March 25, 2021

U.S. Raises Cap on Small-Business Disaster Loans

Here’s what you need to know: Isabella Casillas Guzman, Small Business Administration’s administrator, earlier this…

Credit…Anna Moneymaker for The New York Times

Companies harmed by the coronavirus pandemic can soon borrow up to $500,000 through the Small Business Administration’s emergency lending program, raising a cap that has frustrated many applicants.

“The pandemic has lasted longer than expected,” Isabella Casillas Guzman, the agency’s administrator, said on Wednesday. “We are here to help our small businesses, and that is why I’m proud to more than triple the amount of funding they can access.”

The change to the Economic Injury Disaster Loan program — known as EIDL and pronounced as idle — will take effect the week of April 6. Those who have already received loans but might now qualify for more money will be contacted and offered the opportunity to apply for an increase, the agency said.

The Small Business Administration has approved $200 billion in disaster loans to 3.8 million borrowers since the program began last year. Unlike the forgivable loans made through the larger and higher-profile Paycheck Protection Program, the disaster loans must be paid back. But they carry a low interest rate and a long repayment term.

Normally, the decades-old disaster program makes loans of up to $2 million, and in the early days of the pandemic, the agency gave some applicants as much as $900,000. But it soon capped loans at $150,000 because it feared exhausting the available funding. That limit — which the agency did not tell borrowers about for months — angered applicants who needed more capital to keep their struggling ventures alive.

The agency has $270 billion left to lend through the coronavirus program, James Rivera, the head of the agency’s Office of Disaster Assistance, told senators at a hearing on Wednesday.

Tribune Publishing is the publisher of nine major metropolitan dailies including The Chicago Tribune and The Daily News.
Credit…Charles Rex Arbogast/Associated Press

Tribune Publishing’s board recommended that shareholders approve a purchase offer from the hedge fund Alden Global Capital over a higher bid from a Maryland hotel executive, according to a securities filing Tuesday.

The filing comes a week after Stewart W. Bainum Jr., a hotel magnate, made an $18.50 per share offer for the whole company. Mr. Bainum initially had agreed with Alden to spin off three of Tribune’s titles — The Baltimore Sun and two smaller Maryland papers — at the price of $65 million. But negotiations between Alden and Mr. Banium stalled over details of operating agreements that would be in effect as the Maryland papers transitioned from one owner to another, prompting Mr. Banium to pursue a bid to buy all of Tribune.

Alden, Tribune’s largest shareholder with a 32 percent stake, agreed last month to buy the rest of the company at $17.25 per share and take it private in a deal that would value the company at $630 million. Alden would buy of all the company’s remaining papers, which include The Chicago Tribune and The Daily News.

Alden has been criticized for laying off journalists and shrinking local news coverage at the roughly 60 newspapers it already owns. The hedge fund says it is keeping local newspapers from going out of business.

Stat, which was founded by the Boston Red Sox owner John W. Henry, is produced by the parent company of The Boston Globe, which is owned by Mr. Henry and his wife, Linda Pizzuti Henry.
Credit…Philip Keith for The New York Times

Journalists at Stat, the medical and science news website lauded for its pandemic coverage, will join the Boston Newspaper Guild, union representatives said in a statement Wednesday.

Stat, based in Boston, focuses on science, health and biotech journalism and has close to 40 editorial staff members. It was one of the first outlets to extensively cover the outbreak of the coronavirus in January 2020 and saw a boost in traffic and revenue in the past year as its ambitious coverage gained attention. Helen Branswell, Stat’s infectious-disease reporter, won the 2020 George Polk public service award for her work covering the pandemic.

Damian Garde, a biotech reporter for Stat, said in an interview that workers hoped union protections would help make Stat an even more attractive and competitive employer.

“When people look at the Stat trajectory, they point to my colleague Helen Branswell’s very prescient coverage ahead of the Covid-19 pandemic really becoming what it would become,” he said. “And I think one of the lessons there is: If you invest in people like Helen Branswell, you, too, can have prescient coverage.”

Stat, which was started in 2015 by the Boston Red Sox owner John W. Henry, is produced by Boston Globe Media Partners, the parent company of The Boston Globe, which is owned by Mr. Henry and his wife, Linda Pizzuti Henry. The two publications have separate staffs.

Scott Steeves, the president of the Boston Newspaper Guild, said in a statement that the addition of Stat workers would mean a stronger voice for the union.

“At a time when independent journalism is so important, Guild members strive to deliver the highest-quality news product possible while also standing together to ensure economic and workplace protections,” he said.

Mr. Garde said the union eligibility of certain Stat employees was still under discussion as part of negotiations between the Boston Newspaper Guild and Globe management. Globe union employees have been without a contract for more than two years as a standoff over a new contract continues.

Globe management did not immediately respond to a request for comment.

The Boston Newspaper Guild is affiliated with the NewsGuild, which also represents New York Times employees.

Janet Yellen earlier this month. Ms. Yellen’s team at Treasury is working on developing guidance on how the $200 billion allocated for states and cities can be used.
Credit…Al Drago for The New York Times

Treasury Secretary Janet L. Yellen said on Wednesday that she is grappling with a host of “thorny” issues related to a provision in the $1.9 trillion stimulus package that restricts states from using federal aid money to fund tax cuts, suggesting that the looming legal battle over the matter could be long and complicated.

At a Senate Banking Committee hearing, Ms. Yellen said her team at the Treasury Department was working on developing guidance on how the $200 billion allocated for states and cities can be used.

The Treasury Department has said the intent of the law is for the relief money to pay for matters related to the coronavirus pandemic, not to subsidize tax cuts.

But Ms. Yellen acknowledged that the issue is a “thorny” one.

“We will have to define what it means to use money from this act as an offset for tax cuts,” Ms. Yellen said. “Given the fungibility of money, it’s a hard question to answer.”

The Treasury Department has 60 days from when the law was enacted to craft guidance on how the money can be spent. Ms. Yellen said she believes that states and cities should have a lot of flexibility in how they deploy the funds.

Last week, the Ohio attorney general sought a preliminary injunction that would bar the federal government’s ability to enforce what he described as the “tax mandate.”

Several Republican governors and 21 Republican attorneys general have asked for clarification on the provision. Ms. Yellen wrote a letter to the attorneys general on Tuesday evening explaining why there are restrictions on the use of the funds. She foreshadowed the legal argument that Treasury might use if litigation moves forward.

“It is well-established that Congress may place such reasonable conditions on how states may use federal funding,” she wrote. “Congress includes those sorts of reasonable funding conditions in legislation routinely, including with respect to funding for Medicaid, education and highways.”

Ms. Yellen’s response did not satisfy Patrick Morrisey, the attorney general of West Virginia, who called her position “simply unacceptable.”

“We will now take the final steps necessary to meet the Biden administration in court,” Mr. Morrisey said in a statement on Wednesday. “West Virginia cannot accept the statute’s ambiguity, and given the administration’s failure to correct this problem, we are left with no option other than seeking a court order to protect West Virginia’s interests.”

At the hearing, Senator Mike Crapo, Republican of Idaho, urged Ms. Yellen to provide clear guidance for states quickly.

“It seems to me the states are hamstrung right now. They can’t do anything,” he said.

This bridge can be yours for $69 million.
Credit…Open Sea

The comedian John Cleese is selling a digital sketch that comes with a nonfungible token, or NFT, to authenticate its authorship via blockchain technology. It’s a joke, sort of.

Evoking a classic con, the sale of the Brooklyn Bridge, the Monty Python actor is auctioning an image of the bridge by “The Unnamed Artist John Cleese,” with bidding running through April Fools’ Day. “I don’t make the jokes,” Mr. Cleese told the DealBook newsletter. “I just point them out.”

The project highlights the hyper-commodification of art in a frenzied market. Christie’s recently held its first NFT auction, selling the work of an artist known as Beeple for $69,346,250. That’s how much Mr. Cleese is asking for the sketch (plus 50 cents) if a bidder wants to “buy it now.” He’ll split the proceeds evenly with his partners: a comedy writer, an animator and a law professor doubling as crypto consultant.

The highest bid for Mr. Cleese’s work is now about $36,000. “I think it’s very funny,” Mr. Cleese said. “At the same time, we might make some money.”

“Some things are worth pointing out, and some are not,” Mr. Cleese said. The Beeple sale was notable because it revealed a “mad world,” he added, with people disconnected from meaningful emotional experiences, like seeing a painting at a gallery. Yet the 81-year-old also conceded that someone younger, for whom the line between the physical and digital worlds is more blurred, could have feelings about an NFT.

The art world can’t afford to dismiss NFTs, Mr. Cleese said. Nor can he. By mocking the craze, he is now implicated in the thing he finds absurd — just how he’s made a living as a comedian.

Elon Musk, the chief executive of Tesla, said on Twitter that the company would accept Bitcoin as payment for cars in the United States.
Credit…Brendan Smialowski/Agence France-Presse — Getty Images

Elon Musk, the chief executive of Tesla who recently added “Technoking” to his title, said on Wednesday that the company would accept Bitcoin as payment for cars in the United States, a move that is at odds with the company’s image as an environmentally friendly electric-car maker.

Tesla will hold the digital currency, rather than convert payments to dollars, and handle the crypto transactions internally, Mr. Musk said.

“Bitcoin paid to Tesla will be retained as Bitcoin, not converted to fiat currency,” Mr. Musk explained in a tweet. That means when someone buys a Tesla with Bitcoin, the price of the car could well rise — or fall — over time. In other words, Tesla is turning one-time payments into assets with shifting value, or, essentially, investments.

Buyers outside the United States will have the option to use Bitcoin “later this year,” Mr. Musk said.

Mr. Musk’s embrace of Bitcoin is hailed by many cryptocurrency enthusiasts, but the digital currency’s affect on climate change has come under increasing scrutiny.

“Bitcoin uses more electricity per transaction than any other method known to mankind, and so it’s not a great climate thing,” Bill Gates recently told The New York Times. Depending on the study, the annual carbon emissions from the electricity required to mine Bitcoin and process its transactions are equal to the amount emitted by all of New Zealand. Or Argentina.

There is also an electronic waste problem associated with bitcoin mining, argues Alex de Vries, an economist who created the Bitcoin Energy Consumption Index and tracks the unintended consequences of digital trends. Bitcoin mining is done with highly specialized equipment that has a short life span, and the tools cannot be repurposed, making investment in the digital currency even more problematic from an environmental perspective, he told The Times.

Mr. Musk said last month that the company bought $1.5 billion in Bitcoin for its treasury. The announcement on Wednesday confirms speculation in the crypto community that Tesla would not simply contract out payments to a third-party processor and treat Bitcoin like dollars.

Since Tesla’s Bitcoin purchase in February, the price of Bitcoin and other cryptocurrencies has soared to record highs, but trading has been volatile.

Analysts are pleased with the symbolism at least. “This is a seminal moment for Tesla and for the crypto world,” wrote Daniel Ives and Strecker Backe, analysts at the investment firm Wedbush. “This morning’s news formalizes the strategy of Musk and Tesla diving into the deep end of the pool of bitcoin and crypto from a transactional perspective.”

Stocks on Wall Street fell for a second day on Wednesday. Oil prices climbed, rebounding from a recent decline, after a container ship blocked traffic in the Suez Canal.

  • The S&P 500 index lost 0.6 percent, while the Nasdaq composite dropped 2 percent.

  • GameStop dropped 34 percent after quarterly earnings released on Tuesday missed expectations and the company said in a filing it could sell additional shares.

  • Tesla’s shares fell nearly 5 percent after Elon Musk said the carmaker would accept Bitcoin, the cryptocurrency, as payment for cars in the United States.

  • The eurozone purchasing managers’ index for manufacturing and services for March was above 50 — the line between contraction and expansion — for the first time since October. Germany manufacturing output was at a record high and the index for British services rose to 56.8, well above expectations for a reading of 51.

  • The benchmark Stoxx Europe 600 index was flat, after opening 0.7 percent down. The FTSE 100 index in Britain gained 0.2 percent.

  • Data showed that inflation in Britain unexpectedly fell to an annual rate of 0.4 percent in February from 0.7 percent the month before. Analysts at RBC said they still expected inflation to rise in coming months, but the lower-than-expected February data reflected the pandemic’s disruption to normal seasonal price patterns. For example, clothing prices didn’t rise in the new year after the traditional sales period.

  • Oil prices rose after a container ship got stuck in the Suez Canal, blocking traffic in one of the world’s busiest shipping arteries. The canal is important for the movement of oil as it travels from the Persian Gulf region to Europe and North America. Brent crude futures rose 5.6 percent, to $64.18 a barrel

  • Intel’s new chief executive is doubling down on chip manufacturing in the United States and Europe, a surprise bet that could please government officials worried about component shortages and dependence on factories in Asia. Patrick Gelsinger, who took the top job in February, said on Tuesday that he planned to spend $20 billion on two new factories near existing facilities in Arizona. He also vowed that Intel would become a major manufacturer of chips for other companies, in addition to producing the processors that it has long designed and sold.

  • Walt Disney Studios on Tuesday pushed back the release dates of six movies, including “Black Widow,” a hotly anticipated Marvel prequel. In addition, “Black Widow,” now scheduled for July 9 instead of May 7, and another major Disney movie, “Cruella” (May 28), will premiere on Disney+ at the same time they arrive in theaters. Disney pulled “Luca,” the next Pixar film, from theatrical release entirely, saying it would debut exclusively on Disney+ on June 18. The other movies that were delayed include “Free Guy,” an action-comedy starring Ryan Reynolds as a bank teller who finds himself inside a video game; “Shang-Chi and the Legend of the Ten Rings,” a Marvel extravaganza starring Simu Lieu alongside Awkwafina; and “Death on the Nile,” an all-star remake based on the Agatha Christie mystery.

  • Shares of GameStop tumbled in after-hours trading on Tuesday as quarterly earnings missed expectations and the company said in a filing it could sell additional shares. The company’s stock was down roughly 12 percent shortly after 6 p.m. The stock began to slide after the company said in a separate filing with the Securities and Exchange Commission that it was evaluating whether to sell additional stock “primarily to fund the acceleration of our future transformation initiatives.”

Credit…Maria Chimishkyan

In today’s On Tech newsletter, Shira Ovide talks to two avid book readers from South Africa who explain what they find special about Discord, the talking and texting app that has been in deal talks with Microsoft for a transaction that could top $10 billion.