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A Bitcoin A.T.M. in New York. Bitcoin continued to rise, fueled by Tesla’s announcement that it had purchased $1.5 billion worth of the digital currency.Credit…Michael M. Santiago/Getty Images
Bitcoin continued its rally, the latest leg of which was set off by Tesla’s announcement on Monday that it had purchased $1.5 billion worth of the digital currency and would start accepting Bitcoin payments. Bitcoin rose above $48,000 per coin early on Tuesday, a record, before coming off that high later, according to CoinDesk, a trading platform for digital currencies.
It is up more than 45 percent in 2021, and other cryptocurrencies are rising, too — including Dogecoin, which rose about 1,000 percent over the past week.
The momentum has been building as more trading apps allow users to buy, hold and sell cryptocurrencies, reported Nathaniel Popper for The New York Times: “The rally is a moment of euphoria for the thousands of different versions of digital money, which years ago were dismissed as little more than online Beanie Babies caught in a speculative bubble,” he wrote.
Stock markets
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On Wall Street, the S&P 500 was slightly lower in early trading Tuesday, after the index had climbed to another record on Monday. Through Monday, the S&P 500 had climbed for six consecutive trading days.
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European market were modestly changed, with the FTSE in Britain up slightly while the Stoxx Europe 600 was slightly lower.
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The Nikkei in Japan gained 0.4 percent, while the Kospi in South Korea fell 0.2 percent.
Stimulus checks
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Democrats in the House on Monday proposed legislation to send stimulus checks of $1,400 to Americans earning up to $75,000 and households with incomes up to $150,000. The direct payments are a critical part of President Biden’s stimulus plan, although the proposal may run into opposition from Republicans and some Democrats who want to focus the payments on lower-income Americans.
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House committees on Tuesday are expected to begin considering the overall $1.9 trillion package, aimed at supporting the economy through the pandemic.
Benefits of lockdown
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Ocado, the online supermarket based in Britain, reported a 35 percent rise in sales over the past year. As the company invests in new warehouses, “The landscape for food retailing is changing, for good,” said the chief executive, Tim Steiner.
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Still, the company reported a net loss of 44 million pounds (about $60 million), down from 215 million pounds the previous year, and its shares fell.
Neera Tanden is President Biden’s nominee to head the Office of Management and Budget.Credit…Leah Millis/Reuters
Neera Tanden, President Biden’s nominee to head the Office of Management and Budget, will tell a Senate committee this morning that she would “work in good faith with all members of Congress” if confirmed, in a bid to head off Republican complaints about her past criticisms of conservatives.
Ms. Tanden is the president of the liberal Center for American Progress think tank, a veteran of the Clinton and Obama administrations and a former top aide to Hillary Clinton’s 2016 presidential campaign. She is set to testify on Tuesday morning before the Senate Homeland Security committee, with a second hearing scheduled for Wednesday before the budget committee.
Republicans in the Senate have criticized Ms. Tanden for past statements, including Twitter posts, in which she criticized Republicans in Congress and elsewhere. Ms. Tanden will nod to those criticisms in the opening statement she has prepared for delivery.
“The role of O.M.B. director is different from some of my past positions,” she plans to say. “Over the last few years, it’s been part of my role to be an impassioned advocate. I understand, though, that the role of O.M.B. director calls for bipartisan action, as well as a nonpartisan adherence to facts and evidence.”
Ms. Tanden will also stress her qualifications for the job, including her experience being raised by an immigrant single mother who was forced to draw on the government safety net at times.
“We relied on food stamps to eat, and Section 8 vouchers to pay the rent,” Ms. Tanden will say. “At school, I remember being the only kid in the cafeteria line who used 10-cent vouchers from the Free Lunch Program. I remember using food stamps at the grocery store.”
“If I am privileged to serve as director,” she will say, “I would ensure that O.M.B. uses every tool at its disposal to efficiently and effectively deliver for working Americans, small businesses, and struggling communities.”
Suzanne Scott will remain as the leader of Fox News Media, which includes Fox News, Fox Business and the streaming service Fox Nation.Credit…Fox
The chief executive of Fox News, Suzanne Scott, will remain in her role for several years to come after signing a new contract with Rupert Murdoch’s Fox Corporation, the network said on Tuesday.
The new multiyear deal will keep Ms. Scott as the leader of Fox News Media, which also includes the cable channel Fox Business and the streaming service Fox Nation.
“Suzanne’s track record of success, innovative sprit and dedication to excellence make her the ideal person to continue to lead and grow Fox News,” Lachlan Murdoch, the executive chairman of the Fox Corporation and Rupert Murdoch’s eldest son, said in a statement on Tuesday.
The network did not disclose the exact length or financial terms of the deal.
Fox News is facing a major defamation lawsuit and working to regain the ratings crown it recently lost to CNN for the first time in decades. Some viewers left the network for alternative channels like Newsmax after Fox’s news division called the presidential election for Joseph R. Biden Jr., over the protestations of then-President Trump.
Until Election Day, though, Fox News had been enjoying another record year under Ms. Scott’s tenure. Its weeknight lineup ended the year as the third-most-watched in all of prime-time television, ahead of the ABC broadcast network.
“I am grateful to Rupert and Lachlan Murdoch for the opportunity to continue leading Fox News Media and positioning all of our platforms for future success,” Ms. Scott said in a statement.
Representative Richard E. Neal, Democrat of Massachusetts, unveiled the bill on Monday ahead of a week of legislative work to solidify the details of President Biden’s stimulus proposal. Credit…Anna Moneymaker for The New York Times
House Democrats on Monday rolled out a key plank of President Biden’s stimulus plan, proposing legislation to send direct payments of $1,400 to Americans earning up to $75,000 and households with incomes up to $150,000.
The plan, drafted the day before key committees are scheduled to being meeting to consider it, is at odds with proposals from some Republicans and moderate Democrats who want to curtail eligibility for direct payments, targeting it to lower income people. Mr. Biden has said he is open to such modifications.
For now, the measure would allow individuals earning up to $100,000 and households earning up to $200,000 to be eligible for some payment, though the size of the checks would phase out gradually for those with incomes above $75,000, or $150,000 for a family.
The bill, unveiled by Representative Richard E. Neal, Democrat of Massachusetts and the chairman of the Ways and Means Committee, was one of a series that Democrats presented on Monday ahead of a week of legislative work to solidify the details of Mr. Biden’s stimulus proposal.
The decision to keep the income cap at the same level as the last round of stimulus payments comes after days of debate among the House Democratic caucus over the size of the checks, as some moderates pushed to restrict the full amount to those who make $50,000 or less and households earning up to $100,000.
The legislation also includes a series of significant changes to the tax code and an increase in an extension of weekly federal unemployment benefits. It would raise the $300-a-week payment to $400 a week and continue the program — currently slated to begin lapsing in March — through the end of August.
The $1.9 trillion plan would also provide for billions of dollars for schools and colleges, small businesses and a provision that would increase the federal minimum wage to $15 by 2025, a progressive priority.
Elon Musk, Tesla’s chief executive, is known for bucking convention, so his company’s purchase of Bitcoin is not surprising.Credit…Mike Blake/Reuters
Cryptocurrency prices are soaring after Tesla said that it had purchased $1.5 billion worth of Bitcoin with company funds. The electric carmaker wasn’t the first company to shift corporate cash into cryptocurrencies, but it was one of the biggest. It could make finance chiefs elsewhere consider whether they should follow suit, the DealBook newsletter reports.
Tesla’s move is an “exclamation point” for institutional acceptance of Bitcoin, said Matthew Graham, the chief executive of the Beijing-based blockchain investment firm Sino Global Capital. “It’s clear that Bitcoin is ready for Main Street.”
Elon Musk, Tesla’s chief executive, is known for bucking convention, so his company’s purchase is not as surprising as it would be at, say, Ford or General Motors.
Tesla had more than $19 billion in cash at the end of 2020, a big enough cushion to make the Bitcoin purchase a relatively small share of its resources. But much of that cash was raised in recent stock sales, and the company only recently reported its second year of positive free cash flow. Because of Bitcoin’s unique characteristics, Tesla will have to record declines in the value of its Bitcoin against its earnings, but cannot book gains.
The software company MicroStrategy now holds Bitcoin worth about a third of its market capitalization, according to a site that tracks corporate holdings. MicroStrategy’s chief, Michael Saylor, held a conference last week that promoted Bitcoin for corporations.
Naresh Aggarwal of the Association of Corporate Treasurers in London is skeptical that many companies will follow Tesla and MicroStrategy and buy Bitcoin at scale. “Gold is probably a more traditional form of alternative investment,” he said, yet few firms outside the financial sector hold it. “If they’re not tempted by gold, then I can’t see them being tempted by Bitcoin,” he added, likening it to “putting money on a horse race.”
Keeping money in liquid, safe investments is particularly important during the pandemic, and many corporate finance chiefs remember being burned in 2008 by higher-yielding alternatives.
Supervisors told employees that Kroger was shutting down two stores because of local hazard pay requirements.Credit…Maggie Shannon for The New York Times
The race to distribute vaccines and the emergence of more contagious variants of the coronavirus have put a renewed spotlight on the plight of grocery workers in the United States.
The industry has boomed in the past year as Americans have stayed home and avoided restaurants. But in most cases, that has not translated into extra pay for its workers, Sapna Maheshwari and Michael Corkery report for The New York Times. After Long Beach, Calif., mandated hazard pay for grocery workers, the grocery giant Kroger responded last week by saying it would close two locations.
And now, even as experts warn people to minimize time spent in grocery stores because of new coronavirus variants, The Times found only 13 states that had started specifically vaccinating those workers.
“Kroger is sending a message, more than anything else,” said Andrea Zinder, president of Local 324 of the United Food and Commercial Workers, which represents about 160 employees at the two stores. “They are trying to intimidate workers and communities: If you pass these types of ordinances, there will be consequences.”
Kroger, which operates about 2,750 stores, has attracted particular attention because it pursued stock buybacks last year and because its chief executive, Rodney McMullen, earned more than $20 million in 2019. The median compensation of a Kroger employee that year was $26,790, or a ratio of 789 to 1, according to company filings.
General Motors plans a Hummer pickup as part of its ambitious lineup of electric vehicles.Credit…General Motors, via Agence-France Press — Getty Images
“I’ve been writing about the auto industry for 19 years, and I’ve really never seen anything like this,” Neal E. Boudette, who covers the auto industry for The New York Times, told Shira Ovide in this week’s On Tech newsletter.
“When I saw the G.M. news, I sat back in my chair and reflected on how revolutionary this was,” Mr. Boudette said. “G.M., for more than a century, has been producing internal combustion engine vehicles, and soon it won’t be.
“We’re on the cusp of one of those big industrial transformations in which we shift from an old way of doing things to a completely new one, and everything will be turned upside down.”
They discussed the future of cars and whether traditional automakers or tech-focused companies, like Tesla and Apple, would rule the next generation of the roads.
“It’s not either-or,” Mr. Boudette said. “The companies that succeed will need to think like the other side. Auto companies need to adapt the mind-set and expertise of tech firms, and vice versa.”
Joe Biden in an October 2009 meeting with economic advisers, including Larry Summers, second from right. Mr. Summers, then the director of the National Economic Council, is one of the economists now questioning the scale of the Biden administration’s pandemic stimulus plan.Credit…Mandel Ngan/Agence France-Presse — Getty Images
For weeks, policy veterans have been fretting among themselves over the scale of President Biden’s proposal for more pandemic aid, in private emails and text chains, Neil Irwin reports for The New York Times.
Larry Summers, the former Treasury secretary, made those concerns public with an op-ed article in The Washington Post last week. The article received some support on Twitter from another economist from the Obama administration and from a former chief economist at the International Monetary Fund.
The core question is whether the administration’s $1.9 trillion plan is too big. Is action on that scale needed to contain the economic damage from the pandemic? Or is it far too big relative to the hole the economy’s in, thus setting the stage for a burst of inflation followed by a potential recession?
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Mr. Summers argues that the plan’s total size reaches a scale that risks major future problems. That implies that much of that spending will just slosh around the economy, causing prices to rise.
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Treasury Secretary Janet Yellen and other top officials argue that their proposal is prudent and appropriately scaled and that the United States is in a do-whatever-it-takes moment. They do not dismiss the possibility that there will be higher inflation down the road — but say it is a manageable risk.
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The economy is in uncharted territory. There is a lot of money poised to be spent, and some things may reduce the supply of goods and services. Lots of money chasing finite supply is an Economics 101 recipe for surging prices.
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But for the medium term, the more important question is whether any inflation surge would be a temporary not-so-harmful phenomenon or the start of something more lasting.
