Elon Musk has pulled more than 50 Tesla employees into Twitter

The Twitter profile page belonging to Elon Musk is seen on an Apple iPhone mobile phone.

Nurphoto | Nurphoto | Getty Images

New Twitter owner Elon Musk has pulled more than 50 of his trusted Tesla employees, mostly software engineers from the Autopilot team, into his Twitter takeover, CNBC has learned.

Musk, who is CEO of automaker Tesla and reusable rocket maker SpaceX, completed the $44 billion acquisition of Twitter on Oct. 28 and made his mark there immediately. He fired the company’s CEO, chief financial officer, policy and legal team leaders right away, and has also dissolved Twitter’s board of directors.

According to internal records viewed by CNBC, employees from Musk’s other companies are now authorized to work at Twitter, including more than 50 from Tesla, two from the Boring Company (which is building underground tunnels) and one from Neuralink (which is developing a brain-computer interface).

Some of Musk’s friends, advisors and backers, including the head of his family office Jared Birchall, angel investor Jason Calacanis, and founding PayPal chief operating officer and venture capitalist David Sacks, are also involved. So are two people who share Musk’s last name, James and Andrew Musk, who have worked at Palantir and Neuralink, respectively.

Elon Musk biographer Walter Isaacson on looming Twitter layoffs and potential user fees

Among the dozens who Elon Musk enlisted specifically from Tesla are: director of software development Ashok Elluswamy, director of Autopilot and TeslaBot engineering Milan Kovac, senior director of software engineering Maha Virduhagiri; Pete Scheutzow, a senior staff technical program manager, and Jake Nocon, who is part of Tesla’s surveillance unit, as a senior manager of security intelligence.

Nocon previously worked for Uber and Nisos, a security company that had a multimillion-dollar contract with Tesla to identify insider threats, and monitor critics of the company.

At Twitter, Musk is counting on his lieutenants and loyalists to decide who and what to cut or keep at the social network.

He is also pressing them to learn everything they can about Twitter as quickly as possible, from source code to content moderation and data-privacy requirements, so he can redesign the platform, several Twitter employees told CNBC over the weekend.

Musk has billed himself as a free speech absolutist, but he has to balance those wishes with laws and business realities. He said in an open letter to advertisers last week as he was taking over the company: “Twitter obviously cannot become a free-for-all hellscape, where anything can be said with no consequences.”

It is not immediately clear how Tesla employees are expected to split their schedules between the automaker and Twitter.

Typically, when Tesla employees work for other Elon Musk ventures, usually SpaceX or the Boring Company, they can get paid by the other venture as a consultant. Some of Musk’s employees have full-time roles at more than one of his businesses. For example, Tesla Vice President of Materials Charlie Kuehmann, is concurrently a vice president at SpaceX.

At other times, two Tesla employees told CNBC, workers at the electric automaker are pressured to help with projects at his other companies for no additional pay because it’s seen as good for their careers, or because the work is regarded as helping with a related party transaction or project.

Tesla is facing serious scrutiny around the technology built and maintained by its Autopilot team, namely its driver-assistance systems, which are marketed as Autopilot, FSD and FSD Beta.

The Securities and Exchange Commission, the Department of Justice, and the California Department of Motor Vehicles are all investigating whether Tesla or Musk violated laws and misled consumers about Tesla’s driver assistance systems, which are still in development and do not make the company’s cars self-driving.

Meanwhile, the federal vehicle safety authority, NHTSA, continues to investigate whether Tesla driver assistance systems may have contained defects that contributed to or caused collisions. The way that Tesla marketed these systems on social media, including Twitter, is part of the scope of at least one NHTSA investigation.

Code reviews and 12-hour shifts

Several Twitter employees told CNBC over the weekend that Tesla employees now at Twitter have been involved in code review at the social network, even though their skills from working on Autopilot and other Tesla software and hardware do not directly overlap with the languages and systems used to build and maintain the social network. These employees asked not to be named because they’re not authorized to talk to the press about internal matters, and feared retaliation.

For example, most engineers in automotive companies, even the tech-forward Tesla, do not have experience designing and operating search engines and platforms that are broadly accessible to the public.

Twitter has multiple code bases with millions of lines of code in each, and myriad 10- or even 100-query per second (QPS) systems underpinning it. At Tesla, Python is one of the preferred scripting languages, and at Twitter programmers have used Scala extensively.

Twitter also has more exposure to international regulations around hate speech and data privacy, for example, particularly the European Union’s General Data Protection Regulation.

Twitter employees who were there before Musk took over said they have been asked to show his teams all manner of technical documentation, to justify their work and their teams’ work, and to explain their value within the company. The threat of dismissal looms if they do not impress, they said.

The employees said they are worried about being fired without cause or warning, rather than laid off with severance. Some are worried that they will not be able to reap the rewards of stock options that are scheduled to vest in the first week of November, according to documentation viewed by CNBC.

Meanwhile, the Twitter employees said they have not received specific plans from Musk and his team yet, and are largely in the dark about possible head count cuts within their groups, budgets and long-term strategies.

Musk has set nearly impossible deadlines for some to do-list items, however.

One immediate project is to redesign the company’s subscription software, dubbed Twitter Blue, and the company’s verification system (known sometimes as “blue checks” for the way they are denoted on the service). Employees say Musk wants that work done by the first week of November. The Verge previously reported that Musk wants to charge $20 per user per month, and to only give verification marks to the accounts of users who are paid subscribers, and would remove verification from accounts who do not pay for Twitter Blue.

Semafor's Ben Smith explains why it could become embarrassing to pay for Twitter

Managers at Twitter have instructed some employees to work 12-hour shifts, seven days a week, in order to hit Musk’s aggressive deadlines, according to internal communications. The sprint orders have come without any discussion about overtime pay or comp time, or about job security. Task completion by the early November deadline is seen as a make-or-break matter for their careers at Twitter.

In an atmosphere of fear and distrust, many Twitter employees have stopped communicating with each other on internal systems about workplace issues. What’s more, some of Twitter’s Slack channels have gone nearly silent, multiple employees told CNBC.

Meanwhile, Musk and his inner circle have been plumbing archived messages in the systems, ostensibly looking for people to fire and budgets or projects to slash.

On Sunday night, in a display of his unfettered access to internal information at the company, CEO Elon Musk (who calls himself “Chief Twit” but is officially CEO and sole director) posted a screenshot to his 112 million listed followers on Twitter.

The screenshot depicted comments made by Twitter’s head of safety and integrity, Yoel Roth, in May 2022. At the time, Musk was trying to get out of his agreement to buy Twitter for $54.20 per share.

In court, and in public, Musk had vociferously accused Twitter of faking metrics, specifically of playing down the amount of spam, fake accounts and harmful bots that exist on the platform.

In the internal message that Musk made public, Roth wrote disparagingly of a person involved with the business named Amir, and also remarked, that if Amir continued to “BS” him or others about objectives and key results, Twitter would be “literally doing what Elon is accusing us of doing.”

Musk alleged in a tweet that, “Wachtell & Twitter board deliberately hid this evidence from the court.” He also appeared to threaten further legal action, writing: “Stay tuned, more to come…”

Representatives for Twitter, Tesla and the law firm Wachtell, Lipton, Rosen & Katz have yet to respond to requests for comment.

Homebuilders say steeper downturn is coming as buyers pull back

A worker drills plywood on a single family home under construction in Lehi, Utah, on Friday, Jan. 7, 2022.

George Frey | Bloomberg | Getty Images

The once-hot housing market is cooling off at an alarming rate, and some homebuilders say it will only get worse come the new year as new orders dry up.

Fast-rising mortgage rates have caused once-frenzied homebuyers to turn on their heels and become worried about their potential investment and the health of the overall economy.

“There’s this cliff that’s happening in January,” said Gene Myers, CEO of Thrive Homebuilders in the Denver area, which was one of the hottest markets in the years leading up to and through the coronavirus pandemic.

Pending home sales plunge 31% versus one year ago amid rising mortgage rates

U.S. homebuilders were a major beneficiary of the Covid economy. Record low interest rates, combined with surging demand from consumers looking for more living space, caused a run on housing unlike most had ever seen before. Home prices surged over 40% in just two years, and homebuilders couldn’t meet the orders fast enough. They even slowed sales just to keep pace. All of that is over.

Housing starts for single-family homes dropped nearly 19% year over year in September, according to the U.S. Census. Building permits, which are an indicator of future construction, fell 17%. PulteGroup, one of the nation’s largest homebuilders, reported its cancelation rate jumped from 15% in the second quarter of this year to 24% in the third.

The public homebuilders that have reported earnings so far showed surprisingly strong results, but that is because much of it is based on a backlog of homes that went under contract last spring. That was before mortgage rates crossed 6% and then 7%.

Now builders are preparing for what’s coming next. Myers said that his company’s balance sheet is incredibly strong right now, thanks to a backlog of homes sold at high prices, but he predicted that the market will be “ugly” by the start of next year.  

“It is definitely a hard landing for housing,” he said. “Any hope of a soft landing really evaporated last spring, when it became so clear that our customers who are accustomed to such low mortgage rates just were going to go on strike.”

Myers was around during the last housing crash, which was brought on by a faulty mortgage market where just about anyone, qualified or not, could get a home loan. It caused a massive run on housing, based almost entirely on speculative buying and selling by investors. Single-family housing starts fell a stunning 80% from January 2006 to March 2009, but Myers notes that it was a slower turn compared with what is happening now.

“I think we’re seeing the most abrupt change in the market in my career, and I’ve been around a while,” he said. “I’ve never seen sales just turn off, which for us happened in May.”

Downward spiral

Barely six months ago, single-family housing starts were still up 10% year over year. That was just before mortgage rates really started to jump quickly. To go from a 10% annual gain in construction to a 19% drop in that time frame is an historically sharp turn.

While sales of newly built homes are falling, prices are still higher compared with a year ago. Much of that has to do with still-inflated prices for labor and materials. Part of the price strength may just be indicative of which homes are selling, namely the more expensive ones. But that may change soon, as well.

Sheryl Palmer, CEO of Arizona-based homebuilder Taylor Morrison, which just reported strong earnings for its third quarter, said entry-level buyers are clearly struggling. But she also admitted that higher-end buyers are not flooding in the door either anymore.

“When we look at our move-up and our resort lifestyle buyers they absolutely can still afford to buy, but emotionally, you need to have the confidence,” Palmer said Friday on CNBC’s “Mad Money.” “Even at today’s rates, both our FHA and conventional buyers have a great deal of room, but being able to afford it doesn’t mean they have the confidence, given everything that’s going on in the economy today.”

Demand for new homes down 86% since last year

Palmer told analysts on the company’s earnings call that new orders were down “sharply” in September, and that the slowdown has been felt across a wide range of price points, geographies and consumer groups. As a result Taylor Morrison is pulling back on land investment, lowering its pace of new construction starts and offering buyers additional incentives.

Sales of newly built homes dropped below pre-pandemic levels in September, and cancelations are now double what they were a year ago, according to the National Association of Home Builders.

“This will be the first year since 2011 to see a decline for single-family starts,” NAHB Chief Economist Robert Dietz said in a release. “While some analysts have suggested that the housing market is now more ‘balanced,’ the truth is that the homeownership rate will decline in the quarters ahead as higher interest rates and ongoing elevated construction costs continue to price out a large number of prospective buyers.”

Supply of newly built homes remains elevated, unlike in the existing-home market, where listings are still scarce. NAHB reported that one-quarter of builders are now slashing prices.

And that is the big unknown. Prices are cooling down for both new and existing homes, but analysts are divided as to if they will actually show year-to-year declines, and how wide those declines might be. Myers said he has heard talk of a 20% drop in prices for new construction.

“And it sounds really harsh, but when we were looking back, because our construction costs have gone up so rapidly, we only have to dial back a little over a year to be 20% less than we are now,” Myers said. “So to think about, well, we’re just going to go back to 2020 doesn’t sound nearly as crazy as a 20% price correction. But I think it definitely has to happen if we’re going to get velocity back.”

Long Covid is affecting women more than men, national survey finds

A woman receives a dose of a vaccine against the coronavirus disease (COVID-19) at a sport stadium during the coronavirus disease pandemic, in Vina del Mar, Chile, April 22, 2021.

Rodrigo Garrido | Reuters

Long Covid is more common among women than men, according to federal data.

More than 17% of women have had long Covid at some point during the pandemic, compared with 11% of men, according to data from U.S. Census Bureau and National Center for Health Statistics published this month.

Long Covid was defined as experiencing symptoms for three months or more after infection. The most recent data was collected through an online survey of more than 41,000 adults during the two weeks ending Oct. 17.

Women were also more likely to suffer from more severe long Covid, the survey found. Some 2.4% of all women had symptoms that significantly limited their normal activities, compared with 1.3% of men, according to the data.

Overall, more than 14% of U.S. adults had long Covid at some point during the pandemic, the survey found. Seven percent of U.S. adults currently have long Covid, according to the data.

If those figures held true for the general population, 36 million adults could have had long Covid at some point during the pandemic, while 18 million could currently be dealing with it.

About 2% of adults in the U.S. have suffered from more severe long Covid symptoms that significantly limited their daily activities, according to the data. That would be equivalent to more than 5 million people in the general U.S. adult population.

The Brookings Institution, in a separate analysis, found that as many as 4 million people in the U.S. are unable to work due to long Covid.

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Long Covid presents a wide array symptoms that vary from mild to debilitating and affect multiple organ systems. Some of the most commonly reported symptoms include poor memory or brain fog, fatigue, shortness of breath and loss of smell, according to a recent study published in Journal of the American Medical Association.

The JAMA study also found that long Covid was more common among women. Nearly 18% of Covid survivors who had symptoms for more than two months were women, while 10% were men.

The dominant Covid variant and vaccination status may also play roles in how likely people are to get long Covid.

Nearly 60% people who developed long Covid were infected with the original virus strain that emerged in China, while more than 17% caught the delta variant and more than 10% had omicron, according to the JAMA study.

The study found that 87% of those who had long Covid were unvaccinated.

“There may be differences in these strains and how likely they are to cause long Covid that could teach us something about why this happens,” said Dr. Roy Perlis, the lead author on the study and co-director of the Center for Quantitative Health at Massachusetts General Hospital.

The JAMA study, which published last week, looked at more than 16,000 adults who tested positive for Covid. The data was collected from February 2021 through July 2022 from a national online survey conducted every six weeks called the Covid States Project.

Scientists do not understand the underlying cause of long Covid yet, though there’s a growing consensus that it is likely several distinct conditions and not a single disease. The National Institutes of Health is enrolling a massive study, called Recover, to precisely define the different types of long Covid, identify risk factors and develop tests and treatments.

Wynn Resorts, TuSimple, Newell Brands, First Solar and more

This photograph taken on October 20, 2022 shows the signage of Wynn Casino resort with the Grand Lisboa and Casino Lisboa in the backdrop in Macau.

Eduardo Leal | AFP | Getty Images

Check out the companies making headlines in midday trading.

Wynn Resorts — Shares of the casino operator jumped 9.6% after a filing showed billionaire investor and restaurant owner Tilman Fertitta has built a passive 6.1% stake in the company. The stock is still down more than 20% this year.

Newell Brands – Shares of Newell Brands, a consumer goods manufacturer, slipped 8.24%. The company was recently downgraded by a slew of analysts including those at Raymond James, Deutsche Bank, Jefferies and Wells Fargo following their earnings report last week.

TuSimple – Shares of self-driving startup TuSimple slumped 45.64% after it fired its CEO, Xiaodi Hou. An internal investigation showed improper dealings and a possible tech transfer to a Chinese firm by Hou. The FBI and Securities and Exchange Commission are both investigating, the Wall Street Journal reported.

First Solar — The solar stock jumped 9.72% during midday trading. On Friday, Bank of America raised its price objective on First Solar, saying the company’s growth prospects remain intact even after its more than 60% rally this year, according to the analyst.

Paramount Global — Shares of Paramount Global shed 3.7% after being downgraded by Wells Fargo Securities to underweight from equal weight. Analyst Steven Cahall, who had just downgraded the media company to equal weight earlier this month, expects negative revisions and a possible reconsideration of sports rights or a shift in strategy from Paramount.

HanesBrands Inc — Shares of HanesBrands fell 5.28% after the retailer received a double downgrade from Wells Fargo. The firm cut the stock to underweight from overweight, citing increasing macroeconomic and balance sheet issues in the next year.

Meta Platforms — Shares of Meta Platforms fell 6%, leading declines in megacap technology stocks following disappointing earnings results last week. Alphabet, Apple and Microsoft all slipped as well.

Global Payments — The stock slid 8.8% after the company reported earnings that were in line with expectations on per-share earnings and beat anticipated revenue. Meanwhile, the company said it was taking steps to finance multibillion-dollar transactions that involved debt. The stock is still up about 7% this month.

Align Technology — Align Technology stock jumped 3% Monday after the company announced a new $200 million accelerated share buyback agreement under its $1 billion repurchase program.

Howmet Aerospace — Shares of Howmet Aerospace, an aerospace manufacturer, fell 1.71% Monday after the company reported quarterly results that missed Wall Street expectations for revenue. The company reported revenue of $1.43 billion in the quarter, where analysts expected $1.44 billion, according to StreetAccount.

NOV Inc. — Shares of oil and gas manufacturer NOV rose 3.8% after Morgan Stanley boosted its price target for the company. The firm has an equal weight rating on the stock.

Oil and energy stocks — Oil and energy company stocks got a boost Monday after the Organization of Petroleum Exporting Countries said it sees oil demand growing for the next few decades and called for trillions of dollars of investment into the sector. Shares of Coterra Energy added 3.4%. Diamondback gained 2% and Occidental Petroleum rose nearly 1%.

ON Semiconductor — Shares of ON Semiconductor fell 8.97% even after the company beat estimates on the top and bottom lines. The company’s fourth-quarter guidance was mostly in line, according to StreetAccount, though it did call for a sequential decline in revenue. Other chip stocks were also under pressure on Monday, with Advanced Micro Devices dipping 3.1%.

Amgen — The biopharma stock dipped 1.3% after Barclays downgraded Amgen to underweight from equal weight, saying investor enthusiasm ahead of an obesity drug update next week may be overdone. Shares of Amgen rallied nearly 20% this month, creating a “challenging setup” for the stock to outperform following the update, according to the firm.

— CNBC’s Yun Li, Alex Harring, Michelle Fox, Sarah Min and Jesse Pound contributed reporting.

Paul Pelosi attacker David DePape hit with federal criminal charges

Speaker of the United States House of Representatives Nancy Pelosi and her husband Paul Pelosi arrive on the red carpet for the Time 100 Gala at the Lincoln Center in New York on April 23, 2019.

Angela Weiss | AFP | Getty Images

The Justice Department filed two federal criminal charges Monday against David DePape, who is accused of viciously attacking Paul Pelosi, the husband of House Speaker Nancy Pelosi, in the couple’s San Francisco home.

The new federal criminal complaint says evidence shows DePape “was prepared to detain and injure Speaker Pelosi when he entered the Pelosi residence in the early morning” Friday, when DePape was toting zip ties, tape, rope, and at least one hammer.

And when Paul Pelosi told DePape that Nancy Pelosi “would not be home for several days,” DePape “reiterated that he would wait,” the complaint alleges.

“DePap also later explained that by breaking Nancy’s kneecaps, she would then have to be wheeled into Congress, which would show other Members of Congress there were consequences to actions,” according to the complaint.

DePape, 42, was charged with assaulting an immediate family member of a United States official with the intent to retaliate against the official on account of the performance of official duties. He also was charged with attempted kidnapping.

The Richmond, California, resident was arrested by San Francisco Police on Friday after he was found at the home struggling with the 82-year-old Paul Pelosi over a hammer.

When officers ordered the men to drop the hammer, DePape gained control of it, and hit Pelosi in the head, knocking him out, authorities said.

Police found a roll of tape, white rope, a second hammer, a pair of rubber and cloth gloves, and zip ties from the crime scene, the Justice Department noted in a press release Monday.

DePape faces a maximum possible prison term of 30 years if convicted of the federal assault charge, and a maximum of 20 years in prison if convicted of attempted kidnapping.

Pelosi remained in the intensive care unit at a San Francisco hospital, surrounded by family members, on Monday morning, sources told NBC.

David Depape is shown in Berkeley, Calif.,on Friday, Dec. 13, 2013. An intruder attacked and severely beat House Speaker Nancy Pelosi’s husband with a hammer in the couple’s San Francisco home early Friday, Oct. 28, 2022, while searching for the Democratic leader. Police were called to the home to check on Paul Pelosi when they discovered the 82-year-old and the suspect, Depape, both grabbing onto the hammer, said Police Chief William Scott.

Michael Short | San Francisco Chronicle | AP

Law enforcement officials including FBI agents on Sunday obtained Pelosi’s account of the home invasion, a source with knowledge of the investigation told NBC.

Pelosi told police he had been asleep when DePape, whom he did not know, entered his bedroom looking for Nancy Pelosi, authorities said.

Pelosi had all of his cognitive functions and seemed to recall everything about the incident, the source said. 

Nancy Pelosi, a California Democrat who as House speaker is second in the line of presidential succession, was in Washington, D.C., at the time of the attack.

This is breaking news. Please check back for updates.

Trump asks Supreme Court to block Congress getting his tax returns

Former U.S. President Donald Trump speaks during a rally in Robstown, Texas, U.S., October 22, 2022. 

Go Nakamura | Reuters

Former President Donald Trump on Monday asked the Supreme Court to block a judge’s order that the IRS give years of his tax returns to the House Ways and Means Committee later this week.

The request to delay the execution of the judicial order pending a planned appeal came days after Trump lost an attempt to reverse the order at a federal appeals court.

“This case raises important questions about the separation of powers that will affect every future President,” Trump’s lawyers said in their emergency application to Chief Justice John Roberts. The chief justice has authority over such petitions from cases arising from the U.S. Court of Appeals for the District of Columbia Circuit.

Trump’s lawyers asked the court to act by Wednesday to delay an appeals court ruling that cleared the way for the IRS to deliver the tax returns on Thursday.

The delay would give Trump time to formally ask the high court to hear an appeal of the ruling. But the lawyers also said the Supreme Court could consider Monday’s filing itself a request to hear the case.

The filing accused the committee of trying to get Trump’s tax returns solely for the purpose of releasing them to the public, and not for a review of IRS audits of presidents, as the House panel has stated.

Trump’s attorney William Consovoy and a spokeswoman for the Ways and Means Committee did not immediately respond to requests for comment.

If the Supreme Court grants Trump’s application, it could thwart the Democratic-controlled committee from receiving the returns for several more years — at the very least.

A Supreme Court case challenging the order could take months or longer to resolve.

And if Republicans regain majority control in the House of Representatives in the upcoming midterm elections, before the Supreme Court case is resolved, they are expected to end the Ways and Means Committee’s three-year-long bid to get Trump’s tax returns.

That committee has sought Trump’s tax records and those of related business entities as part of an investigation of how the Internal Revenue Service audits presidential tax returns. The IRS, which is a division of the Treasury Department, is legally mandated to audit the annual tax returns of sitting presidents.

The committee sued to obtain Trump’s federal returns for the years from 2015 through 2020 after then-Treasury Secretary Steven Mnuchin refused to comply with the committee’s request. The Trump appointee Mnuchin said that the panel did not have a legitimate legislative purpose.

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Last December, Washington, D.C., federal court Judge Trevor McFadden, who was appointed by Trump, ruled that the Treasury Department had to turn over the tax returns as requested. McFadden said that even if the committee’s request was politically motivated, as Trump has argued, its chairman had stated a “valid legislative purpose” in seeking the returns, as the law required.

Trump then appealed McFadden’s ruling to the U.S. Court of Appeals for the District of Columbia Circuit.

In August, a three-judge panel on that appeals court unanimously ruled against Trump.

The panel noted that while tax returns are generally confidential under federal law, one exception is when the chairman of the Ways and Means Committee requests such returns in writing from the Treasury Department’s secretary.

“The Chairman has identified a legitimate legislative purpose that it requires information to accomplish,” Judge David Sentelle wrote in the panel’s opinion. “At this stage, it is not our place to delve deeper than this.”

Trump then asked for a re-hearing of his appeal at the same court in a so-called en banc hearing, in which most of the court’s judges would consider his arguments.

On Thursday, a slate of 10 judges on the appeals court unanimously rejected Trump’s request. The same group of judges denied a request by Trump to stay its denial pending his expected petition to the Supreme Court.

Ways and Means Committee Chairman Richard Neal, in a statement Thursday said, “The law has always been on our side. Former President Trump has tried to delay the inevitable, but once again, the Court has affirmed the strength of our position.”

“We’ve waited long enough — we must begin our oversight of the IRS’s mandatory presidential audit program as soon as possible,” Neal said.

Lula’s victory in Brazil sparks optimism on climate change

Luiz Inacio Lula da Silva, Brazil’s former president, center, addresses supporters after winning the runoff presidential election in Sao Paulo, Brazil, on Sunday, Oct. 30, 2022.

Bloomberg | Bloomberg | Getty Images

The narrow win by Luiz Inácio Lula da Silva in the Brazilian presidential election marks a key turning point on environmental issues, analysts say. 

Da Silva, commonly known as Lula, took 50.9% of the second round vote to incumbent Jair Bolsonaro’s 49.1%, according to Brazil’s election authority. 

The 77-year-old leftist campaigned on policies including exempting the lowest earners from income tax, raising the minimum wage and upping investment in public services to create new jobs. He has vowed to reduce poverty and boost economic growth, citing his record of doing so when he served two terms as president from 2003 to 2010.

The remarkable political return comes after he was jailed in 2017 on money laundering and corruption charges that were overturned in 2019.

“It’s a significant change, I can’t emphasize how much things will be different in this country with Lula’s election,” James Green, professor of Latin American History at Brown University, told CNBC’s “Squawk Box Europe” Monday, citing planned increases in welfare provision, more public-inclusive decision making, and the return of a “government of transparency.”

It also, Green said, “means a return to policies to save the Amazon.” As well as containing 25% of the world’s terrestrial biodiversity, the Amazon plays a crucial global role through storing billions of tons of carbon and releasing billions of tons of water each year.

Lula's victory will enable Brazil to return to a democracy, says professor

Lula used his victory address to pledge to combat climate change and deforestation — issues observers say have not just been sidelined but severely worsened under Bolsonaro’s tenure.

Deforestation in the Brazilian Amazon rose to an all-time high in the first half of 2022 and was 80% higher than the same period in 2018, the year before Bolsonaro took office, according to a report by the Amazon Environmental Research Institute.

Bolsonaro has been criticized for enabling the proliferation of illegal activity in Brazilian rainforests — including land grabs and violence against indigenous people and campaigners — through funding cuts to on-the-ground law enforcement; slashing the national environment agency’s budget; seeking to overturn environmental regulations; approving thousands of new pesticides; and appeasing the country’s powerful agricultural businesses by failing to act on encroachment onto protected lands.

Brazil has also failed to detail plans to cut carbon emissions in line with international agreements, according to Human Rights Watch, and its emissions from agriculture and cattle-raising have risen to the highest level on record.

Bolsonaro’s office was not immediately available for comment when contacted by CNBC. Bolsonaro has previously said he was taking action to protect the rainforest; but he has also defended the expansion of mining projects, while also accusing foreign governments and the media of exaggerating the damage being done. In 2019, he told foreign journalists: “No country in the world has the moral right to talk about the Amazon. You destroyed your own ecosystems.”

Environmental turnaround?

Organized crime has taken hold of several areas of the Amazon during Bolsonaro’s presidency, with many illegal miners and land grabbers seeing him as an ally, Carlos Rittl, international policy advisor and Brazil specialist at Norwegian NGO Rainforest Foundation, told CNBC on a call.

“Around 95% of deforestation in the last four years in the Amazon has had some level of illegality,” he said. “Areas that should have remained as forest have become private land, indigenous land has been invaded. It has reached this level because of the inaction of the government.”

“If we take a look at the promises Lula has made, including in his victory speech last night, he was addressing several major problems but also net zero deforestation, protecting indigenous people’s rights,” Rittl continued.

“We can expect him to re-strengthen the environmental agency and recover the budget to allow them to act against environmental crimes” — but only so long as he “walks the talk,” Rittl said.

It won’t be easy or immediate, he added, for a variety of reasons. A 2023 budget has already been agreed and systems have to be rebuilt and put to work. Lula will be seeking consensus in a strongly divided country and political system. And things have changed since his previous term (when annual deforestation of the Amazon plunged from 25,396 sqkm in 2003 to 7,000 sqkm in 2010) due to higher levels of organized crime with a strong foothold.

International cooperation on these efforts will be important, Rittl added. Norway is already looking to resume aid for anti-deforestation efforts to Brazil, which it suspended during Bolsonaro’s term, local newspaper Aftenposten reported Monday.

Growth targets

It remains to be seen how international investors will respond to the return of a Lula presidency, especially one with significant spending pledges to fulfil, and where he will take Bolsonaro’s planned pro-market reforms and privatizations.

The real dropped 2% on the news, before trimming losses, and shares in U.S.-listed Brazilian companies, including oil giant Petrobras, fell in pre-market trading.

The immediate concern for markets and also Brazilians and the international community is political stability during the handover of power, which is set to take two months.

There are still questions over whether Bolsonaro will challenge the election outcome. He could also seek to block a smooth transition, Green noted.

Energy question

TuSimple CEO fired over improper ties to Chinese firm Hydron

TuSimple, partly owned by UPS, makes self-driving trucks, a technology that may be among the innovations to help lower longer-run inflation in the transport sector.

Source: TuSimple

Self-driving truck startup TuSimple has fired its CEO, Xiaodi Hou, after an internal investigation found improper dealings and possible tech transfer to a Chinese firm led by TuSimple’s now-departed co-founder, the company said Monday.

The San Diego-based startup’s operations chief, Ersin Yumer, will serve as interim CEO and president while TuSimple’s board of directors searches for a permanent successor. Hou was also the company’s chief technology officer.

Shares of TuSimple were down more than 40% in mid-morning trading following the news.

TuSimple said in a regulatory filing Monday that based on an investigation by its board of directors, it believes some of its employees spent paid hours in 2021 working for Hydron, a Chinese startup developing autonomous hydrogen-powered trucks. Those employees shared confidential information with Hydron before a nondisclosure agreement was signed, TuSimple said.

The board’s investigation began in July and is ongoing, the company said.

The company’s relationship to Hydron is under investigation by the Federal Bureau of Investigation and the Securities and Exchange Commission, according to a report Monday by The Wall Street Journal. Investigators are examining whether TuSimple’s leadership failed to make required disclosures about its transactions with Hydron and whether the dealings harmed TuSimple investors, according to the report.

TuSimple didn’t immediately respond to a request for comment on the report of federal probes.

Hou co-founded TuSimple in 2015 and became its CEO in March of this year. Shortly after taking the top job, he told CNBC that he wanted to be an “evangelist” for the potential of autonomous trucking.

“Who is the best person to lead this company? It’s me! Because I am a relentless decision-making machine who is backed by the technical background,” Hou said in an interview with CNBC on March 30. 

2023 is our target date for commercializing autonomous trucking, says TuSimple CEO

Hydron was founded in 2021 by Mo Chen, another co-founder of TuSimple who had previously served as its executive chairman. Hydron initially announced plans to build electric trucks powered by hydrogen fuel cells in North America, but its operations have so far been mostly in China.

TuSimple will report its third-quarter results on Monday after the market closes but has delayed its conference call to Tuesday morning.

Voters worried about the economy

This election season, voters are laser-focused on one big issue: the economy. Americans rank inflation as the most important problem facing the U.S., followed by jobs and the overall economy, an October Ipsos/Reuters poll found.

In the last year, Americans aimed to go back to dining out, traveling and enjoying in-person events, which became scarce in the early days of the Covid-19 pandemic. But skyrocketing prices for everything from eggs to airfare, as well as uncertainty about the future, put a damper on many of those plans.

Voters may be divided on a lot of issues, but they all seem to agree that money and how the government affects it need to be addressed. When asked what single message voters hope to send politicians with their votes this year, the responses tied for No. 1 are “be more effective and do more” and “fix the economy and reduce the cost of living,” an NBC News poll found.

With that in mind, here’s a look at three of the top economic issues facing the U.S. right now.

1. The growing cost of living

2. The looming possibility of a recession

3. The volatile stock market

The stock market is not a full picture of the economy, but its performance certainly matters to voters. Watching their portfolios swell as pandemic recovery efforts took hold, only to bust and remain volatile through 2022, has many consumers re-thinking retirement plans and worried about their futures.

The stock market will remain up-and-down until there is a clear idea of what the government is doing, Harvard’s Ansolabehere says. Tax reform and changes to funding for social programs like food stamps and Medicare can affect consumer budgets and lead to more market uncertainty.

“There are things Congress shouldn’t do, and things that they can do in terms of creating a more stable situation,” Ansolabehere says. “What Wall Street wants is certainty. They want to be able to expect what Congress is going to do in terms of budgets and taxes.”

Finding that stability could be challenging. If Democrats lose the House, Congress could gear up for another debt ceiling standoff that may threaten to shut down the government or push the country to default on its debt, The Washington Post reports.

The war in Ukraine, another Covid surge and climate change could slow down or undo progress toward a full economic recovery, where prices come back down to earth and checking your 401(k) isn’t so gut-wrenching. But it’s up to voters to decide who’s best to handle these issues.

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JPMorgan Chase unveils payments platform for landlords and tenants

A JPMorgan logo displayed on a smartphone.

Omar Marques | SOPA Images | LightRocket via Getty Images

JPMorgan Chase is betting that landlords and tenants are finally ready to ditch paper checks and embrace digital payments.

The bank is piloting a platform it created for property owners and managers that automates the invoicing and receipt of online rent payments, according to Sam Yen, chief innovation officer of JPMorgan’s commercial banking division.

While digital payments have steadily taken over more of the world’s transactions, boosted in recent years by the Covid pandemic, there is one corner of commerce where paper still reigns supreme: the monthly rent check. That’s because the market is highly fragmented, with most of the country’s 12 million property owners running smaller portfolios of fewer than 100 units.

As a result, about 78% are still paid using old-school checks and money orders, according to JPMorgan. More than 100 million Americans pay a combined $500 billion annually in rent, the bank said.

“The vast majority of rent payments are still done through checks,” Yen said in a recent interview. “If you talk to residents to this day, they often say ‘The only reason I have a checkbook still is to pay my rent.’ So there are lots of opportunities to provide efficiencies there.”

Excel, QuickBooks

JPMorgan hopes to gain traction by offering users valuable insights through data and analytics, including how to set rent levels, where to make future investments and even assist in screening tenants, according to Yen.

While the bank says it is the country’s top lender to multifamily property owners with $95.2 billion in loans out at midyear, it is aiming beyond its 33,000 clients in the sector.

Landlords and renters don’t have to be JPMorgan customers to sign up for the platform when it is released more broadly next year, said Yen. The bank hasn’t yet finalized its fee structure for the product, he said.

Residents can automate monthly rent payments, receive notifications and view their payment history and lease agreement through an online dashboard. That provides ease of mind versus mailing out a paper check, Yen said.

Digital push