Snapchat’s role in fentanyl crisis probed during House roundtable

Snap-owned Snapchat, and its role in the fentanyl crisis, was the focus of a House roundtable hosted by the Energy and Commerce Committee on Wednesday that could set the stage for new proposals to protect kids on the internet or limit the liability protections for online platforms.

The roundtable featured the mother of a child who died after taking a drug containing fentanyl allegedly purchased over Snapchat, apparently believing it was a prescription painkiller. It also featured two lawyers who litigate such cases against tech companies as well as a sheriff from Washington state who has investigated fentanyl deaths.

Witnesses testified at the hearing on Wednesday that Snap’s popular photo and texting app, known for its disappearing messages, was uniquely designed in a way that attracted drug transactions.

“Big Tech has many problems,” said Carrie Goldberg, a lawyer who works on cases seeking to hold tech platforms accountable for often offline harms. “But the lethal fentanyl sales is not a general Big Tech problem. It’s a Snap-specific problem. Snap’s product is designed specifically to attract both children and illicit adult activity.”

Goldberg expressed concern with Snapchat’s disappearing messages, anonymity and real-time mapping features, which users have to turn on for their friends to see their location.

Bloomberg reported Wednesday that the Federal Bureau of Investigation and Department of Justice are also investigating Snap’s role in fentanyl sales. DOJ declined to comment and the FBI did not immediately respond.

Lawmakers are concerned about other platforms like Facebook Messenger, too. “This is not just Snapchat,” Rep. Gus Bilirakis, R-Fla., said. “It’s all these social medias.” Bilirakis pointed to two examples of someone buying a fentanyl-laced drug over Facebook Messenger, for example.

A Facebook spokesperson wasn’t immediately available for comment.

The Energy and Commerce Committee, now led by Rep. Cathy McMorris Rodgers, R-Wash., votes on legislation across topics including privacy, consumer protection, content moderation and health.

McMorris Rodgers has indicated that under her stewardship, the panel will seek to significantly narrow liability protections for tech platforms, which advocates on the panel suggested should be done in the case of wrongful death lawsuits.

A document from last year laying out Republican priorities for the committee suggests they should “Scrap 230,” the law that shields platforms from liability for their users’ posts, and start over to create what they see as a less politically biased standard. McMorris Rodgers has also expressed interest in exploring tech impacts on kids’ health, including mental health, in the past.

A Snap spokesperson said the company is “committed to doing our part to fight the national fentanyl poisoning crisis, which includes using cutting-edge technology to help us proactively find and shut down drug dealers’ accounts.”

The company blocks search results for drug-related terms and redirects users to expert resources about fentanyl risks, the spokesperson added. The company has said it’s made improvements to parental supervision features and machine learning to proactively catch illicit sales and has made it harder for adults to find teens to connect with unless they have multiple friends in common. It said, of drug-related reports from users, those specifically about drug sales have fallen from about 23% in September 2021, to about 3% in December 2022.

“We continually expand our support for law enforcement investigations, helping them bring dealers to justice, and we work closely with experts to share patterns of dealers’ activities across platforms to more quickly identify and stop illegal behavior,” the spokesperson said. “We will continue to do everything we can to tackle this epidemic, including by working with other tech companies, public health agencies, law enforcement, families and nonprofits.”

Laura Marquez-Garrett, an attorney with the Social Media Victims Law Center, disputed some of Snap’s claims, saying despite what the company has said, many of the kids who have died from fentanyl overdoses were not actively looking for drugs and the company has not sufficiently preserved data for law enforcement to use in such investigations.

Goldberg called Section 230 the “main hurdle” in holding tech companies liable for harm to their users. That’s because it does not incentivize safety features, she said, and also prevents tech platforms from reaching the discovery stage in many cases, which could otherwise reveal internal information.

Spokane County Sheriff John Nowels said that his office invests heavily in tech expertise to help investigate fentanyl transactions, including on other encrypted services. He added that dealers will often have profiles on other platforms too, but they will point consumers to their Snapchat accounts from there. He said it’s “short-lived” once dealers realize other platforms are cooperating with law enforcement.

Nowels said the lack of laws around how tech services should retain information and hand it over to law enforcement, as well as end-to-end encryption that obscures messages except for between the users talking to each other, makes it harder for investigators to trace back the source of illegal drug deals. But legislation weakening encryption for law enforcement investigations would also likely be at odds with the committee’s other goal of increasing digital privacy protections.

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WATCH: Lawmakers grill TikTok, YouTube, Snap executives

Facebook and Instagram will reinstate Trump after two-year ban

An image of President Donald Trump appears on video screens before his speech to supporters from the Ellipse at the White House in Washington on Wednesday, Jan. 6, 2021, as the Congress prepares to certify the electoral college votes.

Bill Clark | CQ-Roll Call, Inc. | Getty Images

Meta will allow former President Donald Trump to return to Facebook and Instagram in the coming weeks, the company announced, two years after his suspension was enacted following the 2021 insurrection at the U.S. Capitol.

“As a general rule, we don’t want to get in the way of open, public and democratic debate on Meta’s platforms – especially in the context of elections in democratic societies like the United States,” Nick Clegg, Meta’s president of global affairs, wrote in a blog post announcing the decision. “The public should be able to hear what their politicians are saying – the good, the bad and the ugly – so that they can make informed choices at the ballot box.”

Facebook, Twitter and Google-owned YouTube all made the unprecedented decision to block the sitting U.S. president from their platforms at the time, after they determined doing so outweighed the risk of potential further incitement of violence. The platforms’ bans varied in their degrees, however, with Twitter opting for a permanent ban and Facebook saying its suspension was temporary, eventually setting a timeline of two years before it reviewed the decision.

The suspensions came after a mob charged into the U.S. Capitol on Jan. 6, as lawmakers worked to certify the election of President Joe Biden. Then-Vice President Mike Pence was whisked away to a secure location by the Secret Service, recognizing the danger to him as he oversaw what’s usually a routine procedure in Congress.

Though Trump at one point urged the mob to remain peaceful, he also stoked the lie that the election was “stolen from us,” tweeting at one point during the day that Pence “didn’t have the courage to do what should have been done to protect our country and our Constitution,” presumably by obstructing the election results that denied Trump a second term.

“The suspension was an extraordinary decision taken in extraordinary circumstances,” Clegg wrote. “Now that the time period of the suspension has elapsed, the question is not whether we choose to reinstate Mr. Trump’s accounts, but whether there remain such extraordinary circumstances that extending the suspension beyond the original two-year period is justified.”

Clegg said in making the decision, Meta took into account conduct around last year’s midterm elections in the U.S. and expert assessments of the security environment. As a result, the company concluded “that the risk has sufficiently receded, and that we should therefore adhere to the two-year timeline we set out.”

Still, Clegg said Trump would be subject to “heightened penalties for repeat offenses,” which also apply to other public figures who are reinstated for civil unrest, under a newly updated protocol. If Trump violates Meta’s community guidelines again, the violating posts will be removed and he’ll be suspended anywhere from a month to two years, depending on the severity.

The updated protocol “addresses content that does not violate our Community Standards but that contributes to the sort of risk that materialized on January 6th, such as content that delegitimizes an upcoming election or is related to QAnon,” Clegg wrote. Meta may suppress distribution of such posts and for repeated offenses, temporarily limit access to Meta’s advertising tools. The company could also choose to remove the reshare button on posts that violate those guidelines or prevent them from being run as ads. Meta could take similar steps if Trump posted something that “violates the letter” of its community guidelines but that it deems newsworthy.

“We know that any decision we make on this issue will be fiercely criticized,” Clegg wrote. “Reasonable people will disagree over whether it is the right decision. But a decision had to be made, so we have tried to make it as best we can in a way that is consistent with our values and the process we established in response to the Oversight Board’s guidance.”

Setting the two-year suspension

Platforms like Facebook and Twitter earlier removed or labeled certain posts by the president that they believed to be harmful before ultimately choosing to block his account.

On the evening of Jan. 6, 2021 Facebook said that “two policy violations” on Trump’s page would trigger a 24-hour block on its platforms. The next day, the company said in a statement that it felt “the risks of allowing President Trump to continue to use our service during this period are simply too great,” and said the ban would last “for at least the next two weeks,” through the inauguration.

On the day of Biden’s inauguration, the company said it was referring the suspension to its independent Oversight Board, which Facebook established to make binding content decisions. The Oversight Board said Facebook should set a timeline for reevaluating its decision, which Facebook determined in June 2021 should be two years from Trump’s January 7, 2021 suspension.

In a blog post announcing the timeframe, Facebook executive Nick Clegg said the decision on whether to reinstate Trump’s account would be based on “whether the risk to public safety has receded,” accounting for “instances of violence, restrictions on peaceful assembly and other markers of civil unrest.”

Should Trump be allowed back onto the service, Clegg said at the time, there would be “a strict set of rapidly escalating sanctions that will be triggered if Mr. Trump commits further violations in future, up to and including permanent removal of his pages and accounts.”

Trump has since moved his musings to Truth Social, an app he’s backed that closely resembles Twitter and is led by former Rep. Devin Nunes, R-Calif.

Twitter’s new owner Elon Musk lifted the platform’s suspension of Trump last year, though the former president has yet to resume tweeting from his account.

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WATCH: House Minority Leader Kevin McCarthy recorded venting his opinions about Jan. 6

House Minority Leader Kevin McCarthy recorded venting his opinions about Jan. 6

Tesla (TSLA) earnings Q4 2022

Hong Kong, China, 13 Sept 2022, A red Tesla car passes in front of a Tesla dealership in Wanchai. (Photo by Marc Fernandes/NurPhoto via Getty Images)

Nurphoto | Nurphoto | Getty Images

Electric vehicle maker Tesla reported earnings after the bell, beating on both earnings and revenue. Shares were about flat after hours. Here are the results.

  • Earnings (adjusted): $1.19 vs $1.13 per share expected, per Refinitiv
  • Revenue: $24.32 billion vs $24.16 billion expected, per Refinitiv

In the year-ago quarter, Tesla reported revenue of $17.72 billion and adjusted earnings of $2.52 per share.

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Tesla reported automotive revenue of $21.3 billion in the fourth quarter, representing 33% growth year-over-year. $467 million of that came from regulatory credits in the fourth quarter of 2022, up by nearly half from the prior year in the same period.

Automotive gross margins came in at 25.9%, the lowest figure in the last five quarters.

In a shareholder deck, the company acknowledged that average sales prices have “generally been on a downward trajectory for many years,” and said “affordability” would be necessary for Tesla to grow into a company that sells multiple millions of cars annually. The company recently cut prices to stoke demand.

Earlier this month, Tesla reported vehicle delivery and production numbers for the fourth quarter of 2022 that set a new record for the company, but fell shy of the company’s goals and analysts’ expectations, despite having cut prices on its cars in December to spur customers to take deliveries before the year’s end.

Tesla reported 405,278 vehicle deliveries and production of 439,701 vehicles in the period ending December 31, 2022. Full year deliveries amounted to around 1.31 million, a record for Tesla, after the company started production at its new factories in Austin, Texas, and Brandenburg, Germany.

This is breaking news. Please check back for updates.

With a recession looming, how to decide if you should to go back to school

Maskot | Maskot | Getty Images

An economic downturn usually sparks a renewed interest in reschooling.

Historically, enrollment in graduate school picks up amid recession as workers take the time to “skill up” or pivot to another industry with better career prospects or pay.

“When the economy goes down, the interest in graduate schools goes up,” said Eric Greenberg, president of Greenberg Educational Group, a New York-based consulting firm. “The education umbrella is kind of a hedge.”

But this economic cycle is unlike any other.

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A wave of layoff announcements has raised concerns that the job market is finally cooling as recession fears take hold. Yet government data shows the U.S. labor market is still strong, with a record low unemployment rate of 3.5%.

Still, a recession may be looming, some experts say, which raises the question of whether going back to school makes more sense than trying to weather a potential period of unemployment.

But there are many factors, including cost and a larger debt burden, to consider that could erode the financial return on investment for a graduate education, Greenberg said. “There are subtle nuances in play.”

Here are some of those key considerations:

This is not your average economic cycle

History is often the best guide, but in this case, the usual patterns may not apply. 

In 2020, nationwide enrollment in graduate school initially sank but then quickly rebounded in 2021, only to slump again in the fall of 2022. This year’s 1% slide reversed the previous year’s 2.7% gain, according to a report by the National Student Clearinghouse Research Center based on data from colleges. 

In 2023, enrollment rates could likely pick up once again, in part because, this time, a recession wouldn’t be as short-lived as it was during the pandemic, explained Doug Shapiro, executive director of the National Student Clearinghouse Research Center.

There’s usually a lag time of up to a year after the economy slows before workers return to school for retraining, he said.

“Without that expectation of a quick rebound, that could lead to the increased enrollment response that we’re used to seeing,” Shapiro said.

There’s better access to advanced degrees

Students walk past Stanford University’s Graduate School of Business in Stanford, California.

Susan Ragan | Bloomberg | Getty Images

With more programs available remotely, getting an advanced degree is also more manageable than it was before the pandemic.

Now tech workers, for example, who have been impacted by a recent wave of layoffs could boost their resumes with additional graduate qualifications and certificates that they can pick up online, Shapiro said.

To further expand access, some schools, including Northwestern’s Kellogg School of Management, MIT’s Sloan School of Management, the Tuck School of Business at Dartmouth, Duke’s Fuqua School of Business and UC Berkeley’s Haas School of Business, have waived testing requirements, fees or extended application deadlines for recently laid-off employees.

“There’s an influx of exceptionally talented individuals in the labor market right now who may have been considering business school someday down the road, and the road just took an unexpected sharp turn on them,” Lawrence Mur’ray, Dartmouth’s executive director of admissions and financial aid, said in a statement.

The potential return on investment

Return on MBA investment varies by race

Going back to school typically pays. Workers with master’s, professional or doctoral degrees have the highest earnings overall and experience lower levels of unemployment, according to the U.S. Bureau of Labor Statistics.

But in addition to the economic payoff, there is also a higher cost. In less than two decades, the median debt among borrowers who completed master’s degrees has nearly doubled as the cost of a graduate degree, particularly in the form of student debt, spiked, according to Urban Institute’s Center on Education Data and Policy.

“The financing aspect profoundly influences the decision making,” said Allen Koh, CEO of Cardinal Education, a California-based tutoring, test-prep and college admissions firm.

The interest rate on federal student loans taken out for the 2022-23 academic year rose again to 4.99%, up from 3.73% last year and 2.75% in 2020-21. For graduate students, the rate jumped to 6.54%, from 5.28% last year and any loans disbursed after July 1 will likely be even higher.

At the same time, inflation has also caused the cost of living to soar, making rent and daily expenses even less affordable on a student’s budget.

To that end, some master’s programs have particularly high debt-to-earnings ratios, such as social work, counseling, music and fine arts, the Urban Institute also found.

The growing availability of tuition benefits  

A growing number of companies may be willing to pick up a portion of the tab to ease the burden of affording education.

Coming out of the pandemic, education benefits played a big part in the competition for workers and, as a result, more companies are now offering opportunities to develop new skills, according to the Society for Human Resource Management’s recent employee benefits survey. 

Almost half, or 48%, of employers said they offer undergraduate or graduate tuition assistance as a benefit, according to that survey.

Of course, employers paying for their employees to get a degree is not new. For decades, businesses have picked up the tab for white-collar workers’ graduate studies and MBAs.

However, many companies are now extending this benefit to hourly and part-time employees as well as heavily promoting the offering more than they have before.

Even if there is a strong desire to go back to school, less than half of employees said they have been able to pursue educational goals in the last several years, mostly due to the time commitment and financial obstacles, according to research by Bright Horizons.

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Covid omicron boosters offer some protection against XBB variant

Pfizer‘s and Moderna‘s omicron boosters reduced the risk of mild illness from the XBB family of subvariants compared to people who did not receive the shot, according to a study from the Centers for Disease Control and Prevention published Wednesday.

The CDC study provides the first estimate of the omicron shots’ real-world effectiveness against the XBB family of subvariants. Some scientists have warned the XBB subvariants could cause another Covid wave because they are so good at evading the antibodies that block infections.

For people ages 18 to 49, the omicron booster reduced the risk of mild illness by about 48% two to three months after receiving the shot. The shots provided 38% protection against mild illness for those ages 50 to 64 and 42% protection for people ages 65 and older, according to the study.

CDC officials, in a call with reporters Wednesday, said the study results are reassuring because people who received the boosters had more protection than those did not. Protection against severe illness should be higher, they said.

“It cuts your risk of symptomatic infection in about half at the population level,” said Dr. Ruth Link-Gelles, a CDC official and author on the study.

“What we know from past experience is generally that the vaccines protect better against more severe disease,” Link-Gelles said. “So these are estimates for symptomatic infection and we would expect that similar estimates for hospitalization and death would be higher.”

The XBB.1.5 subvariant is quickly rising to dominance in the U.S. and currently makes up about 49% of new Covid cases nationwide. Officials at the World Health Organization have described XBB.1.5 as the most transmissible version of the virus yet, though it doesn’t have any mutations that would suggest it makes people sicker than other subvariants.

XBB.1.5 is very immune evasive and has mutations that allow it to bind better to human cells. But the CDC study found that the omicron boosters provide about as much protection against the XBB family as they do against the BA.5 subvariant and its descendants such as BQ.1 and BQ.1.1. Protection against mild illness from the BA.5 famly was about

“We did not see reduced vaccine protection against symptomatic illness for XBB and XBB.1.5 compared with those other recent BA.5 variants,” said Dr. Brendan Jackson, head of the CDC’s Covid-19 response.

The study compared people who received the new booster with those who received between two and four doses of the original vaccine. The boosters target omicron BA.5 and the original strain of Covid that emerged in Wuhan, China, while the old shots only target the original virus strain.

People who only received the original shots generally got their last dose about 13 months ago. They had very little protection against mild illness due to waning immunity observed with the old vaccines, Link-Gelles said. It’s too early to draw conclusions about how the protection from the omicron boosters holds up over time, she said.

“Even though you may have diminished protection over time against symptomatic infection, you’re likely still protected against more severe disease for a longer period of time,” Link-Gelles said.

This is a developing story please. Check back for updates.

92% of millennial homebuyers say inflation has impacted their plans

Lifestylevisuals | E+ | Getty Images

It may come as no surprise that among millennials who have intended to buy a house this year, 92% said in a recent survey that inflation has impacted their goal.

Yet most of them aren’t letting it serve as a roadblock, according to the survey from Real Estate Witch, an education platform owned by real estate data firm Clever.

While 28% of those millennials are delaying their buying plans, the remainder say they’re responding by saving more money for the purchase (59%), spending more than expected (36%), buying a fixer-upper (26%) and buying a smaller home (25%). 

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Millennials — who are roughly ages 27 to 42 — are in their prime homebuying years. The typical first-time buyer was age 36 in 2022, up from age 33 in 2021, according to the National Association of Realtors. 

Last year, first-time buyers made up 26% of home purchases, compared with 34% in 2021. The combination of year-over-year double-digit price jumps for much of 2022 and rising mortgage rates created an affordability problem for many buyers.

Home prices continue heading down from their highs

However, the situation is gradually improving as home prices continue sliding. The median price for an existing house was $366,900 in December, just 2.3% higher than a year earlier and down from $370,700 in November, according to the Realtors association. Last June, the median price was $416,000 — 13.4% higher than in June 2021.

Additionally, interest rates on mortgages have eased. The average for a 30-year fixed-rate loan is 6.21% as of Jan. 24, according to Mortgage News Daily. That compares with 7.32% in late October. As buyers know, the higher the rate, the more their monthly payment is.

5% or 6% may be the ‘new normal’ for mortgage rates

New data shows surge in mortgage demand

“Those were unusual circumstances,” said Lawrence Yun, chief economist for the National Association of Realtors.

“Buyers should have the mindset that the new normal is a rate of 5% or 6%,” Yun said. 

Houses are still selling quickly

Homes that sit on the market longer may be a buying opportunity

If you’re hoping to find a seller who’s more likely to come down on price, one strategy is to look for homes that have been on the market longer.

“There’s usually a lot of competition for new listings,” he said. “If you find a home that’s been on the market for at least a month or two, it’s a great opportunity… sometimes sellers will take 10% to 15% off the list price.”

Except for in premium areas, in most cases sellers are back to allowing contingencies.

Stephen Rinaldi

President and founder of Rinaldi Group

“Except for in premium areas, in most cases sellers are back to allowing contingencies,” Rinaldi said.

 Also, if you’re looking at homes close to a city, it may be worth expanding your search radius, Yun said.

“There are always more affordable houses further out,” he said. “And those homes tend to stay on the market for a longer period.”

An adjustable rate mortgage may be an option

While there’s a limit to how much the rate can change, experts recommend making sure you’d be able to afford the maximum rate if faced with it down the road. 

You may be able to find an ARM whose introductory rate is at least a percentage point below fixed rates, Rinaldi said.

“I think it’s worth evaluating, depending on the person’s situation,” he said.

Jim Cramer’s top 8 things Wednesday: Microsoft, 3M, Boeing earnings

My top 8 things to watch Wednesday, Jan. 25

1. Microsoft (MSFT) shares sink nearly 3% early Wednesday, pressuring the broader market after the Dow Jones Industrial Average, the S&P 500 and the Nasdaq. Microsoft’s fiscal second-quarter earnings beat estimates. Revenue missed. Guidance short. CEO Satya Nadella excited about OpenAI’s ChatGPT. But CFO Amy Hood plays grim reaper halfway through the call. Maturing tech. MUST WAIT UNTIL AMY. Only thing that matters. Azure cloud sales up 38% year over year in constant currency. Lots of price target cuts by Wall Street analysts, but they largely keep their buy ratings. The Club has MSFT at our 2 rating, meaning we’d like to see more pullback before considering buying more.

2. 3M (MMM) was bad. I mean terrible on every line item for the quarter. Full-year sales decline of 2% to 6%, worse than estimates at the midpoint. You have to wonder what the heck management is going to do besides come up with a new kind of scotch tape. Multiple PT cuts on the Street. The industrial giant announces 2,500 manufacturing job cuts.

3. Boeing (BA) reports big fourth-quarter loss. Supply chain snarls outweigh surging travel demand as the world learns to live with Covid. Aircraft manufacturing suffered during the height of the pandemic. Revenue of $19.98 billion fell short of estimates. Reaffirms guidance on Max and Dreamliner. Positive annual free cash flow.

4. AT&T (T) fourth-quarter earnings beat but revenue misses. Not great but better than Verizon (VZ). Full-year guidance free cash flow of $16 billion or better versus $16.2 billion expected. FCF in 2022 was $14.1 billion. Increase in subscribers but annual profit outlook below expectations.

5. JPMorgan cuts Ford (F) price target to $15 per share from $16 and General Motors (GM) PT to $57 from $59; keeps overweight (buy) ratings on both. Analysts at JPMorgan also cut Tesla (TSLA) price target to $120 from $125; keep underweight (sell) rating. Tesla shares bounce 16% year to date but still down over 53% over the past 12 months. Elon Musk’s electric vehicle maker is set to report quarterly results after the closing bell Wednesday.

6. Baird keeps Danaher (DHR) at an overweight (buy) rating but cuts price target to $309 per share from $321. Analysts say the life sciences and medical diagnostics company now derisked from Covid. We saw Tuesday’s DHR stock drop after largely solid quarterly results was a buying opportunity.

7. Barclays raises price target on SLB (SLB) to $74 per share from $62. Already in the stock? That’s the question with all oil and gas companies. I say no. We had the nation’s strategic petroleum reserve (SPR) being emptied, and there’s no shortage of places that are being drilled. Instead of SLB, we own oilfield services giant Halliburton (HAL), which reported a strong quarter Tuesday.

8. Bank of America (BAC) gives employees who make up to $500,000 a year restricted stock. In a memo to staff, CEO Brian Moynihan said the bank is investing its people “at a time of change in the global economy.”

(Jim Cramer’s Charitable Trust is long MSFT, F, DHR, HAL. See here for a full list of the stocks.)

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Russia fumes at West’s decision to send tanks to Ukraine

Russian President Vladimir Putin attends an annual meeting of the Defence Ministry Board in Moscow, Russia, December 21, 2022. 

Sergei Fadeichev | Sputnik | Reuters

Russia expressed mounting fury at the prospect of modern Western tanks being sent to Ukraine, calling it “extremely dangerous” and saying previous “red lines” were now a thing of the past.

Germany announced earlier Wednesday that it was ready to send 14 Leopard 2 battle tanks to Ukraine, and to allow other countries to send their own German-made tanks to Kyiv. The U.S. is also expected to announce its own intention to send Abrams tanks to Ukraine imminently.

The use of modern Western tanks by Ukraine is likely to add momentum to its efforts to push Russian forces out of occupied areas of the country, particularly the eastern Donbas region, but Russia sees the gift of tanks as further evidence that the West is fighting what it sees as a proxy war against it in Ukraine.

‘Extremely dangerous’

The Russian Embassy in Berlin called the German government’s decision “extremely dangerous” and said it “takes the conflict to a new level of confrontation.”

In a statement online, translated by Google, the embassy said the move “contradicts the statements of German politicians about the unwillingness of the FRG [Federal Republic of Germany] to be drawn into it [the war]. Unfortunately, this happens over and over again.” 

The embassy said it was now convinced that Germany and its closest allies were “not interested in a diplomatic solution to the Ukrainian crisis” but were “set up for its permanent escalation and unlimited pumping of the Kyiv regime with more and more deadly weapons.” 

Lastly, it warned that “red lines,” or limits, for both sides were now “a thing of the past,” echoing similar comments from Russia’s Foreign Ministry earlier Wednesday as it reacted to the prospect of U.S. Abrams tanks being sent to Ukraine, claiming Washington “has unequivocally stated its desire to inflict a strategic defeat on Russia.”

“There is a hybrid war going on against our country, which Foreign Minister [Sergey] Lavrov spoke about in detail just recently. Arguments about the red lines are a thing of the past,” the Foreign Ministry told state news agency Tass, in comments translated by Google.

“The United States has unequivocally stated its desire to inflict a strategic defeat on Russia. It is impossible not to notice the reality,” the ministry added, Tass reported.

Following Germany’s decision on tanks, all eyes are on the U.S. to see whether it will announce it’s ready to send a number of its own Abrams tanks to Ukraine. Three senior U.S. officials told NBC News on Tuesday that the Biden administration is preparing to send a couple dozen Abrams tanks to Ukraine although they stressed the decision was not final.

Germany was reportedly reluctant to send its own tanks unless the U.S. did the same, and a defense summit in Germany last Friday failed to reach an agreement over tanks, with the U.S. remaining noncommittal about sending Abrams. But Germany’s U-turn signals a change of heart in Washington, too.

Even in the absence of a White House announcement, Russia’s ambassador to the United States, Anatoly Antonov, slammed the prospect of U.S. tanks in Ukraine, describing the move as “another blatant provocation against the Russian Federation.”

“If the United States decides to supply tanks, it will be impossible to justify such step using arguments about ‘defensive weapons,'” he said Wednesday on Telegram, adding that American tanks would be “destroyed [just like] all other samples of NATO military equipment.”

‘Absurd’ and a ‘failure’

Russia has repeatedly warned the West against sending tanks to Ukraine, saying they would be a legitimate target for Russia’s armed forces, like other NATO weaponry, and would make any prospect for talks to end the war an even more distant possibility.

Kremlin spokesperson Dmitry Peskov commented at a media briefing Wednesday that “now we can only state that there are currently no prospects for entering the diplomatic path.”

“Unfortunately, we see a lot of manifestations of the conviction of a number of politicians, a number of experts, the military and so on, who believe that it is by continuing the war that the security of the continent can be ensured. This is an absurd belief,” Peskov said in comments translated by NBC News.

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Asked about the possibility of U.S. Abrams being sent to Ukraine, Peskov told reporters, “I am convinced that many experts understand the absurdity of this idea too. It’s just that, in terms of technological aspects, this plan is quite a failure, and most importantly, it is a clear overestimation of the potential that it will add to the Armed Forces of Ukraine,” he said.

“But we have already said that these tanks would burn up just like all the others,” Peskov said.

Boeing (BA) earnings Q4 2022

A Boeing 747-8F operated by AirBridgeCargo takes off from Leipzig/Halle Airport.

Jan Woitas | Picture Alliance | Getty Images

Boeing posted a $663 million loss for the fourth quarter as supply chain issues weighed on results despite a rebound in aircraft sales and deliveries that drove up revenue.

Airlines and aircraft manufacturers have benefited from a sharp recovery in air travel, one of the most affected industries from the Covid pandemic. But Boeing’s leaders have been hesitant to ramp up aircraft production until the supply chain has stabilized.

The company is producing 31 of its 737 jets a month and plans to increase that to about 50 per month in 2025 or 2026. It said it would raise what has been low production rate of the 787 Dreamliners to five each month toward the end of the year and to 10 per month in 2025 or 2026. Deliveries of those wide-body planes had been paused for around two years until this summer due to production flaws.

For the full year, Boeing had a loss of $5 billion despite a 7% increase in revenue to $66.6 billion.

Here’s how the company performed in the fourth quarter compared with analysts’ estimates complied by Refinitiv:

  • Adjusted loss per share: $1.75 vs. expected earnings per share of 26 cents.
  • Revenue: $19.98 billion vs. $20.38 billion expected.

Boeing generated $3.1 billion in cash flow in the fourth quarter, higher than analyst forecasts, and $2.3 billion for the year, the most since 2018, before the second of two fatal 737 Max crashes that sparked a yearslong crisis for the company.

Its commercial aircraft unit generated $9.2 billion in sales in the fourth quarter, up 94% from a year earlier as deliveries jumped, but it still produced a loss due to abnormal costs and other expenses such as research and development, the company said.

Boeing reiterated its expectation to generate between $3 billion and $5 billion in free cash flow this year.

“We’re proud of how we closed out 2022, and despite the hurdles in front of us, we’re confident in our path ahead,” CEO Dave Calhoun said Wednesday in a memo to employees. “We have a robust pipeline of development programs, we’re innovating for the future and we’re increasing investments to prepare for our next generation of products.”

Russia says it carried out hypersonic missile exercise in the Atlantic

This photo taken on April 21, 2019 shows the Russian missile frigate Admiral Gorshkov arriving in Qingdao in China’s eastern Shandong province.

Str | Afp | Getty Images

The Russian Defense Ministry said Wednesday one of its hypersonic-missile carrying frigates had conducted “hypersonic missile exercises” in the western part of the Atlantic Ocean.

The frigate Admiral Gorshkov tested the strike capabilities of Russia’s much-hyped Zircon hypersonic missile in the western Atlantic Ocean, according to a statement released by the ministry, using “computer simulation” exercises.

Russian President Vladimir Putin announced the development of the hypersonic Zircon (or Tsirkon) missiles back in 2019 when he said the missiles have a top speed of mach 9 (or nine times the speed of sound) and have a range of 1,000 kilometers (620 miles). The missiles, Putin said, “can hit navy or land targets.”

“In accordance with the training situation, the frigate practiced arranging [a] Tsirkon hypersonic missile strike against a maritime target at a distance over 900 kilometers away,” Russia’s defense ministry said in its statement about the exercise.

It did not say it had launched a missile.

The ministry noted that the Admiral Gorshkov frigate “is a modern multi-purpose ship, equipped with guided missiles, and designed for operating in distant maritime and oceanic areas.”

Russia has become a pariah state. What's next?

“Fitted with Tsirkon [missiles], the ship is capable of launching pinpoint and powerful strikes at any offshore and onshore targets,” it said.

Russia’s testing of its strike capabilities in the Atlantic Ocean is likely to be seen as a provocative step by the U.S. and its NATO allies.

Relations between Moscow and the West are at an all-time low following Russia’s unprovoked invasion of Ukraine.

Russia accuses the West, which has provided Ukraine with billions of dollars’ worth of arms and military aid, of waging a proxy war against it.