Wall Street’s eternally optimistic forecasters are expecting corporate profit growth to surge by the middle of next year — views that are about to collide with reality as hundreds of companies report financial results and update investors on their prospects.
American companies go through this ritual every three months: sharing financial statements and holding conference calls in which they sometimes offer their expectations for future quarters, what Wall Street calls “guidance.” For this quarter, it begins with reports from several big banks on Tuesday.
In between these reports, executives continue to issue guidance, trying to nudge expectations higher or lower with speeches at conferences or other events so official results don’t jolt investors.
Lately, they’ve been doing less of the in-between nudging, and that could make this round of earnings reports more important than usual.
“Companies are starting to do what they do when there is rampant uncertainty, which is just stop issuing guidance,” said Savita Subramanian, head of United States equity strategy at Bank of America Merrill Lynch. “Companies just basically go dark.”
During the three months that ended in September, companies in the S&P 500 offered the fewest updates — positive or negative — to investors since 2000, according to the bank’s analysts.
The “rampant uncertainty” that Ms. Subramanian referred to flows from many sources: signs that the economy and job growth are slowing, evidence that the manufacturing sector may already be in a recession, and the trade war’s toll on China, Japan and Germany.
Plus, politics and the 2020 presidential election were always going to be a distraction, but the impeachment investigation has made it harder to know where policy will go.
On Friday, President Trump said the United States and China had reached an interim deal to avert a planned tariff increase on Tuesday. But the agreement was spoken and would take several weeks to write, doing little to remove the uncertainty surrounding the economic battle between Beijing and Washington.
Regardless of the companies’ reasons, the relative silence since their last reports means stock investors may be in for a lot of bad news all at once.
Then there’s the matter of the habitually overenthusiastic Wall Street analysts who rate stocks and try to predict where they’re heading. Stock prices hinge on expectations — not on what just happened — and the predictions look increasingly divorced from reality.
Right now, the collective forecast is that profits at S&P 500 companies will jump more than 10 percent in 2020, a view that defies expectations for the economy to slow further.
“It doesn’t look likely,” said Ralph Davidson, chief global equity strategist at BTG Pactual, a Brazilian investment bank, of the profit forecast. “We expect guidance to be coming down.”
It’s not that double-digit profit growth is unprecedented. In 2018, earnings jumped 22 percent after a sharp cut in corporate taxes. But it’s becoming clear that last year’s surge was a one-time jolt.
The current year offers an example of what may happen if it dawns on analysts that they’re being too rosy.
Last October, they were forecasting that profits would grow about 10 percent in 2019. Those targets came down fast at the end of the year because of sudden worry that the trade war and rising interest rates might tip the economy into a recession.
As the year progressed, and companies reported results, the analysts cut the forecast down, again and again.
Now, they expect that profits will have grown just under 2 percent once the year is done. For the third quarter, which ended in September, analysts expect S&P 500 companies to report that their profits fell 3 percent.
Lower profits aren’t necessarily bad news for the economy. One reason corporate earnings have been pinched is that wages have been rising. That reflects the strong job market and helps support consumer spending, which is the bedrock for economic growth in the United States.
Nor does a slowdown in profits definitely mean stocks will fall. The key reason that stocks haven’t done worse as growth targets have been reduced is the Federal Reserve’s decision to cut interest rates.
The central bank made its first cut in July and, most recently, announced that it would expand its balance sheet, a process that pumps money into financial markets. All of this has been good for stocks.
But eventually investors will have to turn their attention back to the fundamental question of whether profits are going to keep growing, and how fast. And that could make the next few weeks rocky.
“I think we’re going to see a wave of negative guidance on next year’s earnings,” said Ms. Subramanian of Bank of America. “And that might not be great for the market.”
NEW YORK (Reuters) - WeWork has opened almost as many new locations in the last 3-1/2 months as it did in the whole first half of this year, likely accelerating the speed with which the office-sharing company is burning through cash as increasingly hard-nosed investors scrutinize its prospects for going public.
FILE PHOTO: The WeWork logo is displayed outside of a co-working space in New York City, New York U.S., January 8, 2019. REUTERS/Brendan McDermid/File Photo
According to a Reuters analysis of information on the company’s website, WeWork had 622 sites open in 123 cities on Oct. 10. That compares with its footprint of 528 locations in 111 cities on June 30 that was outlined in the prospectus for its abandoned IPO.
The website also identifies 89 sites as “coming soon” and 117 sites as “just announced” - all new locations that are yet to open.
Altogether, WeWork says on the website that it will soon have 845 locations in 125 cities, but it is unclear whether all those will still open. A WeWork spokesman declined to comment on its plans.
The quickening pace of new office openings adds to the risks for WeWork, a company that has created a global brand for its shared workspace concept but was forced to halt plans to go public on Sept. 30 because of investor concerns about how it was valued and whether its business model is sustainable.
The company is now cutting back, including laying off some employees and closing or selling entities that are not essential to its core operations as it seeks to avoid running out of cash. On Friday, WeWork said it will shut down its WeGrow private school in New York City as it pares peripheral operations.
The 97 new locations WeWork added in the first half of this year on average cost $2.63 million each in design and construction costs, up 38% from the $1.91 million that 82 openings each cost in the first half of 2018, according to the IPO document. It added 94 new locations between the start of July and Oct. 10, according to its website.
Whether the average size of a new location in the latest burst of openings is similar to those in the first half of this year is unclear. A WeWork spokesman declined to comment.
“Investors don’t want to invest in a company with such a high cash-burn rate,” said Gina Szymanski, a portfolio manager at real estate-focused AEW Capital Management LP in Boston. “They have got to slow their growth down and focus a little bit more on profitability.”
BLEEDING CASH
WeWork has only about $2.5 billion of cash on hand as of June 30, according to the prospectus that was issued in August.
It will run out of money in the second quarter of next year if the company’s current trajectory doesn’t change, according to research by AllianceBernstein. Some media reports in recent days said it may run out of cash before the end of the year without a new lifeline.
As well as substantial costs for opening new sites, WeWork’s current operations are also still big loss makers. In the year to June 30, its expenses were $2.9 billion and revenue just $1.54 billion.
IFR reported banking sources as saying on Friday that WeWork is in talks with JPMorgan Chase to seek $1.75 billion in bank financing that would provide it with enough liquidity to see it through to the end of the year. Chase is in talks with other banks to syndicate the letter of credit, it said.
In addition, WeWork is in discussions with banks to issue $3.25 billion in secured and unsecured bonds with warrants, IFR added.
WeWork was locked in negotiations this week with its largest shareholder, Softbank Group Corp, over a new $1 billion investment to help the company go through a major restructuring, according to sources familiar with discussions.
WeWork has certainly slowed new leasing in response to investor feedback, said Szymanski, citing AEW’s analysis of WeWork’s market presence.
The leases for many of the recently opened sites would likely have been signed before August, which was when the company first became a punching bag for investors and analysts critical of how it was being valued and run.
WeWork owner, The We Company, said in the IPO document that it has mitigated expenses by refining its design and construction processes, which included investments in new technology to help WeWork quickly and efficiently develop a workspace. The new technology wasn’t defined and the company declined to comment.
Reporting by Herbert Lash; Additional reporting by Carrie Monahan in New York; Editing by Martin Howell and Daniel Wallis
An estimated 44.5 million retired workers receive monthly income in the form of Social Security benefits. If you work and pay Social Security taxes, then chances are, those benefits will be an important source of income for you once your career comes to an end. But if you rely on those benefits too heavily and neglect your savings as a result, you may be in for an unpleasant reality check as soon as your golden years kick off.
Currently, 50% of married seniors and 70% of unmarried seniors get 50% or more of their income from Social Security, while for 21% of married seniors and 45% of unmarried retirees, those benefits represent 90% or more of their income. But when we look at how much money that actually translates into, it's easy to see why Social Security alone isn't enough to sustain the typical senior.
IMAGE SOURCE: GETTY IMAGES.
The average retiree on Social Security today collects $1,471 a month, or $17,652 a year. Meanwhile, the average senior aged 65 and over spends $46,000 a year on living expenses, reports the Bureau of Labor Statistics. Clearly, there's a pretty wide gap between those two numbers, and it's for this reason that planning to live on Social Security alone in retirement is a truly bad idea. If that's your intent, consider this your wakeup call to start building savings and come up with a backup plan.
What will your expenses look like in retirement?
Many people expect their living costs to drop dramatically once they retire, but many seniors don't see all that substantial a decline. And when we think about the things seniors generally spend money on, that makes sense.
Seniors require housing, transportation, food, clothing, utilities, and modest forms of leisure, like cable TV, just like working folks do. Furthermore, retirees tend to face higher healthcare costs than workers, especially when we consider the various out-of-pocket expenses associated with Medicare. And that's why most seniors can't get by on just 40% of their former income, which is what Social Security is designed to pay the average earner. Retirement just plain costs too much money.
The solution? Save as much as you can while you're working. If you start out young, you can get away with contributing smaller amounts to a retirement savings plan and growing your balance with the right investments. If you're already older, you'll need to make more sizable contributions to build a solid level of savings.
Check out the following table, which illustrates how your savings efforts might pan out, depending on the window of time you have to work with and the amount of money you sock away in a retirement plan each month:
Age You Start Saving
Monthly Retirement Plan Contribution
Total Savings by Age 65 (Assumes a 7% Average Annual Return)
30
$400
$663,000
35
$500
$567,000
40
$600
$455,000
45
$700
$344,000
50
$800
$241,000
CALCULATIONS BY AUTHOR.
The less time you give yourself to sock away funds for retirement, the less wealth you stand to amass. In our table, increasing monthly contributions doesn't help compensate for delayed savings. That's because by putting off your savings, you miss out on years of critical investment growth. And if you're wondering about the 7% return used above, it's actually a couple of percentage points below the stock market's average yearly performance.
Of course, building savings isn't the only way to supplement your Social Security benefits. You can also get a part-time job in retirement or monetize a hobby. In fact, your retirement income can come from a variety of sources. Just make sure your plan is not to have all of it come from Social Security.
Rep. Bill Huizenga (R-MI) discusses the current state of the General Motors strike and its impact on the economy.
The United Auto Workers board voted on Saturday to bump up workers' strike pay by $25 a week and allow them to take part-time jobs and still qualify for the benefit.
Continue Reading Below
The decision comes as the UAW's nationwide strike against General Motors is a few days away from its one-month mark.
Starting on Sunday, workers who perform picket duty will get $275 a week in strike pay. Strike pay was $250 a week and was already set to rise to $275 in 2020.
"UAW members and their families are sacrificing for all of us," union president Gary Jones said in a statement. "We are all standing together for our future. This action reflects the UAW commitment and solidarity to all of our members and their families who are taking a courageous stand together to protect our middle-class way of life."
A member of the United Auto Workers walks the picket line at the General Motors Romulus Powertrain plant in Romulus, Mich., Wednesday, Oct. 9, 2019. (AP Photo/Paul Sancya)
The looser standards will also apply to UAW-represented Aramark janitorial employees who work at GM facilities and walked off the job a day before autoworkers did the same.
Previously, if workers performed outside work earning more than $250 a week, they forfeited the strike pay. Those workers still qualified for specified health care benefits available through the UAW Strike and Defense Fund.
Elon Musk shared new details about SpaceX's planned Mars-capable crewed launch system, called Starship, on September 28.
SpaceX is developing and launching Starship prototypes next to Boca Chica Village, a small neighborhood of retiree-age residents in South Texas.
Citing concerns about safety and disruptions, the rocket company recently offered to buy out everyone's homes in the area. But most residents initially balked at the deal.
While he was in town for his highly anticipated talk, Musk, the founder and CEO of SpaceX, met privately with some of the residents.
Villagers who attended the meeting described it as "awkward," "tense," and "heated," but ultimately productive in that they felt Musk — and SpaceX — listened to their complaints.
Hours after fans cheered him on-stage in South Texas, Elon Musk walked into a morass: a private meeting with perturbed locals whose properties that SpaceX, the rocket company Musk founded, had recently offered to buy out.
Residents say Musk attentively listened to their concerns and squashed some of their fears about the buyout process. But they described their roughly half-hour encounter with the tech mogul as "awkward," "tense," "heated," "confused," and "exhausting" — though it ended with handshakes, selfies, and some sense of progress.
Musk heard out his tough audience just before midnight on Saturday, September 28, during a visit to Boca Chica. The remote strip of land is located at the southeastern tip of the state, and it's where SpaceX is building a private launch site and spaceport.
But it's also where about 20 retiree-age residents live in the formerly sleepy residential neighborhood of Boca Chica Village, some of them for decades.
"We weren't playing nice with him. We made it clear we were not happy," said one resident to Business Insider. The person attended the private meeting but asked not to be named.
Why Musk met with villagers in southeastern Texas
A prototype of SpaceX's Starship, called Mk 1, rocket is seen at the company's South Texas launch facility in Boca Chica on September 28, 2019. Future versions of Starship are designed to be massive enough to take people to the moon, Mars, and beyond.
Loren Elliott/Getty Images
Musk's main task for the trip was delivering a highly anticipated update on SpaceX's plans for a next-generation rocket system, called Starship.
"The critical breakthrough that's needed for us to become a space-faring civilization is to make space travel like air travel," Musk said during his presentation while standing before a 16-story steel prototype.
Critical to making such a breakthrough, though, is room to safely build, test, and launch such Starship prototypes — vehicles which Musk has said last year might explode (though this is a risky reality of any rocket-test program). SpaceX has mostly used Boca Chica for this work, and Musk's presentation, which featured a new Starship launch visualization showing off big plans for the coastal site, underscored the company's hopes for its nascent spaceport.
"I think it's definitely possible that the first crewed mission on Starship could leave from Boca [Chica]," Musk said.
However, SpaceX has set up its rocket skunkworks close to residents' homes. The company built its launch pad just 1 1/2 miles from properties on the eastern edge of the community — twice as close as NASA permitted spectators to get to its space shuttles in Florida.
An overview of the Boca Chica area in south Texas circa 2017.
Google Earth
"[I]t has become clear that expansion of spaceflight activities as well as compliance with Federal Aviation Administration and other public safety regulations will make it increasingly more challenging to minimize disruption to residents of the Village," the company's cover letter said.
A prototype of SpaceX's Starship vehicle is pictured behind a home in Boca Chica Village, Texas, on September 28, 2019. SpaceX is attempting to buy out the residents of this community in order to expand spaceflight activities.
Loren Elliott/Getty ImagesBut SpaceX's seemingly generous pitch — three times an appraised value for each home — alarmed many if not most residents.
Some told Business Insider that they planned to permanently retire in the area and weren't interested in moving.
Nearly everyone had concerns about the offer's base appraisals, claiming they were abnormally low, and thus even a three-fold offer wouldn't come close to paying for a comparable coastal home in South Texas. (Some residents described the appraisals as "lowball" and "drive-by," since they did not evaluate the interior of homes.
Residents also told Business Insider that property comparisons, which were used to inform value, relied on properties that SpaceX purchased under duress, as well as suburban homes in Brownsville that didn't compare to their bucolic coastal setting.)
Some who wanted to stay said they feared a eminent domain process led by Cameron County, in which Boca Chica is based, may eventually force them out to make way for SpaceX's out-of-this-world ambitions.
With tensions peaking and Musk in town, SpaceX decided to put their CEO and a cadre of residents into a room to work things out.
SpaceX stopped one resident from trying to record the meeting. But according to interviews with five people who were in the room, here's what happened.
Residents said at first they 'felt like we'd been set up'
Elon Musk unveiled the 164-foot-tall Starship Mark 1 prototype in Boca Chica, Texas, on September 28, 2019.
SpaceX/YouTube
Days before Musk's Starship presentation, SpaceX invited village residents to come. Around 10 people RSVP'd, and SpaceX picked them up with a shuttle. Helping corral and greet everyone was a senior legal counsel for the company from Washington, DC, as well as a government and business-affairs liaison who worked on-site in Boca Chica.
The last shuttle drove into SpaceX's work yard compound shortly before 8 p.m., where workers had finished assembling a 16-story prototype of Starship's spaceship the day before. Residents say their handlers directed them to a sandbagged area just a few yards to the left of a small riser, which Musk stepped onto and spoke for about 40 minutes.
Immediately after he walked off-stage, SpaceX cued the residents to head to the shuttle, which they expected to drop them off at their homes less than a mile away. But once everyone had boarded, SpaceX invited the residents to join them at Stargate: a two-story technology park funded by the University of Texas Rio Grande Valley facility (which SpaceX uses as a launch control center).
"They turned around and said, 'Well, we're going to take you over here to the Stargate, upstairs, and we're going to have a special guest come meet you there,'" said Patricia Mitchell, who's owned a home in the village since 2005 with her husband, Walter.
SpaceX workers rush to and from UTRGV's Stargate facility to a launchpad during tests.
Dave Mosher/Business InsiderThey arrived to a spread of wine, beer, cookies, chips, and other snacks. The group got comfortable on couches, chairs, and stools awaiting their "special guest," whom they could only presume was Musk.
As the residents were settling in at Stargate, Musk returned to the stage at SpaceX's work yard to take questions from media. Christian Davenport of The Washington Post asked about SpaceX's long-term plans for the Boca Chica site.
"It will definitely get fancier than it currently is. The reason it's not fancier is because it would have taken too long to build the buildings," Musk said. "I think it will be a lot more buildings and a lot more stuff. Way more stuff than is currently here."
An illustration of SpaceX's planned 39-story-tall Starship rocket system at a launch site in Boca Chica, Texas.
SpaceX/YouTube
Later on, Jeff Foust of Space News asked about the future of residents in light of the FAA's apparent safety concerns.
"We're going to make sure that the risks to the public is extremely, vanishingly small. Almost nothing, basically," Musk said. "I don't see any fundamental obstacles. We are working with the residents of Boca Chica Village because we think oh, it's time, it's going to be quite disruptive to their — to living in Boca Chica Village. Because it'll end up needing to get cleared for safety a lot of times."
He added: "I think the actual danger to Boca Chica Village is low but is not tiny. So therefore we want super-tiny risk. Probably over time, [it's] better to buy out the villagers. And we've made an offer to that effect."
Most residents in the room at Stargate didn't learn about the Q&A or Musk's comments — the clearest yet from the company regarding the villagers' futures — until just before 11 p.m.
"We would have rather been down there or streaming. We just weren't savvy enough," said Maria Pointer, who was there with her husband, Ray.
"Everybody felt like we'd been set up," Walter Mitchell said. "We had questions we wanted to ask right there and have media exposure."
As some residents in the room played back streaming video of the Q&A session, agitated at having missed the remarks — and at being in their second hour of waiting for Musk — SpaceX's senior legal counsel addressed the room. She announced that Musk would arrive in about 15 to 20 minutes, noting that anyone who needed to leave could be driven home. She also opened the floor to concerns or questions to pass along.
"She invited a dialogue at that time," one resident said of the moment. "And suddenly everyone wants to unload on her."
Residents began heatedly questioning the "non-negotiable" wording in their buyout offers. They also brought up what some described to Business Insider as an "aggressive" two-week deadline to accept the deal, as well as what seemingly everyone felt was an undervaluation of their properties.
"We all felt that deadline, and three times, and 'not negotiable' — we felt that was a threat," Walter Mitchell said.
As the complaints petered out, a few residents left. One person forgot her pain medication, and her husband followed her out. Another left from exhaustion. Silence came over the room just before Musk walked in, which was sometime around 11:20 p.m.
'Nobody knew how to talk to this guy'
SpaceX CEO Elon Musk gives an update on the next-generation Starship spacecraft at the company's Texas launch facility on September 28, 2019 in Boca Chica near Brownsville, Texas.
Loren Elliott/Getty ImagesMusk arrived with an entourage of about five or six people, and immediately walked up to the residents, most of whom were sitting in a small semicircle of chairs and a couch. Everyone stood up, and Musk shook their hands, then he started speaking about why SpaceX picked Boca Chica to be the company's private spaceport.
"He talked about the regulations in Florida and why it was better for them to be here rather than in Florida, because things could get done a bit faster," Mr. Pointer said.
After a few minutes of opening remarks, Musk paused and there was a brief pause.
"It was pretty awkward. Nobody knew how to talk to this guy," Mrs. Pointer said. "You could tell people were feeling excited or flattered."
But Mr. Pointer apparently broke the silence. In an interview with Business Insider, he said he wasted little time expressing to Musk how he thought the appraisals and SpaceX's buyout offer process generally was unfair.
"I said I thought it was unconscionable that we were having to see ourselves — in so many words — dispossessed with a short-notice letter and the sword of Damocles over our heads concerning eminent domain. Those aren't my exact words, but that's certainly what I wanted to get out," Mr. Pointer said. "And then the Mitchells chimed in with their feelings about that as well — similar feelings — and then everyone started going at it."
The Mitchells explained how the offer they received for their property, which the couple planned to pass down to their children, wouldn't buy them a somewhat comparable setup in nearby South Padre Island, the nearest beachside real-estate market (though a much hotter one as a popular tourist destination).
"He was very polite and listened to what we had to say on that matter," Mr. Pointer said. "He just absorbed it and waited for the next blow."
When someone brought up the "non-negotiable" issue with the buyout offer letter, Musk chimed in with an edit.
"He goes, 'It's negotiable.' And everyone goes, 'It is negotiable?'" Mrs. Pointer said. "It surprised us and floored us."
While the three-fold number was not negotiable to be fair to everyone, Musk apparently explained, SpaceX would consider new appraisals that addressed residents' concerns. Shortly after that, two residents said they asked about eminent domain and whether or not those who chose to stay would eventually be forced out for reasons of safety or convenience.
"He said that he didn't want to do that, that's not what he wanted to do," Mr. Pointer said. "But that's not an answer to the question."
Two other residents allegedly said that they "didn't mind" SpaceX's presence and inquired about staying, according to others in the room. (One of residents previously described himself to Business Insider as "the biggest SpaceX fan in Texas," so much so that he moved to Boca Chica in 2015 to retire amid the company's launch site.)
Residents brought up a community meeting SpaceX held in 2015, not too long after the company had broken ground on its launch site. According to residents, officials allegedly said the company would — during temporary launch evacuations under a previous (and now-abandoned) plan — house residents in hotels in Brownsville, about 20 miles west of Boca Chica.
Walter Mitchell made himself clear: "There are people here that want to keep their property," Mitchell said he told Musk. "I said, 'You guys said in that meeting that you would take us and put us in hotels.' I said, 'Can that work? And they can keep their property?'"
"Well, if they don't mind frequent shuttles to a hotel frequently, we could probably do that," Musk responded according to Mitchell.
Residents also brought up other grievances and needs: a request for soundproof windows, a more courteous and helpful on-site contact with the company, and more transparency from the company about its activities.
Free Teslas and selfies
After airing their complaints and feeling heard by Musk, residents told Business Insider the "heated" and "exhausting" mood of the room began to change. That shift appears to have happened when the Mitchells cracked a joke: Could Musk throw a free Tesla electric car into everyone's buyout offer?
"We started laughing, almost all of us," a resident said, though Musk then explained that even as CEO he is required to buy his own vehicles from the company.
From there, residents said the previously "heated" conversation shuffled between a mix of joking and technical explanations. The SpaceX fan struck up a conversation about metals used in Starship. Musk apparently also described a long-term plan to move away from land-based launch pads and instead use offshore platforms near Boca Chica Beach to fly Starship with less risk to the ground.
"He mentioned that they have to take off right offshore, but they have to land somewhere, right? And you can't do that on land in the middle of Paris, I think he said," Mrs. Pointer recalled. "So you have to have offshore facilities everywhere."
As the conversation loosened up a bit more, an aide called an end to the meeting.
"He shook everyone's hand, and at the end of it, everyone took selfies," Mr. Pointer said of Musk (though he noted that he himself did not).
'I don't think we were supposed to live next to a rocket ship yard'
Maria Pointer looks on from her front yard in Boca Chica, Texas, as SpaceX workers assemble a prototype of a spaceship called Starship Mark 1 next door on September 27, 2019.
Jonathan Newton/The Washington Post via Getty Images
Residents returned home after midnight and began to soak in what had transpired.
"I don't feel like I'm on the dark side of the moon as much as I was before," Mrs. Pointer said. "I feel like they are seriously learning where all the fault lines were, where all the gaps were, where things were just falling through because they move so fast, and we don't move that fast."
Residents say SpaceX has not only extended its buyout offer deadlines, but also dispatched an appraiser to more fully evaluate their homes and consider properties in coastal areas. If those assessments come back with a more fair valuation, multiple residents who initially said they'd decline the deal told Business Insider they would reconsider selling to SpaceX.
But some residents say they still feel doubtful and pained about their futures. For instance, the Pointers have invested years of work into their Boca Chica property to make it a customized and comfortable retirement homestead, not just a winter home or Airbnb (as some residents use their properties).
"I appreciate where he's going. I understand the Mars thing — I got it — and I'm happy with everyone going forward with that. I think that's an important thing to do; he's doing a good thing, and that's fine," Mr. Pointer said. "But as far as I'm concerned — for me? — he's ruining my life and my situation out here. That being said, I just have to move on under the circumstances."
Mrs. Pointer later added: "I just don't think this is our life. I don't think we were supposed to live next to a rocket ship yard."
SpaceX did not return multiple requests comment for this story ahead of its publication.
Apple CEO Tim Cook has written to employees defending the company's controversial decision to pull an app used by Hong Kong protestors to coordinate gatherings and avoid large concentrations of police.
Apple removed HKMap Live from the App Store on Thursday following the app's approval last week, which itself only came after an internal review of the company's original decision to reject it. Apple's reversal came after the Chinese Communist Party's flagship newspaper criticized Apple for letting the app into its store.
In a company-wide memo, a verified copy of which has been reproduced on Pastebin, Cook told staff that the decision to remove the app was not easy, but that Apple had received "credible information" from Hong Kong police that the app was being used to target individuals for violence. Here's the memo in full:
Team,
You have likely seen the news that we made the decision to remove an app from the App Store entitled HKmap.live. These decisions are never easy, and it is harder still to discuss these topics during moments of furious public debate. It’s out of my great respect for the work you do every day that I want to share the way we went about making this decision.
It is no secret that technology can be used for good or for ill. This case is no different. The app in question allowed for the crowdsourced reporting and mapping of police checkpoints, protest hotspots, and other information. On its own, this information is benign. However, over the past several days we received credible information, from the Hong Kong Cybersecurity and Technology Crime Bureau, as well as from users in Hong Kong, that the app was being used maliciously to target individual officers for violence and to victimize individuals and property where no police are present. This use put the app in violation of Hong Kong law. Similarly, widespread abuse clearly violates our App Store guidelines barring personal harm.
We built the App Store to be a safe and trusted place for every user. It’s a responsibility that we take very seriously, and it’s one that we aim to preserve. National and international debates will outlive us all, and, while important, they do not govern the facts. In this case, we thoroughly reviewed them, and we believe this decision best protects our users.
Tim
Cook has since been criticized for his claim that the app is used to target individual police and members of the public. The developers say HKmap Live is designed to help protestors avoid law enforcement. As such, it doesn't show individual officers but only large concentrations of police, as reflected in the web-hosted version of the app.
In a Twitter post, Charles Mok, a developer and member of Hong Kong's legislative council, revealed that he had written to Cook saying he was "deeply disappointed with Apple's decision to ban the app, and would like to contest the claims made by Hong Kong Police Force's Cyber Security and Technology Crime Bureau (CSTBC)."
"There are numerous cases of innocent passers-by in the neighborhood injured by the Kong Kong Police Force's excessive force in crowd dispersal operations," he wrote.
"The user-generated information shared using HKmap.live in fact helps citizens avoid areas where pedestrians not involved in any criminal activities might be subjected to police brutality which many human rights organizations such as Amnesty International have observed."
Mok's letter went on to note that since the banned app aggregates real-time reports from Telegram, Facebook and other sources, then the same standard should also be applied to review these social media apps.
In the U.S., lawmakers have also criticized Apple for not standing up for democratic values and free speech. "An authoritarian regime is violently suppressing its own citizens who are fighting for democracy," said Democrat senator Ron Wyden in a tweet. "Apple just sided with them."
"Apple assured me last week that their initial decision to ban this app was a mistake," tweeted Republican senator Josh Hawley. "Looks like the Chinese censors have had a word with them since. Who is really running Apple? Tim Cook or Beijing?"
At a press conference on Thursday, Hong Kong's Secretary for Transport and Housing was asked by reporters which local laws HKmap Live had violated that led Apple to remove it from the App Store, but the official deferred to Cupertino: "The taking down of the app from the App Store is the decision made by the operating company – Apple. So, if you want to know the reason for them to take down the app, maybe you can approach Apple and the Apple Store."
Apple has so far declined to comment on the matter.
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