defense.

Renato Mariotti, a former federal prosecutor, says investigators are surely taking note. Anything Bankman-Fried says can be used against him in court, he says.

“Here is a man who appears to be responsible for many people losing their life savings,” says Mariotti, a lawyer at Bryan Cave Leighton Paisner.

“How can someone make that worse? Lock himself into not only one but various versions of a story,” Mariotti says, adding that he expects to see some of these interviews played in court.

Bankman-Fried’s apparent willingness to keep talking was welcomed by a prominent figure in Washington on Friday: Representative Maxine Waters. She’s asked Bankman-Fried to appear before the House Financial Services Committee on Dec. 13.

“We appreciate that you’ve been candid in your discussions about what happened at FTX,” Waters, a Democrat, tweeted.

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©2022 Bloomberg L.P.

(Bloomberg) — There’s an opening for Congress to pass a narrow digital asset regulation bill before the year’s end after the collapse of crypto exchange FTX, Senator Pat Toomey said.

Toomey, the top Republican on the Senate Banking Committee, said he met with FTX founder Sam Bankman-Fried several times before the implosion of the former billionaire’s crypto empire and that the situation puts more pressure on Congress to establish guardrails for the industry.

“I bought the story. I bought the hype. I was impressed,” the Pennsylvania senator told Bloomberg News in an interview Friday in New York. 

Now, in addition to holding a hearing over the FTX downfall, Toomey said he’s working with Democrats to get some measures to regulate cryptocurrency attached to a year-end spending deal after months of inaction in Congress. 

Toomey, 61, is retiring at the end of the year. Before he goes, he said he’s working on an effort to pass a trio of crypto provisions that have been languishing in the Senate for months. While these would fall short of a large-scale regulatory framework he’d like, these legislative changes have bipartisan support and have the potential to be added to a must-pass bill before the end of the year. Those measures include:

• Establish a regulatory framework for stablecoins, assets where the value is tied to that of another currency or financial instrument
• Clarify the definition of a crypto broker to exclude coin miners and wallet manufacturers, so that they aren’t subjected to a tax reporting requirement intended to apply to entities that take custody of other individuals’ cryptocurrency
• Create a tax reporting exemption for crypto transactions of under $50, allowing digital assets to be used for small purchases

Currently, the US has “complete regulatory uncertainty, legal uncertainty, and that leads to all kinds of problems, including, by the way, the migration of money and activity and entrepreneurs and development to overseas jurisdictions where as we’ve seen, regulation aren’t so good,” he said in a separate interview with Bloomberg Television’s “Balance of Power With David Westin.”

Congress is facing a Dec. 16 deadline to fund the federal government or face a shutdown, though lawmakers may agree on a short-term extension to give themselves a few more days to negotiate. Toomey is one of many senators who is looking to attach other priorities to the year-end bill, including a proposal to fast-track energy project permits, business tax cuts and an increase to the child tax credit.

Toomey said that one of his few regrets about his 18 years in Congress is that he was unable to pass comprehensive legislation for the crypto industry. He said that he believes the underlying technology and systems are promising, despite FTX’s recent troubles.

“This blowup of FTX is not about crypto.” Toomey said. “It’s an indictment on the behavior of one or more individuals and really on us for not having passed legislation that would create the guardrails, the regulations, the consumer protections to allow this space to thrive,” he said.

Senate Banking Committee Chairman Sherrod Brown has said he plans to hold a hearing on the FTX collapse, likely before the end of the year, but has not yet set a date for it. Toomey he said he hopes that Bankman-Fried testifies at the hearing.

–With assistance from Gregory Korte.

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©2022 Bloomberg L.P.

(Bloomberg) — The Department of Homeland Security’s Cyber Safety Review Board said Friday it will study the Lapsus$ hacking group, which has been accused of carrying out breaches at major US companies this year. 

The board, comprised of senior government cyber officials and industry representatives, aims to review and compile reports on significant cybersecurity issues. In its first review the board examined a flaw in the Log4j open-source software library.

Lapsus$ has been blamed for hacks affecting Microsoft Corp., Nvidia Corp., Okta Inc. and other major technology companies. Security researchers have told Bloomberg News that the alleged mastermind of the group was a teenager living at his mother’s home in England, who was later arrested by police in the UK earlier this year.

The Lapsus$ crew has differentiated itself from other hackers by its tactics, desire for notoriety and success at breaching major companies. Members of Lapsus$ have employed social engineering techniques such as targeting companies that operate call centers for brand name firms, then publicizing their successes on a Telegram channel. 

Alleged Lapsus$ hackers have also targeted Brazilian health-care systems and police departments, according to Brazilian authorities and multiple cybersecurity experts who investigated the group. The Brazilian Federal Police announced that officials had arrested an alleged Lapsus$ member in October. 

“Lapsus$ actors have perpetrated damaging intrusions against multiple critical infrastructure sectors, including healthcare, government facilities and critical manufacturing,” said Cybersecurity and Infrastructure Security Agency Director Jen Easterly in a statement. “The range of victims and diversity of tactics used demand that we understand how Lapsus$ actors executed their malicious cyber activities so we can mitigate risk to potential future victims.”

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©2022 Bloomberg L.P.

(Bloomberg) — Wall Street got a dose of reality after a shockingly hot jobs report lifted bond yields and sent stocks lower on bets the Federal Reserve will keep tightening even if that means a recession down the road.

Rather than boosting their bets for the Fed’s December meeting, swap traders increased their wagers on where the central bank’s target will top out — climbing to 4.98% — up more than 10 basis points from where it was before the data. That’s from a current range between 3.75% and 4%.

Two-year US yields — which are more sensitive to imminent Fed moves — at one point was above 4.4%. The dollar wavered. The payrolls figures also threw cold water on a weekly rally for equities that was driven by Jerome Powell’s signals of a downshift in the pace of hikes.

US employers added more jobs than forecast and wages surged by the most in nearly a year, Nonfarm payrolls increased 263,000 in November. The unemployment rate held at 3.7% as participation eased. Average hourly earnings rose twice as much as forecast.

“To have 263,000 jobs added even after policy rates have been raised by some 350 basis points is no joke,” said Seema Shah at Principal Asset Management. “The labor market is hot, hot, hot, heaping pressure on the Fed to continue raising policy rates. What is there in this jobs report to convince them not to take policy rates above 5%?”

It’s indeed the Fed’s “dot plot”, which the central bank uses to signal its outlook for the path of policy, that’s in focus at the moment. Anna Wong at Bloomberg Economics says officials may have to boost their terminal-rate forecast from what they wrote down in the September, possibly to 5.25%.

Fed Bank of Chicago President Charles Evans said rates will need to be raised to a higher peak even as the central bank slows the pace of increases. His Richmond counterpart Thomas Barkin sees long-term labor constraint keeping inflation heat.

More Comments:

• Callie Cox at eToro:

A strong job market gives the Fed more basis to hold rates higher for longer, even if they start slowing hikes down. A high-rate environment is a challenging one to invest in, and we could be in for a tougher slog to the highs until inflation comes down significantly.

• Ronald Temple at Lazard Asset Management:

Investors need to reassess their optimism regarding the end of policy tightening – both the level of terminal rates, and how long the Fed keeps rates there.

• Chris Zaccarelli at Independent Advisor Alliance:

This jobs report is another example of why the Fed is going to be fighting inflation for a much longer period than many currently expect. Next year is likely to be a volatile one as a weakening economy and tight financial conditions is our base case.

• Krishna Guha at Evercore ISI:

We are confident that the report will have no effect on the decision to slow the pace of Fed rate hikes to 50bp in Dec. But it means the median Fed official will likely write down a peak rate of 5% to 5.25% rather than 4.75% to 5% and the Fed will maintain a hawkish tone at that meeting.

• David Russell at TradeStation Group.

The Fed also has to think about their credibility. After clearly signaling a turn away from 75 basis points, they’re unlikely to change that two weeks from now. Instead, we’ll probably see more hawkish projections on the dot plot.

Stock investors’ optimism around a cooling labor market and a Fed pivot is overdone, according to Bank of America Corp. strategists, who recommend selling the rally ahead of a likely surge in job losses next year. Their note was published before Friday’s jobs data.

“Bears (like us) worry unemployment in 2023 will be as shocking to Main Street consumer sentiment as inflation in 2022,” strategists led by Michael Hartnett wrote in a note showing that global equity funds just had their biggest weekly outflows in three months. “We’re selling risk rallies from here,” he said, reiterating his preference for bonds over equities in the first half of 2023.

Some of the main moves in markets:

Stocks

• The S&P 500 fell 0.7% as of 1:08 p.m. New York time
• The Nasdaq 100 fell 1.2%
• The Dow Jones Industrial Average fell 0.4%
• The MSCI World index fell 0.5%

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro was little changed at $1.0528
• The British pound rose 0.3% to $1.2278
• The Japanese yen rose 0.5% to 134.64 per dollar

Cryptocurrencies

• Bitcoin was little changed at $16,944.56
• Ether rose 0.3% to $1,280.49

Bonds

• The yield on 10-year Treasuries advanced five basis points to 3.55%
• Germany’s 10-year yield advanced four basis points to 1.86%
• Britain’s 10-year yield advanced five basis points to 3.15%

Commodities

• West Texas Intermediate crude fell 0.9% to $80.45 a barrel
• Gold futures fell 0.3% to $1,809.70 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Cecile Gutscher and Isabelle Lee.

More stories like this are available on bloomberg.com

©2022 Bloomberg L.P.