David McCabe
Samsung will build a $17 billion semiconductor factory in Taylor, Texas, it said on Tuesday, giving a big boost to a bipartisan effort in Washington to persuade chip makers to build more of the components in the United States.The company’s decision came after months of deliberation over possible locations in the United States and South Korea. The company, one of the world’s largest makers of computer chips, considered a site in Austin, which is about forty minutes from Taylor, as well as locations in Arizona and New York.
As Washington has urged chip makers to build more in the United States, cities have raced to get a piece of the potential boom. Taylor went to great lengths to lure the Samsung plant. The city, its independent school district and the surrounding county promised the company hundreds of millions of dollars in tax breaks. Semiconductor plants require abundant water and reliable power, so they reached a deal to transport water from the adjacent county for the facility.
Samsung’s decision comes during a major shortage of semiconductors, which are critical to products as diverse as Ford F-150s, medical devices and iPhones.
Lawmakers and the Biden administration have grown concerned that not enough of the vital components are made in America. China has invested heavily in incentivizing production of computer chips inside its borders, and Taiwan and South Korea both produce a major share of the semiconductors. Policymakers worry that leaves the United States at an economic and national security disadvantage.
The plant in Taylor will be the latest to be built in America in recent years. Intel broke ground this year on two new factories on an existing campus in Arizona. Taiwan Semiconductor Manufacturing Company is also building a new plant in the state.
Many retail giants have opted to close on Thanksgiving Day during the coronavirus pandemic, citing safety concerns and gratitude for their employees.
Retailers also have expanded their online offerings, as well as their pickup and delivery services, to meet customer demand amid lockdowns and pandemic restrictions.
For the second year in a row, Walmart and Target will close on Thanksgiving, repeating the move as retailers across the country scramble to hire or retain employees, with millions fewer Americans working than before the pandemic and more people quitting their jobs than ever before.
Apple stores will be closed on Thanksgiving Day. On Friday, store hours vary, with some stores opening earlier than usual. Customers can view their local store’s hours on Apple’s website.
Best Buy
Best Buy’s stores will not be open on Thanksgiving Day. Friday hours may vary from normal operation, with some stores opening as early as 5 a.m. Customers can view their local store’s hours with Best Buy’s store locator.
Most locations, including 24-hour locations, will have regular hours on Thanksgiving and Friday. The company recommends calling ahead or visiting cvs.com to confirm local hours, as some locations will reduce hours or close for the holiday.
Dollar General
Stores will open an hour earlier than usual, at 7 a.m., and close an hour later, at 10 p.m. Regular hours resume on Friday.Read more
Dollar Tree will raise the prices of most items in all of its stores to $1.25 from $1 by the end of April, the company said on Tuesday, after a successful test of the new pricing strategy.
“For 35 years, Dollar Tree has managed through inflationary periods to maintain the everything-for-one-dollar philosophy,” the company said in a statement accompanying its quarterly financial statement, but it felt that now was the time to raise prices. “This decision is permanent and is not a reaction to short-term or transitory market conditions,” it added.
The dollar store giant said that the price increase, which it first announced it would test in September, will help mitigate freight and distribution costs and wage increases and will allow it to bring back some products that it was no longer able to offer at $1. It said that 91 percent of customers it had surveyed said they would continue to shop at Dollar Tree after the change.
Shares of Dollar Tree rose more than 11 percent after the announcement. The company operates nearly 16,000 stores in the United States and Canada.
Dollar stores have been struggling with a slowdown in sales and shrinking profits. Walmart and other retail giants have also said supply chain issues and labor costs have been adding to expenses but that the increased costs largely have been offset by sales growth.
The Financial Stability Board has raised capital requirements for three banks considered systemically important — BNP Paribas, Goldman Sachs and JPMorgan Chase — as part of a yearly review of the safeguards it sets to try to prevent another global financial crisis.
The board, a body steered by central bankers and other government officials from around the world, published its latest list of “globally systemic banks,” known as G-SIBs, on Tuesday, keeping the total count steady at 30 institutions but changing its categorization of BNP, Goldman and JPMorgan. All three were already on the list, but now they each will have to meet a standard for absorbing losses on their balance sheets that is 0.5 percent higher than last year’s.
JPMorgan and Goldman both already meet the board’s requirement. The so-called G-SIB surcharge that the Federal Reserve imposes on each bank under its own capital requirements exceeds the stability board’s updated number. The Fed does not apply its own G-SIB surcharge to foreign banks, so it does not hold Paris-based BNP to the same standard.
A spokeswoman for JPMorgan noted that the bank exceeds the stability board’s requirement. Spokesmen for Goldman Sachs and BNP declined to comment.
The stability board said in a statement posted on its website that the change reflected a shift in each of the banks’ activities, but it did not elaborate. The pandemic caused cash to flood onto the balance sheets of banks all over the world as governments engaged in stimulus efforts to keep their economies from tanking during lockdowns and other safety measures that dampened normal economic activity.
After months of behind-the-scenes discussions and public assurances that clarity was on the way, federal bank regulators unveiled a “road map” on Tuesday for overseeing cryptocurrencies and other digital assets in ways that would finally let banks hold, trade and lend against them.
The two-page document had one major problem: It contained no details about how to do any of that.
The statement — a product of the Federal Reserve, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation — identified broad areas where regulators had agreed they needed to make new rules, but it said little else.
“Throughout 2022, the agencies plan to provide greater clarity on whether certain activities related to crypto-assets conducted by banking organizations are legally permissible, and expectations for safety and soundness, consumer protection, and compliance with existing laws and regulations,” the regulators said in the statement.
Banks have been clamoring for more information from their regulators in recent months about how they can safely participate in cryptocurrency markets. They have begun to complain that the absence of a clear set of rules is hampering their ability to compete with the upstart financial technology firms invading their space. Some banks, eager to get moving, have individually succeeded in getting their regulators to let them handle digital assets, relying in part on a skeletal framework for doing so that O.C.C. officials created under former President Donald J. Trump.
In a nod to these early adopters, the Office of the Comptroller of the Currency, which oversees nationally chartered banks, including JPMorgan Chase and Wells Fargo, took an extra step on its own Tuesday, releasing a narrowly focused communication — called an interpretive letter. The letter explained how they should proceed when seeking to start offering their customers cryptocurrency services, but it did not break new ground. Rather, the letter made the procedure that the earliest cryptocurrency adopters followed in their dealings with the regulator an explicit requirement for all future comers.
In a news release, the agency said the letter was “part of the O.C.C.’s efforts to provide clarity about crypto-assets and the federal banking system,” part of the same effort as the broader statement.
The joint road map, however, showed that overall progress on this goal is slow. In their announcement, the regulators pledged to detail how banks could hold digital assets on their balance sheets, issue and trade in stablecoins, accept cryptocurrencies as collateral for loans and appropriately incorporate the asset class into their regulatory capital requirements. It’s a to-do list that closely resembled one that Randal K. Quarles, then the Fed’s vice chair for supervision, rattled off during a Senate Banking Committee hearing on May 25.
At the hearing, in response to a question from Senator Mark Warner, Democrat of Virginia, on where the Fed and other U.S. regulators stood on cryptocurrencies, Mr. Quarles assured lawmakers that a similar list was the subject of a three-agency “sprint.” The regulators were pulling together views on “a common regulatory framework,” Mr. Quarles told lawmakers, and were working to identify gaps.
The statement on Tuesday suggested that the Fed and the other agencies needed more time to reach the finish line. Another impending change could drag out the process: Mr. Quarles, whose term as vice chair ended in October, plans to leave the Fed at the end of the year. President Biden has yet to nominate his replacement.Read more
Today, though, I want to address another challenge that families are facing. And the one I think they’re most focused on right now: high gas prices. This is a problem, not just here in the United States, but around the world. Of course, it’s always painful when gas prices — gas prices spike. Today, the price of gas in America on average is $3.40 a gallon — in California, it’s much higher. The impact is real, but the fact is we faced even worse spikes before. The big part of the reason Americans are facing high gas prices is because oil-producing countries and large companies have not ramped up the supply of oil quickly enough to meet the demand. So today, I’m announcing that the largest ever release from the U.S. Strategic Petroleum Reserve to help provide a supply we need as we recover from this pandemic. In addition, I brought together other nations to contribute to the solution. India, Japan, Republic of Korea and the United Kingdom have agreed to release additional oil from their reserves, and China may do more as well. This coordinated action will help us deal with the lack of supply, which in turn helps ease prices.
The release of 50 million barrels of crude oil from the country’s emergency stockpile was meant to address fluctuations in supply and demand, and lower gas prices.CreditCredit...Adrees Latif/Reuters
The United States and five other world powers announced a coordinated effort to tap into their national oil stockpiles on Tuesday, attempting to drive down rising gas prices that have angered consumers around the world.
The move appeared to underwhelm oil traders, who had been expecting President Biden to announce a larger release from America’s Strategic Petroleum Reserve, which is the biggest in the world with 620 million barrels. The price of a barrel of crude oil actually rose after the announcement in global trading, although administration officials said prices could fall in coming weeks.
The market reaction underscored the difficulties Mr. Biden faces, both politically and economically, in his efforts to react to the fastest increase in U.S. inflation in three decades. The president has seen his approval ratings slump as gas and food prices have risen, while Republicans have launched a steady series of attacks blaming Democrats.
Mr. Biden has shifted his messaging on the issue in recent weeks, in hopes of showing consumers he understands their financial pain. On Tuesday at the White House, he cast the release of oil from the strategic reserve as an important step toward lowering fuel costs for drivers at the start of the holiday travel season.
“Today we’re launching a major effort to moderate the price of oil, an effort that will span the globe and ultimately reach your corner gas station, God willing,” Mr. Biden said.
“While our combined actions will not solve the problem with high gas prices overnight, they will make a difference,” he said. “It will take time, but before long you should see the price of gas drop where you fill up your tank.”
Earlier on Tuesday, administration officials said Mr. Biden had ordered the Energy Department to tap into 50 million barrels of crude in the Strategic Petroleum Reserve. Traders had been expecting 100 million barrels, said Richard Bronze, head of geopolitics at Energy Aspects, a market research firm in London.
Britain said it would authorize the release of up to 1.5 million barrels and India said it would release five million. Mr. Bronze estimated that Japan and South Korea would each add four million to five million barrels. China did not announce details of its plans.
The concerted effort, the largest ever for a release of strategic reserves across multiple countries, is meant to address fluctuations in supply and demand for oil, administration officials said. And it was a shot across the bow of OPEC Plus, the name for the Organization of the Petroleum Exporting Countries as well as Russia and other countries. Mr. Biden has pushed those countries to increase production, but has been rebuffed.
The move could bring a response next week when the group holds its monthly meeting. While it could prompt those countries to increase production, it could just as easily push the cartel to restrict supply further and push global prices higher.
In recent monthly meetings, OPEC Plus has stuck with plans to increase production by a relatively modest 400,000 barrels a day each month. U.S. officials sidestepped a question about possible retaliation from OPEC Plus. The officials said they had pushed oil producers to announce their own supply increases for weeks and made clear to those nations that Mr. Biden and other world leaders were considering emergency releases of their own. They said Mr. Biden would have preferred a parallel release that included more oil-producing countries.
The price of oil has fallen since late October partly in anticipation that countries would take action to try to tame energy costs. The U.S. benchmark, West Texas Intermediate, immediately jumped after the administration’s announcement, and was trading 1.3 percent higher for the day. So far this month, the price had dropped 4.75 percent.
Demand for oil fell precipitously in the early months of the pandemic, so oil-producing nations cut output. In the United States, reduced demand led to a substantial decline in drilling; the country’s number of active oil rigs was down nearly 70 percent in summer 2020.
As prices rose in recent months, Mr. Biden looked for ways to show he was trying to tame prices, including asking the Federal Trade Commission to investigate possible illegal conduct by large oil companies in the national gasoline market. The president has pushed oil producers to ramp up supply even as he urges the U.S. and other countries to wean themselves from fossil fuels over the long term to avert catastrophic global warming.
On Tuesday, Mr. Biden said his environmental agenda was not contributing to the recent price increases at the pump.
The emergency stockpile that Mr. Biden tapped is stored in underground caverns in Texas and Louisiana. It was established after the 1973-74 oil embargo by Arab members of the Organization of the Petroleum Exporting Countries, and has been tapped in emergencies like the buildup to the Persian Gulf war in 1991 and the aftermath of Hurricane Katrina in 2005, when much of the Gulf of Mexico oil infrastructure was damaged. The reserve is also used to exchange or lend oil to refineries when accidents or storms block shipping channels.
Most experts believe a release could eventually lower prices modestly, but only for a short time because oil prices are set globally and world consumption averages roughly 100 million barrels a day. The average price for a gallon of regular gasoline in the United States rose to $3.40 on Tuesday from $2.11 a year ago, according to AAA, the travel services organization. But gas prices have started to level off in the past week.
Several recent presidents have ordered releases from America’s strategic reserves, including Mr. Bush; his father, George H.W. Bush; Bill Clinton; and Barack Obama.
But research suggests the effect on gas prices, for the most part, is modest at best — underscoring how gas prices are largely outside a president’s control.
Mr. Obama’s administration led the most recent coordinated global release of oil reserves in June 2011, when the United States and 27 other nations released 60 million barrels of reserves to replace lost production from Libya that was halted by political turmoil in the North African country. Of the total amount of oil released, about half came from reserves in the United States, with the rest from the other 27 industrialized nations that belonged to the International Energy Agency.
Biden administration officials said the coordinated effort announced on Tuesday would come in two parts: a loan of 32 million barrels over several months to refineries and the accelerated sale of 18 million barrels, which has already been congressionally authorized.
Britain will be allowing companies to voluntarily release their oil reserves. If every company takes advantage of the option, it would amount to 1.5 million barrels, a British government representative said.
Helima Croft, head of global commodities at RBC Capital Markets, an investment bank, said OPEC Plus could choose to respond at its next meeting, on Dec. 2.
“If OPEC wants to be obstructionist, they can blunt the impact” of the oil release, she said, by not approving the next monthly 400,000 barrels-a-day production increase at the meeting.
On the other hand, she added, doing that would “expose them to a lot of problems in Washington,” potentially including an antitrust bill in Congress aimed at OPEC, known as NOPEC, that could call for going after the financial reserves of countries like Saudi Arabia and the United Arab Emirates. “I think it would be a nuclear option and OPEC won’t want to go down that path,” she said.
Robert McNally, president of Rapidan Energy Group, a market research firm and a former energy adviser in George W. Bush’s White House, said Tuesday’s announcement “may be politically smart, but I don’t think it is smart in terms of policy and will likely backfire.”
“There are good odds that OPEC Plus will offset this, and they have a bigger fire hose than we do,” he said. “Using strategic stocks to defend an oil price level set in a global market is pure folly.”
Republicans including Representative Kevin McCarthy of California, the House minority leader, criticized Mr. Biden and blamed the White House for inflation.
In a tweet, Mr. McCarthy said the decision to tap America’s strategic reserves “is a crass political ploy just 3 days ahead of Thanksgiving.”
Democrats in Congress, including the Senate majority leader, Chuck Schumer, have recently called for Mr. Biden to take action to provide immediate relief for Americans.
Jennifer M. Granholm, the secretary of energy, cautioned Tuesday against expecting an immediate, dramatic drop in gas prices. When asked when Americans might see lower prices, Ms. Granholm made no promises: “It won’t be tomorrow,” she said.
Millions of American drivers have acutely felt the recent surge in gas prices, which last month hit their highest level since 2014. The national average for a gallon of gas is $3.41, which is $1.29 more than it was a year ago, according to AAA. Even after a recent price dip in crude oil, gasoline remains 7 cents more per gallon than it was a month ago.
Steeper gas prices are pushing people to rejigger household budgets, sometimes by forgoing leisure activities and in other cases by cutting back spending on essentials. Many are trying to save by spending less time on the road, a difficult proposition as the holiday season approaches, and with it the temptation to make up for the lost celebrations of last year. Just 32 percent of Americans plan to drive for Thanksgiving, down from 35 percent last year, at the height of the pandemic, and 65 percent in 2019, according to a survey from the fuel savings platform GasBuddy.
Over the weekend, the International Olympic Committee drew criticism for saying it was reassured about the safety of the Chinese tennis star Peng Shuai, whose whereabouts have been a mystery since she accused a former government official of sexual assault.
The I.O.C.’s statement, which didn’t mention the accusations, did little to quell the controversy — and now, a little more than two months before the Winter Olympics in Beijing, the event’s sponsors face tough questions of their own, the DealBook newsletter reports.
The Olympic organizers said they had held a 30-minute video call with Ms. Peng, the latest in a string of seemingly managed appearances by the tennis star that have done little to assuage critics. On Tuesday, China’s foreign ministry denounced the coverage of Ms. Peng’s case as “malicious hype.”
The Women’s Tennis Association, which has threatened to withdraw its tournaments from China, repeated a call to investigate Ms. Peng’s allegations. And Global Athlete, an advocacy group for athletes, said the I.O.C. had demonstrated “an abhorrent indifference to sexual violence and the well-being of female athletes.”
The I.O.C. told DealBook in a statement that in its conversation with Ms. Peng, “she was very clear in confirming that she is safe and well.” The group added, “Safeguarding the well-being of athletes is paramount to the I.O.C. and the Olympic movement.”
Olympic sponsors have stayed quiet. Of the 15 companies listed as “partners,” representatives for Airbnb and Coke declined to comment, while others did not respond to requests for comment. (Despite being described as partners, General Electric and Dow ended their ties to the Olympics this year.)
Some top sponsors of U.S.A. Gymnastics abandoned the organization when it became embroiled in a sexual abuse scandal.
But businesses fear riling Beijing and losing access to the huge Chinese market. Questioning the government’s line could put tens of billions of dollars in sales at risk. Pointedly, this week the Chinese government said it would punish companies that it deemed supporters of Taiwan’s independence.
Experts are split on the reputational risk for sponsors. If the Peng situation remains in the spotlight during the Olympics, “I can certainly see some brands becoming more wary of their association,” said Brayden King, a management professor at Northwestern University.
Others downplayed the risk: “It doesn’t matter where the games are; there’s controversy that something is not right,” said Rick Burton, the chief marketing officer for the U.S. Olympic Committee for the 2008 Beijing Games. If you’re a top I.O.C. sponsor, he added, “you know what you’re getting into.”
After Clearview AI scraped billions of photos from the public web — from websites including Instagram, Venmo and LinkedIn — to create a facial recognition tool for law enforcement authorities, many concerns were raised about the company and its norm-breaking tool. Beyond the privacy implications and legality of what Clearview AI had done, there were questions about whether the tool worked as advertised: Could the company actually find one particular person’s face out of a database of billions?
Clearview AI’s app was in the hands of law enforcement agencies for years before its accuracy was tested by an impartial third party. Now, after two rounds of federal testing in the last month, the accuracy of the tool is no longer a prime concern.
In results announced on Monday, Clearview, which is based in New York, placed among the top 10 out of nearly 100 facial recognition vendors in a federal test intended to reveal which tools are best at finding the right face while looking through photos of millions of people. Clearview performed less well in another version of the test, which simulates using facial recognition for providing access to buildings, such as verifying that someone is an employee.
The company also performed well last month in a test — called a one-to-one test — of its ability to match two different photos of the same person, simulating the facial verification that people use to unlock their smartphones.
The National Institute of Standards and Technology has been administering Face Recognition Vendor Tests for two decades. Since those tests began, the report notes, “face recognition has undergone an industrial revolution, with algorithms increasingly tolerant of poorly illuminated and other low-quality images, and poorly posed subjects.”
Clearview made an impressive debut on the charts for investigative, or one-to-many, searches, but the top performers were SenseTime, a Chinese company, and Cubox, from South Korea. In 2019, the Commerce Department blacklisted SenseTime and 27 other Chinese entities because their products were implicated in China’s campaign against Uyghurs and other Muslim minorities. Axios has reported that the designation was later changed to “Beijing SenseTime,” limiting the effects of the blacklisting.
Accuracy aside, questions remain about the legality of Clearview’s tool. The authorities in Canada and in Australia have said Clearview broke their laws by failing to get the consent of citizens whose photos are included in the database, and the company is fighting lawsuits over privacy in Illinois and Vermont
In just under two hours of testimony, which is continuing on Tuesday, Ms. Holmes pushed back against accusations that she had lied about Theranos’s work with drug companies. She also pointed the blame at the scientists and doctors who had worked at her start-up, saying she believed what they had told her about Theranos’s technology.
And throughout it all, Ms. Holmes’s defense bolstered the idea it has been pushing since the start of the trial: She may have made mistakes, but failure is not a crime.
“We thought this was a really big idea,” Ms. Holmes said about Theranos’s machines, which she once promised could run a long list of medical tests from just a few drops of their blood.
It was her second day of testimony in a trial that has gripped Silicon Valley and become a referendum on start-up culture and just how far entrepreneurs will take their hubristic claims of changing the world. For her lawyers, the idea on Monday was to show the kernel of truth that may have existed in some of the most blatant misrepresentations that prosecutors attributed to her.
West Texas Intermediate, the U.S. crude benchmark, jumped more than 2 percent to $78.50 after the announcement. The release of oil reserves is being coordinated with Britain, China, India, Japan and Korea in an effort to combat soaring global prices, but some strategists said oil traders had been expecting a larger release.
In the stock market, investors were reacting to the latest earnings reports from big retailers.
Shares of Best Buy fell 12.3 percent after the electronics retailer issued a weaker-than-expected sales forecast for the end of the year. Urban Outfitters fell 9.3 percent after it reported on Monday that cost pressures stemming from the pandemic were affecting its performance. Dollar Tree rose 9.2 percent after the company announced prices of most items in all of its stores to $1.25 from $1 by the end of April.
Zoom shares fell more than 14 percent on Tuesday after the company reported on Monday a slowdown in revenue growth during the three months ending in October.
In Europe, stock indexes slid as a fourth wave of the coronavirus cases is prompting lockdowns and health restrictions across the continent, which could reduce travel and foot traffic at shopping centers. The Stoxx Europe 600 closed 1.3 percent lower.
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