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Credit…Pool photo by Susan Walsh
Jerome H. Powell, the head of the Federal Reserve, will tell lawmakers on Tuesday that the economy is healing, saying that while many workers and businesses continue to suffer, the aggressive response from the central bank, Congress and the White House helped to avoid the most devastating economic scenarios.
“While the economic fallout has been real and widespread, the worst was avoided by swift and vigorous action,” Mr. Powell will tell the House Financial Services committee, according to prepared remarks.
He will point out that the economy has recently improved, including the labor market, which has begun adding back jobs after a winter lull.
“However, the sectors of the economy most adversely affected by the resurgence of the virus, and by greater social distancing, remain weak, and the unemployment rate — still elevated at 6.2 percent — underestimates the shortfall,” Mr. Powell is set to say.
The Fed chair will add that the central bank, which currently has rates at near-zero and is buying bonds to keep credit flowing and to bolster the economy, “will not lose sight of the millions of Americans who are still hurting.”
Mr. Powell will say the Fed’s many market-facing programs in 2020, which supported credit to corporations, midsize businesses and municipalities, helped to “keep organizations from shuttering and put employers in both a better position to keep workers on and to hire them back as the recovery continues.”
And he will underline that the programs, in most cases, have either shut down or will soon end. Mr. Powell consistently has said that the lending efforts, supported by the Treasury, were emergency tools that the Fed would stop using once conditions were stable.
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Some investors have started distancing themselves from Dispo, a fast-growing photo-sharing app, after its co-founder, the YouTube creator David Dobrik, became embroiled in controversy.
Dispo, which launched in 2019, is a photo-based social platform similar to Instagram that mimics the experience of using a disposable camera. Photos taken through the Dispo app take 24 hours to “develop” and appear on a user’s feed.
In October, Dispo raised $4 million in a funding round led by Seven Seven Six, the firm of Alexis Ohanian, the Reddit co-founder. In February, the company garnered an additional $20 million in a financing led by Spark Capital; the funding valued Dispo at $200 million.
But in an investigation by Insider that published last week, Mr. Dobrik was accused of playing a role in a sexual assault scandal involving a former member of his “Vlog Squad.” He later told The Information that he would leave Dispo and step down from its board. And some of Dispo’s investors have also started backing away.
On Sunday, Spark Capital said it would “sever all ties” with Dispo. “We have stepped down from our position on the board, and we are in the process of making arrangements to ensure we do not profit from our recent investment in Dispo,” the venture firm posted on Twitter.
On Monday, Mr. Ohanian and Seven Seven Six also issued a statement calling the accusations against Mr. Dobrik “extremely troubling” and “directly at odds with Seven Seven Six’s core values.” Mr. Ohanian posted to Instagram that he and Seven Seven Six supported Mr. Dobrik’s choice to step down from the company.
Seven Seven Six also said on Twitter that it would donate any profits from its investment “to an organization working with survivors of sexual assault.”
We have made the decision to donate any profits from our investment in Dispo to an organization working with survivors of sexual assault. We have believed in Dispo’s mission since the beginning and will continue to support the hardworking team bringing it to life.
— 7️⃣7️⃣6️⃣ (@sevensevensix) March 22, 2021
Unshackled Ventures, another early investor in Dispo, said on Monday that it would also donate any profits from its investment to organizations focused on survivors of sexual assault, including Maitri, which is focused on helping South Asian survivors of domestic violence.
“We are a female majority team that does not take this lightly. We are in full support of their decision to part ways with David,” Unshackled Ventures said in a statement.
The recent allegations against David Dobrik are disturbing and counter to Unshackled values. As a female majority team, we do not take this lightly. We are in support of the companies decision to part ways with David and will continue to monitor the situation closely.
— Unshackled Ventures (@UnshackledVC) March 22, 2021
Dispo and Mr. Dobrik did not respond to requests for comment.
Over the past year, many investors have become enamored with the influencer world. “I feel like something has palpably shifted in the past year among investors, and it seems like everyone is talking about the creator economy now and investing in creator tools,” Li Jin, founder of Atelier, a venture firm investing in the creator space told The New York Times in December.
But several popular YouTube stars have come under fire over the past year for scandals involving racism and sexual assault.
Mr. Dobrik is one of YouTube’s most popular creators, with more than 18.7 million subscribers on his primary channel. After gaining fame on Vine, the short-video app, he and a group of friends called the “Vlog Squad” began creating short, comedic content often involving stunts for sites such as YouTube, TikTok and Instagram.
Credit…Lexey Swall for The New York Times
President Biden on Monday nominated Lina Khan to the Federal Trade Commission, installing a vocal critic of Big Tech into a key oversight role of the industry.
If her nomination is approved by the Senate, Ms. Khan, 32, would fill one of two empty seats earmarked for Democrats at the F.T.C.
Ms. Khan became recognized for her ideas on antitrust with a Yale Law Journal paper in 2017 called “Amazon’s Antitrust Paradox” that accused Amazon of abusing its monopoly power and put a critical focus on decades-old legal theories that relied heavily on price increases as the underlying measure of antitrust violations.
She served as a senior adviser to Rohit Chopra when he was F.T.C. commissioner. Most recently, she was a leading counsel member to a 16-month-long investigation of online platforms and competition by the House antitrust subcommittee. As a result, Democratic leaders on the subcommittee called for the breakup of Big Tech and legislation to strengthen enforcement of competition violations across the economy.
“As consumers, as users, we love these tech companies,” Ms. Khan said in an interview with The New York Times in 2018. “But as citizens, as workers, and as entrepreneurs, we recognize that their power is troubling. We need a new framework, a new vocabulary for how to assess and address their dominance.”
Ms. Khan is the second prominent advocate of breaking up the large tech companies placed by the Biden administration in top antitrust roles. Also this month, Mr. Biden picked Tim Wu, a prominent critic of Google, Facebook and Amazon, as special assistant to the president on competition policy.
Credit…Murad Sezer/Reuters
Turkey’s currency tumbled on Monday after President Recep Tayyip Erdogan fired the head of the central bank, who had been in the job just four months and had pursued policies aimed at taming inflation. The Turkish lira plunged 7 percent against the U.S. dollar.
The removal of Turkey’s central bank chief, Naci Agbal, signals a return to the unorthodox policies that Mr. Erdogan has long favored, such as cutting interest rates to lower inflation, but which most economists regard as counterproductive. Mr. Erdogan has repeatedly meddled in the central bank’s activities and over the years traders have dumped the lira.
Since his appointment in November, Mr. Agbal has raised the central bank’s benchmark interest rate from 10.25 percent to 19 percent in an effort to slow the overheating economy, control inflation and lure in foreign investment. He had succeeded in pulling the lira up from its record low. The most recent increase in the benchmark rate was on Thursday and he was fired on Friday.
The annual inflation rate was officially 15.6 percent in February but is probably much higher.
The new central bank chief, Sahap Kavcioglu, a university professor and former member of Turkey’s National Assembly, said in a statement that he would continue to fight inflation. But on Monday, the lira was trading at about 7.77 to the dollar, compared with 7.22 on Friday. The plunge in value was a sign that currency traders expect him to bow to pressure from Mr. Erdogan to cut rates, worsening the inflation problem and pushing the country of 82 million people closer to economic collapse.
“We have abandoned our cautiously optimistic view on the lira,” Piotr Matys, a strategist at Rabobank wrote in a note. Mr. Kavcioglu’s comments suggest he is clearly in favor of lower interest rates to stimulate growth, he added.
Elsewhere in markets
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The S&P 500 closed up 0.7 percent on Monday, while the Nasdaq composite finished the day up 1.2 percent and the Dow Jones industrial average gained 0.3 percent.
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Yields on 10-Year Treasury notes fell to about 1.69 percent.
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European indexes were mixed. The Stoxx Europe 600 index gained 0.2 percent, and London’s FTSE 100 gained 0.3 percent. France’s CAC 40 dropped about 0.5 percent.
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Shares in IAG, the airline group which owns British Airways, fell more than 5 percent after the British government’s scientific advisers warned against overseas travel this summer. On Sunday, a government minister also indicated that travel restrictions could be extended. Shares in easyJet and Ryanair also fell.
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Deliveroo, the food-delivery company, started taking orders for its initial public offering on Monday. The share sale would value the company up to 8.8 billion pounds ($12.2 billion). The company will be listed on the London Stock Exchange, and is the exchange’s largest I.P.O. this year.
Credit…Kirsten Luce for The New York Times
A longtime executive at Goldman Sachs and his wife are the buyers of Jeffrey Epstein’s Upper East Side mansion, paying $51 million for the disgraced financier’s former home.
Michael D. Daffey, a former Goldman executive, and his wife, Blake Daffey, are getting Mr. Epstein’s seven-story Manhattan mansion at a considerable discount. The initial asking price was $88 million, but it received no takers. The estate of Mr. Epstein — who killed himself in 2019 while in custody and facing federal sex trafficking charges — put the house on the market less than a year after his death.
Mr. Daffey spent nearly three decades working at Goldman Sachs, and his recent retirement was disclosed in February. He was an early investor in Bitcoin.
While the sale was reported earlier this month, the buyers had not yet been identified until recently. The sale formally closed March 8, Vivian Marino reports for The New York Times, becoming one of New York City’s largest closings in March.
The Epstein mansion is just one location where he was accused of running his sex-trafficking operation. The money from the sale is expected to go to a compensation fund for victims.
Credit…Emon Hassan for The New York Times
Last week, a presentation by a group of junior bankers at Goldman Sachs went viral on social media, in which they complained about what they described as workplace abuse, including 100-hour weeks.
The DealBook newsletter’s inbox has been overflowing with reactions, notably from current, former and aspiring investment bankers. Here’s what some had to say — most requested anonymity to speak freely about their experiences — edited and condensed for clarity:
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“My view is that if it’s not to your liking, quit and find another line of work. It won’t pay as well, but it’s also possible that you won’t learn as much. I am still reaping the benefits of what I learned.” — Anonymous in Sydney
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“I had heard all about the long hours, but once I was in it, I found that I had underestimated. I threw in the towel and left banking, because no amount of money was worth the terrible lifestyle.” — Anonymous in New York
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“I knew I was worked like a donkey but quid pro quo. I could leave, work fewer hours and make less money. But I wasn’t interested in that.” — Anonymous in London
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“In our day, we may have complained to our friends or our family, but we knew that short-term pain was good for long-term gain. I now live a comfortable life enabled by my first years at Goldman Sachs.” — Anonymous in New York
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“We would do the math on the compensation and realize that we were making less than minimum wage per hour. It wasn’t worth being tortured. My health still suffers from my years on Wall Street.” — Anonymous in New York
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“The learning experience was incredible and career-wise it set me on the right track. In hindsight, it could have actually killed me, but I was too young to realize this.” — Anonymous in Dubai
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“Yes, we were ‘abused’ and yelled at, but this was expected and how we learned. My message for these analysts is: If you can’t stand the heat, get out of the kitchen.” — Anonymous in New York
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“There is no money that rewards the mental and physical harm that investment banking does to you. Of course, it’s a hell of an experience, Excel and PowerPoint-wise.” — Anonymous in São Paulo
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“I spent many long nights in the office at the behest of associates and V.P.s, most of the time for no reason but ‘they might need me.’ Then I joined the military, where I had better work-life balance and more respectful leadership than I did in banking.” — Anonymous in New York
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“I am an incoming Goldman Sachs intern. I knew about the work conditions before applying to the job. Anyone engaging in a career at a top investment bank knows about it, or else they applied for the wrong reasons.” — Anonymous in Europe
Credit…Hussein Malla/Associated Press
Tokyo prosecutors on Monday charged two Americans with helping Carlos Ghosn, the former Nissan chief, jump bail in Tokyo, where he was awaiting trial on four counts of financial wrongdoing.
Japanese prosecutors said in an indictment that the two men, Michael Taylor, 60, a former Green Beret, and his son Peter Maxwell Taylor, 27, assisted Mr. Ghosn’s efforts to escape the country, helping him flee to Turkey and then on to Lebanon, where he has been beyond the reach of Japanese law.
American officials arrested the men last May in Massachusetts. Earlier this month, they were extradited to Japan, where they have been held in a Tokyo detention center while undergoing questioning by prosecutors. A third man believed to have aided Mr. Ghosn’s escape remains at large.
The Japanese authorities have accused Michael Taylor of helping Mr. Ghosn travel by train to the western city of Osaka, through security checks at a private jet terminal and then onto a plane bound for Turkey. Once there, Mr. Ghosn transferred to a flight bound for Beirut. Peter Taylor assisted in planning for the escapade, visiting Mr. Ghosn several times before the escape, officials say.
Mr. Ghosn and his son, Anthony Ghosn, paid more than $1.3 million to the Taylors and a company they controlled, U.S. prosecutors have said in court filings.
Mr. Ghosn’s case raised international concerns about what some critics call Japan’s system of “hostage justice,” which includes lengthy detentions of criminal suspects without charge. While in the United States, the Taylors fought a long legal battle to prevent their extradition, with their lawyers arguing that they could be subjected to harsh conditions in a Japanese jail.
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Unions in Italy said they held a 24-hour strike against Amazon on Monday over a breakdown in talks over working conditions. The unions, representing delivery workers and warehouse employees, said they walked out for a day to protest excessive workloads while Amazon has earned huge profits during the pandemic. The three groups — Filt-Cgil, Fit-Cisl and Uiltrasporti — said an average of 75 percent of their memberships had taken part. A spokesman for Amazon said that only about 10 percent of its 9,500 Italian employees participated and that the strike did not cause any delays in shipments, orders or deliveries. He said Amazon already offers “excellent pay, excellent benefits and excellent opportunities for career growth.”
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Leon Black, the Wall Street billionaire who was the main client of the disgraced financier Jeffrey Epstein for the last decade of his life, is stepping down as chief executive and chairman of Apollo Global Management, several months ahead of schedule, the firm said Monday. Jay Clayton, the former Securities and Exchange Commission chairman who recently joined the firm as an independent director, will take over as chairman. Mr. Black said he had decided to leave now to focus on his family and his and his wife’s health. In January, the firm had said he would step down as chief executive before his 70th birthday in July while retaining the chairman role.
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Canadian Pacific and Kansas City Southern announced plans on Sunday to combine in a $29 billion deal that would create the first railroad network connecting the United States, Mexico and Canada. It is an effort to capitalize on the flow of trade that is expected to increase as the three countries rebound from the pandemic. The boards of both companies have unanimously approved the cash-and-stock deal, which is expected to close by the middle of 2022, subject to customary approvals.
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Saudi Aramco, Saudi Arabia’s national oil company, said on Sunday that its net income last year had fallen by 44 percent, to $49 billion, as lower oil prices stemming from the pandemic cut into earnings. The company’s chief executive, Amin H. Nasser, described 2020 in a statement accompanying the earnings data as “one of the most challenging years in recent history.” But Aramco, the world’s largest oil producer, said that it would stick by a pledge to pay a $75 billion dividend. Nearly all of the payment will go to the Saudi government, which owns about 98 percent of the company.
Video
CreditCredit…By Alexis Jamet
In today’s On Tech newsletter, Shira Ovide talks to The Times’s Ben Sisario about why streaming music has been a letdown for many musicians.
