|Bid||192.85 x 800|
|Ask||192.88 x 1100|
|Day's Range||191.57 - 193.57|
|52 Week Range||123.02 - 218.62|
|Beta (3Y Monthly)||1.33|
|PE Ratio (TTM)||28.64|
|Earnings Date||Jul 23, 2019 - Jul 29, 2019|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||222.30|
One of Trump's closest economic confidant's is rather bullish on Facebook's upcoming new cryptocurrency.
The Dow Jones industrials led modest stock market gains early Monday. Facebook stock is approaching a potential buy point.
New investigative documents released by a state agency have given fresh life to questions about the marital history of Democratic Rep. Ilhan Omar, a Minnesota paper says. Meanwhile, a bill wants tech firms to disclose the value of users’ data.
(Bloomberg) -- Alphabet Inc.’s Google said it would invest 1 billion euros ($1.1 billion) to expand its data center infrastructure in the Netherlands.A new facility will be built in Agriport, about 30 miles north of Amsterdam, while an existing site about 130 miles further north, in Eemshaven, will be expanded.In a statement Monday, Joe Kava, vice president of Google’s Global Data Centers, noted that the Netherlands was attractive for its "ample sustainable energy sources."Tech companies are choosing to locate their data centers in regions of the world with access to renewable power, reducing their reliance on fossil fuels. Rich wind and hydroelectric resources, as well as cooler climates that help save on air conditioning, make places like the Netherlands prime destinations. Facebook Inc. has a facility in Lulea, northern Sweden, and Microsoft Corp.’s data center in the Netherlands is a regional hub for its cloud computing services.Google didn’t specify what its new facilities would be used for.In 2018, the search giant announced it had invested 1.5 billion euros into its Netherlands data center operations. The expansions announced Monday bring that total to 2.5 billion euros, it said.To contact the reporter on this story: Nate Lanxon in London at email@example.comTo contact the editors responsible for this story: Giles Turner at firstname.lastname@example.org, Peter ChapmanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Does Uber Stock Deserve More Long-Term Optimism?Uber’s (UBER) debut on the stock market at the beginning of May was among the largest ever, but so far investors aren’t too sure how to analyze the company. While the company has high hopes for the future — including with self-driving cars and being the go-to destination for all transportation — the short-term looks murky. Uber continues to burn through cash, especially as it expands into more cities around the world, while drivers are increasingly unhappy with the way the company treats them.But at the end of the day, the company is growing its revenue and out playing its rivals. Lloyd Walmsley of Deutsche Bank sees this as a reason to be bullish, as he maintains his Buy rating on UBER stock, with $58 price target, which implies nearly 32% upside from current levels. (To watch the Walmsley's track record, click here)Walmsley noted, "We are bullish on Uber and see continued evidence the competitive market continues to improve, with reports from drivers that Lyft (not covered) has communicated plans to reduce driver payouts 4-5% on two drive modes broadly across the US. We see lower driver payouts on stable consumer pricing leading to improving unit economics in the form of improving revenue take-rates. While this seems to be catch-up to lower driver payouts at Uber on similar (and somewhat limited) ride types, we view Lyft moving to Uber as a clear sign competition is rationalizing in the US and feel better about our outlook for improving take rates at Uber."Another factor in Walmsley’s opinion is Uber’s performance in Latin America. The analyst believes “the Latin American market is also stable for Uber,” as the company continues to reach beyond the US. Furthermore, Walmsley believes “fears around competition in the UK are overblown,” saying Bolt and Ola are not meaningful threats to the giant.Uber announced its first-ever quarterly earnings at the end of May, reporting a loss of about $1 billion on revenue of $3 billion, about 20% higher than this time last year. Total bookings increased 34% to more than $14 billion, as active users rose to 93 million. While perhaps its market cap of $74 billion is not justified by its earnings, many are still looking to the future when (the hope is) labor costs are cut and the company sees stability in foreign markets.All in all, though only a handful of analysts were bullish on Uber at the time of its debut, more and more analysts are coming around. TipRanks analysis of 27 analyst ratings shows a consensus Strong Buy rating, with 21 analysts recommending Buy and six Holding. The average price target for the stock stands at $54.23, suggesting the stock can rise about 23% from current levels.Crypto Move Boosts Facebook Stock, But How Will It Play In Long Term?With the tech world going crazy over Facebook (FB) recently announcing its new cryptocurrency Libra, FB stock is responding in kind. Up double-digits this month, many are excited over the company’s new task of making a worldwide currency, which will be used by Facebook users to buy items on the platform and pay each other through Messenger. While crypto’s best came last year, there is still hope among many that it will eventually become mainstream. Facebook hopes to play a role in this, as the company’s massive platform will allow it to provide security and regulation. Walmsley has questions about the new coin, but overall, the analyst is maintaining his Buy rating on Facebook stock with $220 price target, which implies nearly 23% from current levels. (To watch Walmsley's track record, click here)Though Walmsley says he likes the strategic play with Libra and Facebook-developed digital wallet Calibra and the magnitude of the ambition behind it, he still has many questions around whether it can really live up to the recent hype.The big question is whether Libra can scale. If this happens, he Walmsley says “reduced friction in E-commerce can increase the value of Facebook ads, and it can generate interest income on the currency collateral and open the door to more financial products.” Essentially, it will open up new revenue streams for a company that relies (almost) exclusively on ad income. Walmsley also believes that the coin adds “more utility to core Facebook” and will play a role in “reducing the risk users simply leave the...app.” Further, it “enhances the utility of WhatsApp and Messenger, moving them a (small) step closer towards replicating the WeChat’s SuperApp functionality,” by making it extremely simple and safe to send money to peers and sellers. Though Walmsley is positive on the new coin from a product standpoint, as it will help drive revenue and increase engagement on Facebook, he is concerned about regulation. The analyst points out that “intense regulatory scrutiny, lingering trust issues with Facebook, management by committee - among other concerns - weigh heavily in our minds vis-a-vis the ultimate success of the project.” The company is currently under the microscope in Europe and the US, and an attempt to now get into finance will most likely pull other regulatory agencies into the matter. Even so, given Facebook’s prowess across the line, the analyst remains a bull and sees “healthy upside potential to [his] $220 target.” All in all, this latest move is expected to make the popular company even more so. Most analysts on Wall Streets are out rooting for this social media titan to be a winning stock pick, as TipRanks analytics showcase FB as a Strong Buy. Based on 30 analysts polled in the last 3 months, 35 rate a Buy on Facebook stock while 3 maintain a Hold. The 12-month average price target stands at $220.20, marking a nearly 15% upside from where the stock is currently trading.Read more on the stocks mentioned: * Facebook’s (FB) Libra Could Be the Next Big Thing * Should Investors Buy Facebook (FB) Stock After Its Cryptocurrency Launch? Top Analyst Weighs In * Uber (UBER) Faces the Public; Should You Buy the Stock? * Why You Should Avoid Uber Stock Like the Plague More recent articles from Smarter Analyst: * CannTrust Holdings (CTST): Even With Entry Into U.S. Market, Investors Must Remain Patient * Crypto Move Boosts Facebook (FB) Stock, But How Will It Play In Long Term? * Does Uber Stock Deserve More Long-Term Optimism? * Facebook's (FB) Libra Could Be the Next Big Thing
(Bloomberg) -- Stocks with exposure to bitcoin are rallying in pre-market trading after the cryptocurrency traded above $11,000 for the first time in 15 months.Crypto-linked securities with pre-market gains include: Grayscale Bitcoin Trust BTC, which is gaining 7.8%; Riot Blockchain Inc., which is up 4.8%, DPW Holdings Inc. which is rising 6.7%, and Marathon Patent Group, up 3.7%.Some have suggested bitcoin is benefiting from new optimism as Facebook Inc. has decided to push into cryptocurrencies with its new coin, Libra.To contact the reporter on this story: Felice Maranz in New York at email@example.comTo contact the editors responsible for this story: Catherine Larkin at firstname.lastname@example.org, Richard RichtmyerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
There's no denying that Facebook's crypto plans are ambitious. Libra initiative, in the words of CEO Mark Zuckerberg, is to create a "simple global financial infrastructure." But making that a reality is far from a slam dunk. Within hours of Facebook's Libra reveal, skeptics called out seeming contradictions in the documents that Facebook published giving more details on the currency Libra, governing body the Libra Association, and the Calibra subsidiary that will manage digital wallets and other services.
Do you want to open a bank account with Mark Zuckerberg and Facebook? It’s bad enough that Facebook (FB) says it won’t be paying a nickel of interest on any money that customers keep in the company’s new Libra digital accounts. There was a good reason Willie Sutton robbed banks.
(Bloomberg Opinion) -- The internet was supposed to render geography irrelevant.(2) But the corporations that dominate the internet have turned out to be remarkably concentrated, geographically speaking. In internet publishing and web search portals, a somewhat ungainly but very important North American Industry Classification System category, 58% of all U.S. jobs in December could be found in just five counties, and more than 70% in the top 10.The location quotient is a measure of how concentrated an industry is in a particular place — a quotient of 1 means it’s right at the national average — and the location quotients in the above table make clear that this particular industry is heavily concentrated in the top five counties, especially the three bordering San Francisco Bay. In San Mateo County, home of Facebook Inc., one is about 30 times more likely to encounter an internet publishing and web search portal employee than in the country in general. Just to the south in Santa Clara County, the heart of Silicon Valley and the home of Google and its corporate parent Alphabet Inc., it’s 27 times more likely. Just to the north in San Francisco County, home of Twitter Inc. and Pinterest Inc., it’s 13 times more likely. The Bureau of Labor Statistics actually didn’t release fourth-quarter San Mateo County data for the sector, presumably because it was so dominated by Facebook that this would amount to disclosing private information, so I backed out the numbers using metropolitan-area data and a little elbow grease. The BLS did release San Mateo County numbers for the third quarter, and the employment total and location quotient were close to those I came up with (the average weekly wage was higher, at $8,872), so I don’t think this was much of a stretch.Related: Where Microbrewery Jobs Are OverflowingFinancial Jobs Aren’t Just in New YorkA Booming Local Health-Care Industry Isn’t Always a Good ThingEmployment location quotients of 30 and 27 are, it should be stressed, quite high, especially for such populous counties (San Mateo County has about 770,000 inhabitants; Santa Clara County nearly 2 million). Wayne County, Michigan, the headquarters of the U.S. automobile industry, had a December employment location quotient for motor vehicle manufacturing of 16.7; the District of Columbia’s location quotient for federal government employment was 13 and change.Santa Clara County did have a dizzying December location quotient of almost 64 for electronic computer manufacturing (thanks mainly, one assumes, to Cupertino-based Apple Inc.) and 40 for semiconductor machinery manufacturing (industry leader Applied Materials Inc. is based in the city of Santa Clara), but those are at least industries that revolve around creating complex, tangible products, which it stands to reason necessitates lots of people working in the same place. The internet is on first impression different: It’s everywhere, and it can be worked on from anywhere. Yet employment at the corporations that shape it is concentrated in a handful of places in the U.S. and has been getting more so. In March 2014, the top five counties accounted for 48% of the nation’s internet publishing and web search portal jobs, and the top 10 62%.Facebook and Google have been expanding overseas, so it’s possible that this focus on U.S. data is somewhat misleading — sadly there’s no global counterpart to the hyper-detailed Quarterly Census of Employment and Wages from which the data in this column (as well as pieces over the past few days on breweries, financial services and health care) is taken. Also, it’s not all about engineers at Facebook and Google: As the lower average wages outside of Silicon Valley indicate, this category also includes journalists working at online enterprises such as BuzzFeed Inc. and Vox Media Inc. in New York and elsewhere. It may also include contract workers slowly going crazy moderating Facebook pages in Phoenix; it’s often hard to know for sure how specific corporate activities are classified by the BLS, because the BLS isn’t allowed to say, but the goal is to assign the people working at a location to the industry sector that best fits what most of them are working on.Traditional media has a tendency toward concentration, too: Los Angeles County has 27% of the nation’s jobs in motion picture and sound recording industries. New York County (aka Manhattan) has 18% of all U.S. periodicals publishing jobs. The two counties together account for 20% of broadcasting employment. But the top-five and top-10 counties’ shares of jobs in these sectors are much smaller than with internet publishing and web search portals, and in motion pictures and periodicals, the very top counties have actually been losing employment share in recent years as media companies shift production to less expensive locales.In their much-cited 2009 review of what drives economic activity and the resulting wealth to “agglomerate” in certain cities, economists Edward Glaeser and Joshua Gottlieb wrote that:The largest body of evidence supports the view that cities succeed by spurring the transfer of information. Skilled industries are more likely to locate in urban areas and skills predict urban success. Workers have steeper age-earnings profiles in cities and city-level human capital strongly predicts income. It is possible that these effects will be reduced by ongoing improvements in information technology, but that is not certain and has not happened yet.It’s presumably the value of this transfer of information among skilled workers that has driven internet companies to concentrate in a few places. High costs in those places and those “ongoing improvements in information technology” might drive dispersion, although there’s no sign of that yet in this data. Politics might, too: As Facebook in particular has been discovering lately, having your employees concentrated in a few places can mean having few friends in Washington. But for now, the work of internet publishing and web search portals remains tightly clustered along the San Francisco Bay, and to a lesser extent the Hudson River and Puget Sound. Geography still seems to matter, a lot.Coming Tuesday: the sectors with the highest location quotients.(1) I realize that this has become something of a straw man, and that by this point far more has been written attacking the idea that the internet renders geography irrelevant than espousing it. But as someone who was at least halfway paying attention in the 1990s, I think it's fair to say that most people in those days assumed that universal connectivity would lead to a spreading out of economic activity rather than a concentration.To contact the author of this story: Justin Fox at email@example.comTo contact the editor responsible for this story: Brooke Sample at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Justin Fox is a Bloomberg Opinion columnist covering business. He was the editorial director of Harvard Business Review and wrote for Time, Fortune and American Banker. He is the author of “The Myth of the Rational Market.”For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg Opinion) -- It must be the weirdest political crisis of the year. A flimsy pretext has set off violent protests and a fresh confrontation between Georgia and its predatory neighbor, Russia. Interestingly, both the fiercely anti-Russian opposition in Tbilisi and the Kremlin stand to benefit.On June 20, the Interparliamentary Assembly on Orthodoxy (IAO), a little-known group of Orthodox Christian legislators from about two dozen countries, held its regular general assembly at the Georgian parliament. The group’s president, Russian legislator Sergei Gavrilov, sat in the speaker’s chair and addressed the assembly in his native tongue, one of the group’s official languages alongside Greek, English and Arabic. Georgian opposition leaders found this outrageous. The country has had no diplomatic relations with Russia since a brief war in 2008. The latter won and recognized the independence of two breakaway regions, South Ossetia and Abkhazia. Today, both are, to all intents and purposes, run from Moscow, though Tbilisi hasn’t given up on the idea of getting them back someday.Russia is toxic in Georgia’s domestic politics. During last year’s presidential elections, both leading candidates – one backed by the opposition, the other by the ruling Georgian Dream party – accused the other of Kremlin ties. In this context, a Russian legislator taking the speaker’s chair looked like surrender.Opposition activists with links to former president Mikheil Saakashvili mobilized their supporters, and an angry mob stormed the parliament building on the night of June 20. Police responded with rubber bullets and water cannons. That was clearly a tactical mistake. One of Georgian Dream’s key criticisms of Saakashvili was the disproportionate use of violence against protesters; now the opposition can throw that right back at the ruling party.So the government decided to make some concessions to the protesters and assert it wasn’t surrendering to Moscow. Friday saw the resignation of Irakli Kobakhidze, the speaker who had given permission for the controversial meeting in parliament. President Salome Zourabichvili broke off a foreign trip and accused Moscow of fomenting the protests.“Russia is our enemy and an occupier,” she wrote on Facebook. “The fifth column it controls can be even more dangerous today than open aggression.”That wasn’t enough to quell the protests. Thousands still gathered in front of the parliament building every day with two demands: The resignation of the interior minister who had ordered the use of force against protesters, and an early election under proportional representation, rather than the current system where half the seats are won in first-past-the-post races.On Monday, Bidzina Ivanishvili, the billionaire leader of Georgian Dream, agreed to hold the election under those new rules. Ivanishvili, Georgia’s richest man, has made sure his party and its candidates should do well; last year, opposition candidate Grigol Vashadze had a commanding lead in the polls, but Zourabichvili unexpectedly scored a come-from-behind victory.While it officially favors closer ties with the European Union and the North Atlantic Treaty Organization, Georgian Dream has gradually restored economic ties with Russia. Flights between the two countries resumed and Russia lifted its ban on the import of Georgian wine, of which it is the largest consumer. In May, more than 172,217 Russian tourists, more than from any other country, visited the nation of just 3.7 million people.After last week’s protests and Zourabichvili’s Facebook post, however, Russian authorities immediately banned flights between the two countries. On Monday, Russia’s consumer protection agency tightened checks on Georgian wine, citing a recent decline in its quality.This lightning-quick action is hardly warranted: Despite the anti-Russian posters at the protests and the angry rhetoric, visitors from that country are as safe as ever in Georgia. No attacks have been reported, and Zourabichvili has called on Russians to keep coming.President Vladimir Putin, however, is less worried about any hostility Russians might encounter in Georgia than his seemingly exhausted ability to mobilize Russians against external enemies.Opinion polls indicate voters are tired of anti-Ukrainian propaganda and uninterested in any further military adventures in the Middle East. A powerful response to anti-Russian sentiment in Georgia could be useful in rekindling some of the patriotic fervor that boosted Putin’s ratings after he seized Crimea from Ukraine in 2014. So Russian officials have done their best to fan nationalist passions. Putin’s press secretary Dmitry Peskov accused Georgians of “Russophobia” while Foreign Ministry spokeswoman Maria Zakharova unleashed a series of Facebook posts criticizing the Georgian authorities. “Some 10 people have told me today,” she wrote in one of them, “that they’d spent money vacationing over there, but they won’t set foot there again after these placards.” Indeed, a photo of a young Georgian woman holding up a sign with an expletive directed at Russia has gone viral.Given Putin’s struggle to reassure voters that he’s working to reduce poverty and improve the economy, fanning hatred of a neighboring country that insists on pursuing pro-European, pro-NATO policies can’t hurt. For many Russians, national pride takes priority over economic considerations.That’s where the Kremlin’s interests intersect with those of the nationalists seeking to oust the ruling party in Tbilisi. Putin needs enemies; the Georgians aren’t trying to hide the fact they are just that. It could help them to win an election.To contact the author of this story: Leonid Bershidsky at email@example.comTo contact the editor responsible for this story: Edward Evans at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Leonid Bershidsky is Bloomberg Opinion's Europe columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website Slon.ru.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg Opinion) -- In many ways, the economic debate in the U.S. has been stuck for quite a while. Progressives want higher taxes on the rich, more spending on the poor and more government health care; conservatives and libertarians want less. The 2016 election brought some innovation, with Donald Trump’s protectionism and the socialist revival sparked by Bernie Sanders. But the biggest breath of fresh air is coming from Democratic presidential candidate and Massachusetts Senator Elizabeth Warren.Just since the start of this year, Warren has released no fewer than 19 detailed economic policy proposals. This outpouring of ideas has been so dramatic that it has spawned Twitter hashtags such as shehasaplan. Warren’s ideas are neither the cautious, technocratic tweaks that tend to emerge from centrist think tanks, nor the bold but vague promises often issued by the socialist left. Nor are they merely a laundry list of campaign promises. Instead, they represent a coherent, unified program for transforming the U.S. economy.Four Warren proposals stand out as particularly original. The first calls for allocating some corporate board seats to workers -- an idea commonly known as co-determination. Used in Germany, the co-determination system has the potential not just to ensure that company policies take account of the interests of employees, but also to increase productivity by allowing workers to contribute more of their knowledge to the corporate decision-making process.Warren’s second fresh idea is regulation of big technology companies. Although her proposal calls for companies such as Facebook, Alphabet (Google) and Amazon to be broken up, in practice most of her ideas involve enhanced oversight rather than traditional antitrust remedies. Since platforms such as Amazon and Google tend to have strong network effects -- people usually want a one-stop-shop for online retail and a single website for internet search -- breaking them up wouldn’t lead to a competitive market in the long run. Warren’s plan seems to recognize this, and would instead treat these companies more like utilities, forcing them to allow smaller businesses to profit off of the infrastructure they create.The third big innovation concerns housing. With costs for shelter eating a bigger piece of Americans’ paychecks, and local government paralyzed by incumbent homeowners, the country needs a big solution. Warren’s would combine incentives for raising zoning density with increased public construction.But the biggest Warren idea is industrial policy, which she calls “economic patriotism.” Instead of relying on tariffs as President Donald Trump has done, Warren would promote exports. She would also leverage research and infrastructure to promote U.S. industry, and pressure countries to stop holding down the value of their currencies against the dollar. This represents a decisive break with the free-trade consensus of the past few decades, but isn't simply a return to traditional inward-looking protectionism.These four ideas, which are the most unique and original among Warren’s impressive oeuvre, give a picture of the senator’s economic philosophy. A good term for it might be “progressive industrialism.” Though Warren wants to rebalance the economic power of labor and capital, and use government to assist the needy, she also wants to harness private industry to create growth. Her plans for technology regulation and her export promotion would boost small businesses, while her housing plan would leverage the power of private development and her co-determination plan would more closely align the interests of labor and capital. The strategy is reminiscent of the New Deal, in which President Franklin D. Roosevelt strove to integrate private industry with government spending in order to advance both growth and equality. It also bears some resemblance to the strategies used by Germany and Japan to recover from World War II.Warren’s ideas are also notable for their specificity. In their recent book “Concrete Economics,” economist Brad DeLong and historian Stephen S. Cohen argued that successful policy programs should have concrete goal instead of leaving the future up to the vagaries of the market. Warren seems intent on doing exactly that -- under her industrialist program, Americans would get more housing, more opportunity to start their own businesses and more respect and power at work. They would also get more child care, cancellation of student debt, assistance with addiction, and a number of other tangible benefits. A health care plan is surely also forthcoming.This isn't to say that Warren’s plans are ideal in their current form. Her co-determination plan could benefit from the inclusion of German-style worker councils, her industrial policy should remove its harmful “buy-American” provision, her corporate tax plan might discourage investment and her wealth tax might run into constitutional obstacles.But ultimately no set of big, transformational ideas will be perfect. The New Deal certainly wasn’t. But by thinking big, combining intelligence with ambition, and being willing to engage both the public and private sectors, Warren has set herself up to be the closest thing modern American politics has to a successor to FDR. Now it remains to be seen if she can communicate this vision to the public in an inspiring way.To contact the author of this story: Noah Smith at email@example.comTo contact the editor responsible for this story: James Greiff at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Noah Smith is a Bloomberg Opinion columnist. He was an assistant professor of finance at Stony Brook University, and he blogs at Noahpinion.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Facebook Inc. and Apple Inc. are most at risk if government regulators are serious about pursuing antitrust actions against Big Tech.
Alibaba Group Holding (BABA) plans to open an e-commerce trade hub in Yiwu in a bid to set up a trade platform for small players in global trade.
Bitcoin tested 15-month highs on Monday after jumping more than 10% over the weekend, with analysts ascribing the spike to growing optimism over the adoption of cryptocurrencies after Facebook unveiled its Libra digital coin. Facebook said last week it planned to launch a new cryptocurrency called Libra, though the announcement immediately led to questions from regulators and politicians across the world. Mati Greenspan, an analyst at eToro, said bitcoin's gains underscored growing optimism among retail investors that Facebook's plans were part of a wider trend of major companies adopting cryptocurrencies.
(Bloomberg) -- On a recent Wednesday afternoon in late May, roughly 30 Facebook Inc. employees gathered at the company’s Menlo Park, California, headquarters to talk about sexual harassment.The group was there to consider a single, controversial Facebook post: an unsubstantiated list of more than 70 academics accused of predatory behavior, which also encouraged people to submit more “sexual harassers” to the list. The Facebook employees were asked to decide: Should the post remain up?The reality is the group had no authority to determine the post’s fate – that had been decided years ago by Facebook’s content moderators, who decided to leave it up. The employees were instead gathered for a role-playing exercise, the latest in a series of simulations Facebook is running globally on its way to creating a new Content Oversight Board that will review controversial decisions made by the company’s content moderators. If someone believes their post was removed in error, or the general public takes issue with a post that was allowed to remain, the board may step in and provide a final ruling. The list of creepy academics is the kind of post the board may one day review.For more than two hours, the group grappled with the list, taking notes on floor-to-ceiling whiteboards. Were the allegations credible? How many people saw the post? How many people reported it? What did Facebook’s content policies stipulate?One employee posed a question to the group right before they adjourned. “These are evolving situations, right?” said the employee, who Bloomberg agreed to keep anonymous as part of observing the session. “[Pretend] one week later, two weeks later, someone on that list commits suicide. A week later another person commits suicide. Do we take it down? Do we say, no, we decided to keep it up?’” In the end, the group voted overwhelmingly that the list should remain up – 22 votes in favor, 4 against – though few employees seemed fully convicted in their decision. In a world where Facebook is deemed much too powerful, and where the company is constantly criticized by some for taking down too much, and by others for taking down too little, the new Oversight Board represents a potential solution to one of Facebook’s thorniest problems: Its control over global speech. This new board, which doesn’t yet exist, will make content decisions for a global network of 2.4 billion people, making it a de-facto Free Speech Supreme Court for one of the biggest communities on the internet.It undoubtedly comes with challenges. The board’s independence will most certainly be an issue, and it’s unlikely the board will move at the speed necessary to keep up with the internet’s viral tendencies. But Facebook is on an elaborate listening tour in hopes of turning this Supreme Court vision into a reality that people can trust. The idea for Facebook’s Supreme Court originated with Noah Feldman, an author and Harvard law professor who pitched the concept of a “Supreme Court of Facebook” to Chief Operating Officer Sheryl Sandberg in January 2018. (Feldman is also a columnist for Bloomberg Opinion.) Feldman’s pitch outlined the need for an independent, transparent committee to help regulate the company’s content decisions. It was passed along to Zuckerberg, and Facebook ultimately hired Feldman to write a white paper about the idea and stay on as an adviser. The first time the idea was floated publicly was on a podcast that Zuckerberg did with Vox’s Ezra Klein, where he mentioned the idea for an independent appeals process “almost like a Supreme Court.” It's been more than a year since that podcast, and more than seven months since Zuckerberg formally announced plans to build an Oversight Board, and the company is still trying to agree on its fundamental structure. Basic decisions like how many members it should have, how those members should be picked, and how many posts the board will review, are all still undecided. Facebook’s tentative plan is outlined in a draft charter. The company will create a global 40-person board made up of people appointed by Facebook. It’s unclear how many content cases the board will review, though Facebook envisions each case will be reviewed by 3 to 5 members. Once a decision is made, it’s final, and the ruling board members will then write a public explanation, and could even suggest that Facebook tweak its policies.About the only thing that has been decided is that the board should be independent. Critics have slammed Facebook for having too much control over what people are allowed to share online. For years, conservative politicians and media personalities have accused the company of bias against conservative ideas and opinions. Facebook co-founder Chris Hughes criticized Zuckerberg’s power in a recent New York Times op-ed, saying that it was “unprecedented and un-American.” The board is intended to take some of that power. Zuckerberg has promised these decision makers will be free of influence by Facebook and its leaders – though getting to true independence will be the company’s first big challenge. “It’s all well and good for people on the outside to kind of prescribe that, yeah, Facebook needs to cede some of its power to outsiders,” said Nate Persily, a Stanford law professor and expert in election law. “But when you start unpacking how to do that, it becomes extremely complicated very fast.”Persily has already seen a version of the board come together. At Stanford, he just completed a two-month course with a dozen law school students who created their own version of the Facebook Oversight Board. The class presented their findings to Facebook employees at the end of May, suggesting that the board be much larger than the 40 part-time members Facebook outlined in its draft charter.“If they’re going to do any reasonable slice of the cases that are going to go through the appeals process, it’s going to have to be much larger or it’s going to have to be full-time,” Persily said.These kind of suggestions are why Facebook says it’s been running these simulations with academics, researchers and employees all over the world. Each serves as an elaborate survey. Since the start of the year, Facebook has hosted board simulations in Nairobi, Mexico City, Delhi, New York City, and Singapore.It also opened the process to public feedback. During a recent open comment period, Facebook received more than 1,200 proposals from outside individuals and organizations with recommendations on what the company should build. Responses came from established groups like the media advocacy organization Free Press, and also concerned individuals from Argentina, France and Israel. Others like the Electronic Frontier Foundation and the Bonavero Institute of Human Rights at Oxford, provided Facebook with input through their own papers and blog posts.The Bonavero Institute summarized its suggestions in a 13-page report, which included everything from different ways Facebook could pick cases for the board to review, to recommendations on how the board should be compensated. Both the EFF and the Bonavero Institute hammered home the importance of keeping the board independent.“But our biggest concern is that social media councils will end up either legitimating a profoundly broken system (while doing too little to fix it) or becoming a kind of global speech police, setting standards for what is and is not allowed online whether or not that content is legal,” Corynne McSherry, EFF’s legal director, wrote on its blog. “We are hard-pressed to decide which is worse.”Facebook is expected to publicly release a new report with findings from its simulations later this week. Achieving real independence will be tricky given Facebook plans to appoint the initial board members, who will serve three-year terms. It will also pay them, though through a trust. Then the plan is for the board to self-select its replacement members as terms expire. The idea is that, while Facebook may appoint the initial group, future generations of the board will be free of Facebook’s influence.“It isn’t just the people who we’re picking, but the process in which we’re picking them,” said McKenzie Thomas, a Facebook program manager helping lead the Oversight Board project. She emphasized the importance of having the board self-select its own replacement members as a key element of its independence. “This is a starting off point,” she added.Then there’s the speed problem. It’s unrealistic to expect that the board’s decisions will happen with the speed necessary to police the internet. That means the board will likely serve more as a post-mortem – a way to review decisions that have already been made, and if needed, issue a ruling that could impact how future posts are handled by moderators.It won’t, however, be a very efficient way to police Facebook in the moment, which is when content can usually cause the most damage. Facebook’s virality can mean that troubling content reaches millions of people in a matter of hours, if not minutes. The board won’t be necessary to make decisions on extreme violence, like the shooter who livestreamed his killing spree in New Zealand. Facebook already has strict policies in place for that kind of material. But borderline content, like deciding whether a post includes hate speech or just a strong opinion, could remain up for weeks until the board gets to it.“One of the things we need to figure out is…what is a version of a more urgent [board] session?” said Brent Harris, director of governance and global affairs at Facebook. “Does that make sense, and what does that look like?”Kate Klonick, a professor at St. John’s Law School, has written extensively about free speech, including an op-ed about Facebook’s oversight board in the New York Times. She’s observing the board’s creation for a law journal article she’s writing, and already spent one week embedded with the company.The board, she says, may not move quick enough to solve all of Facebook’s content problems, but at least it should provide an outside voice so that Facebook alone isn’t responsible for free speech rules online. “I see this [oversight board] as a solution for maybe that problem,” she added, “and unfortunately, not for the problem of the outrage machine.”In a best case scenario, Klonick thinks Facebook’s oversight board could inspire similar organizations at other private companies. But she’s also prepared for an alternative outcome.“Part of me is terrified [and] totally not delusional to the fact that...there’s just a really big chance that this just flops,” she said.To contact the author of this story: Kurt Wagner in San Francisco at email@example.comTo contact the editor responsible for this story: Emily Biuso at firstname.lastname@example.org, Jillian WardFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
There is "absolutely no evidence" that outside forces such as Russia used Facebook to target users and influence Britain's vote to leave the European Union, the world's biggest social network said on Monday. Nick Clegg, head of global affairs at Facebook and Britain's former deputy prime minister, said the network had run two full analyses of its data held in the run up to the 2016 referendum and found no evidence of a significant attempt by outside forces to influence the outcome.
Bitcoin tested 15-month highs on Monday after jumping more than 10% over the weekend, with analysts ascribing the spike to growing optimism over the adoption of cryptocurrencies after Facebook unveiled its Libra digital coin. Facebook said last week it planned to launch a new cryptocurrency called Libra, though the announcement immediately led to questions from regulators and politicians across the world. Mati Greenspan, an analyst at eToro, said bitcoin's gains underscored growing optimism among retail investors that Facebook's plans were part of a wider trend of major companies adopting cryptocurrencies.
(Bloomberg) -- Bitcoin traded above $11,000 for the first time in 15 months, recouping more than half of the parabolic increase that captured the attention of mainstream investors before the cryptocurrency bubble burst last year.“The bounce-back of Bitcoin has been fairly extraordinary,” said George McDonaugh, chief executive and co-founder of London-based blockchain and cryptocurrency investment firm KR1 Plc. “Money didn’t leave the asset behind, it just sat on the sidelines waiting to get back in.”Bitcoin surged as high as $11,251.21 on Monday, a 13% gain from late Friday that put it at the highest levels since March 2018. It was at $10,797.91 as of 1:28 p.m. in Hong Kong.The largest cryptocurrency had a furious run higher in late 2017 that culminated with a top above $19,500, before an almost-as-relentless move downward over much of 2018. It languished around the $3,300 to $4,100 range for several months.Bitcoin’s ride back accelerated in April, puzzling onlookers trying to pinpoint a reason for the surge. A study by Indexica, an alternative data provider, showed three main drivers: a more complex conversation surrounding Bitcoin, fewer concerns about fraud and a shift in the tense of how Bitcoin is talked about from the past to the future.“The market has matured greatly since the last time Bitcoin crossed $10,000,” said Matt Greenspan, a senior market analyst at eToro. “This run is far more justified given the current level of adoption.”Read more: Why Is Bitcoin Surging? Alternative Data Shows It’s Grown-UpIn contrast with last year, there are now signs of renewed mainstream interest in cryptocurrencies and the underlying blockchain technology, most prominently Facebook Inc.’s Libra. The social-media giant is working with a broad group of partners from Visa Inc. to Uber Technologies Inc. to develop the system, which has already attracted attention and criticism from politicians raising privacy and security concerns.Read more: Facebook Wants Its Cryptocurrency to Rival the GreenbackThe advent of Libra “is validating the crypto space and sending all the major digital coins higher,” said Edward Moya, chief market strategist at Oanda Corp. in New York. “Bitcoin volatility is likely to persist, with $12,000 and $15,000 as the next two critical resistance levels.”Crypto-related stocks advanced as well. GMO Internet Inc. rose 7% in Tokyo to its highest level since October. Remixpoint Inc. gained 9.2%, Metaps Inc. advanced 7.5% and Ceres Inc. increased 5%.Still, the speed of the rally has some observers warning caution is once again warranted.To Whitney Tilson, founder of Empire Financial Research and a former hedge-fund manager, Bitcoin is “exhibit A” in the lexicon of “scams that enrich insiders at the expense of average folks.”“Don’t get fooled by the dead-cat bounce this year,” Tilson said in comments last week. “Mark my words: A year from now, it will be a lot lower. This is a techno-libertarian pump-and-dump scheme that will end in ruin.”(Updates market pricing and adds crypto stocks in ninth paragraph.)\--With assistance from Adam Haigh, Sarah Wells and Kurt Schussler.To contact the reporters on this story: Eric Lam in Hong Kong at email@example.com;Vildana Hajric in New York at firstname.lastname@example.org;Joanna Ossinger in Singapore at email@example.comTo contact the editors responsible for this story: Christopher Anstey at firstname.lastname@example.org, Ravil ShirodkarFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Emerging-market currencies had their best weekly gain since July 2017 lat week and stocks strengthened for a fourth consecutive week as major central banks adopted a more dovish stance, improving investors appetite for risk assets. Bonds also gained, with yields on local government notes nearing an all-time low as the drumbeat for an interest rate cut in the U.S. got louder.Read here, our emerging-market week ahead story.Listen to the emerging-market weekly podcast, here.The following is a roundup of emerging-markets news and highlights for the week ending June 23.Highlights:The Federal Reserve signaled it was ready to lower rates for the first time since 2008, citing “uncertainties” that have increased the case for a cut as officials seek to prolong the near-record U.S. economic expansionThe decision was not unanimous, with St. Louis Fed President James Bullard seeking a quarter-point rate cutMinneapolis Fed President Neel Kashkari said he had advocated for a 50 basis points rate cut at the last meetingMario Draghi nudged the European Central Bank closer to pumping more monetary stimulus into the economyU.S. President Donald Trump accused the euro area and China of weakening their currencies to gain an economic advantage, calling out European Central Bank President Draghi for a willingness to inject monetary stimulus if neededThe U.S. and China said their presidents will meet in Japan later this month to relaunch trade talks after a month-long stalemate, triggering a rally in financial markets. Trump said Tuesday that he had a “very good” phone conversation with Chinese counterpart Xi JinpingA group of chief executive officers of American corporations are set to meet with Chinese Premier Li Keqiang as the simmering trade war ensnares companies from both countriesChina cut its U.S. Treasury holdings to the lowest in almost two years as the months-long trade conflict dragged on between the world’s two largest economiesChina’s Xi told Kim Jong Un that the world wanted him to make progress in nuclear talks with the U.S., drawing a complaint from the North Korean leader that he had already attempted to compromise with little successSecretary of State Michael Pompeo said the U.S. and North Korea were in a “better place” after the leaders of the two countries exchanged lettersTurkey will retaliate against any U.S. sanctions imposed after it takes delivery of a missile-defense system from Russia, President Recep Tayyip Erdogan saidThe Trump administration is weighing three sanctions packages to punish Turkey over its purchase of the Russian S-400 missile-defense system, according to people familiar with the matterErdogan also slammed the Turkish central bank’s high borrowing costs and said they must come down, a statement sure to worry investors concerned about the bank’s autonomy Iran said it shot down a U.S. drone near the entrance to the Persian Gulf, escalating tensions in a region that’s been on the brink of a military confrontation for weeksTrump on June 22 said the U.S. will impose major new sanctions on Iran on MondayHe called off retaliatory strikes on three Iranian sites following the downing of the U.S. Navy drone because the action would not have been “proportionate”Trump downplayed the attack, suggesting a “loose and stupid” individual may have been responsible for the strike Iran will exceed an agreed cap on its inventories of low-grade uranium on June 27, potentially breaching for the first time a landmark 2015 agreement that was meant to prevent it from developing a nuclear bomb Lebanon’s Eurobonds have entered distressed territory as a budget delay and rising political tension in the region complicate efforts to tackle the nation’s fiscal crisisExchange-traded funds that invest in emerging markets suffered a seventh week of outflows, led by Asian assetsGold prices surpassed $1,400 an ounce for the first time since September 2013 on Friday, buoyed by dovish central banks Asia:China will maintain its long-standing commitment to reform and opening up of the economy in order to continue to expand, Premier Li saidThe People’s Bank of China and the main securities regulator called on big banks and brokerages to increase financing support for leading securities firms at a meeting on Tuesday, according to people familiar with the matterHuawei Technologies Co. is preparing for a 40% to 60% drop in international smartphone shipments as the Trump administration’s blacklisting hammers one of the Chinese tech giant’s most important businessesChina will likely increase the quota for new municipal bond issuance this year, and government debt levels will continue to rise, according to Zhao Quanhou, a researcher at Chinese Academy of Fiscal Science, which is under the Ministry of Finance.New home-price growth quickened last month after government measures to spur demand in smaller cities took effectMinutes of the Bank of Korea’s May 31 meeting showed there were at least two dissenting voicesThe escalating U.S.-China trade dispute and concerns over global economic slowdown have increased volatility in South Korea’s financial markets and somewhat weakened companies’ financial soundness, the Bank of Korea said in a semi-annual Financial Stability Report submitted to parliamentExports are showing no sign of recovery as a downturn in the global technology cycle and the U.S.-China trade war drag onBank Indonesia left its key rate unchanged while it cut reserve ratio requirements for lenders. Governor Perry Warjiyo said on Thursday that policy makers will cut rates, but it’s considering “the timing and the magnitude” The government plans to boost investment and improve balance of payment resilience to boost economic growth, according to Finance Minister Sri Mulyani IndrawatiIndia’s flagging growth prospects and subdued inflation give room for decisive action through easing of both monetary and fiscal policies, minutes of the latest meeting of monetary policy makers showedThe end of political uncertainty associated with elections and continuation of economic reforms will lead to a reversal of the current weaknesses in some economic indicators, Reserve Bank of India Governor Shaktikanta Das saidThe Bank of Thailand’s monetary policy is data dependent with an eye on financial stability as well as the tough export outlook, Somchai Jitsuchon, a member of the central bank’s monetary policy committee, saidThe central bank is closely monitoring baht strength and watching out for currency speculation, Assistant Governor Vachira Arromdee said as the baht reached its six-year high during the weekThe U.S.-China trade war is a serious concern for Thailand that has the potential to undermine global business, Prime Minister Prayuth Chan-Ocha saidExports fell for a third month to 5.79% from year earlier in May, exceeding estimate of a 5% dropBank Negara Malaysia isn’t budging from a trading ban on offshore ringgit derivatives, according to Governor Nor Shamsiah Mohd YunusShamsiah said that companies shifting operations from China to Malaysia to sidestep higher U.S. tariffs could add about 10 basis points to growth this year, on top of the current forecast of 4.3% to 4.8%The Philippine central bank surprised most economists by keeping its policy rate unchanged at 4.5%. The monetary authority said it expects the peso to be at about 52.01 per dollar this year and at about 51.50 next yearThe Philippines has ample supply of dollars to meet any increase in demand during imports season, according to Bangko Sentral ng Pilipinas Governor Benjamin DioknoTrade Secretary Ramon Lopez says the nation’s exports may still grow by about 4% this year when global demand recoversTaiwan’s central bank kept its key rate unchanged at 1.375% as expectedThe ruling Democratic Progressive Party’s executive committee officially nominated President Tsai Ing-wen as its candidate in the presidential election scheduled for JanuaryEMEA:Russia returned to the Eurobond market after the dovish Fed meeting, selling $1.5 billion of debt maturing in 2029 and $1 billion of them maturing in 2035, with yields at 3.95% and 4.3% respectively The dovish market mood has driven Poland’s benchmark bond yield below the inflation rate for the first time in almost two decades Serbia raised 1 billion euros ($1.1 billion) from its first publicly syndicated euro deal, taking advantage of low borrowing costs in Europe to refinance more expensive dollar securities Saudi Arabia may sell euro-denominated bonds for the first time after testing investor appetite for a possible deal, according to two people familiar with the matterSaudi Crown Prince Mohammed Bin Salman said Aramco will go through with an initial public offering as soon as next year, though no decision has been made on where the stock will tradeHe also blamed Iran for the recent attack on tankers near the Strait of Hormuz, adding to accusations that are stoking tensions in a region supplying a third of the world’s oilMSCI Inc. will probably upgrade Kuwaiti equities to its main emerging-market index this week, which could trigger $2.8 billion of inflows from passive funds, according to the head of of the nation’s stock exchangePressure on South Africa’s credit rating is “more to the downside than the upside at the moment,” with state-owned electricity company Eskom the “main focus,” said Fitch Ratings’ managing director, Ed ParkerMoody’s Investors Service said South Africa’s credit-rating outlook is stable, giving the country’s new government more time to tackle key challenges such as low economic growth and embattled state-owned companies to ward off junk statusTurkish opposition candidate Ekrem Imamoglu won the redo of the Istanbul mayor’s race by a landslide on Sunday, in a stinging indictment of President Erdogan’s economic policies and his refusal to accept an earlier defeatThe Istanbul exchange started publishing quotes for the lira overnight reference rate, or TLREF, on June 17. The fixing is calculated using a weighted-average of repo transactions, which are short-term borrowings secured by government securitiesGhana’s first-quarter economic growth slowed after expansion eased in mining and the quarrying industry, which includes oil Uganda’s central bank kept its key rate at a two-year high for a fourth straight meeting as it sees inflation edging higher. The Monetary Policy Committee held the rate at 10%Zimbabwe’s stock market hit a record high, for all the wrong reasonsThe nation’s inflation rate is showing no signs of slowing down, reaching the highest level since it peaked at 500 billion% in 2008An attempted coup failed June 22 in Ethiopia, the prime minister’s office said on its Facebook/Twitter page. The nation has one international bond, a $1 billion facility due 2024 that saw its yield plummet about 200 basis points this year to 5.59% on Friday Latin America:Brazil held its benchmark interest rate at a record low and signaled it will be able to cut borrowing costs to help a frail economy once a key austerity measure advances further in CongressThe government struck a deal with lawmakers to vote the pension reform bill in the lower house of Congress in the first half of July, local newspaper Folha de S. Paulo reportedOdebrecht SA, the holding company of the Brazilian conglomerate that stretches from construction to oil and gas, filed for bankruptcy protection in a Sao Paulo courtThe company’s construction unit, which was not included in the bankruptcy filing, made a proposal to restructure $3.1 billion of its debt in an out-of-court dealMexico’s Senate ratified the North American trade deal with the U.S. and Canada, becoming the first to do so amid a truce reached with Trump over an unrelated tariff threatTrump praised Mexico’s efforts to crack down on migrants crossing the border into the U.S. after the two countries entered an agreement aimed at stemming the flow of people crossing Mexico from Central AmericaState-run oil producer Pemex plans $2.5 billion of debt refinancing in 2019, Reuters reportsArgentina remained in recession in the first quarter as unemployment hit a 13-year high and the central bank maintained the world’s highest interest ratesFormer central bank chief Federico Sturzenegger said monthly inflation could slow to 1% by year-endNation’s primary budget surplus rose to the highest level recorded since the data series began in March 2000, in nominal termsColombia left its benchmark interest rate unchanged as its economic recovery stalls and the peso surges the most in the worldProtests broke out in eastern Caracas on Friday during the third day of visits by the United Nation’s High Commissioner for Human Rights, Michelle Bachelet, in Venezuela\--With assistance from Colleen Goko, Selcuk Gokoluk, Philip Sanders, Aline Oyamada and Alec D.B. McCabe.To contact Bloomberg News staff for this story: Yumi Teso in Bangkok at email@example.com;Netty Ismail in Dubai at firstname.lastname@example.org;Ben Bartenstein in New York at email@example.comTo contact the editors responsible for this story: Tomoko Yamazaki at firstname.lastname@example.org, Alex NicholsonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
, says David Yermack, a finance professor at New York University’s Stern School of Business. Apple has carved out a limited role for its own payments system on the iPhone: by contrast, Facebook’s plan is a full-frontal assault. The planned launch, within a year, of its Libra digital currency would have the backing of partners like the payment networks Visa and Mastercard and internet companies Uber and eBay.
(Bloomberg Opinion) -- Much of the commentary about Facebook’s proposed Libra coin has focused on its defects as a cryptocurrency – centralized governance, weak privacy protections – or as a payment processing system – low throughput, inability to handle multiple currencies. I think it’s more interesting to examine the process for creating Libra rather than specific technical features.But Libra is a work-in-progress. Itswhitepaper describes aspirations, not technical design. Work has begun on only some of the aspirations, and they will have to be modified along the way to resolve conflicts, satisfy regulators, attract users, please investors and deal with unanticipated issues. The Libra slated for release in 2020 will be only a trial-size sample of the grand vision, and the mature Libra of 2025, if it survives, could be quite different from what anyone expects today.Money historically has evolved to satisfy needs of users. People use whatever is handy, sea shells, cigarettes, big rocks; gold and silver for more sophisticated economies; paper; electronic ledgers. Occasionally individuals and governments introduce new kinds of money based on rational design rather than tradition. These generally fail, as with the assignats of the French Revolution or the state credits of the Russian one, or have initial success but became problematic, like the Bretton Woods system or the euro, or achieve only local, niche use.Bitcoin was unique. It was a rationally designed new type of money, introduced by an individual or small group, with no links to traditional value (the way paper money started as a promise to pay gold, or the euro began as a basket of national currencies), no use of force, no legal permissions; yet it achieved rapid global acceptance, accrued massive value and stimulated an ongoing revolution in both traditional financial systems and new cryptocurrencies.While Bitcoin’s technical excellence was necessary for success, equally important was the surge of populism arising out of the 2007 – 2009 financial crisis, which encouraged people to distrust government-issued money and financial institutions.Libra is precisely the opposite. Facebook invited a “dream team” of experts to design money and hired professionals to implement it. That’s the kind of top-down, backroom process populists hate, especially when overseen by a distrusted entity. Libra is not something evolved by users to meet self-perceived needs but an idea in which experts have balanced the interests of governments, non-governmental organizations, investors, large businesses and ordinary users.The first four groups will all have strong voices in the development of Libra; users have to trust the experts to understand and defend their interests. While individuals can refuse to use Libra, history suggests that if the other four groups are happy with the coin, user resistance will be met not with improvements to meet objections, but with suppression of alternatives and penalties like legal-tender rules to force adoption.Of course, at this point Libra has not forged any powerful alliance. It has 28 backers, most of which have committed little more than their logos, and only a few of which are powerful. Both populist and progressive politicians have been negative and neither major technology companies nor banks have joined.On the other hand, ever since the Nixon Shock of 1971 ended the Bretton Woods era, people who believe a global elite of experts should design society have been working toward something like Libra—a rationally designed global currency administered by a group of disinterested technocrats insulated from democratic forces. This was the impetus behind the euro, also the gradual transition of financial regulation from national regulators with indirect accountability to voters, to multinational unelected groups like Bank for International Settlements, International Organization of Securities Commissions and Financial Action Task Force.Although Libra has copied some features from cryptocurrencies, its rationale is precisely the opposite. Its competition is national currencies, not crypto. This is explicit. When the whitepaper describes providing currency to the 1.9 billion people now relying exclusively on cash, it means replacing the national currencies of countries like Nigeria, Mexico, Indonesia and Pakistan for the large majority of citizens.While the initial design calls for 100% reserves in developed country currencies and government debt, that’s illusory, since its controllers can change the investments at any time. Any country that allows inflation or issues dubious debt can find its currency and debt dropped from reserves. Moreover, a successful Libra would likely switch to a fractional reserve system, with only enough national currency reserves for liquidity purposes, and currency backed either by loans and other risky assets, or nothing at all.Libra is a complement to cryptocurrencies. Its blockchain design and Move programming language allows seamless interaction with crypto. Attempts to link the traditional financial system to crypto have been marked by extreme volatility, fraud, legal uncertainty and technical problems. One plausible scenario is that Libra succeeds in becoming the legal-tender medium of exchange for much of the traditional commerce in the world and that cryptocurrencies thrive for non-traditional exchanges.On the other hand, if Libra fails, it will not be the last attempt to impose a rational global currency on a skeptical world. It may happen by gradual ceding of central bank and securities regulation to multinational entities, or by a new currency, or by negotiation among developed economy governments. Or it may be blocked by populist sentiment, or superseded by a pure crypto solution. The future of money is in play and Silicon Valley technocrats have just made a compelling move.To contact the author of this story: Aaron Brown at email@example.comTo contact the editor responsible for this story: Robert Burgess at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Aaron Brown is a former managing director and head of financial market research at AQR Capital Management. He is the author of "The Poker Face of Wall Street." He may have a stake in the areas he writes about.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.