Category: Economy and Policy

Feb 23 (Reuters) – Berkshire Hathaway Inc’s prospects for an “an elephant-sized acquisition” are “not good,” because “prices are sky-high for businesses possessing decent long-term prospects,” CEO Warren Buffett said on Saturday while also slamming CEOs who launched buybacks when their stock prices are lofty.

The billionaire investor said stock buybacks “should be price-sensitive,” and “blindly buying an overpriced stock is value-destructive, a fact lost on many promotional or ever-optimistic CEOs.” (Reporting By Jennifer Ablan and Jonathan Stempel; Editing by Andrea Ricci)

Days before a second U.S.-North Korea summit, much rests on the shoulders of a former auto executive trying to find common ground between an American president seeking a big foreign policy win and a North Korean leader who seems unlikely to hand him one.

Stephen Biegun, named Donald Trump’s special envoy for North Korea six months ago, flew to Hanoi ahead of the Feb. 27-28 meeting in the Vietnamese capital where Trump hopes to get closer to his goal of persuading Pyongyang to give up a nuclear weapons program that threatens the United States.

In meetings with his North Korean counterpart, Biegun, a 55-year-old former Ford Motor Co executive, aims to hammer out a joint summit statement showing concrete progress beyond vague commitments agreed by Trump and North Korean leader Kim Jong Un at their first meeting in June.

It’s a tall order, even for someone accustomed to tough assignments.

Before joining Ford as head of international government relations, Biegun was handed the job of giving Sarah Palin a crash course in foreign policy when she was John McCain’s 2008 presidential running mate.

Such experience could prove helpful in explaining what is achievable to Trump, who came into office similarly lacking in diplomatic experience and has set his sights on North Korea as one issue he can tout as a major success that has eluded his predecessors.

While Biegun worked for decades as congressional staffer and as a White House foreign policy aide under President George W. Bush, his latest appointment was initially greeted with skepticism, given he was primarily a Russia specialist with little exposure to the complex North Korea problem.

But several North Korea experts who have since advised Biegun told Reuters they have been struck by how methodical he was in taking the time to talk to as many of them as possible and described him as a quick learner.

Nuclear expert Siegfried Hecker, a former director of the Los Alamos weapons laboratory in New Mexico who is among those who has met Biegun, said was encouraged by the way Biegun had made up for his lack of specialist knowledge by seeking out the right people.

“What he’s been doing is learning and gathering things. I’m impressed by what he’s done – he’s got good advisers.”

A 16-member team Biegun took with him to Pyongyang for three days of talks earlier this month included missile experts, nuclear experts and specialists in international law.

A Capitol Hill staffer whose Democratic Party has been critical of Trump’s personal approach to North Korea, said Biegun’s attitude appeared “much more realistic than what we’ve heard from the administration thus far.”

“He really stands head and shoulders above the rest … and comes to this a with a relatively fresh set of eyes, and as someone who isn’t making old assumptions but also who isn’t making the wrong assumptions.”

Biegun has also won admirers in South Korea, where one former senior diplomat said he clearly had experience in handling complex issues and knew how Washington works. “Among all the nuclear envoys I’ve seen for decades, he must be the weightiest,” he said.

However, it will take more than intelligence, gravitas, an open mind and political savvy to convince North Korea to abandon a nuclear weapons program its ruling family has long seen as essential to its survival.

Biegun has avoided formal media interviews, but did deliver a wide-ranging speech at Stanford University on Jan. 31, when he admitted that despite months of U.S.-North Korea talks, the two sides still had no agreed definition of the term “denuclearization.”

And in spite of Trump’s declaration after the last summit that the nuclear threat from North Korea was over, the country has yet to agree to freeze production of fissile material and its missile program, despite a de facto moratorium on nuclear and missile testing since 2017.

Biegun has said he will be seeking both in Hanoi and will also be looking to agree a roadmap for a possibly lengthy post-summit negotiation process.

INTELLIGENCE COMMUNITY, MILITARY DOUBTS

Yet neither the U.S. intelligence community, nor regional military commanders believe North Korea will agree to give up all of its nuclear weapons.

While welcoming an easing of tensions, critics worry the Trump administration – Biegun included – is now following Pyongyang’s playbook by dropping past demands for complete denuclearization before any concessions.

Trump and U.S. officials insist North Korea’s complete and verified denuclearization remains the ultimate goal, but experts say the mechanics of a negotiated process mean this could take many years – if it happens at all.

Trump’s close involvement could prove a mixed blessing for Biegun.

Unlike predecessors, Biegun has had significant direct contact with Trump, including involvement in White House talks with North Korean officials and an Oval Office meeting with the president in December.

But Trump has sometimes demonstrated a tendency to ignore advisers and act on impulse.

Biegun, according to a veteran American North Korea hand,” is a prisoner … of a president who has no interest in the substance of the issues.” “The president’s priority is himself – his brand,” the person said, speaking on condition of anonymity.

Biegun is also beholden to Secretary of State Mike Pompeo, a trusted Trump aide with a reputation for following the president’s marching orders and for rarely contradicting him.

While Pompeo has overall control of North Korea policy, Trump’s national security adviser, John Bolton, known for hawkish views on a range of global issues, has appeared to fade into the background on North Korea since his calls for the nation’s rapid disarmament nearly derailed the first summit.

The extent of Bolton’s involvement in the Hanoi meeting remains unclear.

Analysts say that for Biegun’s methodical approach to prevail he will need to deliver a semblance of progress in Hanoi. They warn Trump’s taste for a showy moment and apparent lack of patience with the sort of detailed drawn-out haggling any lasting deal will require could complicate Biegun’s task.

A photo Trump tweeted on Christmas Day showing him reading a memo at his desk in the Oval Office while Biegun and White House adviser Allison Hooker stand on his side, looking on, captured the awkwardness of his subordinates’ role. here

Toby Dalton, of the Nuclear Policy Program at Washington’s Carnegie Endowment for International Peace, who was among Biegun’s advisers, noted he had left himself ample leeway in his Stanford speech for a reason.

“This reflects uncertainly about what U.S. policy is,” he said. “U.S. policy is what the president says it is on any given day.”

Egypt’s top administrative court on Saturday lifted a ban on operations by ride-hailing companies Uber and Careem, which have faced fierce opposition from traditional taxi drivers, a judicial source and lawyer said.

A lower administrative court withdrew the permits of U.S.-based Uber and its main rival, Dubai-based Careem, in March 2018 after 42 taxi drivers filed suit, arguing the apps were illegally using private cars as taxis and were registered as a call center and an internet company, respectively.

In April last year, however, the Cairo Court of Urgent Matters said the ruling should be suspended and the two firms should be allowed to continue operating until a final decision was made by the Highest Administrative Court, which accepted the companies’ appeal on Saturday.

Uber has faced repeated regulatory and legal setbacks around the world due to opposition from traditional taxi services. It has been forced to quit several countries, including Denmark and Hungary.

The company has said Egypt is its largest market in the Middle East, with 157,000 drivers in 2017 and four million users since its launch there in 2014.

Last week, Uber reached an agreement with the Egyptian Tax Authority to pay value-added tax (VAT), which Careem said it had been paying since March 2018.

President Donald Trump said on Friday there was “a very good chance” the United States would strike a deal with China to end their trade war and that he was inclined to extend his March 1 tariff deadline and meet soon with Chinese President Xi Jinping.

U.S. and Chinese negotiators had made progress and will extend this week’s round of negotiations by two days through Sunday, Trump told reporters at the White House as he met with his top negotiators and their counterpart, Chinese Vice Premier Liu He.

“I think that we both feel there’s a very good chance a deal will happen,” Trump said.

Liu agreed there had been “great progress”.

“From China, we believe that (it) is very likely that it will happen and we hope that ultimately we’ll have a deal. And the Chinese side is ready to make our utmost effort,” he said at the White House.

The Republican president said he probably would meet with Xi in March in Florida to decide on the most important terms of a trade deal.

Extending the deadline would put on hold Trump’s threatened tariff increase to 25 percent from 10 percent on $200 billion of Chinese imports into the United States. That would prevent a further escalation in a trade war that already has disrupted commerce in goods worth hundreds of billions of dollars, slowed global economic growth and roiled markets.

Optimism that the two sides will find a way to end the trade war lifted stocks, especially technology shares. The S&P 500 stock index reached its highest closing level since Nov. 8. Oil prices rose to their highest since mid-November, with Brent crude reaching a high of $67.73 a barrel. [.N] [O/R]

CURRENCY AGREEMENT

Trump and Treasury Secretary Steven Mnuchin said the two sides had reached an agreement on currency. Trump declined to provide details, but U.S. officials long have expressed concerns that China’s yuan is undervalued, giving China a trade advantage and partly offsetting U.S. tariffs.

Announcement of a pact aimed at limiting yuan depreciation was putting “the currency cart before the trade horse,” but would likely be positive for Asian emerging market currencies, said Alan Ruskin, global head of currency strategy at Deutsche Bank in New York.

“How can you agree to avoid excessive Chinese yuan depreciation or volatility if you have not made an agreement on trade that could have huge FX implications?” Ruskin asked in a note to clients.

In a letter to Trump read aloud by an aide to Liu at the White House, Xi called on negotiators to work hard to strike a deal that benefits both country.

Trump said a deal with China may extend beyond trade to encompass Chinese telecommunications companies Huawei Technologies and ZTE Corp.

The Justice Department has accused Huawei of conspiring to violate U.S. sanctions on Iran and of stealing robotic technology from T-Mobile US Inc.

Chinese peer ZTE was last year prevented from buying essential components from U.S. firms after pleading guilty to similar charges, crippling its operations.

MEMORANDUMS NO MORE

Trump appeared at odds with his top negotiator, U.S. Trade Representative Robert Lighthizer, on the preliminary terms that his team is outlining in memorandums of understanding for a deal with China. Trump said he did not like MOUs because they are short term, and he wanted a long-term deal.

“I don’t like MOUs because they don’t mean anything,” Trump said. “Either you are going to make a deal or you’re not.”

Lighthizer responded testily that MOUs were binding, but that he would never use the term again.

Reuters reported exclusively on Wednesday that the two sides were drafting the language for six MOUs covering the most difficult issues in the trade talks that would require structural economic change in China.

Negotiators have struggled this week to agree on specific language within those memorandums to address tough U.S. demands, according to sources familiar with the talks. The six memorandums include cyber theft, intellectual property rights, services, agriculture and non-tariff barriers to trade, including subsidies.

An industry source briefed on the talks said both sides have narrowed differences on intellectual property rights, market access and narrowing a nearly $400 billion U.S. trade deficit with China. But bigger differences remain on changes to China’s treatment of state-owned enterprises, subsidies, forced technology transfers and cyber theft of U.S. trade secrets.

Lighthizer pushed back when questioned on forced technology transfers, saying the two sides made “a lot of progress” on the issue, but did not elaborate.

The United States has said foreign firms in China are often coerced to transfer their technology to Chinese firms if they want to operate there. China denies this.

The U.S. Chamber of Commerce on Friday urged the U.S. government to ensure the deal was comprehensive and addressed core issues, rather than one based on more Chinese short-term purchases of goods.

Slideshow (3 Images)

China has pledged to increase purchases of agricultural produce, energy, semiconductors and industrial goods to reduce its trade surplus with the United States.

China committed to buying an additional 10 million tonnes of U.S. soybeans on Friday, U.S. Agriculture Secretary Sonny Perdue said on Twitter. China bought about 32 million tonnes of U.S. soybeans in 2017. The commitments are a “show of good faith by the Chinese” and “indications of more good news to come,” Perdue wrote.

China was the top buyer of U.S. soybeans before the trade war, but Beijing’s retaliatory tariffs on U.S. soybeans slashed business that had been worth $12 billion annually.

Some Microsoft Corp employees on Friday demanded that the company cancel a $480 million hardware contract to supply the U.S. Army, with 94 workers signing a petition calling on the company to stop developing “any and all weapons technologies.”

The organizing effort, described to Reuters by three Microsoft workers, offers the latest example in the last year of tech employees protesting cooperation with governments on emerging technologies.

Microsoft won a contract in November to supply the Army with at least 2,500 prototypes of augmented reality headsets, which digitally display contextual information in front of a user’s eyes. The government has said the devices would be used on the battlefield and in training to improve soldiers “lethality, mobility and situational awareness.”

In the petition to Microsoft executives, posted on Twitter, the workers said they “did not sign up to develop weapons, and we demand a say in how our work is used.” They called on the company to develop “a public-facing acceptable use policy” for its technology and an external review board to publicly enforce it.

Microsoft said in a statement that it always appreciates employee feedback. It also referred to an October blog post by its president, Brad Smith, in which he said the company remained committed to assisting the military and would advocate for laws to ensure responsible use of new technologies.

The U.S. Army did not provide immediate comment.

Shares of Microsoft fell 7 cents to $110.90 after hours on Friday.

Though many governments want to draw upon the expertise of the biggest U.S. tech companies, employee resistance has added a new challenge to already complicated relationships.

Worker pushback led Alphabet Inc last year to announce it would not renew a Pentagon contract in which its artificial intelligence technology is used to analyze drone imagery.

In other cases, employee criticism has invited greater public scrutiny to deals, such as $10 billion cloud computing contract yet to be awarded and various contracts with U.S. Immigration and Customs Enforcement.

One Microsoft worker, speaking on condition of anonymity, said it was unclear whether any of the lead petitioners’ work was part of the Army contract. Another said several organizers work in the company’s cloud computing division, which is competing with rivals Google Cloud and Amazon Web Services to gain more government work.

Microsoft is expected unveil updates to HoloLens, its headset for businesses and governments, during an event at the Mobile World Congress industry conference in Barcelona on Sunday.

MEXICO CITY (Reuters) – Mexico’s Pemex produced 1.62 million barrels of crude per day in January, less than any month in almost three decades, the state-owned oil company said on Friday, underscoring the challenges facing a government that vows to pump far more in a few years.

The company’s crude output for the month was the lowest since at least 1990, when Pemex’s publicly available records begin.

The firm’s crude oil output has declined for 14 consecutive years since hitting a peak of 3.4 million bpd in 2004, as Mexico’s most prolific fields have dried up and new ones to replace them have not been discovered.

Pemex’s crude production averaged 1.81 million bpd in 2018.

The company’s crude oil exports also fell in January to total 1.07 million bpd, down nearly 10 percent from 2018 average shipments of 1.18 million bpd.

President Andres Manuel Lopez Obrador, who took office in December and ran on a promise of strengthening the ailing company, long a national treasure, has said he will grow its output to around 2.5 million bpd by the end of his six-year term in 2024.

Lopez Obrador has yet to fully outline how Pemex alone will be able to reverse the long-standing slide, but he did push through a larger budget for the company this year, in addition to a fresh capital injection from the government and lower tax bill.

The veteran leftist has canceled oil and gas auctions open to private and foreign oil companies and he has said he will not allow Pemex to enter into any additional near-term joint venture partnerships with other firms.

Both strategies were linchpins of the previous government’s efforts to grow oil output in Mexico from both Pemex’s operations as well as those of new entrants into the market like U.S.-based major Exxon Mobil and France’s Total .

(Reuters) – Asdrubal Chavez, chief executive of Houston-based Citgo Petroleum Corp, boarded the Venezuelan-owned firm’s corporate jet in Caracas on Jan. 30, after meeting with top officials of the embattled administration of socialist President Nicolas Maduro about the latest U.S. oil sanctions.

Upon landing in the Bahamas – where Chavez has worked for about a year after being denied a U.S. visa – he had received word from Houston that it would be his last trip on a company plane and that his Citgo email account had been shut off.

Day-to-day control of the company had passed to Citgo’s top U.S. executive, Rick Esser, who with the backing of Venezuela’s rising political opposition and the U.S. government would begin clearing the way for a new, anti-Maduro board of directors at Citgo. Esser oversaw the moves to isolate Chavez – a cousin of the late Venezuelan President Hugo Chavez – and would soon start ousting other Citgo executives close to the Maduro administration.

The house-cleaning at the prized U.S.-based subsidiary of Venezuela’s state-owned oil firm, Petroleos de Venezuela (PDVSA), marked a crucial early victory for the country’s rising opposition government – led by self-declared president Juan Guaido – as it struggles to remove Maduro from office and break his grip on the OPEC nation’s oil assets.

The account of the transition of power at Citgo is based on Reuters interviews with more than a dozen current and former Citgo and PDVSA executives, employees, and U.S. and Latin American advisors.

Guaido, head of the Venezuelan congress, announced he would seize the presidency on Jan. 23 because Maduro’s re-election last year was a sham, rendering the socialist leader illegitimate under Venezuela law. Guaido’s claim to interim leadership, until fair elections can be held, was quickly backed by the United States and dozens of other nations.

But Maduro remains in control of the military and PDVSA – making Citgo the obvious first target among national asset for Guaido’s opposition movement to claim, with the help of the U.S. government. The battle for Citgo could prove pivotal in the effort to unseat Maduro because full control of a major U.S. refiner would provide a crucial source of revenue to a post-Maduro administration.

Citgo, with more than $23 billion in annual sales and operations that supply about 4 percent of U.S. fuels, may be the last remaining asset owned by PDVSA with a healthy balance sheet. As PDVSA’s oil production and revenue have plummeted amid crippling debt, mismanagement and international political pressure, Citgo’s U.S. location and financial independence have shielded the firm from the worst of its parent company’s meltdown.

At the end of September, Citgo had net income of about $500 million, according to a creditor with access to financial statements that are not public. The company had almost $500 million in cash and an available credit line of $900 million.

(Graphic: An interactive look at Venezuela’s crude exports to the United States – tmsnrt.rs/2S4YIXB)

Inside Citgo’s Houston headquarters, many employees weary of operating under the control of a failing socialist state eagerly awaited an expected official announcement of the appointments of new company directors, who were chosen by Venezuela’s congress.

“We are not expecting any resistance” to the new board inside the company, said one manager who spoke on condition of anonymity. “On the contrary, we are waiting for directions to lay out the red carpet.”

The new board met together for the first time in Houston on Thursday and named executives to replace those who were ousted.

Board directors and a new executive team was confirmed by Citgo in a statement on Friday. Esser assumed responsibility for day-to-day strategic decisions and operations while a search for a new CEO has begun, it said, without mentioning former CEO Chavez.

“These officers were chosen not only for their experience and knowledge, but also because of their demonstrated commitment to the company over the years,” said Chairwoman Luisa Palacios in the statement.

PDVSA and the White House did not respond to requests for comment.

(Graphic: Citgo’s Louisiana refinery was 2018’s top U.S. consumer of Venezuela’s crude – tmsnrt.rs/2t4ullS.)

SHIFTING ALLEGIANCES

As U.S. sanctions on Jan. 28 shifted the balance of power to Citgo’s anti-Maduro faction of executives, Maduro loyalists scrambled to find their place in the emerging corporate structure.

Two of four senior executives appointed by Chavez openly pledged support for the incoming board of directors in meetings with employees, said two sources who attended the meetings.

But all four – Frank Gygax, Nepmar Escalona, Simon Suarez and Eladio Perez – were escorted out of the building on Monday, according to four people with knowledge of their departures. Gygax declined to comment and the others did not respond to requests.

It is unclear whether Chavez has yet been formally terminated, an action that can only be taken by company directors, but he has been effectively shut out of the firm, Citgo employees said. Chavez did not respond to a request for comment.

Esser has essentially run the company since Chavez’ ouster, in close consultation with U.S. government officials, according to three Citgo employees and two people close to the incoming company board.

A Jan. 30 meeting between White House National Security Advisor John Bolton and Citgo executives thrust the low-key Esser into the spotlight after Bolton tweeted a photo of the meeting, calling it “very productive.”

U.S. officials have voiced concern that Guaido and his supporters had been too slow in seizing control of Citgo and also have pushed for a say in choosing members of the refiner’s new board – a request Guaido’s team declined, according to two people familiar with the talks.

Since clearing Citgo’s upper ranks of Maduro allies, Esser has focused on securing alternatives to the Venezuelan oil that feeds its refineries. Recent U.S. sanctions prevent the firm from importing Venezuelan crude after April 28, which could cripple the company unless it can ensure it has the cash, credit and contracts for alternate supplies.

Advisors to the incoming Citgo board have separately urged U.S. officials to exempt Citgo from sanctions and protect its assets from creditors once it is officially controlled by Guaido’s team.

Esser saw this crisis coming two years ago and put together a group to find new suppliers and test their oils in the event Venezuelan crudes were restricted by sanctions, according to a person familiar with the effort.

The firm’s efforts to sustain operations face a threat from creditors owed money by Venezuela and PDVSA, who could try to use that leverage to hamstring Citgo’s finances, said Carlos Jorda, a former Citgo chairman and now a Houston business consultant. The U.S. government could help the company hold off that threat, he said.

“The U.S. Treasury could say, ‘Hold your horses, you’ll get paid – but not paid by Citgo, but by Venezuela – when the Maduro regime exits,’” Jorda said.

Esser and Citgo finance executive Curtis Rowe traveled to Washington this week to meet with U.S. government officials for at least the second time in three weeks, according to two Citgo employees.

‘FROGS AND SNAKES’

Opposition leaders had difficulty recruiting candidates willing to join the new Citgo board, according to three people familiar with the recruitments.

“There are many risks,” one of the people said, “and if these people have family members in Venezuela, they could be putting them at risk, too.”

In late 2017, six Citgo executives were called to Caracas and jailed amid a graft probe over a failed debt refinancing. Their detention led to Chavez’s appointment as CEO and the arrival of several Maduro loyalists at Citgo’s Houston headquarters.

New Citgo Chairwoman Palacios has been huddling with newly appointed directors and legal advisers to guard against the threat of a potential U.S. court challenge by PDVSA to the new board’s legitimacy, according to two sources close to her team.

Palacios and other board members, which include former Citgo and PDVSA executives living in the United States, did not respond to requests for comment.

One of their priorities will be to audit the finances of a refinery project in Aruba, said the two people close to Palacios. PDVSA and Citgo agreed to a $685 million overhaul of the idled facility in 2016, causing some Citgo executives to resign in protest, arguing the deal made no business sense.

On Monday, Citgo Aruba Refining officially put the money-losing venture on hold and laid off workers, citing the impact of U.S. sanctions on PDVSA. The project has been clouded by corruption allegations, according to four former and current Citgo employees and two people close to the new Citgo board.

“There is also worry about the audits to come. We are expecting ‘frogs and snakes’ to come from there,” said a Citgo employee, using a Venezuelan figure of speech similar in meaning to the opening of a Pandora’s box.

REDECORATING

Since Esser took over Citgo operations, the company has sent clear signals of a return to its century-old American roots.

“We the people of Citgo have a story to tell you” read an advertisement in Tuesday’s Washington Post, borrowing language from the U.S. constitution. The text emphasized the firm’s 6,000 U.S. workers, fiscal strength and U.S. charity work.

Workers at the company’s Houston headquarters also have purged the company website and marketing materials of references to PDVSA and stripped the building of the symbols of Venezuela’s socialist government.

For years, the hallways have been decorated with renderings of a controversial painting of Latin American independence leader Simon Bolivar that had been commissioned by former president Hugo Chavez – and looked more like Chavez than any historical Bolivar painting.

The portraits began to disappear, Citgo employees said, soon after Venezuela’s congress appointed the company’s new board of directors.

(Graphic: Venezuela in 2017 was the world’s second-largest producer of heavy crude – tinyurl.com/y2dzohtq)

New York Governor Andrew Cuomo on Friday ordered two state agencies to investigate a media report that Facebook Inc may be accessing far more personal information than previously known from smartphone users, including health and other sensitive data.

The directive to New York’s Department of State and Department of Financial Services (DFS) came after the Wall Street Journal said testing showed that Facebook collected personal information from other apps on users’ smartphones within seconds of them entering it.

The WSJ reported that several apps share sensitive user data including weight, blood pressure and ovulation status with Facebook. The report said the company can access data in some cases even when the user is not signed into Facebook or does not have a Facebook account.

In a statement Cuomo called the practice an “outrageous abuse of privacy.” He also called on the relevant federal regulators to become involved.

Facebook said in a statement it would assist New York officials in their probe, but noted that the WSJ’s report focused on how other apps use people’s data to create ads.

“As (the WSJ) reported, we require the other app developers to be clear with their users about the information they are sharing with us, and we prohibit app developers from sending us sensitive data. We also take steps to detect and remove data that should not be shared with us,” the company said.

Shares in Facebook took a short-lived hit after the newspaper report was published, but closed up 1.2 percent.

In late January Cuomo along with New York Attorney General Letitia James announced an investigation into Apple Inc’s failure to warn consumers about a FaceTime bug that had let iPhones users listen to conversations of others who have not yet accepted a video call.

Facebook is facing a slew of lawsuits and regulatory inquiries over privacy issues, including a U.S. Federal Trade Commission investigation into disclosures that Facebook inappropriately shared information belonging to 87 million users with British political consulting firm Cambridge Analytica.

New York’s financial services department does not traditionally supervise social media companies directly, but has waded into digital privacy in the financial sector and could have oversight of some app providers that send user data to Facebook.

In March, it is slated to implement the country’s first cybersecurity rules governing state-regulated financial institutions such as banks, insurers and credit monitors.

Last month, DFS said life insurers could use social media posts in underwriting policies, so long as they did not discriminate based on race, color, national origin, sexual orientation or other protected classes.

Weak returns at U.S. shale producers could cost more executives their jobs and lead to increasing battles with activist investors, analysts said following changes at two producers.

After years of outspending cash flow to expand oil and natural gas production, executives are under pressure to pull back on spending and deliver higher returns. Investors have sold shares in companies that increased their drilling budgets, and some have avoided the sector altogether.

Pioneer Natural Resources Co Chief Executive Tim Dove retired on Thursday after a two-year stint in the job, with founder and former CEO Scott Sheffield returning to the top role.

Halcon Resources Corp CEO Floyd Wilson and two other executives – finance chief Mark Mize and Steve Herod, executive vice president of corporate development – resigned the same day. The company said it began the search for a new CEO.

“It’s a what-have-you-done-for-me-lately scenario,” said Jason Wangler, analyst with Imperial Capital in Houston. “Not only are investors holding people accountable, they’re watching every move.” He expects management and board changes at other companies this year.

Activist investor Fir Tree Partners this month called for Halcon to appoint independent board directors, cut costs and sell itself. Fir Tree in a statement on Friday called the management changes “important first steps.”

On Friday, Kimmeridge Energy Management Co announced an activist stake in PDC Energy Inc and urged the producer to cut expenses and pay a dividend. PDC in response said it was focused on capital discipline.

Such battles are likely to “be pretty steady in 2019,” said Leo Mariani, an analyst at KeyBanc Capital Markets Inc. “The common complaint from activist investors is that a lot of these companies have relatively poor returns on capital and outspend cash flow.”

While producers have pledged to pare spending, investors want proof. “There’s a difference between saying and actually doing,” said Morningstar Inc analyst Dave Meats.

Pioneer, one of the largest U.S. shale producers, last week released financial results that fell short of Wall Street expectations due to hedging-related costs.

Halcon was hard hit by the 2014 oil price drop and emerged from bankruptcy restructuring in 2016. The stock market values its land at less than $5,000 an acre, compared with peers whose land is valued above $20,000 an acre, Fir Tree said in a Feb. 4 letter.

Analysts expect the firm to report a loss of 8 cents per share when it releases quarterly results on Tuesday, according to Refinitiv data.

“They laid out a pretty aggressive growth strategy,” Wangler said. “The market obviously has not been conducive to those types of stories, outspending cash to try to grow production.”

CAPE CANAVERAL, Fla. (Reuters) – NASA gave its final go-ahead on Friday to billionaire entrepreneur Elon Musk’s SpaceX company to conduct its first unmanned test flight of a newly designed crew capsule to the International Space Station on March 2.

The approval cleared a key hurdle for SpaceX in its quest to help NASA revive America’s human spaceflight program, stalled since space shuttle missions came to an end in 2011.

NASA has awarded SpaceX $2.6 billion, and aerospace rival Boeing Co $4.2 billion to build separate rocket and capsule launch systems to carry U.S. astronauts to and from the space station, an orbital research laboratory that flies 250 miles (402 km) above Earth.

“Following a full day of briefings and discussion, NASA and SpaceX are proceeding with plans to conduct the first uncrewed test flight of the Crew Dragon on a mission to the International Space Station,” NASA said in a statement announcing its decision.