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Twitter CEO Jack Dorsey is right to scare everyone about hyperinflation: Morning Brief

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This article first appeared in the Morning Brief. Get the Morning Brief sent directly to your inbox every Monday to Friday by 6:30 a.m. ET. Subscribe

Monday, October 25, 2021

I don’t like Jack Dorsey’s Jim “The Anvil” Neidhart-like beard (although I was a big Anvil fan as a kid in the ’80s). It’s unbecoming for a now 44-year-old tech billionaire who knows a lot about all of us through his creations of Twitter and Square. 

But I tell you what I do like from the reclusive Twitter and Square CEO: his dire new warning on hyperinflation. 

“Hyperinflation is going to change everything. It’s happening,” Dorsey tweeted to his 5.8 million loyal subjects late Friday. 

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I think Dorsey is on the mark here, though it’s partly self-serving as any outbreak of hyperinflation would meaningfully erode the value of the U.S. dollar and probably be bullish for crypto (which Dorsey is heavily involved in personally and via Square’s Cash App). 

But the reality is that hyperinflation — or an extreme rise in prices in a short period of time — is beginning to happen right now. It may not be showing up yet in the government’s CPI or PPI reports, but it lurks around the bend. For instance, we are one bad snowstorm away from oil prices going north of $100 a barrel and natural gas prices going even further through the roof, experts have told me. Blame the pandemic and a lack of investment in the space, these pros say.

Meanwhile, Tide maker P&G is looking at a third round of price increases for this year due to rising prices on commodities and transportation. P&G is hardly alone. Appliance king Whirlpool is closing in on a $1 billion financial hit this year from higher commodities prices. It, too, continues to raise prices on consumers. Burrito giant Chipotle is hiking prices to offset labor inflation (but promised me they won’t be cutting historically large portion sizes to reduce costs … thank goodness).

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More talk of price increases are coming as a slew of large companies will report earnings this week.

Here are some fresh inflation commentary from top execs to me on Yahoo Finance Live:

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“People have different definitions of transitory. I’m not quite sure how long you would define transitory these days. I mean, I think the real question is, do we see expected cyclical inflation or does it turn into a structural inflation? I don’t think it’s the latter one, personally. But I think with the inflation environment, we will see around us for some time. It’s not going to go away overnight and we’re prepared to deal with that.” — Whirlpool CEO Marc Bitzer

“If we just look at two components of cost, commodities and transportation, our current forecast is that will be a $2.2 billion after tax increase versus a year ago. We saw about a $600 million after tax increase in those costs in the quarter that we just completed. So it is a significant inflationary cycle.” — P&G’s incoming CEO Jon Moeller

So you are damn right that Federal Reserve Chair Jerome Powell should be warning about increased inflationary pressures as he did on Friday (which spooked the market). Powell lulled everyone into thinking inflation was transitory. He was seriously misguided, and now investors could be left holding the bag. 

Maybe the beard-wearing, crypto-loving hyperinflation worrywart Dorsey should be in the mix for Fed chief. I’ll ask our Fed correspondent Brian Cheung later on today if Dorsey warrants consideration by the Biden administration.

Having said all of this, if you haven’t talked with your financial advisor on how to protect your portfolio against a long period of super high inflation (which is here), make an appointment to do so this week. And say Jack Dorsey and Brian Sozzi inspired the outreach.

Odds and ends

Tech stock to watch: Another avalanche of earnings will barrel down the heads of investors this week. There is the high intrigue around Facebook’s earnings, out after the market close today, in the wake of Snap’s admission that Apple’s iOS privacy changes are causing more harm than anticipated. People on the Street continue to say Facebook’s stock is too cheap to ignore. Well, we are about to find out the truth. Then later in the week there are numbers out of Microsoft (growth is beginning to slow, yet oddly the stock continues to trade as if growth isn’t slowing), Twitter (hard to believe the company won’t echo Snap-like issues in its guidance), Ford (the new stock market darling), Caterpillar (China’s economic growth slowdown has me concerned about the equipment maker’s outlook), Apple (watch for chip shortage comments and a potential sequential China sales slowdown), and Amazon (stock is only up 2% year-to-date, I wouldn’t be surprised to see buyers emerge in what could be a strong holiday shopping season).

But out of all these earnings reports, I think Advanced Micro Devices could be a fun one for active traders. Intel’s quarter and outlook last week suggest AMD had another impressive three months of performance. And in turn, that momentum will be factored into the company’s outlook. AMD CEO Lisa Su continues to fire on all cylinders. To be fair, the stock has exploded 13% in the past month ahead of earnings. So perfection is expected from AMD this week, and it’s likely the chip maker will deliver.

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Yahoo Finance descends on the Nasdaq today.

Yahoo Finance descends on the Nasdaq today.

Game time for Yahoo Finance: As Yahoo Finance Editor-in-chief Andy Serwer wrote Saturday, today is our eighth annual All Markets Summit. I have become truly obsessed with this event as it has morphed into a festival of business and finance where top leaders converge to share their latest bold views. If you saw how I prepped for this thing you would think I was a professional athlete trying to claim a championship. Nevertheless, this year I would say the event is also a celebration of resilience. The resilience of global businesses against inflation, the resilience of workers still pounding away at home for 15 hours a day and the resilience of leaders to keep leading effectively in a world that remains supremely volatile. We’re right out of the gate with our Brian Cheung interviewing SEC Chair Gary Gensler. I have three interviews on the docket: Target Chairman and CEO Brian Cornell (tis’ almost crunch time for Target with the holidays around the bend); American Express Chairman and CEO Stephen Squeri (big quarter out from Amex Friday that pushed the stock to a record); and Intel CEO Pat Gelsinger (yes, the quarter shared last week was challenging as was the company’s outlook). The lineup of speakers is amazing. I would pay careful attention to the following:

All-in-all a fun day on tap, looking forward to talking with my colleagues in-person.

By Brian Sozzi, editor-at-large at Yahoo Finance and anchor for Yahoo Finance Live. Follow him at @BrianSozzi

All Markets Summit

All Markets Summit
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What to watch today

Economy

  • 8:30 a.m. ET: Chicago Fed National Activity Index, September (0.2 expected, 0.29 in August)

  • 10:30 a.m. ET: Dallas Fed Manufacturing Activity Index, October (6.2 expected, 4.6 in September)

Earnings

Pre-market

  • 6:10 a.m. ET: Otis Worldwide Corp. (OTIS) is expected to report adjusted earnings of 74 cents per share on revenue of $3.55 billion

  • 7:30 a.m. ET: Kimberly-Clark Corp. (KMB) is expected to report adjusted earnings of $1.65 per share on revenue of $4.99 billion 

Post-market

  • 4:05 p.m. ET: Facebook (FB) is expected to report adjusted earnings of $3.66 per share on revenue of $29.45 billion

Politics

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  • President Joe Biden is headed to New Jersey today in the latest stop in his efforts to rally support for his economic agenda. The itinerary includes a visit to an elementary school and a speech.

  • Lawmakers also return to Washington after U.S. House of Representatives Speaker Nancy Pelosi announced Sunday that Democrats are “pretty much there” on a social spending deal. She is hoping to have a vote this week on the bipartisan infrastructure bill and also reach agreement on the larger social spending package.

Top News

FTSE 100 climbs as traders look ahead to UK Budget this week {Yahoo Finance UK]

PayPal says it is not pursuing acquisition of Pinterest [Reuters]

Tesla pulls its new Full Self-Driving beta due to software ‘issues’ [Reuters]

Major cryptocurrency project Terraform Labs is suing the SEC [Yahoo Finance]

Yahoo Finance Highlights

Wells Fargo CEO says supply chains ‘will get solved’ in ‘6-to-12 months’

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America has become a massive housing construction site

Dutch Bros. gives coffee giants a run in long-term challenge to Starbucks, Dunkin’

Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, YouTube, and reddit

Read More

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TWITTER

Elon Musk Says He’ll Pay $11 Billion in Taxes in 2021 But Twitter Wants ‘Proof’

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Elon Musk took to Twitter to clarify once and for all that he will be paying a whopping $11 billion as taxes this year.

If the number of times Elon Musk could count when someone has asked him to pay the full taxes, he would be a very rich..wait, never mind. The Tesla boss is rich beyond any private individual has been in history, reports said.

Musk has increasingly been facing criticism from many politicians and many others who insist he has not been paying taxes as compared to the profits his companies have been making. On Sunday, the SpaceX CEO took to Twitter to share that he will be paying a whopping $11 billion as taxes.

For those wondering, I will pay over $11 billion in taxes this year— Elon Musk (@elonmusk) December 20, 2021

But some of the questions did not stop. One person tweeted how they needed to see Musk’s tax returns while yet another asked how much percentage was that of his total income.

A few were, however scathing of the government who thought they will add that amount to their pockets rather than using it for some proper development.

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Wow that’s enough to give each person in the world almost $2 million but instead the government will just stick it in their pockets— greg (@greg16676935420) December 20, 2021

Why not $200 billion? Asking for a Senator— litquidity (@litcapital) December 20, 2021

Earlier this week, Democratic US Senator Elizabeth Warren has tweeted to say that Musk should pay taxes and stop “freeloading off everyone else” after Time magazine named him its “person of the year”.

In response, Musk shot four tweets in which he said that the senator reminded him of a friend’s angry mom who yelled at everybody. He tweeted, ““And if you opened your eyes for 2 seconds, you would realize I will pay more taxes than any American in history this year.” “Don’t spend it all at once … oh wait you did already.”

He added further, “You remind me of when I was a kid and my friend’s angry Mom would just randomly yell at everyone for no reason.”

Musk responded by saying that he “will pay more taxes than any American in history this year”. This Twitter exchange left netizens divided as even though many supported Warren and agreed that Musk should pay more taxes, others felt that he was already doing enough.

Musk’s Tesla is worth about $1 trillion. Over the last few weeks, he has sold nearly $14 billion worth of Tesla shares.

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The Tesla boss has been pushing for his colonize Mars agenda for years now, and has made it very clear in some occasions that he would rather spend the money on putting humanity on the red planet, than pay his taxes. “My plan,” the SpaceX founder tweeted about his fortune, “is to use the money to get humanity to Mars and preserve the light of consciousness.”

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TWITTER

Twitter Admits Policy ‘Errors’ After Far-Right Abuse Its New Rules of Posting Pictures

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Twitter’s new picture permission policy was aimed at combating online abuse, but US activists and researchers said Friday that far-right backers have employed it to protect themselves from scrutiny and to harass opponents.

Even the social network admitted the rollout of the rules, which say anyone can ask Twitter to take down images of themselves posted without their consent, was marred by malicious reports and its teams’ own errors.

It was just the kind of trouble anti-racism advocates worried was coming after the policy was announced this week.

Their concerns were quickly validated, with anti-extremism researcher Kristofer Goldsmith tweeting a screenshot of a far-right call-to-action circulating on Telegram: “Due to the new privacy policy at Twitter, things now unexpectedly work more in our favor.”

“Anyone with a Twitter account should be reporting doxxing posts from the following accounts,” the message said, with a list of dozens of Twitter handles.

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Gwen Snyder, an organizer and researcher in Philadelphia, said her account was blocked this week after a report to Twitter about a series of 2019 photos she said showed a local political candidate at a march organized by extreme-right group Proud Boys.

Rather than go through an appeal with Twitter she opted to delete the images and alert others to what was happening.

“Twitter moving to eliminate (my) work from their platform is incredibly dangerous and is going to enable and embolden fascists,” she told AFP.

In announcing the privacy policy on Tuesday, Twitter noted that “sharing personal media, such as images or videos, can potentially violate a person’s privacy, and may lead to emotional or physical harm.”

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But the rules don’t apply to “public figures or individuals when media and accompanying Tweets are shared in the public interest or add value to public discourse.”

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By Friday, Twitter noted the roll out had been rough: “We became aware of a significant amount of coordinated and malicious reports, and unfortunately, our enforcement teams made several errors.”

“We’ve corrected those errors and are undergoing an internal review to make certain that this policy is used as intended,” the firm added.

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TWITTER

Jack Dorsey Post Twitter Is Chasing His Crypto, Fintech Dream

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At a packed Miami conference in June, Jack Dorsey, mused in front of thousands of attendees about where his real passion lay: “If I weren’t at Square or Twitter, I’d be working on Bitcoin.”

On Monday, Dorsey made good on one part of that, announcing he would leave Twitter for the second time, handing the CEO position to a 10-year veteran at the firm. The 45-year-old entrepreneur, who is often described as an enigma with varied interests from meditation to yoga to fashion design, plans to pursue his passion which include focusing on running Square and doing more philanthropic work, according to a source familiar with his plan.

Well before the surprise news, Dorsey had laid the groundwork for his next chapter, seeding both companies with cryptocurrency-related projects.

Underlying Dorsey’s broader vision is the principle of “decentralisation,” or the idea that technology and finance should not be concentrated among a handful of gatekeepers, as it is now, but should, instead, be steered by the hands of the many, either people or entities.

The concept has played out at Square, which has built a division devoted to working on projects and awarding grants with the aim of growing Bitcoin’s popularity globally. Bitcoin price in India stood at Rs. 44.52 lakh as of 12:50pm IST on December 1.

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Dorsey has been a longtime proponent of Bitcoin, and the appeal is that the cryptocurrency will allow for private and secure transactions with the value of Bitcoin unrelated to any government.

The idea has also underpinned new projects at Twitter, where Dorsey tapped a top lieutenant – and now the company’s new CEO Parag Agrawal – to oversee a team that is attempting to construct a decentralised social media protocol, which will allow different social platforms to connect with one another, similar to the way email providers operate.

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The project called Bluesky will aim to allow users control over the types of content they see online, removing the “burden” on companies like Twitter to enforce a global policy to fight abuse or misleading information, Dorsey said in 2019 when he announced Bluesky.

Bitcoin has also figured prominently at both of his companies. Square became one of the first public companies to own Bitcoin assets on its balance sheet, having invested $220 million (roughly Rs. 1,650 crore) in the cryptocurrency.

In August, Square created a new business unit called TBD to focus on Bitcoin. The company is also planning to build a hardware wallet for Bitcoin, a Bitcoin mining system, as well as a decentralised Bitcoin exchange.

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Twitter allows users to tip their favourite content creators with Bitcoin and has been testing integrations with non-fungible tokens (NFTs), a type of digital asset that allows people to collect unique digital art.

Analysts see the transition as a positive signal for Square, the fintech platform he co-founded in 2009. Square’s core Cash App, after a bull run in its share in 2020, has experienced slower growth in the most recent quarter. It is also trying to digest the $29 billion (roughly Rs. 2,17,240 crore) acquisition of Buy Now Pay Later provider Afterpay, its largest acquisition ever.

But these ambitions will not pay off until years from now, analysts cautioned.

“The blockchain platform they’re trying to develop is great but also fraught with technical challenges and difficult to scale for consumers. I think he’ll focus more on Square and crypto will be part of that,” said Christopher Brendler, an analyst at DA Davidson.

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© Thomson Reuters 2021

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Interested in cryptocurrency? We discuss all things crypto with WazirX CEO Nischal Shetty and WeekendInvesting founder Alok Jain on Orbital, the Gadgets 360 podcast. Orbital is available on Apple Podcasts, Google Podcasts, Spotify, Amazon Music and wherever you get your podcasts.

Cryptocurrency is an unregulated digital currency, not a legal tender and subject to market risks. The information provided in the article is not intended to be and does not constitute financial advice, trading advice or any other advice or recommendation of any sort offered or endorsed by NDTV. NDTV shall not be responsible for any loss arising from any investment based on any perceived recommendation, forecast or any other information contained in the article.

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

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