Pentagon spokeswoman announces departure

Washington (CNN)One of Defense Secretary James Mattis’ most senior civilian advisers is being investigated by the Defense Department Office of Inspector General for allegedly retaliating against staff members after she used some of them to conduct her personal errands and business matters, according to four sources familiar with the probe.Dana White, the Trump administration political appointee who serves as the Pentagon’s chief spokeswoman, has been under investigation for several weeks after multiple complaints were filed against her.White is alleged to have misused support staff, asking them, among other things, to fetch her drycleaning, run to the pharmacy for her and work on her mortgage paperwork. Staffers also charge that she inappropriately transferred personnel after they filed complaints about her.White has not been found in violation of any federal regulation or policy at this point. The inspector general’s office declined to comment.As many as half a dozen defense personnel, and possibly more, have been interviewed, the sources say. All the officials CNN spoke to asked that their names be withheld, not just because the investigation remains ongoing, but because of concerns about reprisal.

Dry cleaning and lunch runs

White did not respond to CNN’s request for comment about the allegations. Charles Summers, the principal deputy assistant to the secretary for public affairs, said: “This is an ongoing review about which we cannot comment.” White became spokeswoman in April 2017 and reports directly to Defense Secretary James Mattis.Pentagon ethics standards state that “a DoD official may not direct or request subordinates to use official time to perform any activities other than official activities.”CNN was told that some staffers did White’s errands and personal chores voluntarily because they thought she was very busy during the work day. But department standards are iron-clad: They apply even if a staff member doesn’t object to performing non-official tasks.Multiple officials tell CNN that White on occasion told her staff to fetch her dry cleaning, purchase personal items for her and drive her to work on snowy days. After a complaint, White reimbursed a staffer for the cost of mileage incurred driving her to the Pentagon.One staff member made repeated trips to the pharmacy inside the Pentagon to purchase snacks and pantyhose for White. Staffers were repeatedly dispatched to the cafeteria to get her lunch, the officials say.Those officials say the IG is looking into allegations that White also directed military and civilian staff to work on her mortgage application and other personal financial paperwork, and arrange her personal leisure travel. They say the IG is also looking into allegations that White had staff make numerous appointments with her personal hair and makeup artist, whose services she paid for herself, to come to her home and Pentagon office.

A request to review ethics rules

Many of the allegations center on the months prior to May 2018. Matters came to a head that month, when at least two staffers raised concerns with more senior officials about White’s use of their time. The staffers were transferred soon after and complained to the IG that they were moved in reprisal for their complaints.CNN has reviewed information that confirms the IG is looking at many of the events described for potential misuse of staff. CNN has also learned from sources familiar with the matter that White had been told certain requests to staff were not allowed and that she subsequently asked to review ethics rules so she could stay within the Pentagon’s guidelines.All the allegations against White, if proven, would be administrative violations. But the probe makes White just the latest in a series of Trump associates and appointees to face scrutiny for their conduct.White used to hold regular televised press briefings, but has not appeared since May. It is not clear if that is related to the investigation. Reporters have been told the White House wanted to see more briefings by senior uniformed officers.

Mattis decides

White previously served as a foreign policy adviser to Sen. John McCain of Arizona, worked on the staff of the Senate Armed Services Committee and as a director of communications for the Renault-Nissan Alliance in France. She also served an earlier stint at the Pentagon, working as Taiwan country director in the Office of the Secretary of Defense.After the inspector general’s office concludes its probe, it will forward a report to Mattis that details whether any of the allegations are considered misconduct and also details charges that aren’t found to have merit.In IG investigations, allegations of wrongdoing are not always substantiated.The final report could include recommendations on how to proceed, but it would be up to Mattis to decide what, if anything, to do, officials say.There is no indication that Mattis was aware of White’s alleged violations prior to the investigation.

CEO Richard Liu wasn’t charged in the US, but back in China people are still weighing his case

Billionaire Richard Liu, founder and chief executive officer of JD.com Inc., attends the Wall Street Journal DLive Asia Conference in Hong Kong, China, on Friday, June 9, 2017. The conference runs from June 8 to 9. Photographer: Billy H.C. Kwok/Bloomberg

Hong Kong (CNN Business)Richard Liu won’t face sexual assault charges in the United States, but the tech billionaire is having to contend with a renewed bout of public scrutiny at home in China.Prosecutors in Minnesota said Friday that they won’t file charges against Liu, the CEO of Chinese e-commerce giant JD.com (JD) who was arrested in August on suspicion of rape.Liu’s case has gripped China, where billionaire company founders often enjoy celebrity status. Social media users have been sounding off in large numbers about the prosecutors’ announcement and Liu’s response.The business leader, whose Chinese name is Liu Qiangdong, said in a statement that the prosecutors’ decision “proves I broke no law.” He went on to apologize for his “interactions” with the young woman who accused him of rape, saying his actions had hurt his family and his wife.

JD.com founder Richard Liu with his wife Zhang Zetian. Liu says his actions in the United States "have hurt my family greatly, especially my wife."

JD.com founder Richard Liu with his wife Zhang Zetian. Liu says his actions in the United States “have hurt my family greatly, especially my wife.”Many users said that while Liu, 45, may not have been charged, he still deserves censure for cheating on his wife, Zhang Zetian.”Liu Qiangdong is not guilty, that is the legal judgment. But there is morality behind the law. As a public figure, he should have higher requirements for his words and deeds,” said a widely shared post by China Women’s News, the news outlet of a women’s rights organization backed by the ruling Chinese Communist Party.Zhang, 25, is a popular figure in China. Before she met Liu, she gained internet fame when a picture of her holding a cup of milk tea went viral, earning her the nickname “Sister Milk Tea.” Zhang could not be reached for comment.

Fellow tech entrepreneur calls actions ‘harmless’

People argued on Weibo, a Twitter-like Chinese social media platform, over what the outcome of the months-long investigation by police and prosecutors meant for Liu.Some users suggested his reputation has been irreparably damaged. But there were others who defended him, including one fellow tech entrepreneur.

JD.com founder will not be charged with sexual assault”It wasn’t sexual assault, just extramarital sex, harmless to shareholders and employees,” wrote Li Guoqing, a co-founder of online book seller Dangdang.com.”It wasn’t an extramarital affair, just sex, low impact to his wife,” he added in a post that drew criticism from other users.Dangdang quickly distanced itself from Li’s comments, posting a statement on its official Weibo account saying that he plays no meaningful role in the company’s management. Dangdang was acquired by a subsidiary of Chinese conglomerate HNA in April.Liu said in his statement that he feels “deep regret and remorse” and that he hopes his wife “can accept my sincere apology.””I will continue to try in every possible way to repair the impact on my family and to fulfill my responsibility as a husband,” he added.

Battered JD shares rebound

The allegations against Liu have weighed on his company’s share price for months.JD.com’s Nasdaq-listed stock closed up about 6% on Friday after prosecutors declined to press charges, but it’s still down more than 30% since his arrest. Like many other Chinese stocks, it has come under pressure from concerns about the country’s economic slowdown and trade war with the United States.

After news of Richard Liu’s arrest hit China, hundreds of millions of people shared his police mug shot on social media.Liu’s case was particularly significant for JD because of the power he wields as its founder. He holds a large majority of the company’s voting rights, giving him control over key decisions.The CEO was in Minneapolis in August because he was enrolled in a doctorate program in business administration at the University of Minnesota’s Carlson School of Management. His accuser, a Chinese woman, was studying at the university.The Minnesota prosecutors said they found “profound evidentiary problems” that would have made it hard to build a criminal case against Liu.The Chinese executive maintains that the sex with the young woman was consensual. The student, who was 21 years old at the time of the alleged assault, said Liu raped her at her off-campus apartment after a group dinner. Liu was arrested the same night, but police let him go the following day without charging him or asking for bail.He quickly returned to China after his releasewhere millions of Weibo users were sharing the police mugshot of him dressed in an orange prison jumpsuit.

Year of the electric luxury car

Mercedes also unveiled its first electric SUV this year. Like Audi’s E-Tron, the Mercedes-Benz EQC doesn’t look terribly different from the brand’s combustion-powered SUVs, but it has a slightly lower, sportier shape. It will go into production next year, but it won’t be available in the United States until 2020.

Porsche’s first fully electric car, the Taycan, will enter production at the end of next year. Porsche promises the 600 horsepower Taycan will provide a driving experience worthy of the Porsche brand. Capable of going from zero to 60 miles an hour in 3.5 seconds it won’t be the quickest electric car you can buy — still, amazingly quick by any normal standards — but it will be capable of “a level of continuous power unmatched by any other electric vehicle,” the company has said. In other words, you’ll be able to actually have fun with it while still getting decent driving range.

Porsche promises the four-door Taycan will be capable of sports car performance.

Porsche promises the four-door Taycan will be capable of sports car performance.BMW used an airplane’s belly to show off a concept version of an electric SUV it plans to begin selling in 2021. Shown to reporters inside a cargo plane as it stopped at different cities around the world, the BMW Vision iNext was a large crossover SUV with an outsized version of the BMW “kidney” grill on the front. Inside, the car’s interactive technology was designed to be as unobtrusive as possible. Knobs and screens are designed to hide themselves away when not needed.

BMW designers used the Vision iNext concept to show off some features they have planned for an electric vehicle in the near future.

BMW designers used the Vision iNext concept to show off some features they have planned for an electric vehicle in the near future.Arriving before the Vision iNext, the BMW iX3 crossover should go on sale earlier in 2020. It was designed using BMW’s new “flexible” engineering which allows for the same model to be produced in gasoline, plug-in hybrid and fully electric versions. The iX3 will be built in China and exported globally.

The BMW iX3 is a more realistic vision of a future BMW electric vehicle that will be produced in China.

The BMW iX3 is a more realistic vision of a future BMW electric vehicle that will be produced in China.Mini, a subsidiary of BMW, will offer its new electric vehicle even earlier. There’s still not much information available about it — it hasn’t even been unveiled yet — but Mini representatives say it will go on sale next year.

Rivian hopes to put its R1T pickup and R1S SUV into production in 2020.

Rivian hopes to put its R1T pickup and R1S SUV into production in 2020.Michigan start up automaker Rivian is already taking reservations for its electric pickup, the R1T, and SUV, the R1S. They are being marketed for their genuine off-road capability, something not often touted in electric vehicles.The company expects them to go on sale in late 2020.

Mark Zuckerberg is proud of Facebook’s 2019

New York (CNN Business)In an annual year-end post on Facebook, Mark Zuckerberg said he is proud of the progress the company made to improve its platform in 2018.”I’m proud of the progress we’ve made in 2018 and grateful to everyone who has helped us get here,” Zuckerberg said.But Facebook (FB) had a scandal-plagued year that left many customers furious, drove the company’s stock down, invited scrutiny from lawmakers and regulators on both sides of the Atlantic, and bruised the carefully-crafted public reputations of once-venerated executives like Zuckerberg and Sheryl Sandberg.

Facebook and Wells Fargo are in bottomless pits of scandal. They each reacted differently

Facebook and Wells Fargo are in bottomless pits of scandal. They each reacted differentlyZuckerberg insisted the company has changed in his post Friday.”We’re a very different company today than we were in 2016, or even a year ago. We’ve fundamentally altered our DNA to focus more on preventing harm in all our services, and we’ve systematically shifted a large portion of our company to work on preventing harm,” he said.Zuckerberg said addressing the issues that have been plagued Facebook is a challenge that will take more than one year, but that the company has “established multi-year plans to overhaul our systems and we’re well into executing those roadmaps.””In the past we didn’t focus as much on these issues as we needed to, but we’re now much more proactive.”Zuckerberg acknowledged that Facebook won’t be able to “catch every bad actor or piece of bad content, or that people won’t find more examples of past mistakes before we improved our systems.” He also said the problems of election interference or harmful speech can never be solved.”But overall, we’ve built some of the most advanced systems in the world for identifying and resolving these issues, and we will keep improving over the coming years,” he said.Facebook had improved its systems for preventing election interference and is removing millions of fake accounts every day, according to Zuckerberg. It has partnered with fact-checkers in countries around the world to identify misinformation, created new standards for advertising transparency, established an independent election research commission to study threats, and partnered with governments and law enforcement to prepare for elections.”Here’s to a great new year to come,” he concluded.

A scandal-plagued 2018

But for Zuckerberg and Facebook, the defining image of the year was the CEO testifying before Congress about the platform’s shortcomings.”The realization of how much the social media giant has screwed up has dropped slowly, but now we know,” New York Times tech critic Kara Swisher said in November.This year, Facebook has faced scrutiny over how it handles user data and its efforts to combat Russian interference in elections, including the 2016 US presidential election. In April, Facebook said Cambridge Analytica, a political consulting firm, may have harvested information on as many as 87 million users without their knowledge.In October, Facebook said that hackers gained access to the phone numbers and email addresses of almost 30 million users.The New York Times reported that the social network gave companies like Netflix (NFLX) the ability to read, write and delete users’ private messages.Facebook has reluctantly acknowledged its shortcomings and made vague promises to do better. But the disclosures of mistreating user data keep coming. Facebook badly underestimated the backlash it would face, including from politicians on both sides of the aisle.

Facebook faced heat for hiring an opposition research firm to dig up dirt on critics. Sandberg asked for information about billionaire George Soros and his financial interest in the company’s stock. The New York Times and Buzzfeed News said Sandberg was more closely involved with a request to look into Soros than she had previously claimed.2018 was also the year when Rappler CEO Maria Ressa leaped into the public eye for her unflinching criticism of Facebook’s failure to stop the proliferation of death threats and hate speech in the Philippines. Ressa won Time Magazine’s person of the year award for her reporting on Philippines President Rodrigo Duterte’s brutal drug wars.”The exponential attacks on social media, the inciting to hate just for doing your job,” Ressa told Time. “You have no idea when it erupts into real-world violence.”Zuckerberg, Facebook’s leading shareholder, has resisted growing calls for him to step aside as chairman. When asked if he’d do so, Zuckerberg told CNN last month “that’s not the plan.”

Being an introvert is a strength

When Cindy Robbins was tasked with leading Salesforce’s human resources division, she felt “uncomfortable” with the new role.A self-described introvert, Robbins says she has learned to become “comfortable with being uncomfortable.””I’ve learned over time that being an introvert is a strength. It’s how you embrace it, and how you bring it into your leadership, and I’ve done that,” Robbins tells CNN’s Poppy Harlow in a recent episode of Boss Files. “I’m not the only introverted leader out there, but I don’t need to be the loudest voice in the room.”

An employee at Salesforce for more than 12 years, the president and chief people officer now reports directly to CEO Marc Benioff.”That was definitely the ‘oh my’ moment,” Robbins says. “That was the first time in the tenure of the company that HR reported to the CEO. And although I had been at Salesforce for a very long time, I knew Marc, but this is a different relationship, one that we had to build, and nurture and it had to be a trusted one.”

orn in Southern Texas, she credits her Mexican-American heritage for instilling the work ethic and values that helped guide her to leadership. She was the first in her family to go to college. Her father picked cotton during the day, and handled a lot of the domestic work at home while her mother built a career in real estate sales.”My mother became the breadwinner, she became a very successful real estate agent, and my father, kind of had a nine-to-five job and was the one that had dinner waiting for us, that took us everywhere we needed to go,” Robbins reflects.Robbins later moved with her family to Northern California, but her roots down south made a lasting impact.

“I would go to Texas, and you would see kind of a different culture that I remember as a kid growing up. You see the women in the kitchen, and the women cleaning. But how I grew up, my mother was the driver, their partnership was so strong, so supportive, never a jealous moment of anything. My father was just so proud of everything my mother achieved, but she couldn’t have done it without him.”It’s that “inherent responsibility” to elevate women that helped Robbins raise the issue of equal pay at Salesforce in 2015. Robbins and her colleague, Leyla Seka, found gender pay disparities in an internal audit and suspected that women at Salesforce were being paid less than men at the company. Benioff was skeptical at first.”When Marc said, ‘Do we have a problem?’ I said, ‘I don’t know. But here are two things we need to line on. Number one, we can’t look under the hood and see money, a big dollar sign, and then shut the hood. And then number two, you don’t just do this once,'” Robbins admits.

Salesforce has since completed three internal audits of its pay practices. To date, the company has spent nearly $9 million to close its gender pay gap, adjusting salaries of its nearly 30,000 employees. But Robbins says there is still more work to do.”This is not a Salesforce issue. This is not even a tech industry issue. This goes across multiple industries. It’s not a US issue,” Robbins continues. “This is not something that I believe will go away. I think it’s just, companies will be forced to be more transparent.”

Robbins says it’s the responsibility of CEOs to fix gender equality in the workplace.”It’s the tone from the top, and it’s what CEOs should be held accountable to. They set the tone. They set the vision,” Robbins says. “That starts to shift behavior down the chain.”When Benioff realized there were hardly any women in his quarterly meetings with top executives at Salesforce, he decided to do something about it. He now requires that 30% of the quarterly meeting attendees are women. Robbins is part of this “Women’s Surge” initiative.”As an officer of the company, it has given me permission, when I’m in certain meetings, if there are 15 people around the room and I’m the only woman, to say to the organizer of the meeting, ‘Why am I the only woman in this meeting?'” she says. “I do that because I think we’ve created this culture now, where it feels like it’s permissible to say that.”

And when it comes to the ratio of female-to-male representation at Salesforce, Robbins says “I would love to see 50/50.””I’m a Latina. I would love to see more Latina women on board, not just as Salesforce, but just on boards in general. I think 50/50 is a great balance to achieve,” Robbins tells Harlow. “What I want for Salesforce is to be viewed as a great place to work and that means a diversity of ideas, that means an inclusive workforce, and just imagine the talent you can attract and retain to make it a great place to work, and be successful, and make your customers successful. That just makes good business sense.”

Common tax misconceptions to avoid

Tax year 2018 marks the first year of the updated tax code under the Tax Cuts and Jobs Act of 2017.While the legislation has been discussed extensively over the past year, some taxpayers still have misconceptions about the changes.

Here are some commonly held — but often mistaken — beliefs about the new tax code.

“The charitable deduction has been eliminated”

While many popular deductions have been eliminated, the charitable deduction remains in place.”People are confusing the charitable deduction with the standard deduction going up,” says Amy Pirozzolo, Fidelity Charitable’s head of donor engagement.That’s probably because fewer people will be able to claim the charitable deduction now that the standard deduction has been increased.Charitable contributions are still deductible, but only as an itemized deduction. To itemize, taxpayers need combined itemized expenses that are greater than the standard deduction.But tax reform doubled the standard deduction, up to $12,000 from $6,000 for single filers, and to $24,000 from $12,700 for those who are married filing jointly. That means more people are likely to take the standard deduction instead of itemizing.”The charitable deduction will be used more heavily to help married couples to get over the $24,000 threshold,” says Bob Falcon, and CPA and certified financial planner with Falcon Wealth Managers.

“I will probably itemize”

While that may have been true in the past, an overwhelming majority of taxpayers won’t, going forward.About 90% of taxpayers are estimated to be able to claim the standard deduction this year, according to Turbo Tax. That’s 20% more people than last year.”The standard deduction increased dramatically from 2017,” says Deborah Meyer, a CPA and certified financial planner with WorthyNest.Plus, the amount of possible deductions to itemize has been sharply reduced. “The deduction for state, local and property taxes is capped at $10,000 for the 2018 tax year. In 2017, you could have claimed unlimited state, local and property tax if you were itemizing other deductions,” Meyer says.Interest on home equity lines of credit (HELOCs) was previously deductible, as well as interest on mortgages up to $1 million. Now, the mortgage interest deduction on primary and secondary residences only applies to loans under $750,000. And taxpayers can no longer deduct interest on HELOCs used to pay personal expenses (like student loan and credit card debt).Although medical expenses exceeding 7.5% of income are deductible if you’re itemizing in 2018, that’s only going to impact a very small portion of people.”With the enhanced standard deduction and cap on deductible taxes, you are more likely to claim the standard deduction in 2018,” says Meyer. “Families with large mortgages and or significant charitable contributions may still itemize, but it will be on a case-by-case basis.”To better understand where your personal situation may fit, TurboTax has a free Standard vs. Itemized Deduction tool.

“I’m going to pay more in taxes because I can’t claim personal exemptions anymore.”

Yes, tax reform has eliminated the personal exemption. But in addition to the standard deduction increasing, the Child Tax Credit has also increased and more of it is refundable. The income-cap phaseout for the Child Tax Credit was also raised to include more people.”Luckily, because the standard deduction has been doubled, this change doesn’t negatively impact married couples with kids,” says Justin Chidester, a certified financial planner and owner of Wealth Mode Financial Planning.He says that since the Child Tax Credit has been doubled to $2,000 per child, and the income limit phaseouts have been raised up to $200,000 for single filers and $400,000 for joint filers, most people with children are going to see a decrease in taxes paid, not an increase.

“I don’t need a tax professional”

If there were ever a year to check in with a tax professional, this may be the year since this is the first year for tax reforms.”I see more people needing the assistance of a professional this year,” says Kate Welker, a certified financial planner with Irvine Wealth Planning Strategies.Of course, the benefit for the overwhelming majority of taxpayers taking the standard deduction is that their returns will be less involved, says Lisa Greene-Lewis, CPA and tax expert at TurboTax.”If you have never tried DIY, you could try it,” says Greene-Lewis. “We have CPAs available who could look over your shoulder. Then you could get the assurance you need by connecting live with them.”

“My refund will be higher”

Don’t hold your breath for a bigger refund. Even if you do owe less in taxes, you may have already gotten that money.”Many individuals that I have done projections for will have a lower tax liability than previous years, but that does not always mean a higher refund,” says Welker.The tax withholding tables have changed to incorporate the new tax law. That may have changed the amount being withheld from each paycheck and taxpayers may have gotten more each pay period throughout the year.”I recommend everyone take a look at their paycheck and make sure it makes sense,” says Welker. “The IRS has a withholding calculator that walks through the variables you would want to consider when filling out a W4.”

Millennial women are working more

Younger women are working longer hours and earning more than ever before. But they’re still carrying more of the burden at home.While millennial households are more likely to adopt egalitarian views about gender, reporting they want to split household duties and income equally, research shows those promises often collapse under the weight of long-held gender stereotypes.

On an average day, 19% of men reported doing housework like laundry, cleaning and other tasks, compared to 49% of women. Women also spend more time every day doing these tasks, according to the Bureau of Labor Statistics.”I think we still have stated intentions and then we have the realities of giving up privilege,” says Jill Yavorsky, assistant professor of sociology at the University of North Carolina at Charlotte. “Men still have a lot of privilege in being able to fall back on gendered notions, because if not, they have to participate a lot in housework and potentially give up on potential career advantages. When it comes down to it, many men are not willing to walk the walk.”

Working more at work, but not working any less at home

In 2017, 78% of young adult women worked at least 50 weeks per year, according to the Pew Research Center. That’s an increase from 72% of employed young women in 2000.They’re also getting paid more, helping them contribute more to household income. Full-time female employees aged 22 to 37 had median earnings of $39,000, up from $37,100 in 2000. This extra earning power helped the millennial household net more than any previous generation of Americans, according to Richard Fry, senior researcher at the Pew Research Center.”Given the fact that the millennial generation was hit so hard by the Great Recession, this is a story about how they’re really now starting to put the Great Recession in the rear view mirror,” says Fry.Yet as women contribute more to household income, they’re still also doing the majority of the unpaid domestic work. Some researchers have pointed to this as a “stall” in the gender revolution, says Melissa Milkie, professor of sociology at the University of Toronto.

“When we talk about things like the wage gap, it’s often not linked to what’s happening in the home, and I think it needs to be, because of that unpaid labor that’s really a central part of people’s work-life balancing,” Milkie says. “With women, the cost is borne in their career or their wages when they’re doing more in the home.”Young adult men are working slightly more, too. But men also spend more time than women exercising, playing games and enjoying other leisure activities, according to the US Department of Labor.

The traditional gender divide

American households can’t rely on public policies that could ease this change. Accessible, affordable childcare and paid family leave would make it easier for couples to actually fulfill their promises of equality, Yavorsky points out.”They have an ideal world set-up: in an ideal situation, we would be egalitarian,” she says. “Then they have a child and they realize there are all these institutional constraints that make it difficult to achieve egalitarianism.”For a long time, couples divided the labor at home depending on who made the most money. Because men were typically the high earners, they got a pass when it came to helping out in the home.

But as more women are contributing more to the household income, that dynamic could soon change.”In the 1990s, women did most of the changing: entering the workforce, entering different occupations, they did less housework, the housework gap closed, so women did a lot of the changing early on — and then we stalled out,” says Joanna Pepin, postdoctoral fellow at the University of Texas at Austin. “So there’s a reason to suspect that future progress is going to need change on men’s part — men doing more in the home and entering different professions.”

China angst; Trump and the shutdown

London (CNN Business)Britain has a stark economic choice to make in 2019: Recession or relief.The United Kingdom is set to leave the European Union on March 29. Crashing out of the bloc without an exit agreement would result in turmoil; striking a deal would minimize damage to the economy.UBS economists led by Arend Kapteyn say their outlook for the UK economy is “binary.” The disruption to trade caused by a disorderly Brexit would “plunge the UK into recession,” they warn. A deal would postpone difficult decisions and provide certainty to business.Prime Minister Theresa May has negotiated a divorce deal with the European Union, but it faces long odds in parliament. UK lawmakers are expected to vote on the agreement in January.

Brexit-fueled recession …

Abruptly leaving the European Union without a deal in place would spell disaster for companiesin the United Kingdom. They would face new trade barriers and an uncertain legal environment. Business lobby groups have warned that many companies are unprepared for a messy Brexit.”The United Kingdom would only have time to reestablish the most critical of the hundreds of international trade and regulatory treaties that it is currently party to via its EU membership,” said Andrew Goodwin, associate director at Oxford Economics.

Government studies predict the UK economy would be 7.7% smaller 15 years after a disorderly Brexit than if it stuck with current trading arrangements. The damage would be even greater if immigration from the European Union drops.Economists expect the damage to show up quickly.Research firm Capital Economics forecasts that a disorderly Brexit would lead to the economy shrinking 0.2% in 2019. It said the pound would likely plummet to $1.12 against the dollar, from its current level of $1.26. According to Oxford Economics, the economy would be 2.1% smaller by the end of 2020 than in a scenario where an exit deal is finalized.

… or relief?

While the UK economy would be worse off under all Brexit scenarios studied by the government, agreeing a deal would provide certainty to companies who have spent the past two years in the dark about future terms of trade with the European Union. Business groups have urged UK lawmakers to approve May’s deal.High levels of uncertainty contributed to a significant slowdown by the UK economy in the second half of 2018. Consumer spending and business investment have also taken a hit since voters chose to leave their biggest trading partner in 2016.”While the long-term risks to UK potential growth from Brexit loom large, the prospect of a deal presents considerable upside potential for the UK economy over the medium-term,” said Kallum Pickering, a senior economist at Berenberg.Companies that had been most at risk, such as carmakers, would see the greatest benefits from a deal, according to Pickering. Wages would also increase at a quicker pace.Leaving under May’s deal or crashing out without it aren’t the only options.There are two more scenarios that would leave the UK economy better off than a disorderly Brexit: Postponing the exit, or calling it off altogether.

Will next year be better?

Narendra Modi Prime Minister of India addressing at the Convocation of Visva-Bharati University on May 25,2018 at Santi Niketan, in West Bengal ,India. (Photo by Debajyoti Chakraborty/NurPhoto via Getty Images)

New Delhi (CNN Business)Narendra Modi swept into power in 2014 with promises to take the Indian economy to new heights and to create jobs for millions of young people.But India’s prime minister faces a bruising election battle next year amid questions over his handling of an economy that has weakened in recent months.Here’s where things stand ahead of crucial elections in 2019:

Growth slump

India’s economy surged ahead in the first half of 2018 after spending much of the previous year recovering from a tax overhaul and a shock decision by Modi to ban most of the country’s cash.Growth accelerated to 8.2% in the quarter ended June 2018, the fastest rate of any major economy. India still holds that distinction, but growth pulled back sharply to 7.1% in the most recent quarter.GDP data for the final quarter of 2018 is expected in February and could factor into Modi’s appeal to voters as he seeks a second term as prime minister.

Voters will also pay attention to Modi’s efforts to promote job creation. Around 12 million Indians enter the workforce every year, but many struggle to find employment. India does not publish official employment data, but a recent study by researchers at Azim Premji University concluded that an “increase in unemployment is clearly visible all across India.”

Rupee trouble

The Indian rupee hit a series of record lows in 2018 and ranks as one of Asia’s worst-performing currencies. Despite a slight recovery as the year draws to a close, it is still down around 10% against the US dollar in 2018.The currency will weaken further next year because of political uncertainty around the election and concerns about the independence of India’s central bank, analysts at Capital Economics wrote in a recent note.

he darkest cloud on India’s economic horizon concerns its central bank, the Reserve Bank of India.Former central bank chief Urjit Patel stepped down abruptly in early December — nine months before his term was due to end. While Patel said he quit for personal reasons, his departure was preceded by a public spat between the central bank and Modi’s government.The government was reportedly pressuring the bank to do more to boost growth ahead of the election, and analysts told CNN that Patel was probably “no longer able to withstand” that pressure.Modi wasted no time in replacing Patel, appointing Shaktikanta Das, a former government finance official, as his successor barely 24 hours later.

Das’ hasty call-up and his government track record have sparked concerns that the central bank’s autonomy could be compromised.His appointment “is likely to keep investors and markets worried about RBI’s independence, given his close ties with the government,” said Priyanka Kishore, senior India economist at Oxford Economics.Kishore and other analysts predict the central bank, which hiked interest rates twice in 2018 and has held them steady since, will slash them in 2019.

What happens next?

Many of Modi’s proposed reforms, particularly to India’s land acquisition and labor laws, have not yet materialized.The major overhauls he has enacted, such as changes to the tax system and the cash ban, have been hugely disruptive to the economy.Next year’s elections could paint a different picture.”An election victory for Prime Minister Modi could provide space to re-energize his reform agenda after a lackluster 2018,” said Shilan Shah, senior India economist at Capital Economics.Modi could seek to cut red tape for business and further open India to foreign investment, Shah said. Another push to privatize state-owned firms is also likely.Other traditional pressures on the Indian economy, such as high oil prices, have eased in recent months. But as one of the world’s biggest energy importers, another spike could hit India hard.Whatever happens at the polls will have major implications for India’s economic health.”The election is likely to prove a turning point for the economy,” Shah said.

First Tunnel is finished. Here’s what it’s like to ride in it

Hawthorne, California (CNN Business)Our Tesla Model X pulled into a small parking lot behind an old kitchen cabinet store and came to a stop on a metal lift. Moments later, Elon Musk’s vision for how to beat traffic congestion began to take shape.The lift slowly lowered our carinto O’Leary Station, a circular hole Musk’s Boring Company had dug in the parking lot in Hawthorne, California. A handful of company employees were gathered around the edge, watching our descent.The lift settled at the bottom of the pit. Looking through the windshield, the other three journalists and I saw what we’d come for — Musk’s first tunnel, a 1.14-mile route built to experiment with undergroundtransportation technology.

Musk, the CEO of Tesla (TSLA) and SpaceX, had previously described his tunnel business as a hobby that started as a joke.In 2016, a frustrated Musk said he planned to start digging tunnels to provide an alternative to Los Angeles’ congested highways. Why sit in traffic above ground when you could speed ahead below it?Now the joke has turned into something very real. The billionaire entrepreneur has started to deliver on his talk of offering a “weird little Disney ride in the middle of LA.”

Our Model X inched forward. It was fitted out with special protruding wheels that held the SUV in place between the tunnel’s walls. Previous iterations of the tunnel had placed the SUV on an electric skate, which propelled it. Now the vehicles in Musk’s tunnels power themselves. The Boring Company said it switched because this was a simpler solution.Red lights atop the tunnel suddenly turned green. The Model X jolted forward and we were off. The trip was bumpy at times as we jostled against the tunnel. The narrow space made the low speeds — we traveled mostly at 35 mph — feel faster. It felt like an amusement park ride. After about two minutes, the car emerged from the tunnel into a large pit in the SpaceX parking lot.

We walked out of the pit into the shadow of a medieval tower that Musk constructed as a tribute to Monty Python and the Holy Grail. In November, the Boring Company even advertised for the job of watchtower guard.”We need a knight to yell insults at people in a French accent,” Musk tweeted, a nod to a scene in the 1975 film.To mark the opening of the tunnel, Musk and the Boring Company threw a private party in the parking lot Tuesday night. It included a knight yelling insults, s’mores lit with flamethrowers and a speech from Musk.Aside from its quirky name and unusual job openings like “vice president of digital dancing,” the Boring Company is attempting serious projects in Los Angeles, Chicago and Washington.

Musk’s ‘eureka moment’

Musk expressed confidence in the projects in a conversation with reporters Tuesday.”For me it was a eureka moment,” he said of his first ride in the tunnel. “It was a epiphany, it’s going to damn well work.”The initial tunnel cost about $10 million, not including the cost of the tunneling machine and research and development. Musk expects a 15-fold improvement in tunneling speed as the Boring Companyimprovesits digging machines.

But the company has encountered some setbacks recently. In November, it scrapped plans to develop another tunnel in Los Angeles following a lawsuit from neighborhood groups. Instead, it’s focusing on a tunnelfrom the Los Feliz, East Hollywood or Rampart Village neighborhoods to Dodger Stadium. Eventually, Musk hopes to build a tunnel network throughout Los Angeles.In Chicago, the Boring Company was selected in June to tunnel a route from downtown to O’Hare Airport. But a contract hasn’t been finalized yet, according to a spokesman for Chicago Mayor Rahm Emanuel. Key details like the exact route and pricing remain unclear.In Washington, the Boring Company started to dig a square hole in a downtown parking lot this year. The site has been silent in recent months, aside from a covering over the hole. The tent-like structure collapsed this fall and was then removed. The Boring Company is working through an environmental review with regulators before it can build the route to Baltimore.

It’s hard to understand what’s real and what’s not’

Musk’s ambitious projects have left nearby residents unsure what to think. The developers of a condo building next door to the Washington site told CNN they’ve debated if they could advertise proximity to a future Boring Company station as a selling point. Ultimately, they decided to hold off formally promoting the station.”It’s the kind of thing that feels so far fetched it’s hard to recognize it as an imminent reality,” said Brook Katzen, senior vice president of development at Urban Investment Partners. “We don’t want to sell homes based on a glimmer of hope.”

Tanner Woodford, executive director of the Design Museum of Chicago, which is a few floors above where the downtown Boring Company station would go, has been watching to see what Musk does next.”It’s hard to understand what’s real and what’s not,” Woodford said. “He could tell me he’s putting a Christmas tree on Mars next week and I’d think that’s about right. I have no idea what he’s capable of.”Musk acknowledged Tuesday that the Boring Company is a work in progress.”We’re obviously at the early stages here. This is a prototype. We’re figuring things out,” he said. “I think there is a path to alleviating traffic congestion in cities.”Musk presented an updated version of the Loop, the form of transportation he initially plans to use in the tunnels. The plan is to eventuallyshift some projects to Hyperloops, the high-speed capsule in a vacuum tube that Musk envisions whisking passengers from Washington to New York in 29 minutes.For now, Musk is focused on the Loop in which autonomous electric vehicles, such as the Tesla Model 3 or the unreleased Model Y, would transport passengers. Private vehicles (not just Teslas) would also be allowed in Musk’s tunnels, provided they’re outfitted with deployable tracking wheels that rub against the walls to hold vehicles in place.”This is not meant to be some walled garden or something that’s special just for Tesla,” Musk said.

We’re still leading the world on 5G, despite political attacks

Dongguan, China (CNN Business)Huawei is firing back against the US-led campaign to push it out of major markets, insisting it’s still on track to lead the world in the introduction of 5G technology.”Despite efforts in markets creating fear about Huawei, using politics to interfere with growth, customers continue to trust us and continue to work with us and build networks with our technologies,” Deputy Chairman Ken Hu told reporters in the Chinese city of Dongguan on Tuesday.Hu was speaking during a turbulent period for the Chinese company, one of the world’s biggest makers of smartphones and telecommunications equipment. Its chief financial officer is under arrest in Canada, facing possible extradition to the United States, and its products are coming under increasing scrutiny from businesses and governments over security concerns.Despite decisions this year by Australia and New Zealand to block wireless operators from using Huawei to build their 5G networks, Hu expressed confidence that the company’s technology is “significantly more advanced” than that of its rivals, giving it a head start of 12 to 18 months and the ability to attract new customers.

“It’s like a running race,” he said during a rare media briefing on one of the company’s campuses in southern China. “We are leading.” The company is on track to hit its target of more than $100 billion in revenue this year, he confirmed, up from around $92 billion in 2017.Even the arrest in Canada of CFO Meng Wanzhou, the daughter of Huawei’s founder, on allegations she helped the company dodge US sanctions on Iran hasn’t shaken its resolve. Business operations remain normal and senior executives are sticking to their international travel plans, according to Hu.”I was on the plane just yesterday,” he said.He declined to comment on Meng’s case, but expressed confidence in Huawei’s trade compliance system and in “the judicial independence and fairness” of the Canadian and US legal systems. “We look forward to a just conclusion,” he added.

Irresponsible decisions’

Hu just arrived back in China from Europe, one of the regions where the company has faced renewed questions over the security of its products.Orange (ORAN), the largest telecoms operator in France, on Friday ruled out using Huawei equipment in its core 5G network in the country. Germany’s Deutsche Telekom (DTEGY) said it was taking the discussion about the security of network elements from Chinese manufacturers “very seriously.”

Hu said he understands the concerns from customers and authorities, but insisted there is no example of Huawei equipment “posing security threats” in the past 30 years.The company has risen rapidly in recent decades to become the world’s biggest manufacturer of telecommunications equipment. Its competitors include Sweden’s Ericsson (ERIC), Finland’s Nokia (NOK) and another Chinese firm, ZTE (ZTCOF), which fell foul of US authorities earlier this year.The US government has long been wary of Huawei and has stepped up efforts this year to limit the use of its products in the United States. American officials have alleged that the Chinese government could use Huawei products for espionage — claims the company denies.

Huawei Deputy Chairman Ken Hu at a media briefing on Tuesday. Business operations have continued as normal since the arrest of CFO Meng Wanzhou, he said.The US government has even been urging its allies to stop using Huawei equipment, according to a report last month by The Wall Street Journal.Hu said that governments sometimes have concerns about which companies should supply 5G networks because of “legitimate” concerns about technology, which Huawei is working to address through communication and investing billions in security-related software.But he slammed the “irresponsible decisions” by some countries that he said rely on “baseless speculations” to target a specific company out of “ideological and geopolitical considerations.