Hope you’re all staying warm. Here’s your quick roundup of business and tech news to know for the week ahead. — Charlotte Cowles
What’s Up? (Feb. 14-20)
A Costly Mix-up
Citigroup made an embarrassing mistake last summer and accidentally wired $900 million to a group of lenders instead of a much smaller interest payment it intended to send. Citigroup has been trying to reclaim the money, which it sent on behalf of the beauty company Revlon, ever since. And typically, recipients of cash wired in error are required to return it. But last week, a judge ruled that the lenders could keep it all. His reasoning: They had grounds to believe that the payment, which covered all that Revlon owed, was intentional. The decision is a major blow to Citigroup, which says it will appeal.
‘What Happened on Jan. 28?’
That was the question posed by members of Congress when they grilled key players in the GameStop trading frenzy that hijacked the stock market last month and caused many investors, both large and small, to lose pots of money. At the center of the hearing was Vlad Tenev, the chief executive of the online brokerage firm Robinhood, which handled most of the GameStop trades but suddenly halted them when they reached a fever pitch on Jan. 28. Mr. Tenev explained — again — that the GameStop trades were stopped because of new requirements from the clearinghouses that perform them. He apologized to his users for the company’s failings, but he also insisted that Robinhood had done nothing wrong and did not privilege powerful business partners at the expense of small-time investors, as some critics have suggested. It’s unclear what — if anything — lawmakers and regulators will do to curtail turmoil like this in the future.
Dollar by Dollar
Walmart, the nation’s largest private employer, said that it would raise wages for 425,000 of its employees. That means about half of its 1.5 million workers in the United States will make at least $15 an hour. But many of its workers will still earn less. Walmart’s minimum wage remains at $11 an hour, unlike those of its biggest rivals like Target and Amazon, whose wages both start at $15 an hour. The company’s announcement came about a week after its chief executive, Doug McMillon, met with President Biden and discussed the administration’s interest in raising the national minimum wage to $15 an hour from its current rate of $7.25 an hour.
What’s Next? (Feb. 21-27)
A Winter Warning
Texas is recovering from a freakish cold snap that left millions without power and running water for days, but its economy remains stricken. Its agriculture industry has been literally frozen, and livestock are dying. Several semiconductor companies had to idle production, compounding a global shortage of computer chips that has already slowed car manufacturing at plants worldwide. But devastating incidents like this one may become the new normal. Economists — including one top Federal Reserve official — are warning that banks need to be better prepared for more climate-change-related disruptions to manufacturing, power, and other industries.
The House of Representatives plans to hold its first floor vote on the Biden administration’s $1.9 trillion pandemic rescue package this coming Friday. Democrats hope to pass the measure before March 14, when additional federal unemployment benefits ($300 a week, provided on top of existing state unemployment benefits) are set to expire. Through a legislative loophole, the stimulus bill could be approved with a simple Congressional majority and no Republican support.
News You Can’t Use
The Australian government has proposed a law to make tech companies pay news outlets for the content that is shared on their platforms (and, in turn, helps them rake in advertising dollars). This poses obvious problems for giants like Facebook and Google, which are taking opposite approaches to the proposal. Facebook adopted a fighting stance by indefinitely blocking all news links from its platforms. Google, on the other hand, announced a three-year deal to compensate Rupert Murdoch’s News Corp for its content, and said that similar partnerships are in the works. Other countries may follow in Australia’s footsteps if the law succeeds.
Retail sales jumped 5.3 percent in January, indicating that Americans spent the stimulus checks they received at the end of the year instead of saving them. Parler, the social network that was forced offline after it drew millions of Trump supporters calling for violence around the time of the Capitol riot, is back up and running. And New York’s attorney general has sued Amazon, accusing the company of providing inadequate safety protection for workers in New York City during the pandemic and retaliating against employees who raised concerns.