Monday, November 23, 2020
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Biden Says He Has Picked a Treasury Secretary

Biden Says He Has Picked a Treasury Secretary
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Credit…Ruth Fremson/The New York Times

President-elect Joseph R. Biden Jr. said on Thursday that he had chosen his nominee for Treasury secretary and that he would announce the pick in the near future.

Mr. Biden, at a news conference following a meeting with U.S. governors, said he believed the selection would be accepted by “all elements of the Democratic Party.” He said the choice would be unveiled just before or just after Thanksgiving.

Mr. Biden has been widely expected to choose a Treasury secretary that would make history. The job has only been held by white men in its 231-year history.

Those believed to be on the shortlist include Lael Brainard, a Federal Reserve governor; Janet L. Yellen, the former Fed chair; and Roger W. Ferguson Jr., a former Fed governor and business executive.

Mr. Biden said on Thursday that he believed his choice would satisfy both the moderate and progressive wings of the Democratic Party.

Treasury Secretary Steven Mnuchin on Thursday said that he would not extend several of the Federal Reserve’s emergency lending programs and asked the Fed to return unused funds, a decision that could hinder the Biden administration’s ability to cushion the economic fallout from the virus. If the Fed does give back the money, a Democratic administration would not be able to simply restart the programs, because the congressional appropriation cannot be used to make new loans after the end of the year.

Credit…Brenna Norman/Reuters

Tyson Foods said on Thursday that it had suspended the employees named in a lawsuit that alleged the manager of a Tyson pork plant in Waterloo, Iowa, organized a betting pool among supervisors to wager on how many workers would get sick.

The lawsuit, filed by the son of Isidro Fernandez, a meatpacking worker who died in late April, said the betting pool was a “cash buy-in, winner take all.” The plant was the site of a deadly coronavirus outbreak this spring.

Those accused of being involved in the betting pool have been suspended without pay, Dean Banks, the president and chief executive of Tyson Foods, said in a statement on Thursday. Tyson also enlisted the law firm Covington & Burling to conduct an independent investigation, which will be led by Eric H. Holder Jr., the former U.S. attorney general.

“If these claims are confirmed, we’ll take all measures necessary to root out and remove this disturbing behavior from our company,” Mr. Banks said.

A spokesman for Tyson said in an email that the company had introduced multiple steps to protect its workers in Waterloo. Those included taking employee temperatures, relaxing attendance policies and erecting barriers on the production floor to create social distance.

At the time of Mr. Fernandez’s death, the Tyson plant was a virus hot spot, though the plant’s leadership initially denied that there was an outbreak and rebuffed efforts by local officials to close the facility, according to the lawsuit filed in federal court in Iowa.

The workers were told to continue working despite showing symptoms of being sick. One worker was told to stay on the production line even after he vomited, the lawsuit said.

In all, about 1,000 workers — about a third of the work force — tested positive for the virus. Some of the issues at the Waterloo plant were detailed in a New York Times article in May. But the allegation about the betting pool among supervisors and managers was revealed this week after lawyers for Mr. Fernandez’s family amended the original lawsuit. The allegation of the betting pool was first reported by The Iowa Capital Dispatch.

“We’re saddened by the loss of any Tyson team member and sympathize with their families,” the company said in a statement. “Our top priority is the health and safety of our workers.”

Credit…Ruth Fremson/The New York Times

Business leaders in Washington and on Wall Street are increasingly calling on the Trump administration to recognize Joseph R. Biden Jr.’s victory in the presidential election and initiate a formal transition ahead of Mr. Biden’s inauguration in January.

Some of the biggest corporate lobbying groups — including the U.S. Chamber of Commerce and the National Association of Manufacturers — supported President Trump in his push to cut taxes and roll back regulations while in office but are now breaking with the president as he pushes unfounded claims of fraud and wages a protracted court battle in an attempt to overturn the election results.

The business pressure comes as the General Services Administration refuses to issue a letter of “ascertainment,” which would allow Mr. Biden’s transition team to begin the transfer of power, and as top Republicans refuse to formally concede that Mr. Trump lost. Senator Mitch McConnell of Kentucky, the majority leader, has yet to recognize Mr. Biden’s victory publicly, but said this week that there would be an “orderly transition of power” before the next inauguration.

The National Association of Manufacturers on Wednesday called on the head of the G.S.A. to formally initiate the transition between Mr. Trump and Mr. Biden.

“It’s imperative that our nation has a president and advisors who are fully prepared to lead our nation on Inauguration Day given the magnitude of the challenges ahead and the threats to our economic and national security, and most importantly, to the public health,” wrote the manufacturing group’s leaders, including its president and chief executive, Jay Timmons, and the chief executives of the chemicals giant Dow and Trane Technologies.

“We call on the Trump administration to work cooperatively with President-elect Biden and his team,” the letter said.

On Thursday, the chief executive of the U.S. Chamber of Commerce, Tom Donohue, told Axios that “while the Trump administration can continue litigating to confirm election outcomes, for the sake of Americans’ safety and well-being, it should not delay the transition a moment longer.”

Credit…Andrew Mangum for The New York Times

Roblox, a gaming site and app that has been a huge hit with tweens, revealed in an offering prospectus on Thursday that its number of users and revenue surged during the coronavirus pandemic, but that its losses deepened.

Roblox said it averaged 31.1 million daily active users in the first nine months of 2020, up 82 percent from a year earlier, as people have flocked to video games while stuck inside because of the pandemic. That helped drive Roblox’s revenue, which reached $589 million in the first nine months of the year, up 68 percent from a year ago.

Even so, the company lost money. Its net loss totaled $203 million in the first nine months of 2020, more than four times the $46 million it lost in the same period a year ago. Roblox also warned that it was unlikely to experience the same growth when the pandemic subsides, warning that the surge was “almost certainly not indicative of our financial and operating results in future periods.”

In a letter in the prospectus, David Baszucki, a Roblox founder and now its chief executive, wrote, “Our original vision to make Roblox a platform for shared experiences is now leading the way for a new category we call human co-experience.” He added, “Our vision for the future of our platform has never been more real and attainable.”

The 14-year-old company joins a flood of other tech start-ups that are moving toward the public market while the stock market remains ebullient, defying the pandemic-induced recession. In just the past 10 days, the delivery company DoorDash, the home-rental site Airbnb and the online financial services company Affirm all disclosed their initial public offering filings. Many of these companies are also losing money.

In total, 41 tech companies have gone public in the United States so far this year, raising $17.7 billion, according to Renaissance Capital.

Roblox, based in San Mateo, Calif., was founded in 2006 by Erik Cassel and Mr. Baszucki. (Mr. Cassel died of cancer in 2013.) The company has raised $335 million in funding. In its most recent financing in February, it added $150 million to its coffers and was valued at $4 billion.

The platform, which is hugely popular among children, especially those 9 to 12 years old, was growing before the pandemic but saw its growth spike once shelter-in-place orders set in. Inside the Roblox online universe, players’ avatars can interact and play millions of unique games set in different worlds, from tropical islands to haunted castles. Players pay real money for premium memberships, as well as items and clothing for their avatars.

Developers who create games for Roblox are often teenagers or young adults themselves. Those who create the most popular Roblox games can earn six-figure salaries.

Credit…Adria Malcolm for The New York Times

New claims for unemployment insurance remained elevated last week amid a surge in coronavirus cases, the government reported Thursday.

More than 743,000 workers filed new claims for state benefits last week, before adjusting for seasonal factors, an increase of 18,000 from the week before. With seasonal swings factored in, the latest figure was 742,000, also an increase from the previous week, the Labor Department said.

Claims had drifted lower in recent weeksbut remain far above the levels reached in previous recessions. What’s more, the coronavirus resurgence in much of the country in recent weeks has caused new restrictions on business activity, leading to more job cuts.

“The economy has made significant progress in healing from the Covid shock, but there is still more work to be done, and layoffs are persisting,” said Michelle Meyer, head of U.S. economics at Bank of America.

New claims for Pandemic Unemployment Assistance, a federal program aimed at self-employed workers and independent contractors, totaled 320,000.

News that competing vaccines from two companies had shown strong evidence of efficacy against the virus has led the stock market higher and fueled hopes that the virus could be brought under control next year. That would clear the way for renewed growth, many experts say.

“We’re potentially entering a period of softness, but the medium term is more promising,” Ms. Meyer said.

On Monday, President-elect Joseph R. Biden Jr. called on the two parties to “come together” and enact a stimulus package along the lines of a $3 trillion proposal passed by the Democratic-controlled House.

For all the body blows of the last year, consumer demand remains relatively healthy, according to Ms. Meyer. “We are still seeing incredible strength in housing, and auto sales remain strong,” she said. “Consumers are still spending on bigger-ticket items.”

Credit…Anna Moneymaker for The New York Times

It is shaping up to be a grim holiday season for 12 million unemployed workers in the United States who will see their jobless benefits disappear by the end of the year, a development that also threatens the larger economy.

Two federal programs created in March under the CARES Act are set to expire unless Congress extends them. But a new aid package will most likely have to wait until Joseph R. Biden Jr. becomes president on Jan. 20.

And there are no guarantees it will happen even then: If Republicans retain control of the Senate after two runoff elections in Georgia in early January, the odds of passing a major stimulus package will lengthen.

A new study by the progressive Century Foundation found that 7.3 million workers will lose their benefits with the end of Pandemic Unemployment Assistance, which provides coverage for gig workers, the self-employed and independent contractors. An additional 4.6 million will be cut off from Pandemic Emergency Unemployment Compensation, which kicks in when state employment benefits run out.

The programs represent “the last lifelines available to millions of Americans in desperate need,” said Andrew Stettner, a senior fellow with the Century Foundation and co-author of the study with Elizabeth Pancotti. “It will be a crippling end to one of our darkest years.”

A separate study by the California Policy Lab, a research group working with state and local governments, reported that nearly 45 percent of California workers had filed for unemployment benefits since March, with 83 percent of the Black labor force applying during that period. Many of those workers are back on the job, but the end of the two programs will affect 750,000 Californians.

The cutoff will also reduce spending by beneficiaries nationwide. Many economists predict that without renewed aid, economic growth could falter next year.

Credit…Amr Alfiky/The New York Times

Macy’s reported a 23 percent drop in quarterly sales on Thursday, as the pandemic continued to keep many shoppers away from stores. With virus cases climbing around the country, the retailer is facing the prospect of potential store shutdowns in the midst of the all-important holiday shopping season.

Net sales for the third quarter declined to about $4 billion, from $5.2 billion in the same period a year ago, Macy’s said in a news release; it swung to a net loss of $91 million, from a $2 million profit in the third quarter of 2019.

Macy’s was hit hard by closures at the start of the pandemic based on its designation as a nonessential retailer and has been pushing for government officials to distinguish retailers as “safe” or “unsafe” if there are future shutdowns, Jeff Gennette, chief executive of Macy’s, said in an interview on Thursday.

“Many essential retailers carry many of the same categories we carry, and to be deemed nonessential, we are preventing our customers from having the opportunity to transact with us,” he said, adding that Macy’s was working with the state and local governments to make its case. “I am heartened by a couple governors talking about how the spread of the infection is not happening in retail establishments; they see it more in bars and restaurants and gyms.”

He said the previous categorizations were “arbitrary” and that retailers should be judged by their adherence to safety standards like crowd control and cleaning protocols.

Macy’s, which also owns Bloomingdale’s and Bluemercury, said digital sales grew in the quarter, which ended Oct. 31. But the company was still grappling with a “gradual steady recovery” at stores across all three of its brands, Mr. Gennette said Thursday during an earnings call.

“The stores that are performing the worst are the ones that are in our downtown locations,” he said on the call. That has been driven by a lack of office workers and tourists, he said.

Those stores would focus on local residents for now, Mr. Gennette said in the interview.

Credit…Erdem Sahin/EPA, via Shutterstock

Turkey’s central bank on Thursday raised its key interest rate to 15 percent from 10.25 percent, a major shift in policy intended to quash inflation and prevent further devaluation of the lira.

The rate increase under a newly appointed central bank governor, which was at the high end of expectations, is a sign that the Turkish president, Recep Tayyip Erdogan, may be willing to at least tolerate measures that economists and members of Turkey’s business community have long said were necessary to stabilize the economy.

Even before the pandemic, economists worried that a combination of double-digit inflation, a sinking currency and a credit bubble made Turkey prone to a financial crisis that could spread well beyond its borders.

Fears about Turkey’s financial stability increased after the lira hit a new low of 8.5 to the dollar in early November. As recently as January it took only six lira to buy a dollar.

Mr. Erdogan has long insisted, against all evidence, that higher rates cause inflation — a view he expressed as recently as Wednesday. But he had also signaled this month that he recognized the threat to his power from a sinking lira, which has raised the price of imported food and fuel and eroded living standards of ordinary Turks.

Earlier this month Mr. Erdogan appointed a new central bank chief, Naci Agbal, a former finance minister who is seen as a capable technocrat. In addition, the Turkish finance minister, Berat Albayrak, who is also Mr. Erdogan’s son-in-law, resigned after being blamed for the country’s economic collapse.

The lira rallied after the personnel moves and gained further on Thursday, trading at 7.6 to the dollar.

Mr. Erdogan created uncertainty, however, after he told an audience of Turkish business people on Wednesday that he was still opposed to higher interest rates, the well-tested remedy for high inflation. The official annual inflation rate was almost 12 percent in October, but some economists think the true rate is much higher. “The cost of high interest rates is clear,’’ Mr. Erdogan told the business group.

The decision by the central bank on Thursday was a test of Mr. Agbal’s independence and his willingness to raise rates. The central bank declared its resolve to get prices under control, saying in a statement that “the tightness of monetary policy will be decisively sustained until a permanent fall in inflation is achieved.”

Free flowing credit has helped fuel Turkey’s rapid economic growth in the last two decades. But the steady decline of the lira scared away foreign investors and contributed to unemployment.

Higher interest rates will slow down the economy. But Hakan Bulgurlu, the chief executive of Arcelik, a maker of home appliances based in Istanbul, said Turks were ready to pay that price. “Turkey will always be a strong market,” Mr. Bulgurlu said in an interview ahead of the central bank decision. “All it needs is some stability and some predictability.”

  • After spending most of the day in negative territory, the S&P 500 rose by less than half a percent. The Stoxx Europe 600 index earlier had dropped 0.7 percent while the Nikkei 225 index in Japan had slipped 0.4 percent.

  • Shares of L Brands, the parent of Bath & Body Works and Victoria’s Secret, were up more than 17 percent after the company reported a profit of nearly $331 million in the three months ending Nov. 2.

  • Local curbs on businesses and other economic activity, including curfews in Maryland and Los Angeles County, are being instituted in response to the growing number of virus cases. Though effective vaccines are in development, their rollout will come after what is expected to be a bleak winter, and prospects for more fiscal stimulus is in doubt. There have been 250,000 coronavirus-related deaths in the United States.

  • The additional restrictions are expected to hamper the economic recovery that took place over the summer. The 37 large countries that make up the Organization for Economic Cooperation and Development, which represent most of the world’s economic activity, saw 9 percent growth in the three months that ended in September, the group said, but that was still 4.3 percent below its precrisis level.

  • In the United States, the Labor Department said new claims for unemployment insurance remained elevated last week amid a surge in coronavirus cases. More than 743,000 workers filed new claims for state benefits last week, before adjusting for seasonal factors, an increase of 18,000 from the week before.

  • The low-cost airline Norwegian Air filed for bankruptcy protection, one of the largest carriers to seek to reorganize since the pandemic crushed air travel. Flights will continue as it attempts to reduce its debts, the company said. Its shares dropped nearly 16 percent.

After two days of conversations with top newsmakers at the DealBook Online Summit this week, these are the moments that will stick with me.

1. Dr. Anthony Fauci said that at least 75 percent of society would need to take the Covid-19 vaccine, even if it had 95 percent efficacy, before it was safe to stop wearing masks and social distancing. That’s a very high threshold considering how polarized things are in the United States over basic steps like masking, let alone getting a shot.

2. Bill Gates predicted that, even after the pandemic, habits will have changed. He said business travel could halve in the long term, which would have huge economic implications.

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My prediction would be that over 50% of business travel and over 30% of days in the office will go away. That now that it’s not the gold standard that, yes, you flew all the way here to sit in front of me that you can do the virtual connection that it will be a very high threshold for actually doing that business trip and that there will be ways that you can work from home a lot of the time.

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CreditCredit…New York Times

3. Jamie Dimon’s no-nonsense approach to negotiations may be easier said than done, but I saw many people nodding on Zoom when the JPMorgan Chase chief executive broke down the state of government stimulus talks. “I know now we have this big debate,” he said. “Is it $2.2 trillion, $1.5 trillion? You’ve got to be kidding me. I mean, just split the baby and move on. This is childish behavior on the part of our politicians.”

3 ½. He also said Bitcoin is “not my cup of tea,” which is making waves in cryptocurrency circles.

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We’re a believer in cryptocurrency properly regulated and properly backed. Bitcoin is kind of different. And that’s not my cup of tea and I don’t want to make news in this particular thing. I’m not really interested in Bitcoin. I’m interested in properly structured AML, KYC, helping people do things cheaply. The blockchain itself will be critical to letting people move money around the world cheaper. That will absolutely be critical and we’re at the forefront of that.

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CreditCredit…New York Times

4. The debate about size and scale was also striking in the juxtaposition between Ruth Porat, Alphabet’s chief financial officer, who argued that Google had helped create many small businesses and Tim Sweeney, the founder of the “Fortnite” maker Epic Games, who said that tech giants were squeezing those businesses too hard.

5. In the panel discussion about race and corporate America with the former Xerox executive Ursula Burns, Robert Smith of Vista Equity Partners and Michael Render (the rapper and activist known as Killer Mike), I brought up the potential controversy over hiring quotas. Ms. Burns pushed back, describing quotas as “the result of failure by business to do what they should be doing naturally.”

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But if we are fair and if you have reasonable economic acumen, mathematical acumen, you understand that participating in a fight for greatness when 2/3 of the population is hindered, is hampering your progress, is a stupid idea. That’s why after a long time they started to include women because they are like, “Oh, my God, half the freaking world is women. We can’t make progress without bringing some of these women along with us.” Quotas is the result of failure by business to do what they should be doing naturally. You don’t have to have a quota, if you do what you should be doing, which is be equitable, diverse and inclusive. If you’re not, then we’re going to put quotas on you.

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CreditCredit…New York Times

6. The N.B.A. star LeBron James’s More Than a Vote group clearly had a profound impact on this election, mobilizing some 300,000 voters. And he broke the news in our discussion, with Sherrilyn Ifill of the NAACP Legal Defense and Education Fund, that the voting-access group would remain active in Georgia for its Senate runoff elections.

7. Throughout the summit, there was a sense, from Mr. James to Killer Mike and the executives we spoke with, that all are now using their platforms to be “more than” their titles — more than an executive, more than an athlete, more than an entertainer. After the election, I wondered whether the past four years of activism among business leaders were an aberration. The past two days convinced me that they were not.

  • “Wonder Woman 1984,” the last potential blockbuster remaining on the 2020 movie calendar, will open both in theaters and on WarnerMedia’s new streaming service, HBO Max, on Dec. 25, the company announced Wednesday. The news was expected, as many cities around the country have shut down theaters in an attempt to stem a rise in coronavirus cases. Internationally, the film will open in theaters on Dec. 16.



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