On The Money: Kudlow floats Trump, Xi meeting at G-20 | Apple, Amazon servers reportedly compromised by China | Musk mocks SEC on Twitter

On The Money: Kudlow floats Trump, Xi meeting at G-20 | Apple, Amazon servers reportedly compromised by China | Musk mocks SEC on Twitter
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Happy Thursday and welcome back to On The Money. I'm Sylvan Lane, and here's your nightly guide to everything affecting your bills, bank account and bottom line.

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THE BIG DEAL--Kudlow floats Trump, Xi meeting at G-20: The White House is mulling the organization of a meeting later this year between President TrumpDonald John TrumpDem lawmaker says Electoral College was 'conceived' as way to perpetuate slavery Stanley Cup champion Washington Capitals to visit White House on Monday Transportation Dept requests formal audit of Boeing 737 Max certification MORE and Chinese President Xi Jinping amid stalled talks over ending a trade war.

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"Maybe, maybe, Trump and Xi will meet at G-20 in Buenos Aires," White House economic adviser Larry Kudlow said at an event hosted by the Economic Club in Washington Thursday. "Maybe not," he added.

The G-20 meeting takes place Nov. 30 and Dec. 1 in Argentina.

The Hill's Niv Elis has more here.



Why it matters: Trade talks between the U.S. and China have fallen apart in the past few months after getting off to an already shaky start this spring. Trump has imposed tariffs on billions of dollars of Chinese goods, and threatened more to come, while China has responded with retaliatory tariffs on U.S. goods.

Kudlow, the director of the White House's National Economic Council, put the blame squarely on China.

"China has played fast and loose with the rules," he said. "Don't blame Trump, blame the system he inherited, which was essentially broken."

 

More from Kudlow's interview: Kudlow also dismissed concerns about the rising federal deficit and insisted that economic growth would bring down the debt.

"I've never been much of a deficit hawk," Kudlow said. "Growth is going to solve a good deal of that deficit and debt burden on the economy."

Kudlow blamed the $21 trillion federal debt on discretionary spending, which as Niv notes here, only accounts for one-third of annual spending.

 

LEADING THE DAY:

Apple, Amazon, among companies compromised in Chinese intelligence hack: Retail giant Amazon and tech giant Apple were among nearly 30 U.S. companies, including a major bank, that were compromised by a Chinese intelligence hardware hacking scheme, according to a Bloomberg report.

The companies and organizations were compromised through a maneuver of installing extra components onto computer chips that the groups had purchased while they were still at the factory being manufactured. The Hill's Ali Breland explains it here.

 

What happened: 

  • The malicious chips were reportedly placed by the Chinese People's Liberation Army, which was able to infiltrate the manufacturing process of a hardware company called Super Micro.
  • At the size of a grain of rice, according to Bloomberg, the chips were designed to be inconspicuous and avoid detection.
  • Once in place, they could be used to access data on a computer and install malware.

Both Apple and Amazon have denied the report, saying in statements to Bloomberg that their systems were not compromised by hacks.

"We've found no evidence to support claims of malicious chips or hardware modifications," Amazon said in its statement to Bloomberg.

Apple also said they had not "found malicious chips."

 

Musk mocks SEC on Twitter as judge mulls fraud settlement: Tesla CEO Elon Musk on Thursday mocked the Securities and Exchange Commission (SEC) on Twitter as a federal judge mulls whether to approve his settlement with the regulator over fraud charges.

"Just want to [sic] that the Shortseller Enrichment Commission is doing incredible work. And the name change is so on point," Musk tweeted Thursday afternoon, riffing on the name of the financial markets watchdog.

Musk's tweeted his shot at the SEC hours after a federal judge in Southern District of New York asked the agency to justify a settlement reached with the CEO last weekend. Musk agreed to step down as chairman of Tesla and pay $20 million in fines to the SEC to settle fraud charges. I've got more about the CEO, who is Extremely Online, right here.

 

Behind the anger: Musk has long had an antagonistic relationship with investors and Wall Street at large, once berating analysts during a Tesla earnings call. He frequently blasts Tesla's short-sellers, investors who bet against Tesla's share price, and compares them to parasites.

So naturally, Tesla stock dropped 2 percent in the overnight market following the tweet after falling 4 percent during trading Thursday.

 

Refresher: Musk landed in trouble with the SEC when he tweeted in August that he had secured a deal to take Telsa private for $4.20 a share. In reality, Musk never finalized such an agreement and said the price he cited was a reference to marijuana.

The SEC filed charges against Musk in September, claiming he mislead and harmed investors with his tweet in blatant violation of securities law. The agency sought to oust Musk from Tesla and bar him from serving as an officer of any publicly traded company.

 

MARKET CHECK: CNBC: Dow falls the most in 2 months on fears of rising rates as 10-year yield hits highest level since 2011.

"Stocks fell sharply on Thursday as interest rates hit new multiyear highs, dampening investor sentiment.

"The Dow Jones Industrial Average dropped 200.91 points to 26,627.48 as Nike and Home Depot lagged. The 30-stock index dropped 356 points at its lows of the day and posted its worst decline since Aug. 10.

"The S&P 500 declined 0.8 percent to 2,901.61, notching its worst day since June 25, with communications and tech sectors both sliding more than 1.5 percent. The Nasdaq Composite dropped 1.8 percent -- its biggest daily drop since June 25 -- to 7,879.51."

 

GOOD TO KNOW

 

ODDS AND ENDS

  • Op-Ed: Nathan Wilmers, an assistant professor at the MIT Sloan School of Management, writes on the "the hidden culprit behind stagnant wages."