Capital One Bank Breach & Tesla’s Tax Promise

Capital One Bank Breach & Tesla’s Tax Promise

this is boom-bust broadcasting around the globe and covering the world of business and finance and the impact upon us all I'm Daniel Brito and I'm 50 I am Washington here's a look at what's on deck today a major breach has rocked the banking world as capital one has suffered a hack revealing the info of millions of people Bartlett Naylor Public Citizen is on hand to break down the beach and what this means for consumer plus the ECB bonds are seeing their day in German High Court Molly barrows of america's lawyer joins us to break down what's in store for the eurozone and later teza is making some big time tax promises but maybe not what it you're thinking Lauren fix the car coach takes a front lap around the latest we have a packed show today so let's go and dive right in another massive consumer data breach leads our global report today as Capital One Financial Corporation admits that the profiles of 106 million of their credit card customers have been hacked the hacked information was stored on cloud servers operated by Amazon Web Services federal agents arrested a former Amazon Web Services employee Paige Thompson and court filings allege that she exploited weakness in the firewall to breach the Amazon servers among the trove of data that the former Amazon employee allegedly obtained and attempted to share with others are 1 million Canadian Social Insurance numbers 140,000 US Social Security numbers and 80,000 bank account numbers authorities say the information was included in credit card applications some dating as far back as 2005 joint us now to provide an expert consumer protection perspective on this massive breaking story is Bartlett Naylor financial policy advocate at Public Citizen so basically Daniels has cited some of the top-line numbers on this breach social security and bank account numbers but what are the other sensitive information that may have been compromised and what was not revealed as far as we know well it's it's a it's a good question and it's it's unclear what is known this is a fairly late-breaking case the raid on the woman's house just took place a few days ago and all that's known is the affidavit by the FBI agent that that filed this clearly this is a problem that affects everybody a hundred million people is pretty much a third of the United States has probably got their data somewhere in this cloud and this breached cloud now and we're all essentially vulnerable and so on that point what should credit card applicants and customers at Capital One since apparently 2005 do if they think their data may have been breached freeze your credit report TransUnion Experian Equifax as you know keeps your credit score information and you call them and freeze that let no credit applicant take that if you want to get credit then you uh then you unfreeze it then unfortunately the law provides that if your credit card is stolen and used you're only liable up to $50 if you turn in the that your debit card is stolen your good as long as it's within a couple of days but again freeze your credit scoring so put this in perspective for the industry could this harm the cloud computing business and is this going to be a cost of doing business and finance moving forward in light of previous similar incidents notably Equifax yes and this is amazon's cloud serving business which is in Loudoun County it's it's the major footprint right here in Northern Virginia of course cap 1 is based here as well yes this is a major challenge for the cloud cloud computing it's a major challenge the major challenge for the banking the financial industry that's not my opinion that's the opinion of our treasury secretary minuchin of Jamie Dimon of JPMorgan the single biggest threat to the entire financial sector not just cloud computing is cyber attacks right and back to the accused hacker here the New York Times reports that this former engineer at Amazon Web Services posted some of the data she is accused of sharing on github on an account linked to her full name as well as to slack using an alias so she seems to have been pretty lacs about her own operational security and perhaps maybe even indifferent to being caught which makes a question how many others other hackers who did due diligence and covering their tracks made have been caught what's your take on me yes an unknown as we just discussed this is a major problem the reason that this was caught is the cap one has a tip line and asking hackers that know about some of these problems to call in and somebody did on July 17th so credit cap one and like Equifax this took about ten days to tell the world at Equifax is case it took months and months but yes and we should take such hot lines such whistleblower venues and supercharge them cap one should pay money they should offer they should offer a bounty for such services so the most immediate consequence for capital one is a 5% slide in their stock price today but for looking well we see regulatory consequences from this series of breaches well when you have the Republican chair of the Senate Banking Committee promising an investigation and and I promise you he is not an aggressive guy but when you have him promising an investigation than I think yes the regulator's and the lawmakers in Washington are ready to move the industry thinks this is a problem and I think Washington is is ready to address the issue head-on and in terms of again back to the information that was shared what besides Social Security numbers and account numbers could be sensitive there they can they can put in account balances if you're trying to apply for credit in something you say well I have so much in my account as it happens cap one is a subprime lender its clientele is not necessarily the upper income people at say Goldman Sachs for example but that said these are also some of the more vulnerable people so what few assets they have could be exposed now it's claimed that she hasn't shared this I don't know what was going through the mind of a sociopath but it is possible that she's simply trying to demonstrate how easy this is to do was she certainly done that Bartlett Naylor financial add policy advocated Public Citizen thanks for joining us thank you Citigroup is combining its stock trading business with its prime brokerage unit and plans on laying off hundreds of equity and fixed income traders in response to weak revenue trends and declining trading volumes in its second quarter results city's trading revenue remained declined for a third consecutive quarter with fixed income down 4% and equities down 9% this update from Citi falls in line with previous reports from other investment banks including BFA Morgan Stanley Deutsche who all reported similar challenges in its trading division trading revenue at the five biggest banks on Wall Street dropped an average of eight percent in the second quarter following a 14 percent slide in the first three months of the year while B of A and M s relied on their wealth management divisions to cover the shortfall city's second quarter earnings were artificially inflated from a one-time gain of trade Webb's I PA despite the beats all these banks are facing cyclical challenges in its trading division as technical article advancements are narrowing spreads new regs are limiting principle bets trading volume has been declining and many hedging clients have suffered massive outflows city is under tremendous pressure to trim costs in an effort to improve the fix its efficiency ratio and its starting with its weakest division the European Commission has said that Canada Brazil Singapore Argentina and Australia don't regulate credit rating agencies with the same rigor as the EU the decision would withdraw some market access rights of those countries and remove their status that makes it possible for European banks to rely on their ratings the block grants financial market access to non EU lenders investment firms credit and credit region rating agencies in its equivalent system as long as it considers their home rules to be in line with the e use and are subject to strong regulation and supervision FAL dis Dombrowski's the u EU Commission vice-president said that these five countries have been warned so they knew there was an issue that was there was going to be consequences saying quote if they during several years chose not to update their legislation than we had to take the decision to withdraw equivalents this is the first time that such access rights and equivalence provisions have been withdrawn this is really concerning since these credit agency has basically been found not to adhere to set standards by Poor's Moody's Fitch that their sole purpose is to assess the qualities of these bonds and that there's a so-called gauze of the credit market system basically rating and telling people which ones to are triple-a and which one have a c- so basically they provide the credit worthiness for the entire credit industry right now they are being complacent in their ratings so this is actually serious concerning because this actually contributed to the 2007 financial crisis right and it's remarkable that we're still dealing with these basic issues basic structural mechanical practical issues more than ten more than twelve years later I don't think this is actually limited to only these five countries David Einhorn and his latest investor note also noted that he is taking a macro position in shorting us corporate bonds simply because he says the credit Reagan's rating agency in the u.s. it's simply too complacent and despite any of the macro changes in the financial industry they have refused to adjust their rating scores something you should listen to Germany's top judges must once again determine if the European Central Bank's asset purchases constitute illegal state funding if they find it as illegal chaos could ensue legal journalist Molly burrows contributor with america's lawyer joins us now with more so Molly what is the issue here well Germany's Constitutional Court is beginning two days of hearings today and it's all over a ruling regarding the European Central Bank's or ECB's bond buying program at issue is if the central bank's multi-billion euro crisis fighting measures are legal well this has come up before since 2000 set r15 in fact the court's hearing is part of a long-running case that centers on whether the purchases constitute so called monetary financing which is illegal under EU law so what does monetary financing eurozone treaties keep the ECB from financing member states governments by buying their debt and that's known as monetary financing and the rule aims to protect the central bank from political pressure and avoid inflation well to increase the money supply to encourage lending and investment central banks will buy government securities or other securities in the market in this case a group of almost 2000 people including German economists and law professors say that that's illegal that they want nice central bank Boone's Bank the biggest buyer of bonds to stop taking part in this ECB bond buying program in this case before the top judges in Germany is their latest attempt to block it so they started back in 2015 and this is their latest attempt to say hey you are unfairly burdening German taxpayers by taking on this debt it's leaving them exposed to doing that right and with this challenge to the bond buying program which was was basically a policy for 10 years as called quantitative easing and the ECB wants to go back to that soon so I imagine they have a lot to say about this case right now yes so the judges it's gonna be a tricky question for them but not for the ECB they've always argued that its bond buying is on the secondary market as conducted under its QE program and it's not illegal the ECB says it extended asset purchases we're fully within their mandate to keep currency stable but the German plaintiffs argue the ECB is effectively bankrolling highly indebted au government's by printing money and they feared German taxpayers are gonna get saddled with that debt European law forbids the banks from buying bonds or forbids that being from buying bonds and other assets directly from governments and participating in these so-called primary market debt sales but it can buy from bondholders in the secondary market so that's what ECB is saying is happening and these German plaintiffs are saying wait a minute so what would happen if these purchases are ruled as unconstitutional well a lot of folks are a little concerned about that they say it would pledge the ECB's entire policy as Daniel mentioned into complete disarray and for that reason some economists say it's unlikely these German judges will vote against that so making a clear distinction though they think should be a priority between buying in primary and secondary markets but it's going to be tricky instead they say Germany's top court may apply more stringent criteria for when and how much the ECB can buy other economic leaders say Germany's judges may also want to strengthen Democratic oversight of ECB policy by national governments and other legal ramifications going back to that are whether the judgments of Germany's highest court should take precedence over European so there's a lot at stake for this particular case the complainants brought their case under the german constitution and until now it hasn't been clear whether the Constitution's power can be superseded by EU law so that's something that they could potentially rule on or consider and the outcome of this case could take a while given all these sensitivities involved and some observers don't expect a decision in fact until the end of the year and by that time the ECB's plan to launch a fresh round of stimulus could already be underway so if they do come back with the ruling that impacts that fresh round of stimulus again you could have some chaotic outcomes but we'll have to wait and see as they say right and so there's some important issues here that could set some really important precedents in the long term but and as you say it could take a while but what's what's the do we know the next steps in this particular case well they have two days of hearings ahead of them they'll each present their side and of course the ECB wants to continue as as part of their like you said their overall policy to continue to to finance and to inject a new stimulus into the economy so if there are decisions that are made that have ramifications about that it can certainly have a ripple effect that could impact a number of countries but Germany in particular is impacted by this because they are Boone's Bank is such a big buyer of these bonds so we'll be interesting to see what happens over the next couple of days and when they come back with a decision absolutely we'll definitely keep an eye out for that Molly burrows contributor to America's lawyer thank you so much for being here thank you time now for a quick break but stay tuned because when we return Tesla is making some big-time tax promises but they may not be what you're thinking Warren fix the car coach takes us for a lap around the latest and as we go to break here are the market numbers at the clothes mainstream news is in ruins I should know because I saw it from the inside and I know how they operate stop falling for exaggerations distractions and fictions for news that tells you what's really going on tune in to RT America where we always question more on Larry King questioning listening learning you know I've always said I never learned anything when I was talking it's important to listen question more major questions birth new questions numberless as stars and endless as the sea and bring you all in sight distance depth and more lift your eyes to all that remains in question I'm Mike Papantonio host of America's lawyer when white-collar criminals pile sky-high profits and sneer at the pain of those they rip off and ruin well that's where I come in question more hey guys I made a professional issue PowerPoint to show you how RT America fits into the greater media landscape RT is not all left or all right but we are a solid alternative to the bullsh we don't see you liberal or conservative and as you can see from this bar graph we don't skew the facts either talking-head lefties talking-head righties oh there you go above it all so look out world artsy America is in the spotlight now and frankly I have no IDE of classifiers it actually took me way more time than I care to admit your world wired as never before veins of information a twisting every way let me untangle these countless threads just press play huawei's sales continued to grow in the second quarter despite the continued us campaign aim at crippling its global reach sales jumped to more than 58 billion dollars in the first half of the year boosted by smartphone business and securing new 5g network contracts revenue jumped by 23 percent compared to the same period last year as huawei dominated the smartphone market in China with a 38 percent market share it grew shipments by 31 percent when the overall market is shrinking and rivals like Apple have declined by over 14 percent with the geopolitical headwinds huawei has shifted the focus of its consumer business to the domestic market building its own ecosystem to provide services including pre-installed apps and advertising in the follow up store the last earnings report noted that the US trade blacklist has had some impact on its development but the core products have not been significantly affected it reiterated that it has the ability to develop its own operating system for smartphones if the Android is not available CEO Renton Fei spoke out saying that by banning Huawei the u.s. had more to lose he said even if they have supercomputers and super large capacity connections the US might still fall behind because they don't have superfast connections shutting huawei out is a start of the u.s. falling behind and turning to South America a small country is at the center of a growing scandal over the world's largest hydroelectric plants Paraguay's Foreign Minister has resigned just hours after asking for an energy deal with Brazil involving the e-type udam to be suspended critics say the agreement was unfavorable to Paraguay which jointly operates the dam with Brazil along their shared border and would have cost Paraguay 200 million dollars annually the head of Paraguay state become a state energy company a and EE the Paraguayan ambassador to Brazil and the top Paraguayan manager of the dam have also resigned after the terms of the agreement which was signed in May were finally revealed last week this was the second resignation from the top post at a NDE in the past week over the controversy Tesla has agreed to pay China 2.2 three billion yen or roughly 323 million dollars in taxes per year as part of a deal to build out a factory outside of Shanghai the electric manufacturer vehicle must start generating annual tax revenues by the end of 2023 or relinquish the land back to Shanghai government meanwhile and the company's tank you finally on Monday it was revealed that Giga factory Shanghai is subject to a number of uncertainties including regulatory approval receipt and maintenance of certain manufacturing licenses which they have not required as of yet the shanghai facility will be the first overseas plant for Tesla as they attempt to reduce costs and selling EVs to the world's largest market joining us now to discuss what this means for Tesla and other auto news from around the globe is car coach Lauren fix so Lauren Tesla says that they hope to produce half a million cars at the Shanghai facility over the next 12 years does a tax requirement and a requirement to spend 2 billion dollars in capital expenditures on the plan over the next five years affect the company's bottom line oh it's absolutely going to affect the bottom line when you're talking about that kind of money 320 million dollars in taxes on an annual basis you have to make that up in profits because you have the cost of building the vehicle plus you have a profit margin so you have to take that out of your profit margin and you're not getting those government incentives like they are here in the US so in order to do that you have to sell quite a few vehicles and if you're not selling that many vehicles you're going to take a severe loss in each one because if you don't sell as many vehicles as expected in the forecast comes out to be substantially less than what it is there's no way you're going to be able to keep the company alive in China and they've so far never been able to hit forecast as of yet so what about the fact that they have admitted that they're still waiting for regulatory approval on the site can Tesla afford to have delays when it comes to getting this facility rolling well right now they've spent about 1/5 of what it actually costs to produce a factory here in the US or anywhere else in the world so I don't know how they can say that they're ready to go to production when they're not but the biggest factor is China requires a license to manufacture and that not been secured it was not listed in their 10k from February but it was listed buried on page 56 on their 10 Q for June so when you're looking at going deep into a financial statement like that and not announcing that this was not approved that makes a huge difference on and for investors when they're thinking about I'm going to invest in a company and they starting to build in China but they don't have the license to do so and so I think this is gonna be a huge factor once that's sealed and in place then they can start producing product but remember there's a lot of competition and they're also having a serious global crunch in China where sales are down cars less cars are being sold and they're having a lot of financial issues so it's going to affect not just Tesla but every manufacturer mm-hm over-promising and overly optimistic assumptions and projections seem to be repeated problem over there turning back to the US market auto sales in US are looking at a troubling trend and analysts say the US sales may fall for the seventh straight month what's the status of the US auto market well right now they're talking about a possible 1.8 percent to 2.9 percent decrease that's based on July's sale this would be the first time since 2014 that overall sales was the average market that they're expecting is below 17 million and that's a lot so that means there's going to be incentives available for consumers the average incentive is similar being thirty six hundred and four thousand dollars but remember the average cost of a vehicle is up so when you're getting that discount it comes out to be about 2.7 percent decrease an average across all the vehicles bottom line is there are sales out there there are deals to be had 20 19's that are left on the lot they've made way too many vehicles on a global basis than are being sold and so this is a good thing for consumers but not a good thing for manufacturers or investors mmm good summary there and in Canada Hyundai Canada is investigating a situation where an electric Hyundai Kona model exploded while in a customer's garage so did these continued stories of fires and explosions of EVs hurt the market or are they just the kinks being worked out in a relatively new sector I think it certainly brings up a lot of concerns for consumers that are thinking about purchasing an electric vehicle of any brand you know if this happened in China there was a bunch of parking garages we had Neos that caught fire and now we this is the first time we've ever heard of a Hyundai Kona so we don't know if it's one specific problem with one specific car or there's an inherent problem across the lineup of course they're gonna do their investigation Hyundai doesn't usually operate this way so we'll soon find out but overall when you're looking at China saying they're no longer allowing electric vehicles to be parked in parking garages that's a huge concern and it causes some doubt in consumers minds which is partly why sales here in the US have kind of been on the flat side for electric vehicles on a global basis it has increased a bit but that's only because of government incentives so earlier this month BMW unveiled vision M the next new concept sports car with an electric drivetrain that boasts artificial noise and self-driving capabilities so just check this out on how this how amazing this looks BMW even has tapped its famed composer Hans Zimmer to make a cinematic sound when the engine starts so Lauren what do we need to know about this electric sports car from BMW and how do these high concept cars really come into fruition well concept cars are just that they're our concept of what is capable but BMW has done that when you look at the i8 when it first came out as a concept car they put out posters and they created a lot of hype and everyone that saw it could not believe that that was a BMW when you think about BMW is a performance driving machine and now they've got the i8 so now you're looking at this new concept car and with the sound it sort of makes people feel like they're driving something which is a big problem with a lot of electric vehicles you press the button to start and you don't hear anything whether you're driving a Nissan Leaf or a Hyundai Kona so I think people kind of want that sensory feeling that you don't get so I think that's a great thing to show that it can be done it can be exciting but also BMW has not had greatest luck with the i3 or with the BMW i8 and they are cutting back on some of their production models and sort of transitioning as much as they can as quick as they can to electric vehicles even though in Europe they're popular but here in the US people still want their performance driving machines Lauren fix the car coach thank you so much for being here thank you that's it for this time you can catch boom-bust on DirecTV Channel 321 Dish Network channel 280 or streaming 24/7 on Pluto TV the free TV app channel 279 or as always hit us up at slash boom-bust our team see you next time

8 thoughts on “Capital One Bank Breach & Tesla’s Tax Promise

  1. She/he was hunting somebody or people. Did she spend money ? Did she sell any info? She had a specific target. She/he had a plan and her target was I highly assume a VICTIM IN PC… EVERYONE FAILED from what I understand so far…. the team…. so was it the one in PC who submitted the tip?

  2. Sounds more like she wanted to high light a vulnerability in the system and upper management would not give her the time of day. If you have stolen millions of records, you sell them quietly.

  3. Exploding Kona

  4. Surprised Tesla shares have performed so well with so much bad news.

    Or maybe its taking a while for the news to filter through the market, and this is more of a dead cat bounce from that plummet down

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