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Why Wall Street Loves Gridlock in Washington
Stocks tend to rally after midterm elections, historical data shows. They perform even better when voters deliver divided government.“Midterm elections are one of the best historic buy signals.”Brendan Mcdermid/ReutersDivided we rise? It’s become a favorite data point among sell-side Wall Street historians: In the year after every midterm election since 1950, the S&P 500 has gone up, regardless of the party in power.“It’s no exaggeration to say that midterm elections are one of the best historic buy signals for equities we have,” Jim Reid, a markets strategist at Deutsche Bank, wrote in a client note this morning.Even better: Stocks tend to outperform when there’s a divided government. According to LPL Financial, since 1950, the S&P 500 has outperformed (on a 52-week basis) whenever voters produce the power scenario of a split or Republican-controlled Congress and a Democratic president. (The benchmark S&P has climbed 17.5 percent in those years versus an overall average annual return of 12.3 percent.) That combination is looking more likely this morning, with the polls suggesting that the Republicans will most likely take control of the House, while the Senate is a tossup.As always, past performance is no indicator for future gains (or losses). Still, it’s worth examining how politics and investor psychology have tended to influence the markets after midterm elections over the past eight decades.There are two central reasons markets rally after the midterms. First, say the LPL markets strategists Barry Gilbert and Jeffrey Buchbinder, “uncertainty associated with the election is behind us, and markets don’t like uncertainty.” More crucially, investors view the midterms as “something of a course correction from presidential elections.” If the opposing party gains ground, it’s more likely businesses and investors will see greater “prospects of a better policy balance ahead, regardless of who is in the Oval Office.”One result: ambitious tax and government spending increases would be off the table, a scenario that could buoy corporate profits, according to Brian Gardner, the chief Washington policy strategist at Stifel, an investment bank and wealth management firm. A potential drawback? It could open the door to a debt-ceiling standoff, higher odds of a government shutdown and partisan paralysis when it comes to trying to get stuff done — i.e., a fiscal spending plan to lift the country out of a looming recession.The way-too-early winners and losers view: The energy and defense sectors would do well, Gardner says. Big Pharma could also benefit, if Republicans succeed in rolling back Medicare’s ability to negotiate on prescription drug prices, a key pillar of the Inflation Reduction Act. A potential loser is Big Tech, which has critics in both parties.HERE’S WHAT’S HAPPENING Donald Trump drops a hint about 2024. The former president stole the spotlight at a rally in Ohio, telling supporters in a speech for J.D. Vance, the Republican Senate candidate, that he would make “a very big announcement on Nov. 15 at Mar-a-Lago.” The comments fueled speculation that he was gearing up for another White House run.FTT, the digital coin tied to the leading crypto exchange FTX, plunges. The token has lost nearly a quarter of its value in the past day. It is also raising fears about more instability in crypto land, causing drops in Bitcoin, Ether and Solana. Alameda Research, the hedge fund operated by the crypto mogul Sam Bankman-Fried, has big holdings in FTT and Solana.The State of the 2022 Midterm ElectionsElection Day is Tuesday, Nov. 8.Final Landscape: As candidates make their closing arguments, Democrats are bracing for potential losses even in traditionally blue corners of the country as Republicans predict a red wave.The Battle for Congress: With so many races on edge, a range of outcomes is still possible. Nate Cohn, The Times’s chief political analyst, breaks down four possible scenarios.Voting Worries: Even as voting goes smoothly, fear and suspicion hang over the process, exposing the toll former President Donald J. Trump’s falsehoods have taken on American democracy.Nvidia starts selling a China-only chip. The U.S. chip-maker is reportedly selling an alternative to a high-end chip banned from sale in China under new American export restrictions. Meanwhile, Apple’s warning that it would not be able to produce enough iPhones for the holiday season because of Covid-19 lockdowns in China highlights how enmeshed the tech giant is there, even as many of its Western peers are shut out.The owners of Liverpool F.C. put the soccer club up for sale. Goldman Sachs and Morgan Stanley have been hired to sell the franchise, one of the most popular worldwide. The club could sell for far more than the $3 billion that Chelsea fetched this year; Forbes values Liverpool at nearly $4.5 billion.Elizabeth Holmes is denied a new trial. A federal judge that the Theranos founder’s arguments for a new one didn’t introduce any new evidence. Holmes is set to be sentenced on Nov. 18 on four counts of criminal fraud.Activists at COP27 in Egypt.Sean Gallup/Getty ImagesMoney matters dominate COP One of the big questions to emerge so far from COP27: Who is paying for efforts to combat global warming, and is it fair? Here’s what’s happening at the gathering in Sharm el Sheikh, Egypt:The Switzerland plan — pay poorer countries to reduce their carbon emissions, then claim credits toward its own carbon footprint — is drawing scrutiny.Egypt may be hosting a conference dedicated to reducing carbon emissions, but it’s eager to sell fossil fuels to Europe to raise money for its debt-ridden economy.Climate activists are protesting Coke’s sponsorship of COP27, pointing to its increasing use of plastics.A new study by Oxfam said that the world’s 125 wealthiest individuals collectively produce 393 million tons in annual carbon emissions — or 3 million tons each on average.Musk, and the power of one Is Elon Musk’s frenetic management style, which is often punctuated by a daily tweet barrage (including a now-deleted one engaging with a quote from a white nationalist), a sign of genius, or an indication that he’s in over his head? Yesterday, the prominent venture capitalist Chris Sacca, an early Twitter investor, spoke on the matter.“One of the biggest risks of wealth/power is no longer having anyone around you who can push back, give candid feedback, suggest alternatives, or just simply let you know you’re wrong,” he wrote.Musk’s management of Twitter has been chaotic. He pushed for a huge round of layoffs, only to ask some of those workers to return. He delayed the rollout of Twitter’s subscription product amid internal pushback. Advertisers have paused their spending. While Musk says Twitter usage is at a record high, others point to potentially troubling data. And just yesterday, he publicly urged independent voters to back Republican candidates in today’s midterm elections.Others are seizing on the moment: The news publisher Axios has promoted its newsletters to potential advertisers as a “well-lit alternative to Twitter,” according to an email to ad buyers obtained by DealBook.Many of his supporters remain in his corner. The investor Ron Baron, an early Tesla investor, told CNBC that the opportunities at Twitter were “gigantic.” Meanwhile, Musk allies in charge at Twitter include his personal lawyer and a crowd nicknamed “Elon’s goons.” Sacca was unimpressed: “I’ve recently watched those around him become increasingly sycophantic and opportunistic.”Sacca sees a corollary in Travis Kalanick, Uber’s co-founder. In 2017, Kalanick resigned from the ride-hailing company after shareholders revolted over a toxic workplace culture. Other tech founders have been similarly humbled: Musk was fired from PayPal in 2000.To be clear, Sacca isn’t calling for Musk to leave Twitter. “I really want this thing to work,” he tweeted. “The only way I see that happening is if anyone around Elon can speak some truth to power and complement his bold and ambitious instincts with desperately needed nuance.”In fashion, green clashes with antitrustFashion brands are under pressure to go green. But an effort by some big houses to collaborate on sustainability initiatives has put them in the cross hairs of antitrust authorities, with European regulators claiming that some attempts may have resembled collusion, write The Times’s Lizzie Paton and Jenny Gross, and DealBook’s Ephrat Livni.The coronavirus pandemic inspired fashion to rethink its practices. During lockdowns, a group of clothing executives and designers spoke on Zoom about limiting waste, and went on to publish ambitious statements in 2020 on making the industry more environmentally friendly. But those declarations set off alarm bells in Brussels: E.U. antitrust regulators raided unnamed fashion houses in May, stating that the targets may have violated rules against price fixing and created a cartel. (People at several of the companies confirmed they had been contacted. The brands declined to comment, and the E.U. has not publicly identified them.)Many sustainability policies would end up raising prices and reducing quantity, said Hill Wellford, a former antitrust official at the Justice Department now at the law firm Vinson & Elkins. “Multiple client consortiums have called me about making agreements for environmental purposes,” he said, “and I have to say to them, ‘Those are dangerous to do.’”The clash between sustainability and competition policy is hot political fodder. “Congress will increasingly use its oversight powers to scrutinize the institutionalized antitrust violations being committed in the name of E.S.G.,” Senator Tom Cotton, Republican of Arkansas, and others wrote in a Nov. 3 letter to 51 major law firms advising clients on environmental practices. With Republicans likely to win back at least one chamber in the midterm elections, conservative lawmakers are gearing up for more of these kinds of fights.“Inside counsel at major companies who really want to be sustainability leaders see antitrust as their biggest hurdle,” Amelia Miazad, an expert in sustainable capitalism and the founder of the Business in Society Institute at Berkeley Law, told The Times. “Companies cannot continue to produce products for consumers in the future unless they’re able to collaborate.”THE SPEED READ DealsThe actor Matthew McConaughey reportedly may join a potential bid by Jeff Bezos and Jay-Z for the N.F.L.’s Washington Commanders. (N.Y. Post)Investment losses at Tiger Global’s flagship hedge fund have grown to nearly 55 percent as the firm’s bets on tech companies and on China suffered. (FT)Foxconn will invest $170 million in the electric truck maker Lordstown Motors. (WSJ)SoftBank’s C.E.O., Masayoshi Son, reportedly plans to put an end to his memorably unusual earnings presentations. (WSJ)PolicyThe Justice Department seized Bitcoin once valued at nearly $3.4 billion from a man who pleaded guilty to stealing from the Silk Road online black-market bazaar. (WSJ)Oil companies have called Britain “fiscally unstable” as its government weighs a windfall tax on the industry. (FT)The Supreme Court’s conservative justices signaled that they were open to further limiting the power of federal regulators like the S.E.C. (NYT)Best of the restJohn Tyson, the C.F.O. of the meat processor Tyson Foods, was arrested after he reportedly became intoxicated and fell asleep in the wrong house. (CNBC)British companies have an “appalling” shortfall of women in executive positions, according to new research. (FT)Inside the messy split — Rolexes and handbags held as hostages and more — of Rome’s soccer legend and his estranged wife. (NYT)John Foley, Peloton’s co-founder and former C.E.O., has found his next act: selling custom rugs directly to consumers. (Insider)Evelyn de Rothschild, who helped unite branches of his family’s banking dynasty and advised the British government and Queen Elizabeth II, has died. He was 91. (Bloomberg)Thanks for reading! We’ll see you tomorrow.We’d like your feedback. Please email thoughts and suggestions to dealbook@nytimes.com. More
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Elon Musk Is Tweeting Through a Tide of Criticism
The new owner of Twitter has embarked on a tweeting spree to push back, spar and justify his actions.Illustration By The New York Times; Photo By Adrees Latif/reutersUnder pressure and facing a wave of criticism, Elon Musk has increasingly turned to his favorite release valve: Twitter.Since Saturday, Mr. Musk, the world’s richest man and the new owner of Twitter, has embarked on a tweeting spree so voluminous that he is on a pace to post more than 750 times this month, or more than 25 times a day, according to an analysis from the digital investigations company Memetica. That would be up from about 13 times a day in April, when Mr. Musk first agreed to buy Twitter.His recent tweets have covered an increasingly broad range of topics. Over the last four days, Mr. Musk, 51, needled the comedian Kathy Griffin and beefed with the Twitter co-founder Jack Dorsey on the platform. He made masturbation jokes aimed at a rival — and much smaller — social media platform. He posted, then deleted, a tweet engaging with a quote from a white nationalist. And he defended his ownership of Twitter, including why he had laid off 50 percent of the company’s staff and why people should not impersonate others on the service.All in all, Mr. Musk, who described himself in his Twitter profile as “Chief Twit” before later changing the description to “Twitter Complaint Hotline Operator,” has tweeted more than 105 times since Friday, mainly about Twitter, according to a tally by Memetica.“Birds haven’t been real since 1986,” Mr. Musk tweeted on Sunday in a discussion thread about Twitter, including a meme from an absurdist conspiracy theory that posits that birds are actually robot spies. He did not respond to a request for comment.Mr. Musk is under tremendous scrutiny 11 days after completing his $44 billion deal for Twitter, which was the largest leveraged buyout of a technology company in history. On Friday, he cut roughly 3,700 of the company’s 7,500 employees, saying he had no choice because Twitter was losing $4 million a day. At the same time, he has found himself embroiled in the same content debates that have plagued other social media companies, including how to give people a way to speak out without spreading misinformation and toxic speech.More on Elon Musk’s Twitter TakeoverA Familiar Playbook: In his first days at Twitter, Elon Musk has been emulating some of the actions of Mark Zuckerberg, who leads Facebook, Instagram and WhatsApp.A Different Kind of Deal: Silicon Valley moguls used to buy yachts and islands. Now they are rich enough to acquire companies they fancy.‘Hard Fork’: In an episode of The Times’s tech podcast, two Twitter employees described the atmosphere inside the company in the aftermath of the acquisition.Effect on Midterms: Mr. Musk is in the middle of firing thousands of Twitter employees, including many who helped fight misinformation. What could that mean for the upcoming elections?Already Mr. Musk has had to delay the rollout of a subscription product that would have given people check marks on their Twitter profiles. Advertisers have paused their spending on Twitter over fears that Mr. Musk will loosen content rules on the platform. And the midterm elections are set to be a test of how a slimmed-down Twitter will perform in catching inflammatory posts and misinformation about voting and election results.In a report that was published on Monday, researchers at the Fletcher School at Tufts University said the early signs of Mr. Musk’s Twitter “show the platform is heading in the wrong direction under his leadership — at a particularly inconvenient time for American democracy.”The researchers said they had tracked narratives about civil war, election fraud, citizen policing of voting, and allegations of pedophilia and grooming on Twitter from July through October. “Post-Musk takeover, the quality of the conversation has decayed” as more extremists and misinformation peddlers have tested the platform’s boundaries, the researchers wrote.Amid the hubbub, Mr. Musk’s behavior on Twitter suggests that he intends to simply post through it. And while he has always been a prolific tweeter, he has raised the level in recent days.On Friday, Mr. Musk, who has more than 114 million followers on Twitter, proposed a “thermonuclear name & shame” campaign against brands that had stopped advertising on the platform. He said that he had done everything he could to appease advertisers but that activists had worked against him to cause brands to drop out of spending on Twitter.At the same time, the billionaire was embroiled in a fight over his plan to charge Twitter users $8 a month for a subscription service, Twitter Blue, which would give a check mark to anyone who paid. The check mark had been free for notable people whose identities had been verified by the company, including celebrities, politicians and journalists, as a way to protect against impersonation.Critics were unhappy about Mr. Musk’s plans to monetize the check mark, saying it could lead to the spread of misinformation and fraud on the platform. In protest, some Twitter accounts that had check marks changed their display names and photographs to match Mr. Musk’s account over the weekend, a move intended to illustrate why it would be confusing if anyone could buy a check mark.On Sunday, Mr. Musk announced that he would permanently suspend any account “engaging in impersonation without clearly specifying ‘parody.’” The billionaire, who had previously criticized Twitter when it permanently barred users, then barred Ms. Griffin, who had posed as him on the service.Mr. Musk, who has called himself a “free speech absolutist,” is learning the basic expectation of content moderation for popular social networks, said Daphne Keller, director of the Program on Platform Regulation at Stanford’s Cyber Policy Center.“His ideas have been incoherent for a while,” she said.On Sunday night, Mr. Musk responded to a tweet featuring a quote from a white nationalist, before deleting the post and moving on to squabble with Mr. Dorsey over Birdwatch, a feature that lets community members add context to tweets that they believe are misleading. Mr. Musk, who previously lauded the feature, proposed changing the feature’s name to “Community Notes.”“Community notes is the most boring Facebook name ever,” replied Mr. Dorsey, who owns a $1 billion stake in Mr. Musk’s Twitter.Then on Monday, Mr. Musk suggested he might pursue civil society groups and activists who were pushing for Twitter advertiser boycotts, when he replied to a right-wing commentator that “we do” have grounds for legal action. Legal experts said the holding of boycotts for social and political goals is protected under the First Amendment.Mr. Musk also tweeted that people should vote Republican in Tuesday’s midterm elections. “Shared power curbs the worst excesses of both parties, therefore I recommend voting for a Republican Congress, given that the Presidency is Democratic,” he tweeted. He later posted that he was an independent with a “voting history of entirely Democrat until this year.”He soon moved on. Mr. Musk’s attention became fixed on Mastodon, a Twitter competitor that has gained traction over the past 10 days. Playing off Mastodon’s name, he made several crude jokes about masturbation — then deleted those posts an hour later.Tiffany Hsu More
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Russia Reactivates Its Trolls and Bots Ahead of Tuesday’s Midterms
Researchers have identified a series of Russian information operations to influence American elections and, perhaps, erode support for Ukraine.The user on Gab who identifies as Nora Berka resurfaced in August after a yearlong silence on the social media platform, reposting a handful of messages with sharply conservative political themes before writing a stream of original vitriol.The posts mostly denigrated President Biden and other prominent Democrats, sometimes obscenely. They also lamented the use of taxpayer dollars to support Ukraine in its war against invading Russian forces, depicting Ukraine’s president as a caricature straight out of Russian propaganda.The fusion of political concerns was no coincidence.The account was previously linked to the same secretive Russian agency that interfered in the 2016 presidential election and again in 2020, the Internet Research Agency in St. Petersburg, according to the cybersecurity group Recorded Future.It is part of what the group and other researchers have identified as a new, though more narrowly targeted, Russian effort ahead of Tuesday’s midterm elections. The goal, as before, is to stoke anger among conservative voters and to undermine trust in the American electoral system. This time, it also appears intended to undermine the Biden administration’s extensive military assistance to Ukraine.“It’s clear they are trying to get them to cut off aid and money to Ukraine,” said Alex Plitsas, a former Army soldier and Pentagon information operations official now with Providence Consulting Group, a business technology company.The campaign — using accounts that pose as enraged Americans like Nora Berka — have added fuel to the most divisive political and cultural issues in the country today.It has specifically targeted Democratic candidates in the most contested races, including the Senate seats up for grabs in Ohio, Arizona and Pennsylvania, calculating that a Republican majority in the Senate and the House of Representatives could help the Russian war effort.The campaigns show not only how vulnerable the American political system remains to foreign manipulation but also how purveyors of disinformation have evolved and adapted to efforts by the major social media platforms to remove or play down false or deceptive content.Last month, the Federal Bureau of Investigation and the Cybersecurity and Infrastructure Security Agency issued an alert warning of the threat of disinformation spread by “dark web media channels, online journals, messaging applications, spoofed websites, emails, text messages and fake online personas.” The disinformation could include claims that voting data or results had been hacked or compromised.The agencies urged people not to like, discuss or share posts online from unknown or distrustful sources. They did not identify specific efforts, but social media platforms and researchers who track disinformation have recently uncovered a variety of campaigns by Russia, China and Iran.The State of the WarGrain Deal: Russia rejoined an agreement allowing the shipment of Ukrainian grain through the Black Sea, one of the few areas of cooperation amid the war, easing uncertainty over the fate of a deal seen as crucial to preventing famine in other parts of the world.On the Diplomatic Front: The Group of 7 nations announced that they would work together to rebuild critical infrastructure in Ukraine that has been destroyed by Russia’s military and to defend such sites from further attacks.Turning the Tables: With powerful Western weapons and deadly homemade drones, Ukraine now has an artillery advantage in the south, where a battle for the city of Kherson appears to be imminent. The work of reconnaissance teams penetrating enemy lines has also proven key in breaking Russia’s hold in the territory.Refugees: The war has sent the numbers of Ukrainians seeking shelter in Europe soaring, pushing asylum seekers from other conflicts to the end of the line.Recorded Future and two other social media research companies, Graphika and Mandiant, found a number of Russian campaigns that have turned to Gab, Parler, Getter and other newer platforms that pride themselves on creating unmoderated spaces in the name of free speech.These are much smaller campaigns than those in the 2016 election, where inauthentic accounts reached millions of voters across the political spectrum on Facebook and other major platforms. The efforts are no less pernicious, though, in reaching impressionable users who can help accomplish Russian objectives, researchers said.“The audiences are much, much smaller than on your other traditional social media networks,” said Brian Liston, a senior intelligence analyst with Recorded Future who identified the Nora Berka account. “But you can engage the audiences in much more targeted influence ops because those who are on these platforms are generally U.S. conservatives who are maybe more accepting of conspiratorial claims.”Many of the accounts the researchers identified were previously used by a news outlet calling itself the Newsroom for American and European Based Citizens. Meta, the owner of Facebook and Instagram, has previously linked the news outlet to the Russian information campaigns centered around the Internet Research Agency.The network appears to have since disbanded, and many of the social media accounts associated with it went dormant after being publicly identified around the 2020 election. The accounts started becoming active again in August and September, called to action like sleeper cells.Nora Berka’s account on Gab has many of the characteristics of an inauthentic user, Mr. Liston said. There is no profile picture or identifying biographical details. No one responded to a message sent to the account through Gab.The account, with more than 8,000 followers, posts exclusively on political issues — not in just one state but across the country — and often spreads false or misleading posts. Most have little engagement but a recent post about the F.B.I. received 43 responses and 11 replies, and was reposted 64 times.Since September the account has repeatedly shared links to a previously unknown website — electiontruth.net — that Recorded Future said was almost certainly linked to the Russian campaign.Electiontruth.net’s earliest posts date only from Sept. 5; since then, it has posted articles almost daily ridiculing President Biden and prominent Democratic candidates, while criticizing policies regarding race, crime and gender that it said were destroying the United States. “America under Communism” was one typical headline.The articles all have pseudonyms as bylines, like Andrew J, Truth4Ever and Laura. According to Mr. Liston, the website domain was registered using Bitcoin accounts.Electiontruth.net lists a cafe in Cotter, Ark., as its contact. The cafe has closed, replaced by the Cotter Bridge Market. The market’s owners said they knew nothing about the website.Trent Bozeman for The New York TimesFor its contact information, electiontruth.net lists a cafe inside a converted gas station in Cotter, Ark., a town of 900 people on a bend in the White River. The cafe has closed, however, and been replaced by Cotter Bridge Market, a produce shop and deli whose owners said they knew nothing about the website. No one at Election Truth responded to a request for comment submitted through the site.Mr. Liston said that links to electiontruth.net appeared to be closely coordinated with the accounts on Gab linked to the Russians.In another campaign, Graphika identified a recent series of cartoons that appeared on Gab, Gettr, Parler and the discussion forum patriots.win. The cartoons, by an artist named “Schmitz,” disparaged Democrats in the tightest Senate and governor races.One targeting Senator Raphael Warnock of Georgia, who is Black, employed racist motifs. Another falsely claimed that Representative Tim Ryan, the Democratic Senate candidate in Ohio, would release “all Fentanyl distributors and drug traffickers” from prison.The cartoons received little engagement and did not spread virally to other platforms, according to Graphika.A recurring theme of the new Russian efforts is an argument that the United States under President Biden is wasting money by supporting Ukraine in its resistance to the Russian invasion that began in February.Nora Berka, for example, posted a doctored photograph in September that showed President Volodymyr Zelensky of Ukraine as a bikini-wearing poll dancer being showered with dollar bills by Mr. Biden.“As working class Americans struggle to afford food, gas, and find baby formula, Joe Biden wants to spend $13.7 billion more in aid to Ukraine,” the account posted. Not incidentally, that post echoed a theme that has gained some traction among Republican lawmakers and voters who have questioned the delivery of weapons and other military assistance.“It’s no secret that Republicans — that a large portion of Republicans — have questioned whether we should be supporting what has been referred to as foreign adventures or somebody else’s conflict,” said Graham Brookie, senior director of the Digital Forensics Lab at the Atlantic Council, which has also been tracking foreign influence operations.The F.B.I. and the Cybersecurity and Infrastructure Security Agency did not respond to requests for comment about the Russian efforts. Mr. Brookie called the revived accounts “recidivist behavior.” Gab did not respond to a request for comment.As before, it may be hard to measure the exact impact of these accounts on voters come Tuesday. At a minimum, they contribute to what Edward P. Perez, a board member with the OSET Institute, a nonpartisan election security organization, called “manufactured chaos” in the country’s body politic.While Russians in the past sought to build large followings for their inauthentic accounts on the major platforms, today’s campaigns could be smaller and yet still achieve a desired effect — in part because the divisions in American society are already such fertile soil for disinformation, he said.“Since 2016, it appears that foreign states can afford to take some of the foot off the gas,” Mr. Perez, who previously worked at Twitter, said, “because they have already created such sufficient division that there are many domestic actors to carry the water of disinformation for them.” More
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On Social Media, Hunting for Voter Fraud Becomes a Game
On the messaging app Telegram this week, 300 people gathered in a channel devoted to Arizona politics to play an online game.The rules were simple: Find examples of voter fraud and win virtual points. If members of the group had names of undocumented immigrants who intended to vote illegally in Tuesday’s midterm elections and posted details, they were awarded two points. If they identified people who might be organizing buses to transport those immigrants to voting stations, they got 50 points.“I have a name for you,” one participant wrote in the Telegram channel on Monday. He submitted a common Latino name and said the person was undocumented and planned on voting. Though he didn’t provide evidence backing up his claim, he was given two points anyway.The group erupted in congratulations. “One down, one million to go,” another participant responded, according to messages viewed by The New York Times. “Gotta find them all.”That many of the posts, photos and videos used to score points have been widely debunked as misinformation did not slow down the group. Nor has it impeded the spread of the game to other social platforms, where dozens of private messaging channels are also engaged in a hunt for voter fraud.The Times reviewed 26 such games being played on the messaging apps and social platforms Telegram, WhatsApp, Gab and Truth Social over the past two months. In each, players were granted a loose system of points or honorary titles if they shared supposed evidence of voting irregularities. Many of the participants were encouraged to post as much as possible, egged on by raucous carnival-like conversations and posts.The games originated in online groups that purported to be about voter integrity and securing elections. It was unclear how long the games have existed, because many of the channels have changed names or cleared their digital histories. None appeared to turn up proof of voter fraud, which is exceptionally rare.The State of the 2022 Midterm ElectionsElection Day is Tuesday, Nov. 8.Biden’s Speech: In a prime-time address, President Biden denounced Republicans who deny the legitimacy of elections, warning that the country’s democratic traditions are on the line.State Supreme Court Races: The traditionally overlooked contests have emerged this year as crucial battlefields in the struggle over the course of American democracy.Democrats’ Mounting Anxiety: Top Democratic officials are openly second-guessing their party’s pitch and tactics, saying Democrats have failed to unite around one central message.Social Security and Medicare: Republicans, eyeing a midterms victory, are floating changes to the safety net programs. Democrats have seized on the proposals to galvanize voters.But facts are often not the point of these games. Instead, they are part of a broader trend of “participatory misinformation,” in which people become more actively involved in sharing falsehoods and conspiracy theories. That leads to people integrating with a wider community and earning kudos, which makes them more likely to believe and invest in the misinformation, researchers said.“There’s a feeling that you can participate in the construction of a narrative and have impact,” said Kate Starbird, a professor of human-computer interaction at the University of Washington who studies misinformation. “It’s very empowering.”Fences surrounded the Maricopa County elections center in Phoenix this month. Misinformation about voting has flourished online.Olivier Touron/Agence France-Presse, via Getty ImagesThe gamification of voter fraud on social media has implications for how the legitimacy of the vote will be seen in Tuesday’s midterm elections. Confidence in the electoral process has eroded in recent years, with former President Donald J. Trump casting doubt on the 2020 presidential election’s outcome by falsely claiming he was the victim of duplicitous voting practices.In recent months, candidates such as Kari Lake, a Republican running for Arizona governor, have amplified voting misinformation on the campaign trail, such as questioning the accuracy of voting machines. Falsehoods about voting have circulated widely on Twitter, TikTok, Truth Social, Rumble and Gab.Some people now are so suspicious of the voting process that they have set up watch parties to monitor ballot boxes and prevent tampering on Election Day. States such as Georgia have passed laws that require people to show new IDs to vote. On Wednesday, President Biden condemned Mr. Trump and other Republicans for imperiling American democracy with lies about voting and the 2020 election.The voter fraud games add to the fraught atmosphere, Ms. Starbird said. They are “one more way that people are being pushed to spread, and even create, examples of voter fraud to fuel their false narratives and sow distrust in the midterms,” she said.Participatory misinformation has a history of spurring online conspiracy theory movements, researchers said. QAnon, a movement that revolved around the falsehood that the world was run by a cabal of Satan-worshiping Democrats, was nurtured by people seeking clues online about the identities of those running the group and seeing hidden meanings in supposed symbols and coded messages.After the 2020 election, the “Stop the Steal” movement, which falsely claimed that Mr. Trump had won, was also fueled by online participation. On Facebook, dozens of groups encouraged their followers to find examples that proved the election had been stolen from Mr. Trump.Since then, claims of voter fraud have grown to include unsubstantiated theories that voting machines were rigged, that dead people and pets had voted and that corrupt election officials were not counting certain kinds of ballots.In the voter fraud games on Telegram, WhatsApp and other platforms, the groups viewed by The Times ranged in size from a few dozen people to several hundred. Many players appeared to use pseudonyms and shared only scant personal information. While some of the games awarded points, others bestowed titles like “master” and “grand master” to those who posted multiple examples of purported voter fraud.The points and titles do not appear to add up to any real-world prizes. Instead they gave participants online clout and bragging rights over fellow players.In one Pennsylvania-based Telegram group, 200 people raced this week to find examples of “unverified ballots,” or ballots that were sent without verifying voters’ identities, after Mr. Trump falsely claimed on Tuesday that 250,000 of these ballots had been mailed to voters in the state.“There are hundreds of thousands, makes them easy to find,” one person in the group wrote. “I say one point a person.”In a WhatsApp group that was an offshoot of a larger Ohio-based Telegram group, nine participants recently kept a leaderboard as they played their game. At the top of the board was a member who the group said had uncovered cases of dead people who had voted. The player had not provided evidence of his accusations.Not all of the games have a formal structure, or take place in dedicated channels. On Truth Social, the platform started by Mr. Trump, the gamelike approach of awarding points or acclaim to users participating in misinformation has spilled into the comments sections.When Mr. Trump asserted to his 4.4 million followers on Truth Social on Monday that voter fraud was rife in Pennsylvania, for example, comments and links to his post included promises that those who found any alleged wrongdoing would be rewarded.One person who shared Mr. Trump’s post said he would give “special status” to anyone who captured footage of the unverified ballots. Others said they would go door to door to verify voters themselves and “get a point” if they found the ballots.On Telegram, some groups that have exhorted people to watch ballot boxes in Arizona to prevent voter fraud have also treated it like a game. “Ten points if you spend an hour” monitoring a ballot box, one person wrote in a Telegram channel with nearly 100 people. “1,000 if you catch them,” the person added, using expletives to describe undocumented immigrants.Similar Telegram channels have popped up in other states. In New Hampshire and Wisconsin, groups dedicated to monitoring the elections next week were also conferring points to players for finding local cases of voter fraud.In one Wisconsin-based Telegram group, where 100 people were engaged in scoring points by finding voter fraud, one participant, whose user name contained a racial slur, posted a video last week of someone claiming to burn ballots.The player obtained 10 virtual points for the video. But the footage had already circulated widely on the internet after the 2020 election and was debunked as fake. The person shown in the video was burning sample ballots, not ones that voters had used. More
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Elon Musk Takes a Page Out of Mark Zuckerberg’s Social Media Playbook
As Mr. Musk takes over Twitter, he is emulating some of the actions of Mr. Zuckerberg, who leads Facebook, Instagram and WhatsApp.Elon Musk has positioned himself as an unconventional businessman. When he agreed to buy Twitter this year, he declared he would make the social media service a place for unfettered free speech, reversing many of its rules and allowing banned users like former President Donald J. Trump to return.But since closing his $44 billion buyout of Twitter last week, Mr. Musk has followed a surprisingly conventional social media playbook.The world’s richest man met with more than six civil rights groups — including the N.A.A.C.P. and the Anti-Defamation League — on Tuesday to assure them that he will not make changes to Twitter’s content rules before the results of next week’s midterm elections are certified. He also met with advertising executives to discuss their concerns about their brands appearing alongside toxic online content. Last week, Mr. Musk said he would form a council to advise Twitter on what kinds of content to remove from the platform and would not immediately reinstate banned accounts.If these decisions and outreach seem familiar, that’s because they are. Other leaders of social media companies have taken similar steps. After Facebook was criticized for being misused in the 2016 presidential election, Mark Zuckerberg, the social network’s chief executive, also met with civil rights groups to calm them and worked to mollify irate advertisers. He later said he would establish an independent board to advise his company on content decisions.Mr. Musk is in his early days of owning Twitter and is expected to make big changes to the service and business, including laying off some of the company’s 7,500 employees. But for now, he is engaging with many of the same constituents that Mr. Zuckerberg has had to over many years, social media experts and heads of civil society groups said.Mr. Musk “has discovered what Mark Zuckerberg discovered several years ago: Being the face of controversial big calls isn’t fun,” said Evelyn Douek, an assistant professor at Stanford Law School. Social media companies “all face the same pressures of users, advertisers and governments, and there’s always this convergence around this common set of norms and processes that you’re forced toward.”Mr. Musk did not immediately respond to a request for comment, and a Twitter spokeswoman declined to comment. Meta, which owns Facebook and Instagram, declined to comment.Elon Musk’s Acquisition of TwitterCard 1 of 8A blockbuster deal. More
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Debunking Voting Misinformation About the Midterm Elections
Here are some of the main falsehoods and rumors that have spread on social media in the lead-up to Election Day.Voting-related falsehoods and rumors are flourishing across social media in the final stretch before Election Day on Tuesday.Much of the misinformation and conspiracy theories, which are swirling on Facebook, Twitter and other platforms, build on familiar and unsubstantiated narratives spread about the 2020 presidential election. They include debunked claims of meddling with voting equipment, falsehoods about fraudulent ballots, alleged malfeasance by elections officials and unsubstantiated rumors about mail-in voting.Many of the posts are outright falsehoods, while others appear intended to simply raise doubts and undermine confidence in voting, researchers said. And they are spreading through more conduits, such as the fast-rising video app TikTok and right-wing social media sites like Truth Social, Rumble and Telegram, according to the data research firms Zignal and Graphika and researchers.“People are primed, much more mobilized and more soaked in conspiracy theories,” said Mike Caulfield, a research scientist who studies election misinformation at the University of Washington’s Center for an Informed Public.Here are some of the most widespread falsehoods and rumors related to voting.Voting machines aren’t rigged.President Donald J. Trump and his allies falsely claimed in 2020 that ballot-tabulating machines had changed votes for him to votes for Joseph R. Biden Jr. They claimed the voting machines were connected to the internet, allowing corrupt election officials and outsiders to tamper with the equipment.While voting machines sometimes encounter programming errors, they are rare, and the equipment is tested before and after Election Day, election officials said. For example, in Maricopa County, Ariz., a political battleground and focal point of conspiracy theorists around the 2020 election, four independent auditors check the security of the equipment, which does not connect to the internet.Even so, falsehoods about the machines have picked up online in recent weeks.On Twitter, “voting machines” has been a top voting-related narrative related to the midterm elections, with more than 89,888 mentions in October, nearly double the 49,765 mentions during the same month in 2021 but down from 191,391 in October before the midterm elections in 2018, according to Zignal.Last month, a Wisconsin state representative said voting machines in the state were connected to the internet. Equipment makers and security experts refuted the claim, but Mr. Trump seized on the falsehood and posted the Wisconsin official’s statement on his social media site, Truth Social.“Rigged Election, what a mess,” he wrote. The post was shared more than 5,000 times and liked more than 13,000 times.Mike Lindell, the chief executive of MyPillow and a Trump supporter, was featured last week in several interviews on the video-sharing site Rumble saying that voting machines were connected to the internet and had been tampered with to steal elections. One of his interviews on Rumble was viewed more than 20,000 times.Ballot fraud isn’t rampant.Over the past month, there were more than 365,592 mentions of “voter fraud” on Twitter, up 25 percent from October 2018, according to Zignal.Claims of voter fraud have often centered on ballot drop boxes. One false theory involves Democrats paying people to stuff the boxes with illegal ballots. The idea was stoked by the May release of the film “2000 Mules,” which asserted with little evidence that illegal drop box stuffing could be traced through cellphone location data. Security experts and former Attorney General William P. Barr have refuted the claims.Last month, Melody Jennings, a Trump supporter and the founder of CleanElectionsUSA, an activist group that has spread unfounded rumors of illegal drop-box stuffing, warned on Truth Social that “mules” — or people who were allegedly vote-trafficking — were “doing their thing” at drop boxes in Maricopa County. She and other conspiracy theorists falsely said these mules had stuffed boxes with illegal ballots and called for volunteers to watch over the boxes. Her post was shared more than 3,000 times and liked 7,400 times.Conspiracy theories about the handling of ballots by election officials are also circulating on social media. According to one unsubstantiated theory, election officials are purposely confusing voters over the kinds of pens that can be used to mark ballots — and declaring that ballots marked with Sharpie pens aren’t counted.Those false claims, which have circulated since 2020, resurfaced in July when a Maricopa County election office sent an advisory suggesting that voters use felt-tip pens on their ballots. The advisory created a backlash online, with several voters posting on Twitter and Facebook that they would instead use blue ballpoint pens because they worried that ballots marked with felt-tip pens provided at polling stations would not be counted.Dead people and illegal immigrants aren’t being exploited.False rumors of voting by dead people and illegal immigrants have long circulated, including after the 2020 election in states such as Arizona, Virginia, Nevada, Pennsylvania, Michigan and Georgia. In all of these states, a small fraction of ballots were cast in the names of dead individuals.The trope has reared its head again online ahead of the midterms.Politicians including Representative Matt Gaetz, Republican of Florida, have recently said without evidence that Democrats want immigrants who are in the United States illegally to vote.“Any illegal alien who attempts to vote in our elections should be arrested and deported,” Mr. Gaetz tweeted on Sunday. His post was shared more than 7,000 times and liked more than 48,000 times.Last week, Texas Scorecard, a self-described citizen journalism group, posted a video on YouTube claiming without evidence that Beto O’Rourke, the Democratic candidate for governor in Texas, had sent pre-filled voter registration applications to dead people. Texas officials validate all voter registration applications. The video was viewed 5,000 times.An election worker sorted ballots in October 2020 at the Maricopa County Recorder’s Office in Phoenix.Matt York/Associated PressVoting by mail isn’t untrustworthy.Some Republican candidates and voters are using social media to cast doubt on whether ballots sent by mail or submitted into drop boxes are counted. “Mail-in voting” and “mail-in ballots” have been mentioned over 338,528 times in the past month on Twitter, up from 137,507 in the October 2021 and 114,159 in October 2018, according to Zignal.Conspiracy theorists also seized on a story last month of the burning of a mail truck that was allegedly carrying ballots in Georgia. Images of the burning truck were spread across social media as a sign of cheating in the election, even though an election official later said there were no ballots on the truck.Social media users have used such incidents to warn against mail-in voting. The hashtag #GetOutAndVoteInPerson has spread widely on Telegram from communities with pro-Trump, Christian, military and election conspiracy theory leanings, said Kyle Weiss, a researcher at Graphika.Voting by mail has taken place for more than 150 years, and fraud is extremely rare, according to the Brennan Center, a nonprofit voter rights organization. In rural areas and for low-income and disabled voters, voting by mail is often the only option. Rules for mail-in voting and the use of drop boxes vary by stateDelays in counting votes are not irregularities.Official results for many races on Tuesday won’t be announced that night and may not be for days because the counting of votes could take longer. Some social media users are focusing on potential counting delays to raise suspicions of election irregularities, state officials and voting experts said.Last Thursday, Senator Ted Cruz, Republican of Texas, responded to a news report that Pennsylvania’s top elections official expected official vote counting to take days. “Why is it only Democrat blue cities that take ‘days’ to count their votes?” he tweeted. “The rest of the country manages to get it done on election night.” The tweet was shared more than 5,500 times and liked 19,200 times.Tallying a final count typically takes days in some states because of the many mail-in votes. In Pennsylvania, officials can begin counting mail-in ballots only on Tuesday morning. In Arizona, election officials said the count could take more than a week because a bipartisan processing board had to certify mail-in ballot signatures. If any ballots are questioned, the law allows five days for the ballot to be reviewed and tallied. More
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As Europe Piles Sanctions on Russia, Some Sacred Cows Are Spared
The European Union has been severing economic ties with Moscow to support Ukraine, but some countries have lobbied to protect key sectors.BRUSSELS — Eight months into the war in Ukraine, and eight rounds of frantic negotiations later, Europe’s sanctions against Russia run hundreds of pages long and have in many places cut to the bone.Since February, the European Union has named 1,236 people and 155 companies for sanctions, freezing their assets and blocking their access to the bloc. It has banned the trade of products in nearly 1,000 categories and hundreds of subcategories. It has put in place a near-total embargo on Russian oil. About one-third of the bloc’s exports to Russia by value and two-thirds of imports have been banned.But even now some goods and sectors remain conspicuously exempted. A look at just a few items reveals the intense back-room bargaining and arm-twisting by some nations and by private industry to protect sectors they deem too valuable to give up — as well as the compromises the European Union has made to maintain consensus.The Belgians have shielded trade in Russian diamonds. The Greeks ship Russian oil unimpeded. France and several other nations still import Russian uranium for nuclear power generation.The net impact of these exemptions on the effectiveness of Europe’s penalties against Russia is hard to assess, but politically, they have allowed the 27 members of the bloc to pull together an otherwise vast sanctions regime with exceptional speed and unanimity.“Ultimately, this is the price of unanimity to hold together this coalition, and in the grander scheme of things the sanctions are really working,” said Jacob Kirkegaard, a senior fellow in the Brussels office of the research group the German Marshall Fund, citing Russia’s diminished access to military technology as evidence.A Lukoil gas station in Priolo Gargallo, Italy, last month. The European Union has put in place a near-total embargo on Russian oil, but some sectors of trade remain conspicuously exempt from sanctions.Gianni Cipriano for The New York Times“We would love to have everything included, diamonds and every other special interest hit, but I am of the opinion that, if sparing them is what it takes to keep everyone together, so be it,” he added.The Ukrainian government has criticized some of the exemptions, with President Volodymyr Zelensky chiding European nations for continuing to permit business with Russia, saying they are skirting sacrifices.“There are people for whom the diamonds sold in Antwerp are more important than the battle we are waging. Peace is worth much more than diamonds,” Mr. Zelensky said to the Belgian Parliament during an address by video link in late March.Keeping Diamonds ComingThe continued success of Belgium and the broad diamond sector in keeping the Russian diamond trade flowing exemplifies the sacred cows some E.U. nations refuse to sacrifice, even as their peers accept pain to punish the Kremlin.Exports of rough diamonds are very lucrative for Russia, and they flow to the Belgian port of Antwerp, a historically important diamond hub.The trade, worth 1.8 billion euros a year — about $1.75 billion — has been shielded in consecutive rounds of the bloc’s sanctions, despite being raised as a possible target soon after the Russian invasion of Ukraine in late February.The Belgian government has said that it has never asked the European Commission, the E.U. executive body that drafts the measures, to remove diamonds from any sanctions list and that if diamonds were added, it would go along.Diamonds being sorted in Mirny, Russia, at a facility operated by Alrosa, the Russian state-owned diamond company. Russian diamonds have been shielded in consecutive rounds of European sanctions.Maxim Babenko for The New York TimesTechnically speaking, that may be true. But the latest round of penalties, adopted this month, exposed the intensive interventions when a coordination error occurred among the various services in the bloc that are involved in the technical preparation of sanctions.The incident, described to The New York Times by several diplomats involved as “farcical,” shows how the lobbying works. The diplomats spoke anonymously in order to describe freely what happened.The European Commission over the course of September prepared the latest round of sanctions and left diamonds off that list.But the European External Action Service — the E.U.’s equivalent of a foreign service or state department, which works with the commission to prepare sanctions — did not get the memo that diamonds should remain exempted and included in its own draft listings Alrosa, the Russian state-owned diamonds company.Once Alrosa had been put on the draft document, removing it became difficult. Spotting the error, Poland and other hard-line pro-Ukraine countries in the bloc dragged out the negotiations over the package as much as they could on the basis that Alrosa should indeed face sanctions.In the end, the need for unanimity and speed prevailed, and Alrosa continues to export to the European Union, at least until the next round of sanctions is negotiated. In proposals for a fresh, ninth round of sanctions, presented by Poland and its allies last week, diamonds were again included, but formal talks on the new set of penalties have not yet begun.A spokesman for the European External Action Service declined to comment, saying it does not comment on internal procedures involved in preparing sanctions.The Tricastin nuclear power plant in the Drôme region of southeastern France. France is one of several E.U. countries that depend on Russian uranium to operate civil nuclear power facilities. Andrea Mantovani for The New York TimesNuclear PowerMost exemptions have not been as clear-cut as diamonds because they have involved more complex industries or services, or affected more than one country.Uranium exported from Russia for use in civil nuclear power production falls under this category. Nuclear power plants in France, Hungary, Slovakia, Finland and other countries depend on Russian civilian uranium exports.The trade is worth 200 million euros, or about $194 million, according to Greenpeace, which has been lobbying for its ban. Germany and other E.U. countries have supported the calls to ban civilian nuclear imports from Russia, making this another issue likely to come up in the next round of sanctions talks.In August, Mr. Zelensky also highlighted the persistent protection of the Russian nuclear exports to Europe just as Ukraine’s Zaporizhzhia nuclear power plant came under fire.Some supporters of keeping Russian uranium running say that France and the other countries’ ability to generate electricity by operating their nuclear power plants during an acute energy crisis is more important than the political or financial gains that could come from a ban through E.U. sanctions, at least for now.Tankers in the NightOne of the most complex and important lobbying efforts to protect a European industry from sanctions is the one mounted by Greek diplomats to allow Greek-owned tankers to transport Russian oil to non-European destinations.This has facilitated one of the Kremlin’s biggest revenue streams. More than half of the vessels transporting Russia’s oil are Greek-owned, according to information aggregated from MarineTraffic, a shipping data platform.Supporters of the Greek shipping industry say that if it pulled out of that business, others would step in to deliver Russian oil to places like India and China. Experts say lining up enough tankers to make up for a total Greek pullout would not be simple, considering the sheer size of Greek-interest fleets and their dominance in this trade.According to European diplomats involved in the negotiations, their Greek counterparts were able to exempt Greek shipping companies from the oil embargo in a tough round of talks last May and June.Since then, the E.U. has come around to a United States-led idea to keep facilitating the transport of Russian oil, in order to avert a global oil-market meltdown, but to do so at a capped price to limit Russia’s revenues.The Greeks saw an opening: They would continue to transport Russian oil, but at the capped price. The bloc offered them additional concessions, and Greece agreed that the shipping of Russian oil would be banned if the price cap was not observed.The Greek-flagged oil tanker Minerva Virgo. Greek diplomats have lobbied for Greek-owned tankers to be allowed to transport Russian oil to non-European destinations. Bjoern Kils/ReutersEven if the economic benefits of such exemptions are hard to define, from a political perspective, the continued protection of some goods and industries is creating bad blood among E.U. members.Governments that have readily taken big hits through sanctions to support Ukraine, sacrificing revenues and jobs, are embittered that their partners in the bloc continue to doggedly protect their own interests.The divisions deepen a sense of disconnect between those more hawkish pro-Ukraine E.U. nations nearer Ukraine and those farther away, although geographical proximity is far from the only determinant of countries’ attitudes toward the war.And given that the bloc is a constant negotiating arena on many issues, some warn that what goes around eventually will come around.“This may be a raw calculation of national interests, but it’s going to linger,” Mr. Kirkegaard said. “Whoever doesn’t contribute now through sacrifice, next time there’s a budget or some other debate, it’s going to come back and haunt them.” More
