Rental assistance funds could be clawed back from states and cities that were slow to distribute it.

Daily Business Briefing

Oct. 4, 2021, 1:00 p.m. ET

Oct. 4, 2021, 1:00 p.m. ET

ImageRental assistance funds could be clawed back from states and cities that were slow to distribute it.
Credit…Josh Edelson/Agence France-Presse — Getty Images

SAN FRANCISCO — Facebook and some of its apps, including Instagram and WhatsApp, appeared to go down at the same time on Monday for many users, who turned to Twitter and other social media platforms to lament the outage.

The social network and its apps began displaying error messages before noon Eastern time, users reported. All of the company’s family of apps — Facebook, Instagram, WhatsApp and Facebook Messenger — showed outage reports, according to the site, which monitors web traffic and site activity.

It was unclear what caused the error messages. Outages are not uncommon for apps, but to have so many interconnected apps at the world’s largest social media company go down at the same time is rare. The company has been trying to integrate the underlying technical infrastructure of Facebook, WhatsApp and Instagram for several years.

Two Facebook security team members, who were not authorized to speak publicly, said it was unlikely that a cyberattack caused the issues. That’s because the technology behind the apps was still different enough that one hack was not likely to affect all of them at the same time.

Dane Knecht, a vice president at Cloudflare, a web infrastructure company, said that the outage seemed to have originated from a technical problem with Facebook.

Andy Stone, a Facebook spokesman, posted on Twitter, “We’re aware that some people are having trouble accessing our apps and products. We’re working to get things back to normal as quickly as possible, and we apologize for any inconvenience.”

On Twitter, the hashtag #facebookdown quickly started trending. Some users said they were miffed by the abrupt outage, while others poked fun at it.

Facebook has already been dealing with plenty of scrutiny. The company has been under fire from a whistle-blower, Frances Haugen, a former Facebook product manager who amassed thousands of pages of internal research and has since distributed them to the news media, lawmakers and regulators. The documents revealed that Facebook knew of many harms that its services were causing.

Ms. Haugen, who revealed her identity on Sunday online and on “60 Minutes,” is scheduled to testify on Tuesday in Congress about Facebook’s impact on young users.

This is a developing story and will be updated.

Credit…Robert Fortunato/CBS, via Associated Press

Frances Haugen on Sunday revealed that she was the person who has loudly blown the whistle on Facebook. Until she left in May, she was a product manager on the social network’s civic misinformation team.

She amassed a trove of documents and used them to expose how much the company knew about the harms that it was causing and provided the evidence to lawmakers, regulators and the news media.

The spotlight on Ms. Haugen is set to grow brighter. On Tuesday, she is scheduled to testify in Congress about Facebook’s impact on young users.

In an interview with “60 Minutes” that was broadcast on Sunday night, Ms. Haugen, 37, said, “I’ve seen a bunch of social networks and it was substantially worse at Facebook than what I had seen before.” She added, “Facebook, over and over again, has shown it chooses profit over safety.”

Ms. Haugen gave many of the Facebook documents to The Wall Street Journal, which last month began publishing the findings. The revelations — including that Facebook knew Instagram was worsening body image issues among teenagers and that it had a two-tier justice system — have spurred criticism from lawmakers, regulators and the public.

She has also filed a whistle-blower complaint with the Securities and Exchange Commission, accusing Facebook of misleading investors on various issues with public statements that did not match the company’s internal actions.

Credit…Yuri Gripas for The New York Times

President Biden urged congressional leaders to raise the debt ceiling on Monday, excoriating Republicans for what he said was “reckless” and “disgraceful” obstruction ahead of a default deadline later this month that he warned would amount to “a self-inflicted wound that takes our economy over a cliff.”

Mr. Biden, trying to convey the risks to everyday Americans, warned that they could see the effects as early as this week if Senate Democrats were not able to vote to raise the debt ceiling. The debt ceiling controls the amount of money the government can borrow to fulfill its financial obligations, including Social Security checks, salaries for military personnel and other bills.

“It starts with a simple truth: The United States is a nation that pays its bills and always has,” Mr. Biden said. “If we’re going to make good on what has already been approved by previous Congresses, and previous presidents and parties, we have to pay for it.”

The remarks presaged increased public engagement by Mr. Biden on an issue that risks economic crisis.

Mr. Biden pointed out that Republicans had voted several times to increase the debt limit under President Donald J. Trump but are threatening to filibuster any attempt by Democrats to raise it this time. He said that he would not be expecting Republicans to “do their part,” but he warned them “not to use procedural tricks to block us from doing the job.”

Technically, the United States hit its debt limit at the end of July, following a two-year extension that Congress agreed to in 2019. Treasury Secretary Janet L. Yellen has been using “extraordinary measures” since then to delay a default. Those are essentially fiscal accounting tools that curb certain government investments so that the bills can continue to be paid.

Ms. Yellen warned Congress last week of “catastrophic” consequences should lawmakers fail to suspend or raise the statutory debt limit before Oct. 18, which the Treasury believes is the date the United States will run out of enough money to pay all its bills.

Congress raises the debt limit to cover spending it has already approved, and the Treasury has warned that failure to do so would tank financial markets and have wide-ranging impact on Americans: Defaulting could pause Social Security checks, delay the pay of military troops, and interfere with child tax credit payments.

But Republicans — who had voted to raise the debt cap by trillions when their party controlled Washington — have moved to block a spending bill needed to avoid default. Instead, Republicans including Senator Mitch McConnell of Kentucky, the minority leader, have sought to place political responsibility on Democrats, who are at the same time seeking to advance a sprawling social policy bill that could cost as much as $3.5 trillion.

“Bipartisanship is not a light switch that Speaker Pelosi and Leader Schumer may flip on to borrow money and flip off to spend it,” Mr. McConnell wrote in a letter to Mr. Biden on Monday, referring to Senator Chuck Schumber of New York, the majority leader. “For two and a half months, we have simply warned that since your party wishes to govern alone, it must handle the debt limit alone as well.”

The president said he planned on talking to Mr. McConnell about the letter: “He and I have been down this road once before,” Mr. Biden said.

Democrats have so far refused to try and raise the debt ceiling through a fast-track process known as reconciliation. On Monday, Mr. Schumer told Democrats that a spending bill needed to reach Mr. Biden’s desk within days, not weeks.

“Let me be clear about the task ahead of us: We must get a bill to the President’s desk dealing with the debt limit by the end of the week. Period. We do not have the luxury of waiting until Oct. 18,” he wrote in a “dear colleague” letter dated Monday.

Asked if he supported reconciliation to raise the debt ceiling, Mr. Biden said the process would be “fraught with all kinds of potential danger or miscalculation,” and said the way to proceed would be a vote on a bill to raise the limit.

Administration officials say Mr. Biden will continue to pressure Republicans to step aside — by breaking their filibuster — and allow Democrats to vote on their own this week to raise the limit.

“Let us vote,” Mr. Biden said. “and end the mess.”

As he urges congressional leaders to find a way forward on raising the debt limit, Mr. Biden still must drum up support for a bipartisan infrastructure deal and an expansive social spending plan.

“I’ve been able to close the deal on 99 percent of my party,” Mr. Biden said, before adding that “two people” remain opposed to the second piece, a reference to Senator Joe Manchin III of West Virginia and Senator Kyrsten Sinema of Arizona.

“It’s not a smart thing to negotiate with yourself in public,” Mr. Biden said, when asked if he would support a lower figure on the reconciliation package.

Ozy Media, the embattled company that announced last week that it would shut down after The New York Times reported that it had misled potential investors and partners, will try to keep operating, Carlos Watson, its chief executive and a co-founder, said Monday.

In an interview Monday morning on NBC’s “Today” show, Mr. Watson compared his company to Lazarus, the biblical figure Jesus raised from the dead, and to Tylenol, the drug brand that regained consumers’ trust after seven people died in 1982 after being poisoned by capsules that had been laced with cyanide.

“We’re going to open for business, so we’re making news today,” Mr. Watson told the anchor, Craig Melvin. “This is our Lazarus moment, if you will, this is our Tylenol moment. Last week was traumatic, it was difficult, heartbreaking in many ways.”

Mr. Watson also conceded in an interview on CNBC on Monday that the company had misled its own staff and guests about where a program produced by Ozy, “The Carlos Watson Show,” would air, claiming it would appear on the cable channel A&E.

“That was wrong,” he said. “I don’t know if that was a mistake or that was intentional.”

The show is available on YouTube and the Ozy website, which remains online, although journalists who worked there said they were no longer employed by the company.

In a statement on Friday, the company’s board praised the “dedicated staff,” adding, “It is therefore with the heaviest of hearts that we must announce today that we are closing Ozy’s doors.”

States and cities that have been slow to distribute emergency rental assistance funds will have to submit improvement plans or face the prospect of having the money redistributed to other places next month, the Treasury Department said Monday.

The move to begin reallocating the money comes as the Biden administration has been trying to get the $46.5 billion of relief funds flowing faster amid the recent expiration of a federal moratorium on evictions. Through August, just $7.7 billion has been distributed, and the Treasury Department is now essentially telling local governments to use it or lose it.

In a letter to officials across the country, Wally Adeyemo, the deputy Treasury secretary, said that some grant recipients have not done enough to distribute the money and that, in some cases, states and cities got more money than they needed.

Treasury is giving local officials a chance to develop improvement plans and adopt the department’s recommendations for doling out the funds more quickly. States and cities that are responsible for disbursing the funds must show that they have obligated at least 65 percent of the money that they received or that they have already distributed 30 percent of the money to eligible households.

The Treasury Department will begin clawing back funds and reallocating the money on Nov. 15.

A Treasury official said that the prospect of losing the funds has led states and cities to pick up the pace of getting the money out the door. The official said that the department will aim to reallocate to jurisdictions within states that have been using it most effectively and that are most in need.

Credit…Alan Devall/Reuters

Global trade recovered from its pandemic lows faster than anticipated in the first half of 2021 and is set to grow more quickly than expected next year, lifting global growth forecasts, the World Trade Organization said Monday.

The W.T.O. now forecasts global merchandise trade to grow 10.8 percent in 2021, up from the 8 percent it forecast in March, as the flow of goods recovers from last year’s slump. Global trade is expected to rise 4.7 percent in 2022 as the growth rate approaches its prepandemic trend, the W.T.O. said.

That trade growth has not been equal as a result of the pandemic, the group said, with developing regions in particular lagging behind because of lower vaccination rates, and supply chain disruptions continuing to weigh on trade in some areas.

In remarks Monday, Ngozi Okonjo-Iweala, the W.T.O. director general, said that uneven access to vaccines was exacerbating an economic divergence across regions. She urged the group’s members to come together to agree on a foundation for more rapid vaccine production and equitable distribution.

“This is necessary to sustain the global economic recovery,” she said. “Vaccine policy is economic policy — and trade policy.”

More than six billion doses of the vaccine have been produced and administered worldwide, the W.T.O. said, but only 2.2 percent of people in low-income countries have received at least one dose.

Stocks on Wall Street dipped in early trading Monday, with the S&P 500 falling as technology stocks again tumbled. The index was down 1.3 percent, while the Nasdaq composite dropped 2.2 percent.

Apple, Amazon and Microsoft were about 2.5 percent lower, while Google was down about 3.5 percent and Facebook was off 4.5 percent. The biggest tech companies have enormous sway on the S&P 500 and Nasdaq.

A Senate vote on the stand-alone bill that would lift the statutory limit on federal borrowing until December 2022 is expected to fail amid a Republican filibuster. Janet Yellen, the Treasury secretary, told Congress that the deadline was Oct. 18 and inaction would risk a default on the federal debt.

Oil prices rose, with West Texas Intermediate, the U.S. crude benchmark, up 3 percent to $77.08 a barrel. Officials from OPEC, Russia and other oil producers are expected to meet Monday to decide whether to add more oil to the market amid rising demand for energy.

Shares of China Evergrande were suspended on Hong Kong’s stock exchange on Monday after reports of a “major transaction.” The real estate developer has been under close watch by foreign investors after it missed two important interest payments on U.S. dollar bonds.

European stock indexes were higher, with the Stoxx Europe 600 up 0.2 percent.

Tesla rose 2 percent after the electric carmaker reported on Saturday a rise in deliveries during its third quarter. The company delivered 241,300 vehicles in the three months ending September, up from 139,593 during the same period last year.

Credit…Eric Gay/Associated Press

Oil prices hit their highest levels since 2018 as officials from OPEC, Russia and other oil producers decided on Monday to stick with their previous agreement to only gradually add oil to the market. The announcement came despite rising demand for energy as businesses around the world resumed operations.

The 23-member group, known as OPEC Plus, said in a terse news release that it would raise production by a modest 400,000 barrels a day in November, less than 0.5 percent of world demand, under a deal reached in July.

In effect, the group shrugged off political and commercial pressure to ramp up oil production to ease a tightening market.

“It’s going to take oil prices sustaining above $80 a barrel for a period of time or pushing sharply higher” for OPEC to consider changing its plan, said Richard Bronze, head of geopolitics at Energy Aspects, a research firm.

So far, analysts say, recent increases in the price of oil have not been sufficient to knock OPEC Plus off the course it worked out in July. In addition, prices at these levels are probably a pleasant surprise for the oil producers.

“There are squalls around, but they don’t want to rock the boat,” said Bhushan Bahree, a senior director at IHS Markit, a research firm.

Oil prices climbed as it emerged that OPEC Plus was unlikely to increase output beyond the levels it had already agreed on. Brent crude, the international benchmark, was up nearly 3 percent to $81.56 a barrel, while West Texas Intermediate, the American standard, also leapt to $77.79 a barrel. Oil prices have more than doubled in a year.

OPEC Plus did little to explain its reasoning. The group said it was “acting in view of current oil market fundamentals.”

Analysts say the group is more cautious in its outlook than some industry observers who see demand for oil far outstripping supply in the months ahead. Consumption of oil has recovered strongly after crashing 9 percent last year, but the pandemic remains a concern in key oil consuming nations, including the United States.

With oil prices recovering, OPEC and its allies likely saw little reason to reopen the agreement reached through long and difficult negotiations in July. That deal calls for gradual monthly output increases of 400,000 barrels per day well into next year.

OPEC Plus plans to meet each month to review the plan in case it needs adjusting.

A change of course might have encountered opposition, and it also might have provided an opening for new negotiations on quotas from producers that would like higher ceilings — something that Prince Abdulaziz bin Salman, the Saudi oil minister, who leads these meetings, most likely wanted to avoid.

On the other hand, pressures are growing to open the taps. Signs of distress are emerging in the energy markets.

Already a global crunch in natural gas — a key fuel for generating electric power — threatens to affect oil prices. British consumers have faced several days of disruption because of a shortage of gasoline that is being blamed on a lack of fuel truck drivers.

Damage caused by Hurricane Ida in August to oil and gas infrastructure in the Gulf of Mexico has negated some of the impact of recent production increases by OPEC Plus.

A price jump to $90 a barrel or more might throw cold water on demand for oil and prompt a political backlash, including from the United States, some analysts say.

OPEC Plus could face louder calls for bigger increases at the group’s next meeting, which is scheduled for Nov. 4.

Credit…Gilles Sabrie for The New York Times

Shares of China Evergrande were halted on Hong Kong’s stock exchange on Monday pending a deal, as doubts swirled over whether the struggling property giant would be able to meet its immense financial obligations.

Evergrande said in a filing that its shares were halted ahead of an announcement about a “major transaction.” It gave no additional details.

The real estate developer — once China’s most prolific — has been under close watch by foreign investors and local regulators after it missed two important interest payments on U.S. dollar bonds. The missed payments may not necessarily trigger a default because they each have a 30-day grace period before the missing payment would be considered a default.

Evergrande is under pressure from contractors and employees who are owed more than $300 billion in unpaid bills, as well as home buyers who are waiting on as many as 1.6 million unfinished apartments. In recent days, Wall Street banks and financial sleuths have been uncovering other liabilities that Evergrande may have in the form of guarantees that may add to its towering debt pile.

The company has not addressed its missed bond payments but said last week that it had sold a stake in a Chinese bank for $1.5 billion, which would go to pay some of its debts. Investors who are owed payments said they had not heard anything from the company, either.

Many of them have become increasingly pessimistic of a scenario where Beijing would step in to save Evergrande. It has hired restructuring experts to “explore all feasible options” for its future.

“I don’t expect payments will be made because the group has to be restructured,” said Michel Löwy, chief executive of SC Lowy, an investment firm that has a position in Evergrande bonds.

“I think it’s going to be a major hit for bondholders,” said Mr. Löwy, who said he was much more negative about the situation as more information has emerged about the quality of the land that Evergrande owns but has yet to develop. A restructuring of the entire sprawling real estate empire “would be very difficult to monetize,” he said.

Credit…Steve Fecht/General Motors/Via Reuters

Engine No. 1, the activist investment firm that made its name by successfully taking on Exxon Mobil, announced on Monday that it has taken a stake in General Motors. Unlike its bruising battle with Exxon, the purchase was pitched as a show of support for the automaker’s transition to electric vehicles.

G.M.’s stock rose by about 3 percent in early trading.

Activist investors more often take a stake in a company to lobby for management to make changes, not to endorse its strategy. Engine No. 1’s move also provides investors new information about how the upstart firm, which promotes its green credentials, values companies, at a time when corporate America is incorporating social and environmental factors into traditional financial measures.

In a white paper released ahead of the automaker’s investor day on Wednesday, Engine No. 1 argued that G.M. merited a higher valuation because of its scale and the commitments it had made to shifting to electric cars.

G.M.’s market capitalization is $77 billion, or about a tenth the value of Tesla’s.

“With General Motors, you have a management team and a board who has decided to really go all in on E.V.s — and to actually be a disrupter within their own industry,” Engine No. 1’s founder, Chris James, told the DealBook newsletter.

In January, G.M. became the first traditional auto company to commit to selling only zero-emission vehicles by 2035, an announcement that piqued Engine No. 1’s interest. The carmaker plans to spend $35 billion on electric and autonomous vehicles and build four battery plants in the United States by 2025.

Engine No. 1 first took a stake in G.M. in the first quarter. It declined to disclose the size of its position, but said it is among the three largest in its private fund. (The firm’s positions have been relatively small so far, including the stake it used to win board seats at Exxon.)

The firm has met informally with the carmaker’s management, including its chief executive, Mary Barra, and has no plans to start a proxy fight as it did at Exxon, Mr. James said.

“There is a very strong contrast here between the two companies,” Mr. James said, referring to Exxon and G.M. “A lot of it has to do with Mary, who is just a great leader, and having a board that is forward looking and willing to accept change and risk.”

Funding G.M.’s electric-vehicle initiatives has become trickier lately, as G.M.’s finances are dented by the semiconductor shortage. Electric vehicles also remain a small sliver of total U.S. auto sales, held back in part by a lack of charging stations, one of the many pieces of infrastructure in limbo amid congressional infighting.

“There are still challenges, unquestionably, and a supportive policy will move this faster,” Mr. James said. “But it’s now inevitable.

Credit…Mike Kai Chen for The New York Times
  • OPEC meeting: The Organization of the Petroleum Exporting Countries and its allies are expected to review their oil output policy as energy prices soar. The cartel could revise its agreement to increase production each month by 400,000 barrels a day. Brent crude futures, the global benchmark, recently hit their highest level in almost three years.

  • Hollywood strike: The International Alliance of Theatrical Stage Employees, a union representing more than 150,000 TV and film production workers, could vote to authorize a strike. The union, which has been working without a contract since mid-September, is negotiating on issues including excessive hours and reduced pay on streaming projects.

  • Facebook hearing: A Facebook whistle-blower will testify at a Senate hearing about the company’s effect on young users. The hearing comes after The Wall Street Journal reported on internal company documents detailing Facebook’s research on the negative impact of its Instagram app on teenage girls and others.

  • Elizabeth Holmes trial: The fraud trial of the Theranos founder Elizabeth Holmes will head into its fifth week. So far, jurors have heard detailed technical accounts from former employees of the problems with Theranos’s blood tests, including that machines that failed quality control tests and delivered inaccurate results.

  • Levi Strauss earnings: The clothing retailer is set to report its financial performance for the quarter ending August. Investors are looking out for any signs of supply chain disruptions, which have plagued other retailers as factories in Vietnam and China have partially or completely shut down following coronavirus outbreaks and power outages.

  • Justice Department Nominee: Jonathan Kanter, President Biden’s appointee to lead the Justice Department’s antitrust division, will appear before the Senate Judiciary Committee for a confirmation hearing. Mr. Kanter’s critics are likely to question whether his previous work as a corporate lawyer against American tech giants is a conflict of interest that should keep him out of investigations into these companies.

  • Jobs report: The Labor Department is expected to release its monthly jobs report for September. The report for August showed a hiring slowdown. Economists are forecasting that the U.S. economy added 450,000 jobs during the month, a sharp gain from the 235,000 added in August but still below the growth rates seen earlier in the spring and summer.

Credit…Charles Krupa/Associated Press

The cryptocurrency industry has been up in arms over a tax-reporting provision in the infrastructure bill working its way through Congress.

The proposed bill defines a “broker” in a way that would apply to everyone involved in a crypto transaction, including software developers of decentralized finance platforms and Bitcoin miners. It is damaging and impractical to require these players to report tax data on users that they do not know, crypto advocates have argued.

A bug in a popular protocol’s code, discovered during a recent upgrade, has undermined the industry’s claims, the DealBook newsletter reports.

Last week, a flaw in the code of the automated money market protocol Compound, which has $15 billion in assets, led to tens of millions of dollars worth of its crypto token erroneously going to some users. Compound’s chief, Robert Leshner, tweeted that anyone who didn’t voluntarily return the money would be reported to the I.R.S., seemingly undermining claims that identifying users of decentralized crypto platforms like Compound is impossible.

“This episode shows that the current lack of tax reporting by major cryptocurrency platforms aren’t technological limitations,” said Alexis Goldstein of the Open Markets Institute. “They’re design decisions.”

Mr. Leshner said that his tweet was “misconstrued,” adding that anyone could identify the public Ethereum addresses that interact with the Compound protocol, and whether they engaged with popular exchanges like Coinbase that collect information about users. Mr. Leshner said he “intended to suggest” that given the likelihood of interaction with a centralized exchange, “anyone could point to which addresses received an unexpected windfall.”

The episode exposed the vulnerabilities of automated crypto financial systems, just as regulators, alarmed by the alternative ecosystems being built on the blockchain, plan to issue a series of reports this fall outlining new rules for the future of finance.

Do crypto’s benefits offset its considerable energy demands? The Times’s Andrew Ross Sorkin and the DealBook team evaluate the industry’s impact and look at innovations for a cleaner future.

Even as global warming melts the ice that covers 80 percent of Greenland, the world wants its potentially abundant reserves of hard-to-find minerals — so-called rare earths, used in wind turbines, electric motors and many other electronic devices, that are essential raw materials as the world tries to break its addiction to fossil fuels.

But mining projects have side effects, and proposals that threaten the environment or livelihoods may run into trouble from local people who are quite capable of standing up to powerful interests. READ THE ARTICLE →

Credit…Liz Martin/The Gazette, via Associated Press

“Anyone recognize him?” the police in Winter Haven, Fla., asked on Facebook last month in a post that included photos of a man walking out of a Walmart without paying for boxes of diapers and other items.

“When your card is declined and you try another one with the same result, that is NOT license to just walk out with the items anyway,” the police said in a Facebook post, which was later deleted.

The Winter Haven Police Department drew swift criticism for the post from people wondering why the department had gone after a man who had stolen basic necessities for his children, also pictured in the surveillance photos.

After the incident, which was previously reported by WFTS-TV in Tampa, Fla., the store asked the police not to prosecute the man, according to a waiver of prosecution the police department provided to The New York Times. Walmart and the man did not respond to requests for comment.

It’s possible the man was among the one in three American families who struggle with diaper need, according to a February 2020 report by the National Diaper Bank Network, an organization that provides diapers to children. Joanne Samuel Goldblum, the network’s founder and chief executive, said she suspects that figure probably rose during the coronavirus pandemic as diaper prices increased and supply plummeted.

“Diaper need is a topic that’s so swept under the rug,” she said. “Covid really laid it bare for us.”

The pandemic has upended global supply chains and created a run on many products, including diapers. Kimberly-Clark and Procter & Gamble, two of the country’s largest diaper manufacturers, increased the prices of baby products this year. A typical package of 100 diapers costs $30 to $50 from most online retailers.

Even a small price increase can put a strain on families, many of whom pay around $75 for a month’s worth of diapers for one baby, according to the National Diaper Bank Network. Many parents have to choose between buying diapers or other necessities, and some will leave their child in a soiled diaper because they can’t afford a replacement.

Rental assistance funds could be clawed back from states and cities that were slow to distribute it.