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A bipartisan pair of senators want more answers from the company accused of selling Apple and Amazon data servers compromised by Chinese spies

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marco rubio richard blumenthal

  • Sens. Marco Rubio and Richard Blumenthal sent a letter to Supermicro, the motherboard supplier named in a recent bombshell Bloomberg report on Chinese infiltration.
  • Rubio and Blumenthal requested the company send information regarding microchips allegedly placed onto equipment by Chinese government officials that was then sold to tech giants like Apple and Amazon as well as government contractors.
  • While Apple and Amazon have both strongly denied the report, Rubio and Blumenthal felt the importance of the issue demanded further investigation by Capitol Hill.
  • Read the full letter below.

A bipartisan pair of senators requested more answers from Supermicro, the motherboard producer that an explosive report said sold equipment to major US tech companies that had been infiltrated by the Chinese government.

Republican Sen. Marco Rubio and Democratic Sen. Richard Blumenthal sent a letter Tuesday to Supermicro's CEO, Charles Liang, asking for more information following a Bloomberg story that reported the company sold motherboards to Apple, Amazon, and the US government that contained microchips implanted by Chinese spies.

In turn, Bloomberg reported, these microchips could have given the Chinese government backdoor access to data on servers where the motherboards were installed.

"If this news report is accurate, the potential infiltration of Chinese backdoors could provide a foothold for adversaries and competitors to engage in commercial espionage and launch destructive cyber attacks," Rubio and Blumenthal wrote.

The pair added: "As Members of Congress, we are alarmed by any potential threats to national security and have a responsibility to ensure our nation’s sensitive networks are kept safe. We write to request information from Supermicro on these reported attempts to subvert its computer products to spy on the United States."

Both Apple and Amazon strongly denied the report, which Rubio and Blumenthal acknowledged. But they said the issues raised in the report were too important to simply accept the companies' statements.

"In The Information’s February 2017 article, Mr. Leng disclosed that 'thousands of customers' were using the same hardware. These customers deserve answers immediately," the letter said. "While large tech firms may have the financial resources and expertise to mitigate sophisticated cyber security threats or completely remove affected hardware, most companies do not. Nor do they have the information to act."

Bloomberg also reported Tuesday that a "major US telecom" also discovered compromised Supermicro equipment in August.

The letter from the senators follows concern from both sides of the aisle about the Bloomberg report. Rep. Adam Schiff, the top-ranking Democrat on the House Intelligence Committee, told Business Insider on Thursday that the Bloomberg report was another example of China's long-standing attempts to infiltrate the information structures of the US.

"The report that China sought to infiltrate the computer chip supply chain, if true, is deeply disturbing and the latest example of the lengths that Beijing will go to in order to steal America's official and commercial secrets," Schiff said in a statement.

Here's the full letter from Rubio and Blumenthal:

Dear Mr. Liang,

On October 4, 2018, Bloomberg Businessweek published stunning allegations of sophisticated cyber espionage operations by the Chinese government purported to involve the tampering of computer hardware manufactured and distributed by Supermicro. If this news report is accurate, the potential infiltration of Chinese backdoors could provide a foothold for adversaries and competitors to engage in commercial espionage and launch destructive cyber attacks. As Members of Congress, we are alarmed by any potential threats to national security and have a responsibility to ensure our nation’s sensitive networks are kept safe. We write to request information from Supermicro on these reported attempts to subvert its computer products to spy on the United States.

Bloomberg reported that the Chinese People’s Liberation Army engaged in a sophisticated operation to insert malicious surveillance and data manipulation components onto server motherboards. Chinese intelligence agents reportedly deceived, bribed, and coerced Supermicro’s third-party manufacturers and subcontractors to alter motherboard designs. These added components—while appearing to be innocuous, common chips to an observer—would have been complex backdoors, and could quietly provide the Chinese government the ability to exfiltrate confidential data and bypass security controls on the nation’s most sensitive systems.

According to Bloomberg’s report, the infected servers were found in almost 30 companies, including important financial institutions, government contractors, and technology companies. Moreover, the operation was reportedly not found until Apple and Amazon detected abnormal network traffic and undocumented hardware components in audits of their networks and systems. WhenThe Information reported in February 2017 on Apple’s decision to end its contract with your company, Supermicro’s senior vice-president of technology, Tau Leng, told the publication that malicious firmware from an outside manufacturer was found and committed to an independent investigation.

We note that Supermicro, Apple, and Amazon have issued strong denials regarding the Bloomberg report. However, the nature of the claims raised alarms that must be comprehensively addressed. In The Information’s February 2017 article, Mr. Leng disclosed that “thousands of customers” were using the same hardware. These customers deserve answers immediately. While large tech firms may have the financial resources and expertise to mitigate sophisticated cyber security threats or completely remove affected hardware, most companies do not. Nor do they have the information to act.

We are alarmed about the dangers posed by backdoors, and take any claimed threat to the nation’s networks and supply chain seriously. These new allegations require thorough answers and urgent investigation for customers, law enforcement, and Congress. We ask that you provide responses to following questions by October 17, 2018:

1.)    When did Supermicro first become aware of reports regarding malicious hardware components and firmware in its computers and hardware? Has Supermicro ever found tampering of components or firmware that targeted its products?

2.)    Has Supermicro conducted an investigation of its chain of suppliers to identify any possible modifications or security issues with its products? If it has found tampering, has it severed ties with those suppliers?

3.)    If Supermicro has found or otherwise become aware of unaccounted-for modification on hardware or firmware, has it taken steps to remove the tampered product from the supply chain? 

4.)    When The Information reported in February 2017 that Apple had found compromised firmware, did Supermicro conduct any investigation into the potential infiltration of its supply chain as Mr. Leng had committed to do so? If so, what were the results of this investigation?

5.)    Has Supermicro cooperated with law enforcement in the United States to address such reports? If tampering is found, will you provide a list of potentially affected customers to U.S. authorities and provide information to customers?

6.)    Has Supermicro enacted screening measures or audits to assess its supply chain and detect and mitigate any such attempts to tamper with products?

7.)    If tampering is found, does Supermicro assess that such tampering could be mitigated based on firmware updates, software patches, configuration changes, or operating system defenses?

8.)    Has the Chinese government ever requested access to Supermicro’s confidential security information or sought to restrict information regarding the security of Supermicro’s products? 

Thank you for your attention to these important issues. We look forward to your response.

SEE ALSO: Lawmakers say that China's reported use of a microchip to target tech giants like Amazon and Apple shows the 'lengths that Beijing will go to in order to steal' America's secrets

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The US government appeared to take a shot at Tesla after the company touted the Model 3's safety features (TSLA)

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  • The National Highway Traffic Safety Administration (NHTSA) said in a statement on Tuesday that it does not evaluate vehicle safety beyond its star rating system.
  • The statement was an apparent response to Tesla's claim that its Model 3 sedan gives occupants a lower probability of receiving a serious injury in a crash than any other vehicle tested by the agency.
  • A Tesla representative directed Business Insider to NHTSA data that appeared to support its claim.
  • When asked to comment on Tesla's claims about injury probabilities, the NHTSA directed Business Insider to its statement.

The National Highway Traffic Safety Administration (NHTSA) said in a statement on Tuesday that it does not evaluate vehicle safety beyond its star rating system — an apparent response to Tesla's claim that its Model 3 sedan gives occupants a lower probability of receiving a serious injury in a crash than any other vehicle tested by the government agency.

"A 5-star rating is the highest safety rating a vehicle can achieve. NHTSA does not distinguish safety performance beyond that rating, thus there is no 'safest' vehicle among those vehicles achieving 5-star ratings," the agency said.

A Tesla representative directed Business Insider to a government website that links to a spreadsheet with NHTSA crash-test data. (You can find the spreadsheet here.)

The spreadsheet lists injury probabilities for different collision scenarios associated with 2018 model year vehicles and a cumulative "vehicle safety score" for each vehicle (the combined injury probability for each crash scenario divided by 15%), which the NHTSA calls its "baseline injury risk" in a 2008 edition of the United States Federal Register.

The Model 3 has the lowest "vehicle safety score" of any vehicle on the spreadsheet, which means the NHTSA determined that it presents the lowest risk of injury in its various collision scenarios.

When asked to comment on Tesla's claims about injury probabilities, the NHTSA directed Business Insider to its statement.

In a post on its website, the automaker said Model 3 occupants have less than a 6% chance of suffering a serious injury during a collision. The automaker also said its Model S sedan and Model X SUV have the second and third-lowest injury probability ratings of any vehicle tested by the NHTSA, respectively.

In September, the agency gave the Model 3 a five-star overall safety rating. The Model 3 received a five-star rating in the frontal crash, side crash, and rollover categories, and some of its driver assistance features — like forward collision warning, lane departure warning, crash imminent braking, and dynamic brake support.

The Model S and Model X also received five-star safety ratings from the agency.

Have a Tesla news tip? Contact this reporter at mmatousek@businessinsider.com.

SEE ALSO: Apple, Waymo, and even Amazon will have a huge advantage against Tesla in the race to launch self-driving taxis, one Wall Street analyst says

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Taylor Swift's epic AMAs performance earned her a bleep — and fans loved it

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  • Taylor Swift performed at the 2018 American Music Awards on Tuesday at Los Angeles' Microsoft Theater.
  • The 28-year-old sang "I Did Something Bad," from her latest album "reputation."
  • While singing, one of the lyrics included the word "s---," and ABC bleeped the expletive. 
  • Fans took to Twitter to express their mixed reactions over Swift's song getting bleeped. 

 

Taylor Swift opened the 2018 American Music Awards with her song "I Did Something Bad," and got bleeped for cursing. 

On Tuesday, the 28-year-old appeared on stage at Los Angeles' Microsoft Theater to perform the track from her 2017 album "reputation." In the song, Swift says: "If a man talks s---, then I owe him nothing / I don't regret it one bit, 'cause he had it coming."

During the live show, ABC bleeped the expletive and fans took to Twitter to share their reactions. 

Some praised the performance and applauded the singer for belting out the lyrics.

Others pointed that this is the first time Swift has been bleeped on TV, and said they never thought it would happen to the "Bad Blood" artist.

Even though s--- is considered an explicit word, Twitter users wondered why it was blocked. Additional fans weren't pleased with the removed word.

Watch part of Taylor Swift's AMAs performance below.

Visit INSIDER's homepage for more.

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Tracee Ellis Ross slayed her AMAs opening with a tribute to Cardi B, Beyoncé, and more artists

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Tracee Ellis Ross AMAs 2018

  • American Music Awards host Tracee Ellis Ross took the stage at Los Angeles' Microsoft Theater on Tuesday for an entertaining opening number. 
  • The "black-ish" star lip synced to Cardi B's "Bodak Yellow" and showed off choreographed moves to Childish Gambino's "This Is America," Beyoncé and Jay-Z's "APES---," Aretha Franklin's "Respect," Bruno Mars' "Uptown Funk," and Bey's "Run the World."
  • Ross also jokingly asked Jennifer Lopez how she maintains the stamina to dance for an extended period of time.

 

Tracee Ellis Ross kicked off the 2018 American Music Awards on Tuesday with an energized medley of hits from artists like Beyoncé and Cardi B.

Following Taylor Swift's performance, the "black-ish" star and host of the AMAs took the Microsoft Theater stage in a sparkling outfit. She began by lip syncing to Cardi B's "Bodak Yellow" with a gold grill in her mouth, then showed off her best moves to Childish Gambino's "This Is America," Beyoncé and Jay-Z's "APES---," and Aretha Franklin's "Respect."

She also grooved to Bruno Mars' "Uptown Funk" and Bey's "Run the World."

At one point, Ross appeared out of breath and asked Jennifer Lopez how she maintains the stamina to dance for an extended period of time.

"J.Lo, I don't know how you do that all the time," the 45-year-old said. "I am not a dancer. I think I'm just a lady who moves."

After concluding her opening number, Ross' TV children Miles Brown and Marasi Martin jokingly held up judging paddles with the numbers "three" and "seven" to score her performance. 

"Together that makes a perfect 10," the actress said. "And I had fun, and that's all that matters, because that's what tonight's all about — having fun."

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Caught between Trump and China, Japan is making a small upgrade so its submarines can be quieter for longer

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Japan navy JMSDF submarine sub Oryu Soryu

  • Japan launched its latest Soryu-class diesel-electric attack sub this month, the Oryu.
  • The sub was the first to feature lithium-ion batteries, which store about double the power as previous batteries.
  • The new batteries may help Japan's own defense industry and give Japan an edge in the increasingly crowded waters of the western Pacific.

With more Chinese submarines roaming the Pacific and the Trump administration pushing US-made hardware, Japan is putting into play a new piece of gear that may give its subs an edge at sea and keep its defense firms afloat.

On October 4 in the city of Kobe, Mitsubishi Heavy Industries launched the Soryu-class diesel-electric attack sub Oryu, the 11th sub in the class and the first to be equipped with lithium-ion batteries.

The Oryu has a number of upgrades over previous Soryu-class boats, which are the biggest diesel-electric subs in the world, but the biggest change is the batteries.

Japan navy JMSDF submarine sub Oryu Soryu

Diesel-electric subs use power from their diesel engines to charge their batteries, which they switch to during operations or in combat situations in order to run quietly and avoid detection.

The lithium-ion batteries in the Oryu — which store about double the power of the lead-acid batteries they replace — extend the range and time the sub can spend underwater considerably.

Mitsubishi turned to Kyoto-based firm GS Yuasa to produce the new batteries.

The latter company said in February 2017 that Japan would be the first country in the world to equip diesel-electric attack subs with lithium-ion batteries, putting them on the final two boats in the Soryu class: the Oryu, designated SS 511, and its successor, designated SS 512.

Japan navy JMSDF submarine sub Oryu Soryu

Previous Soryu-class subs used two Kawasaki diesel generators and two Kawasaki air-independent propulsion engines. (AIP allows nonnuclear subs to operate without access to atmospheric oxygen, replacing or augmenting diesel-electric systems.)

Both platforms have a top speed of 12 knots, or about 14 mph, on the surface and of 20 knots, or 23 mph, while submerged, according to Jane's.

Soryu-class subs are outfitted with six tubes in their bow that can fire Japan's Type 89 heavyweight torpedo. They can also fire UGM-84C Harpoon medium-range anti-ship missiles against targets on the surface.

Construction started on the 275-foot-long Oryu — which displaces 2,950 metric tons on the surface and 4,100 metric tons underwater — in March 2015. It's expected to enter service with Japan's Maritime Self-Defense Force in March 2020.

Under pressure

A Japanese Maritime Self-Defense Force (JMSDF) submarine Wakashio surfaces off the water during a fleet review off Sagami Bay, south of Tokyo, Japan, Sunday, Oct. 14, 2012.

The Oryu's launch comes as Japan's military and defense industry face pressure from two vastly different sources.

The Trump administration has been pushing Japan to buy more US military hardware, which Trump sees as a way to cut the trade imbalance between the two countries.

Japan, which has tried hard to court Trump, has beefed up its purchases of US-made gear. Tokyo spent about $3.5 billion through the US's Foreign Military Sales program in the most recent fiscal year, after never spending more than about $880 million a year through fiscal year 2011, according to Nikkei Asian Review.

Those acquisitions have helped Japan get sophisticated US hardware but have been of little benefit for Japan's defense industry, which has struggled to export its own wares. Additional purchases from the US are likely to leave Japanese firms with fewer orders.

Facing pressure from US military imports and with Chinese and South Korean firms gaining an edge in commercial shipbuilding, subs are the only outlet left for Japanese heavy industry, which has specialized technology and strong shipbuilding infrastructure, according to Nikkei.

Chinese submarine in Senkaku waters

The Oryu also launches amid rising tensions in the East and South China Seas, where a number of countries have challenged Beijing's expansive claims and aggressive behavior.

China has put "growing emphasis on the maritime domain," the Pentagon said earlier this year. Beijing can now deploy 56 subs — 47 of which are believed to be diesel or diesel-electric attack boats. That force is only expected to grow.

While those subs need to surface periodically, they can still operate quietly and strike with long-range anti-ship missiles — capabilities that likely weigh on the minds of US and Japanese policymakers.

Of particular concern for Tokyo is Chinese submarine activity in the East China Sea, around the Senkaku/Diaoyu Islands, which Japan controls but China claims.

In January, a Chinese Shang-class nuclear-powered attack sub was detected in the contiguous zone around the islands — the first confirmed identification of a Chinese sub in that area. The presence of a concealed sub was seen by Japan as a much more serious threat than the presence of surface ships, and Tokyo lodged a protest with China.

Japan is using its own subs to challenge Beijing.

In September, JMSDF Oyashio-class attack sub Kuroshiro joined other Japanese warships for exercises in the South China Sea — the first time a Japanese sub had done drills there, the Defense Ministry said.

The drills, done away from islands that China has built military outposts on, involved the Japanese sub trying to evade detection.

SEE ALSO: US submarines are better than China's 'by far' — but in a war that may not matter

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'SNL' star Taran Killam's jaw literally dropped during Cardi B's AMAs performance – and fans can relate

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  • Cardi B performed her single, "I Like It," with Bad Bunny and J Balvin during the Tuesday broadcast of the American Music Awards from Los Angeles' Microsoft Theater on ABC.
  • The performance provided viewers with a lot of dynamic elements.
  • "Saturday Night Live" star Taran Killam's expression while watching the performance became the ideal image of how viewers felt.

Cardi B performed during Tuesday's broadcast of the "American Music Awards" from Los Angeles' and left quite the impression on "Saturday Night Live" star Taran Killam.

The New York-raised rapper hit the stage with her newest single, "I Like It," alongside Bad Bunny (who was wheeled out in a shopping cart) and J Balvin.

Decked out in Mardi Gras colors, Cardi B pulled out all the stops. Fans loved when she pulled off her skirt to proudly reveal her fit body after giving birth to her daughter, Kulture Kiari Cephus, in July. At another point, she rode past us on a bicycle, and she also showed off her flexibility by pulling her leg up to her head.

Killam's face became the perfect expression for the performance.

Cardi B tied with Drake for the top-nominated AMA artist this year with a total of eight nominations, including New Artist of the Year. Currently, she had already nabbed the award for rap/hip hop artist.

Watch part of Cardi B's AMAs performance below.

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Sears is said to be inching closer to bankruptcy and a filing could come as soon as this week, report says

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Sears

  • Sears has hired advisors to help the company prepare for bankruptcy, The Wall Street Journal reported on Tuesday.
  • The struggling retailer is bringing in M-III Partners to put together a bankruptcy filing that could land as early as this week, The Journal reported citing people familiar with the plans.
  • Sears has been losing money and closing stores for years, in part because of an e-commerce boom that has seen companies like Amazon dominate the retail market.
  • The company has a $134 million debt payment due on Monday. M-III Partners is said to have been working on the potential bankruptcy filing for a few weeks, according to The Journal.

Sears has hired advisors to help the company prepare for a possible bankruptcy, The Wall Street Journal reported on Tuesday.

The struggling retailer is bringing in M-III Partners to put together a bankruptcy filing that could land as early as this week, The Journal reported citing people familiar with the plans.

Sears has been losing money and closing stores for years, in part because of an e-commerce boom that has seen companies like Amazon dominate the retail market. The company in May got a small boost in its share price on news that it was partnering with Amazon to provide automotive services to Amazon customers at Sears locations.

Despite this, the outlook for Sears has been dismal. The company is staring down a $134 million debt payment due on Monday.

M-III Partners is said to have been working on the potential bankruptcy filing for a few weeks, according to The Journal's sources who say the company is considering other options as well.

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Taylor Swift uses her record-breaking AMAs win to continue her political message

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taylor swift AMAs 2018

  • Taylor Swift became the most decorated female artist in the history of the American Music Awards with her wins on Tuesday at Los Angeles' Microsoft Theater.
  • While accepting the award for artist of the year, Swift once again urged fans to vote during the upcoming midterm elections. 
  • "I just wanted to make a mention of the fact that this award and every single award given out tonight were voted on by the people," the singer said. "And you know what else is voted on by the people? It's the midterm elections on November 6. Get on and vote."

 

Taylor Swift made history at the 2018 American Music Awards on Tuesday, and she took a moment to encourage fans to exercise their right to vote.

The singer racked up wins for favorite pop/rock album for "reputation," tour of the year, and artist of the year. Her awards also led her to become the most decorated female artist at the AMAs, with 22 trophies. As of now, the show has yet to announce whether she won a 23rd in the favorite female artist - pop/rock category. Whitney Houston previously held the record with 21.

Upon receiving the biggest honor of the night and thanking fans for their support, Swift — who recently broke her silence and endorsed Democrats from Tennessee — urged viewers to get involved in politics.

"I just wanted to make a mention of the fact that this award and every single award given out tonight were voted on by the people," the 28-year-old said at Los Angeles' Microsoft Theater. "And you know what else is voted on by the people? It's the midterm elections on November 6. Get on and vote. I love you guys."

Recently, Swift took to Instagram with a lengthy message about her political views. In her photo caption, she admitted that she has been "reluctant to publicly voice my political opinions, but due to several events in my life and in the world in the past two years, I feel very differently about that now."

The singer added: "I always have and always will cast my vote based on which candidate will protect and fight for the human rights I believe we all deserve in this country."

Swift went on to say that she will be voting for Phil Bredesen for Senate and Jim Cooper for House of Representatives, and encouraged followers to register to vote. 
"Please, please educate yourself on the candidates running in your state and vote based on who most closely represents your values," the "Bad Blood" singer added. "For a lot of us, we may never find a candidate or party with whom we agree 100% on every issue, but we have to vote anyway."

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'I just can't leave now': Trump shelves summit with North Korea's Kim Jong Un until after the midterms

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  • President Donald Trump says he's shelving the idea of a second summit with North Korean leader Kim Jong Un until after the midterm elections.
  • "I just can't leave now," Trump said to reporters on Tuesday.
  • The November election is expected to a pivotal moment, both in Trump's presidency and in both the Senate and the House of Representatives., because Democrats could flip a number of seats currently held by Republicans, potentially reclaiming the majority.
  • Trump had positive words about Kim after his June summit with the North Korean leader in Singapore. The president said the second meeting could happen at his Mar-a-Lago estate in Florida.

President Donald Trump says he's shelving the idea of a second summit with North Korean leader Kim Jong Un.

"It'll be after the midterms," Trump told reporters aboard Air Force One on Tuesday. "I just can't leave now."

The November election is expected to a pivotal moment, both in Trump's presidency and in both the Senate and the House of Representatives., because Democrats could flip a number of seats currently held by Republicans, potentially reclaiming the majority.

Earlier on Tuesday, Trump touted what he called "incredible" progress on US-North Korean relations, as evidenced by Secretary of State Mike Pompeo's recent trip to Pyongyang — his fourth trip since becoming secretary of state.

Pompeo said Kim would allow international inspectors to observe Punggye-ri, a North Korean nuclear test site; and the Sohae missile engine test facility "as soon as we get it logistically worked out."

"You got no rockets flying, you have no missiles flying, you have no nuclear testing," Trump said at the White House. "We've made incredible progress — beyond incredible."

"But I have agreed to meet," Trump added. "We have a very good relationship with Chairman Kim. I like him, he likes me, the relationship is good."

Trump held his first meeting with Kim in Singapore on June 12, marking the first summit between a sitting US president and a North Korean leader. While Trump described Singapore's summit as "great," he floated the possibility of hosting the second meeting in the US, including his Mar-a-Lago estate.

"He'd probably like that," Trump said of the idea. "I'd like that, too. I think it would be good. But we'll see. We're talking about three or four different locations. Timing — won't be too far away."

"I don't want to embarrass anybody by asking," Trump added. "I think eventually we're going to have lots of meetings on US soil and on their soil, by the way."

SEE ALSO: 16 pictures show North Korea's grand performance at the Mass Games, where South Korea's president gave his first speech directly to North Koreans

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Lululemon founder Chip Wilson describes how he made the company's ex-CEO cry, slams Under Armour, and insults Diet Coke-drinking women, in a new tell-all book (LULU)

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Chip Wilson Lululemon founder

  • Lululemon founder Chip Wilson has published a tell-all ebook that eviscerates the company's current and former directors and chief executives.
  • In the book, titled "Little Black Stretchy Pants," Wilson writes that Lululemon "self-imploded" by allegedly lowering investments in quality control and focusing too heavily on strategies that would drive up the company's stock price.
  • He claims that he told ex-Lululemon CEO Christine Day in a meeting that she was a "world-class chief operations officer" but a "terrible CEO" and alleges that she "fake" cried in response.
  • Wilson rails against the term "athleisure," saying it denotes a "non-athletic, smoking, Diet Coke-drinking woman in a New Jersey shopping mall wearing an unflattering pink velour tracksuit."


Lululemon founder Chip Wilson has published a tell-all ebook that eviscerates the company's current and former directors and chief executives, as well as the media and Wall Street analysts.

In the book, titled "Little Black Stretchy Pants," Wilson writes that Lululemon "self-imploded" when its executives, and particularly former CEO Christine Day, allegedly focused too much on driving up the company's stock price and in turn, lowered investments in quality control.

This strategy, Wilson claims, ultimately led to Lululemon's catastrophic 2013 recall of 17% of its pants for being too sheer, which cost the company about $60 million. 

"A lifetime of research into how to make best-in-the-world non-transparent black stretch pants all came undone in an instant," Wilson writes in the new ebook. "The sheerness issue was our fault, plain and simple. I was mortified for Lululemon."

Wilson addresses a variety of other surprising and somewhat unpopular opinions and topics throughout the book, including his tacit support for child labor and his belief that the birth control pill led to higher divorce rates and breast cancer.

Here are some of the most interesting highlights:

SEE ALSO: The founder of Lululemon is now one of the 500 richest people in the world

Wilson addresses his 2013 interview with Bloomberg, in which he said Lululemon pants "don't work" for some women's bodies. Wilson writes that the "catastrophic" interview "ruined" him.

When asked in 2013 why customers were complaining that their pants were pilling, Wilson told Bloomberg TV: "Frankly some women's bodies just don't actually work for it."

He went on to say: "They don't work for some women's bodies ... it's really about the rubbing through the thighs, how much pressure is there over a period of time, how much they use it."

His remarks were widely condemned.

"With those words and that sound bite, I was ruined," he writes in the new book. "From the Bloomberg moment on, nothing would be the same. My comments were the antithesis of everything I stood for, and of everything the women of Lululemon and I had built. The ramifications for the company, for my family, and for everyone involved were catastrophic. I made a mistake, and I was going to pay heavily for it."

In the aftermath of the interview, Lululemon's board of directors painted him as the "weird uncle," he told Business Insider in an interview. 

This gave the board the power to shift the conversation from quality issues to a "wildcard founder" who was sinking the ship, he said.



But Wilson still stands by his belief that pilling problems with Lululemon's leggings were caused by women squeezing into pants that were too small.

Wilson writes that his comments were misinterpreted and "what was simple was made scandalous."

"With the pilling, what I eventually discovered was that some women were buying the pants two to four sizes smaller than necessary, with body shaping in mind," he writes. "If enough stress is placed on any object, fractures will occur."



Wilson also suggests that The New York Times might have accepted a bribe in return for publishing a negative story about Lululemon in 2007.

The Times wrote a story in 2007 accusing Lululemon of making false claims that its clothing contained seaweed. The story cited lab testing as evidence that the claims were false. 

"When I read it, my first thought was that it was mean-spirited," Wilson recalls in the book. "Lululemon was all about love so I couldn't imagine why someone would ever write something like that."

Wilson says he wouldn't doubt that a short-seller paid the Times to write the story.

If "short sellers want to ensure profits, then the smart ones will manufacture a false story that will impact the stock," Wilson writes. "There is so much money to be made I wouldn't doubt a backroom payoff to the writer."



See the rest of the story at Business Insider

Toys R Us is hinting at a post-bankruptcy revival and some former employees are not happy about it

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An image of people protesting Toys R Us in New York City

  • Some former Toys R Us employees say they're upset that the toy chain likened its bankruptcy to a vacation.
  • Toys R Us posted a tweet on October 6 featuring a picture of the company mascot, Geoffrey the Giraffe, holding a suitcase, saying that the iconic mascot had returned from traveling the world, signaling the company's plans to relaunch the brand.
  • Some of those former employees have accused the company's investors of profiting from the bankruptcy while failing to pay into a fund intended to help affected employees.

Toys R Us signaled that it could make a comeback using its mascot, Geoffrey the giraffe in a message posted on Twitter last weekend.

"He's been traveling across the globe for the past few months but now #GeoffreysBack and once again ready to set play free for children of all ages," the tweet reads in part.

News of the potential comeback follows a press release from Geoffrey LLC, the company that holds Toys R Us' intellectual property, announcing that its existing lenders would acquire the company's assets.

Some former Toys R Us employees have sounded off about the plan, and the image of its corporate mascot having been on vacation. The company in January announced the closure of all of its US stores, affecting some 31,000 employees. The impact was so great, it delivered a blow to the US jobs report in August.

"They're saying Geoffrey went on vacation. We certainly did not go on vacation," Sarah Woodhams, who worked for Toys R Us for seven years, told The Washington Post

The Post, citing the retail advocacy group Rise Up Retail, reported that workers are still owed $75 million in severance pay.

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'They've got some explaining to do': The case of a missing Washington Post columnist raises more questions after reports suggests he was murdered by Saudi agents

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Jamal Khashoggi

  • The case surrounding Jamal Khashoggi, the missing Washington Post columnist who disappeared after entering a Saudi consulate in Istanbul, raised more concerns after mounting evidence suggested he was murdered.
  • Khashoggi, a Saudi journalist, published write-ups that were critical of the Saudi government. He had been living in the US state of Virginia.
  • A team of 15 Saudis who flew in from Saudi Arabia to visit and leave the consulate on the same day of Khashoggi's disappearance is suspected of playing a role in his disappearance, people familiar with the investigation said in a Washington Post report.
  • US intelligence officials reportedly intercepted communications that the Saudis discussed a plan to lure and capture Khashoggi before his disappearance.
  • When asked for video footage on Khashoggi, Saudi officials reportedly told Republican Sen. Bob Corker of Tennessee that they "only livestream their tapes."
  • The Saudi government asserted that Khashoggi left the premises shortly after his visit.

The case surrounding the missing Washington Post columnist who disappeared after entering a Saudi consulate in Istanbul, Turkey, raised more concerns in the US after mounting evidence suggested he was murdered during the visit.

Jamal Khashoggi, 59, has not been heard from his fiance nor coworkers after his disappearance on October 2. Khashoggi, a Saudi journalist, published critical pieces of the Saudi government and exiled himself to Virginia.

Turkish officials launched an investigation and claim that the evidence already suggests Khashoggi entered but never left the consulate. A team of 15 Saudis who flew in from Riyadh, the capital of Saudi Arabia, to visit and leave the consulate on the same day of his disappearance is suspected of playing a role, people familiar with the investigation said in a Washington Post report published Tuesday.

US intelligence officials reportedly intercepted communications that the Saudis discussed a plan to lure and capture Khashoggi before his disappearance, a person familiar with the situation said in The Post. The Post's source added it was unclear how the Saudi's planned on handling Khashoggi after receiving him or if the US warned him that he was targeted.

The Post's report follows Defense Secretary James Mattis's remarks about Khashoggi's disappearance, in which he suggested the US was keeping track of the developments.

"We're monitoring this very closely, this situation very closely, and we are working closely with [the] State Department," Mattis said.

Republican Sen. Bob Corker of Tennessee, chairman of the Senate Foreign Relations Committee expressed concern after reviewing classified reports on the situation.

"It points to the idea that whatever has happened to him, the Saudis — I mean, they've got some explaining to do," Corker said in a Daily Beast report.

bob corker

Corker described his talks with Khalid bin Salman, the Saudi ambassador to the US, as "not a great conversation," and asked to show him video footage of him leaving the consulate.

"He shared with me that they only livestream their tapes,"Corker said, according to CNN correspondent Manu Raju. "I've never heard of an embassy in my life that doesn't tape."

"And so to me it feels very much like some nefarious activity has occurred by them," Corker added, according to The Beast. "But I don't want to rush to judgment."

The Trump administration has been criticized for not taking a firmer stance against Saudi Arabia and its leader, Crown Prince Mohammed bin Salman, who has vigorously campaigned to convince other nations of its progressive reforms.

On Tuesday, Secretary of State Mike Pompeo said his department called on Saudi Arabia to "support a thorough investigation ... and to be transparent about the results."

"We have seen conflicting reports on the safety and whereabouts of prominent Saudi journalist and Washington Post contributor Jamal Khashoggi," Pompeo said in a statement. "‎As the President has conveyed, the United States is concerned by his disappearance.

But the Saudi government asserted Khashoggi left the premises shortly after his visit and claimed they too were worried for him.

"I would normally prefer not to address such outrageous claims, especially when it concerns the well-being of a missing citizen who dedicated a great portion of his life to serve his country," Khalid bin Salman said in a statement. "It goes without saying that his family in the Kingdom remain gravely concerned about him, and so are we.

"Jamal has many friends in the Kingdom, including myself, and despite our differences, and his choice to go into his so called 'self-exile,' we still maintained regular contact when he was in Washington," Khalid bin Salman added.

SEE ALSO: A Saudi Arabian journalist is missing and Turkey believes he was brutally murdered by his own government

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The 10 most important things in the world right now

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Nikki Haley.

Hello! Here's what's happening on Wednesday.

1. US President Donald Trump says he's shelving the idea of a second summit with North Korean leader Kim Jong Un until after the US midterm elections"I just can't leave now," Trump told reporters.

2. Nikki Haley resigned as US ambassador to the UNHaley also shot down rumors of a 2020 presidential run.

3. The wife of disappeared former Interpol chief Meng Hongwei says Chinese agents threatened her over the phone. Hongwei went to China on September 29 and hasn't been heard from since, prompting concerns for his safety.

4. CCTV footage from the Saudi consulate in Turkey has vanished, following the disappearance of journalist Jamal Khashoggi. Staff members were also told to go home on the day Khashoggi visited, leading to speculation that Riyadh was behind his disappearance. 

5. Leaked transcripts from Google reveal the company is actively working on a censored Chinese search engineGoogle's privacy chief Keith Enright previously said the company is "not close to launching a product in China" amid backlash.

6. A Venezuelan politician jailed for his alleged involvement in a suspected assassination attempt on President Nicolas Maduro died under mysterious circumstancesVenezuela’s government said Fernando Alban killed himself but his party asserts that he was murdered by the government.

7. Hurricane Michael is predicted to be a major Category 4 storm, and it's still strengthening as it approaches Florida's Gulf Coast. Hurricane warnings are in effect in Florida from the Alabama border to the Suwannee River.

8. Softbank may make a $15 billion to $20 billion investment in coworking space company WeWorkSoftBank's technology-focused Vision Fund already made a $4.4 billion investment in WeWork last August, giving it a 20% ownership stake in the company.

9. The Australian government has pledged to continue to back coal, despite environmental risksThe move follows a major UN report which said reducing coal consumption was critical to reducing global warming.

10. Coca-Cola, Pepsi, and Nestle are the top producers of global plastic waste, according to Greenpeace. The environmental group found Coke-branded trash in 40 of the 42 countries it inspected.

And finally...

I've been traveling the world for 6 months, and I've found real life doesn't always live up to the hype. These are the most disappointing places I've been.

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'You listen, but you don’t speak:' Wife of missing former Interpol chief says Chinese agents threatened her over the phone

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meng hongwei interpol

  • The wife of Meng Hongwei, the former Interpol chief who disappeared and abruptly "resigned" from his post, says she received a call from Chinese agents threatening her safety. 
  • Speaking to Associated Press, Grace Meng said a mysterious Chinese caller told her: "We’ve come in two work-teams, two work-teams just for you."
  • She says the man claimed he knew where she was. The threatening call prompted authorities to place her under police protection. 
  • She told AP that speaking publicly about her husband's fate risks retaliation from China and puts her "in great danger."

The wife of Meng Hongwei, the former Interpol chief who disappeared and abruptly "resigned" from his post, says she received a call from Chinese agents threatening her safety. 

Speaking to Associated Press on Monday from a hotel in Lyon, France where she lives, Grace Meng says she had just put her two boys to bed when a mysterious call came through on her cell phone. 

"You listen, but you don’t speak," the man, speaking in Chinese, told Meng. "We’ve come in two work teams, two work teams just for you."

Meng said the man revealed that he used to work for Meng, leading to the belief that he was part of China's security apparatus. 

"Just imagine: My husband was missing, my kids were asleep, all my other phones weren’t working, and that was the only call I got," she told AP. "I was so frightened."

meng hongwei wife

She says the man added that he knew where she was. The threatening call prompted authorities to place her under police protection. 

A French judicial official confirmed to AP that police are investigating the threats made against Meng, though it is unclear if Chinese agents had been sent to Lyon to monitor her. 

Meng says she has not heard from her husband since September 25 after traveling from France to China. The last text she received from him was an emoji of a knife, possibly to warn her that he was in danger, the Associated Press said.

Interpol has been vague on the details of Meng Hongwei's whereabouts. On Sunday, Interpol posted a statement on Twitter, saying Meng had resigned as president of the agency's executive committee "with immediate effect," though it did not provide reason why. 

China's China's Central Commission for Discipline Inspection gave a terse statement on its website on Sunday night: "Meng Hongwei, deputy minister of the Ministry of Public Security, is suspected of violating the law and is currently under the supervision of the State Supervision Commission."

Mrs. Meng denied the allegations on behalf of her husband and offered to make their bank accounts public. 

She told the AP that speaking publicly about her husband's fate risks retaliation in China and puts her "in great danger."

Meng appears to have gotten caught in China's widespread anti-corruption effort

Xi Jinping

Details of Meng's alleged violations are not clear, but his detention appears to be part of a far-reaching "anti-corruption drive" promulgated by President Xi Jinping amid his moves to consolidate power.

Several prominent military leaders, politicians, and celebrities have been targeted in the graft. Meng previously served as China's vice minister of public security.

China has been accused of engaging in global espionage, and recent reports indicate that China appears to be engaging in a large-scale operation to forcibly repatriate its citizens to China, notably individuals with money or political power.  

In January 2017, Xiao Jianhua, a Chinese-Canadian billionaire, was believed to have been kidnapped from his luxury apartment in Hong Kong sent back to mainland China, after men were captured on security cameras at the building rolling him away in a wheelchair with his head covered.

In 2005, Chen Yonglin, a Chinese diplomat who defected to Australia, claimed kidnappings in Australia were carried out at least once a year. Chen also said security forces drugged and kidnapped the son of a former Chinese official and sent him back to China via a shipping vessel, though Australian officials and the alleged victim reportedly deny the claims.

Alexandra Ma contributed to this report. 

SEE ALSO: China says it detained missing Interpol chief over bribery allegations as wife claims 'political persecution'

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The 21-year-old who built a robot lawyer to fight parking tickets has a new tool to help you automatically sue companies who get hacked (FB, TWTR)

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joshua browder

  • Automated legal tool DoNotPay is trying to help people lock down their online privacy settings and sue companies that get hacked.
  • Created by 21-year-old entrepreneur Joshua Browder, DoNotPay started out by helping users challenge parking tickets.
  • It has since expanded into more than a thousand new areas, from getting flight discounts to assisting with landlord disputes.

First Joshua Browder went after parking tickets, building a bot that helped hundreds of thousands of users challenge their fines.

Then, the 21-year-old student broadened his focus, expanding into everything from landlord disputes to chasing compensation for lost luggage on flights.

In 2018, Browder  took aim at Equifax after a data breach exposed the personal data the firm held on tens of millions of Americans, and his app DoNotPay was used to help file 25,000 lawsuits against the company.

The British entrepreneur is now expanding into privacy and data security. On Wednesday, he announced that DoNotPay will now help users easily lock the privacy settings on their social media accounts — and help sue those companies that expose users' data through hacks and breaches.

"My data was hacked and sold by Cambridge Analytica," he told Business Insider in an email, referring to this year's Facebook security scandal. "At the time, it seemed like data breaches were uncommon. However, in the past year, it has become the most requested feature to add to DoNotPay.

"The mistakes companies like Equifax are making, such as not encrypting data, are mistakes a high school Computer Science student would avoid. I want to punish these companies for their incompetence and protect people from having their data sold."

So how does DoNotPay work?

DoNotPay is a tool that provides automated, free legal assistance. The user writes in what they need help with, and they're then asked relevant questions before being given appropriate documentation or guidance on how to tackle their problem — from flight refunds to maternity leave requests — sidestepping the need for traditional (and costly) legal guidance.

There's two strands to Wednesday's update. The first is focused on privacy, and helps users lock down their accounts from prying eyes. It automatically makes a series of what Browder calls "no brainer" changes to users' settings on Facebook, Instagram, and Twitter — like disabling personalized Twitter ads, deleting your call and text history from Facebook, and stopping other accounts seeing when you're online on Instagram.

Google will also be added soon "in light of the recent issues," Browder said, referring to this week's disclosure of a security lapse in the Google+ social network.

The second part is all about hitting back at services that have been hacked, exposing users' data. Using HaveIBeenPwned, a service that lets users know if apps and platforms they use have been hacked, DoNotPay will tell users if they've been compromised — then help the affected user sue the company in question, if they desire.

"By providing these services, anyone who can follow simple instructions can now get justice and protect their data," Browder said. "It seems like the only people who are benefitting from data breaches are a handful of lawyers. I hope to replace them all and bankrupt any company that is careless with user data."

Originally from the UK, Browder was a student at Stanford University in California and now works full-time on DoNotPay. His startup has raised $1.1 million in funding from venture capital firms including Andreessen Horowitz.

Got a tip? Contact this reporter via Signal or WhatsApp at +1 (650) 636-6268 using a non-work phone, email at rprice@businessinsider.com, WeChat at robaeprice, or Twitter DM at @robaeprice. (PR pitches by email only, please.) You can also contact Business Insider securely via SecureDrop.

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10 things in tech you need to know today

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Google Pixel 3

Good morning! This is the tech news you need to know this Wednesday.

  1. Google launched a slew of new hardware products on Tuesday, including its latest flagship smartphones, the Pixel 3 and Pixel 3 XL. There was also a new tablet, the Pixel Slate, and a new Google Home speaker.
  2. Bloomberg has doubled down on its reporting that China compromised server firm Supermicro in a major supply chain hack. Bloomberg reported that an unnamed US telecoms firm found and removed compromised hardware, citing security expert Yossi Appleboum.
  3. Google's plan to launch a censored search engine in China is further along than the company is admitting, according to a leaked transcript obtained by The Intercept. Publicly, the company has said the plans are not very developed, but executive Ben Gomes said in a private meeting the firm wanted to be able to quickly deploy the search engine.
  4. SoftBank is in talks to invest $15 billion to $20 billion in WeWork for a majority stake. The potential deal would effectively give Japan's SoftBank control of the fast-growing office sharing company.
  5. More than a dozen high profile tech executives, including famous venture capital investor Marc Andreessen and former Uber CEO Travis Kalanick are part of a newly announced advisory panel for a $500 billion Saudi mega-city project. The panel was announced as much of the focus on Saudi Arabia turns towards the fate of a Saudi dissident who disappeared after entering the Saudi consulate in Istanbul.
  6. Uber drivers staged their first multi-city strike in the UK in a sign that their anger over 'exploitation' is getting harder for Uber to ignore. Around 1,000 drivers were expected to strike, and they requested users not to cross the "digital picket line" by ordering a cab from the app.
  7. A bipartisan pair of senators want more answers from Supermicro, the company accused of selling Apple and Amazon data servers compromised by Chinese spies. Sens. Marco Rubio and Richard Blumenthal sent a letter to Supermicro, the motherboard supplier named in recent bombshell Bloomberg reports on Chinese infiltration.
  8. Microsoft thinks it has a fix for the glitch in a huge new Windows 10 update that was deleting people's personal files. Microsoft says that the issue only affected one one-hundredth of one percent of people who had installed the update.
  9. At least two US attorneys general are investigating the Google glitch that exposed hundreds of thousands of users' personal dataThe investigation follows Google's announcement on Monday that it would shut down the consumer version of its social network Google+ and tighten its data-sharing policies after a "bug" potentially exposed user data.
  10. There was already a big clue that Google+ was dead before Google announced its shutdown this week: its executives stopped using it at least a year ago. Cofounder Larry Page last posted in 2015, CEO Sundar Pichai in 2016, and cofounder Sergei Brin as recently as September 2017.

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A ticking time bomb in China has global markets looking really shaky right now

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China tug of war

  • Global markets are jittery in recent days as fears about growth in China take hold.
  • "The larger the stimulus used by China to offset the trade war impact, the bigger will its deficit likely be," Tao Wang, UBS's chief China economist, said in a report on Tuesday
  • Markets are also worried about the ongoing Italian debt crisis, and the rising price of oil.

Trouble is brewing in global markets. Look no further than China. 

China's current account balance is down significantly from last year's 1.3% and will likely turn into a small deficit in 2019. If so that would be the first time in 24 years.

"The larger the stimulus used by China to offset the trade war impact, the bigger will its deficit likely be," UBS's Tao Wang, chief China economist, said in a report on Tuesday.

That may hurt confidence and hasten outflows, putting pressure on the nation's currency. 

"Although CNY depreciation can partially offset trade war impact, a large depreciation will likely hurt domestic confidence, trigger panic outflows and risk financial stability," UBS said. 

In the US stock market, Morgan Stanley says a bear market correction could arrive in 2019, sooner than markets currently expect.

After years of monetary stimulus and a short-term boost from the Trump administration’s tax cuts, more rate rises and lower bond prices will ultimately bring the US economy to a halt. But "before this occurs, it appears we will get a final spike higher," in yields, Morgan Stanley says.

The IMF lowered its outlook for the global economy, saying it will grow 3.7% this year, the same as in 2017 but down from the 3.9% it was forecasting for 2018 in July.

China has accepted its fate: Beijing is coming to terms with a lower rate of growth as the trade war with the US escalates, Barclay's chief China economist, Jian Chang, told CNBC. Tit-for-tat tariffs and reduction in Chinese export growth might trim between 0.5% to 1% off the Chinese economy, she said.

China's issues are leading major banks to question the strength of its stock market, with JPMorgan cutting its outlook on the country's equities from overweight to neutral last week.

The bank thinks the trade war brewing between Beijing and the Trump administration will have a negative impact on China's economy and, as a result, hit stocks.

"Total impact on China's GDP growth is 1.0%, if China does not take countermeasures," a team of JPMorgan analysts wrote.

Italy is also troublesome

Italy flag jets

Away from China and the USA, issues in Europe are also partly to blame for market jitters sweeping the globe. After a few months out of the limelight, Italy has sprung back to the forefront of investor concerns.

Last week, Italy submitted its spending plans for the next year to the EU. The budget came as a shock: The country said it planned to spend a whopping 2.4% more than it makes over the next three years.

This target risked breaching EU rules. Investors balked, sending the country's bond risk premium higher, and the euro tumbling.

Italy's longstanding high levels of debt are well-known, but previous governments had all at least paid lip service to the idea that they would reduce that debt. The current populist coalition is barely even doing that, and this is scaring people.

What's worse is that this week, research from Nomura suggestedit could be decades before Italy can rein in its government debt to a level that meets European Union rules.

It's not just China and Italy that are worrying investors though.

Oil is also driving market concerns, with throttled output from major producers threatening to push prices even higher, and drag down total economic growth.

A combination of low output from OPEC producers coupled with looming sanctions from the USA against Iran has pushed up prices for oil in recent months, sending it to a more than four year high.

High oil prices tend to stunt economic growth, particularly in developing markets where increasing oil consumption is a key driver of rapid growth. The current situation, which sees Brent crude oil, the international benchmark, trading above $84 is particularly troubling, and was described as a "risky situation" by one of the most powerful people in the market this week.

"We should all see the risky situation, the oil markets are entering the red zone,"Fatih Birol, the executive director of the International Energy Agency (IEA) said on Tuesday. Birol appealed for OPEC producers to increase output, warning that failing to do so will make for a "very, very challenging" end to the year.

SEE ALSO: Britain could be forced to increase government spending in a no-deal Brexit, IMF says

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10 foods you didn't know that you could eat raw

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steak tartar

If you've ever had sushi, you know that eating raw fish won't make you sick under the right circumstances.

And it turns out it's not the only food that you can eat uncooked, as long as it's prepared correctly. 

Here are 10 more foods that you may not have realized you could eat raw.

Wild rice doesn't have to be boiled.

You probably grew up making rice by cooking it in a pan of boiling water, but when it comes to wild rice boiling it isn't necessary.

Wild rice, which is technically a grass, not rice, can be eaten raw after soaking it in a couple cups of water for two-three days. According to the vegan blog The Full Helping, you can tell when the grain is ready to be eaten when it becomes chewy.



Many recipes call for raw zucchini​.

From spinach to broccoli to mushrooms, most vegetables are eaten raw almost as often as they are cooked. Zucchini, on the other hand, isn't sliced up and added to a salad as often as say cucumbers or carrots. Yet, there's no reason it shouldn't be.

Raw zucchini can be used for cold pasta dishes or salads. 



Rhubarb doesn't only exist cooked into pies.

The next time you're whipping up a pie or dessert that calls for rhubarb, don't be afraid to give it a nibble before adding it to the recipe.

But, for starters, make sure to take the leaves off first as they can be poisonous.

Once the leaves are removed, Smithsonian Magazine recommends dipping a raw rhubarb stalk in sugar, honey, or maple syrup. You can also chop it up and add it to yogurt.  



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Elon Musk has to step down as the chairman of Tesla's board — here are 8 people who could replace him (TSLA)

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al gore

  • As a result of a settlement with the Securities and Exchange Commission (SEC), Tesla CEO Elon Musk will have to step down as the chairman of the automaker's board of directors for three years.
  • Tesla's board has been criticized for failing to hold Musk accountable for erratic behavior that has at times caused the company's stock price to fall.
  • The Financial Times reported on Wednesday that current Tesla director James Murdoch is the leading candidate to become the board's next chairman.
  • Other possible candidates include Al Gore, Warren Buffett, and Alan Mulally.

 

As a result of a settlement with the Securities and Exchange Commission (SEC), Tesla CEO Elon Musk will have to step down as the chairman of the automaker's board of directors for three years. Musk has held the position since the automaker was founded in 2003.

The settlement came after the SEC filed a lawsuit against Musk, accusing him of making "false and misleading statements" in August about the possibility of taking Tesla private. Musk said he was "deeply saddened and disappointed" by the lawsuit, which he called "unjustified," but it may end up working in Tesla's favor.

Musk has received criticism for his erratic behavior this year, which has included joking about the company's financial situation, sparring with Wall Street analysts on an earnings call, accusing a British diver of being a pedophile without offering evidence, and even taking aim at the SEC just four days after his settlement with the government agency.

A company's board of directors is supposed to oversee its management team and make sure it's working in the best interests of the company's shareholders. But some have criticized Tesla's directors, many of whom have connections to Musk's other businesses, for failing to hold Musk accountable for behavior that has at times caused the company's stock price to fall. A new director could help the board repair its reputation.

But the job won't be easy. Tesla employees have described Musk as a stubborn, demanding, and temperamental boss. Tesla's new chairman will be tasked with steering Musk from his worst impulses without suppressing a leadership style employees have said inspires them to operate at their best. 

The Financial Times reported on Wednesday that current Tesla director James Murdoch is the leading candidate to become the board's next chairman. Like chairman candidates floated by Recode founder Kara Swisher and publications like Bloomberg, The New York Times, and The Wall Street Journal, he has experience in highly-visible, pressure-filled positions. 

Here are eight possible candidates to be the next chairman of Tesla's board of directors.

SEE ALSO: Every puzzling thing that has happened since Elon Musk tweeted that he had 'funding secured' to take Tesla private

Alan Mulally

Mulally was the president and CEO of Ford from 2006 to 2014. Before that, he was the executive vice president of Boeing and the president and CEO of Boeing Commercial Airplanes.

Source: Bloomberg, CNBC, Wall Street Journal



Al Gore

Al Gore was the US Vice President from 1993 to 2001. Before that, he was a member of the US Senate and House of Representatives.

Source: Bloomberg



Jim McNerney

McNerney was the chairman, president, and CEO of Boeing from 2005 to 2015. Before that, he was the president and CEO of 3M and General Electric Aircraft Engines.

Source: Bloomberg



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20 words you won't believe were actually added to the dictionary

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queen selfie

The Oxford English Dictionary adds new words on a regular basis to reflect new cultural phenomena.

Some of these words may have seemed silly at first but slowly worked their way into everyday conversation. Some of them are just silly, period.

Here are 20 surprising words that somehow made it into the dictionary.

"Bro hug"

Definition: a friendly embrace between two men.



"YOLO"

Definition: "You only live once;" used to express the view that one should make the most of the present moment without worrying about the future (often as a rationale for impulsive or reckless behavior).



"Adorbs"

Definition: arousing great delight; cute or adorable.



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