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      Calls to can Goya Foods grow after CEO repeats Trump's election lies

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      Calls for a boycott of Goya beans, chickpeas and other foodstuffs have grown louder after chief executive Robert Unanue made a series of false claims about the presidential election in a speech to the Conservative Political Action Conference, or CPAC, in Florida on Sunday.Unanue has previously courted controversy with praise for Donald Trump, which last year prompted Ivanka Trump to pose, infamously, with a can of Goya beans.Onstage in Orlando, Unanue called Donald Trump “the real, legitimate and still actual president of the United States”.He also falsely claimed the presidential election that Trump lost conclusively to Joe Biden and the state contest in Georgia, which Biden won narrowly, were “not legitimate”, and claimed mail-in ballots were fraudulent.“We still have faith,” Unanue said, “that the majority of the people of the United States voted for the president … I think a great majority of the people in the United States voted for President Trump, and even a few Democrats.”Biden won more than 81m votes, or 51.3% of the total cast, to more than 74m for Trump. The Democrat won the electoral college 306-232, a margin Trump called a landslide when it was in his favour over Hillary Clinton.Trump has continued to lie about the election, in January inciting supporters to attack the US Capitol in a bid to stop the ratification of results. That led to his second impeachment, which ended with his second acquittal. The former president repeated his lies about the election in his own speech at CPAC, on Sunday night.Unanue has previously been censured by his company for speaking in support of Trump. In January, owner Andy Unanue told the New York Post: “Bob does not speak for Goya Foods when he speaks on TV. The family has diverse views on politics, but politics is not part of our business. Our political point of views are irrelevant.”Robert Unanue said then: “I don’t believe I should speak politically or in a faith-based manner on behalf of the company. But I leave open the possibility of speaking on behalf of myself.”After his remarks at CPAC on Sunday, the journalist Soledad O’Brien tweeted: “Folks at Goya should be embarrassed.”The speech also prompted renewed calls for a boycott of Goya products.“No more chickpeas from Goya for me,” tweeted one famous consumer, Joy Behar, a cohost of The View on ABC. More

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      Johnson & Johnson one-shot Covid vaccine gets nod from FDA advisory panel

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      The battle against Covid-19 took a major step forward on Friday as the US moved closer to distributing its first one-shot Covid-19 vaccine, after an independent expert advisory panel recommended drug regulators authorize the Johnson & Johnson vaccine for emergency use.The authorization would be a significant boost to the Biden administration’s vaccination plans, making Johnson & Johnson’s vaccine the third available to the public. Janssen, Johnson & Johnson’s vaccine subsidiary, told a congressional hearing this week that it expects to deliver 20m doses by March and a total of 100m doses before the end of June.The Johnson & Johnson vaccine, along with those from Pfizer and Moderna, should provide the US with more than enough supply to vaccinate every vaccine-eligible person.“We’re still in the midst of this deadly pandemic,” said Dr Archana Chatterjee, a voting member of the panel and an infectious disease pediatrician at Chicago Medical School, as she explained her vote in favor of recommending the vaccine. “There is a shortage of vaccines that are currently authorized, and I think authorization of this vaccine will help meet the needs at the moment.”While regulators at the US Food and Drug Administration (FDA) do not always take the advice of their advisory panels, the agency is expected to authorize the vaccine for emergency use.“We urgently need more vaccines [authorized] to protect the millions of Americans who remain at risk” of Covid-19 infection, said Dr Greg Poland, the editor-in-chief of the medical journal Vaccine and leader of the Vaccine Research Group at the Mayo Clinic.“Today, we have seen clear and compelling evidence that the Janssen vaccine candidate is well tolerated, has an acceptable safety profile and most importantly is highly efficacious against Covid-19,” he said. “To me, it is clear that the known benefits vastly outweigh the known risks.”The recommendation comes soon after the US marks 500,000 deaths from Covid-19, a toll that comes as cases decline in the US and across many countries worldwide. More than 28 million Americans have been infected by Covid-19.“We are seeing positive trends in terms of declining cases,” said Dr Adam MacNeil, a member of the Covid-19 epidemiology taskforce with the US Centers for Disease Control and Prevention. He later added: “We are certainly not out of the woods yet.”Importantly, Johnson & Johnson’s vaccine would also be the easiest to distribute. Unlike vaccines from Pfizer and Moderna, which require sub-zero storage, Johnson & Johnson’s vaccine can be stored at common refrigerator temperatures for up to three months. When frozen it has a shelf life of three years.The convenience of the Johnson & Johnson vaccine comes with caveats. The company’s clinical trials were the first to show the potential impacts of Covid-19 variants, or evolutionary changes in the virus.The vaccine was found to 85% effective at preventing severe disease and to provide complete protection against Covid-19-related hospitalization and death after 28 days. Johnson & Johnson’s vaccine was found to be 72% effective in clinical trials in the US, but only 57% effective in South Africa, where a variant called B1351 originated.However, vaccination remains a powerful weapon, even with threats posed by variants. “Even with decreased effectiveness, vaccination may still provide partial protection against variants,” said MacNeil. Like the Moderna vaccine, Johnson & Johnson’s product will only be available to people 18 and older. Pfizer’s vaccine is available to teenagers older than 16. Also, as with other vaccines, researchers are uncertain how long the vaccine protects against Covid-19, and whether it reduces asymptomatic transmission of the virus, although studies are promising.Johnson & Johnson’s vaccine uses different technology from the two vaccines currently available in the US. The new vaccine uses “viral vector” technology, which introduces the body to the genetic code for the spike protein covering the outside of the coronavirus. This code is transmitted by a second, weakened virus called an adenovirus.Immunity is provoked when the body’s immune system then recognizes the coronavirus by this key structure. Vaccines developed by Pfizer and Moderna also prompt the body to recognize spike proteins on the outside of the coronavirus, but deliver the genetic code through lipid nanoparticles, or tiny molecules of fatty acids.Because scientists are still researching the degree to which any of the authorized vaccines prevent people from spreading Covid-19 to other people, public health authorities recommend people continue to social distance and wear masks after being vaccinated. In theory, a vaccinated person could still spread the SARS-CoV-2 virus, even if they do not experience any symptoms of the disease Covid-19.Johnson & Johnson’s vaccines and the doses already scheduled to be delivered by Moderna and Pfizer, the makers of the two vaccines currently authorized in the US, mean there could be enough supply to vaccinate 400 million people by July. Roughly 267 million people in the US are eligible for a vaccine.This ease of storage and one-dose regime is likely to increase pressure on the US government to pledge doses to low- and middle-income countries, which often lack the cold chain infrastructure needed to distribute the Pfizer or Moderna vaccines. Currently, dozens of low- and middle-income countries do not expect to begin broadly distributing vaccine doses until 2022.Activists, many of whom also worked to expand access to Aids medications, have described this as “vaccine apartheid”, and a threat to the “project of global population immunity”. More

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      House set to approve $1.9tn Covid aid bill despite minimum wage setback

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      The US House of Representatives is aiming to pass Joe Biden’s $1.9tn coronavirus aid bill on Friday in what would be his first big legislative win, although marred by the news that a favored minimum wage hike would have to be tossed out.A spirited and potentially long debate was expected, as most Republicans oppose the cost of the bill that would pay for vaccines and other medical supplies to battle a Covid-19 pandemic that has killed more than 500,000 Americans and thrown millions out of work.The measure would also send a new round of emergency financial aid to households, small businesses and state and local governments.A group of Senate Republicans had offered Biden a slimmed-down alternative, but the White House and some economists insist a big package is needed.Biden has focused his first weeks in office on tackling the greatest public health crisis in a century, which has upended most aspects of American life.Democrats control the House by a 221-211 margin, and Speaker Nancy Pelosi is counting on nearly all of her rank and file to get the bill passed before sending it to a 50-50 Senate, where the Democratic vice-president, Kamala Harris, holds the tie-breaking vote.Embedded in the House bill is a federal minimum wage increase, which would be the first since 2009 and would gradually bump it up to $15 an hour in 2025 from the current $7.25 rate.But the future of the wage hike was dealt a serious blow on Thursday, when the Senate parliamentarian ruled that it could not be allowed in the Senate version of the coronavirus bill under that chamber’s “reconciliation” rules.The special rules allow the legislation to advance in the Senate with a simple majority of the 100 senators, instead of the 60 needed for most legislation.Biden has not given up on raising the minimum wage to $15, a top White House economic adviser said on Friday.A higher wage “is the right thing to do”, White House national economic council director, Brian Deese, said in an interview on MSNBC.“We’re going to consult with our congressional allies, congressional leaders today to talk about a path forward, about how we can make progress urgently on what is an urgent issue.”Meanwhile, lawmakers must also act on the coronavirus stimulus package, Deese said.The $15 minimum wage figure had already faced opposition in the Senate from most Republicans and at least two Democrats, which would have been enough to sink the plan. An array of senators are talking about a smaller increase, in the range of $10 to $12 an hour.In a statement after the Senate parliamentarian’s ruling, Pelosi said: “House Democrats believe that the minimum wage hike is necessary.”She said it would stay in the House version of the coronavirus bill.In arguing for passage of the relief bill, Pelosi cited opinion polls indicating the support of a significant majority of Americans who have been battered by the yearlong pandemic.“It’s about putting vaccinations in the arm, money in the pocket, children in the schools, workers in their jobs,” Pelosi told reporters on Thursday. “It’s what this country needs.“Among the big-ticket items in the bill are $1,400 direct payments to individuals, a $400-per-week federal unemployment benefit through 29 August and help for those having difficulties paying their rent and home mortgages during the pandemic.An array of business interests also have weighed in behind Biden’s America Rescue Plan Act, as the bill is called.Republicans have criticized the legislation as a “liberal wishlist giveaway” that fails to dedicate enough money to reopening schools that have been partially operating with “virtual” learning during the pandemic.The House minority leader, Kevin McCarthy, complained it was “too costly, too corrupt”. While Republicans for months have blocked a new round of aid to state and local governments, McCarthy said he was open to his home state of California getting some of the bill’s $350bn in funding, despite a one-time $15bn budget surplus.Efforts to craft a bipartisan coronavirus aid bill fizzled early on, shortly after Biden was sworn in as president on 20 January, following a series of bipartisan bills enacted in 2020 that totaled around $4tn. More

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      Ilhan Omar leads calls to fire Senate official who scuppered $15 wage rise

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      The progressive Democrat Ilhan Omar has called for the firing of the government official who effectively blocked the party’s plans to raise the minimum wage.Democratic plans to include a gradual raise to $15 in Joe Biden’s $1.9tn coronavirus stimulus bill were effectively ended on Thursday when the Senate parliamentarian ruled it should not be part of the package.The decision by Elizabeth MacDonough, who has held the non-partisan position since 2012, dashed hopes of including the raise in the bill – the first increase in over a decade.“Abolish the filibuster. Replace the parliamentarian,” Omar said in a tweet. “What’s a Democratic majority if we can’t pass our priority bills? This is unacceptable.”Abolish the filibuster.Replace the parliamentarian.What’s a Democratic majority if we can’t pass our priority bills? This is unacceptable.— Ilhan Omar (@IlhanMN) February 26, 2021
      Biden campaigned on a pledge to increase the minimum wage to $15. Low-wage workers and unions have campaigned for a rise since 2012, and its inclusion in the coronavirus stimulus bill had been seen as a major victory.While the proposal faced universal opposition by Republican senators and skepticism from some Democrats, Senator Bernie Sanders and others were confident that it could be pushed through with a simple majority in the Senate, where the Democrats hold a slim majority.In order to achieve this, the proposal would have to be passed by “budget reconciliation” – a mechanism that allows legislation to bypass the 60% vote bills need to get through the Senate.Late on Thursday, MacDonough ruled that the wage increase did not meet the standards for budget reconciliation.The parliamentarian acts as an impartial judge and has only been removed from office once. MacDonough is well respected by many members of both parties, and the Biden administration seems unlikely to push for her removal.Other progressive Democrats have proposed a less drastic solution – overruling her.“The Senate parliamentarian issues an advisory opinion,” congresswoman Pramila Jayapal said in a tweet. “The VP can overrule them – as has been done before. We should do EVERYTHING we can to keep our promise, deliver a $15 minimum wage, and give 27 million workers a raise.”Sanders, one of the most ardent supporters of a minimum-wage increase, has proposed an alternative plan – imposing penalties and incentives to push companies toward higher wages.“I will be working with my colleagues in the Senate to move forward with an amendment to take tax deductions away from large, profitable corporations that don’t pay workers at least $15 an hour, and to provide small businesses with the incentives they need to raise wages,” Sanders said in a statement. “That amendment must be included in this reconciliation bill.”Sanders’ comments come after a Senate hearing on Thursday where he lambasted the low wages paid by McDonald’s, Walmart and others. Sanders pointed to a government report that found nearly half of workers who make less than $15 an hour rely on public assistance programs that cost taxpayers $107bn each year.The American people are “sick and tired” of subsidizing “starvation wages” at these companies, Sanders said. More

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      in US Politics

      Bernie Sanders: US sick of subsidizing 'starvation wages' at Walmart and McDonald's

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      US taxpayers should not be “forced to subsidize some of the largest and most profitable corporations in America”, Bernie Sanders told a Senate hearing on Thursday.As Congress debates the first rise in the minimum wage in over a decade, the Vermont senator said he had “talked to too many workers in this country who, with tears in their eyes, tell me the struggles they have to provide for their kids on starvation wages” even as the chief executives of companies including McDonald’s, Walmart and others take home multi-million dollar pay packages.Executives from Walmart and McDonald’s were invited to the hearing, titled Should Taxpayers Subsidize Poverty Wages at Large Profitable Corporations?They declined to appear.The senators heard from low-wage workers from McDonald’s and Walmart. Terence Wise, a McDonald’s employee from Kansas City, Missouri, said his low pay had led to his family becoming homeless.“My family has been homeless despite two incomes. We’ve endured freezing temperatures in our purple minivan. I’d see my daughter’s eyes wide open, tossing and turning, in the back seat. Try waking up in the morning and getting ready for work and school in a parking lot with your family of five,” said Wise.“That’s something a parent can never forget and a memory you can never take away from your children. You should never have multiple jobs in the United States and nowhere to sleep.”Sanders cited a government accountability office (GAO) report that found nearly half of workers who make less than $15 an hour rely on public assistance programs that cost taxpayers $107bn each year.Walmart spent $8.3bn on stock buybacks in 2017, the Walton family, the chain’s founders, are worth over $200bn and have increased their wealth by $50bn since the start of the pandemic, said Sanders. And yet the company “cannot afford to pay its workers at least $15 an hour”.“If Walmart thinks they’re going to avoid answering that question because they’re not here today, they’re deeply mistaken. The American people are sick and tired of subsidizing the wealthiest family in America,” said Sanders.The hearing comes at a tense moment for minimum wage advocates. Joe Biden campaigned on a pledge to increase the minimum wage to $15 an hour from its current level of $7.25. The proposal is part of his $1.9tn Covid stimulus package.But that package faces stiff opposition from in the Senate with the Republican minority set to vote against it and some Democrats opposing the wage rise.A recent Congressional Budget Office concluded 27 million Americans would be affected by an increase in the minimum wage to $15, and that 900,000 would be lifted out of poverty. But the CBO also said the increase would lead to 1.4m job losses and increase the federal budget deficit by $54bn over the next 10 years. The Economic Policy Institute, and others, have called the report “wrong, and inappropriately inflated”.Republican Senator Mike Bruin told the hearing that an increase would be unfair on states with a lower cost of living and would hurt small businesses.“We need to slow it down,” he said. “The main result is you are going to hurt Main Street,” he said. More

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      GameStop hearing live: Robinhood CEO and others in trading saga testify before Congress

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      Key events

      Show

      3.59pm EST15:59
      Tenev admits Robinhood did not have the collateral to back the huge increase in trade

      3.31pm EST15:31
      Are Robinhood users better off than the average investor?

      2.44pm EST14:44
      Tenev addresses the suicide of a former customer

      1.42pm EST13:42
      ​Tenev defends decision to freeze buying of GameStop

      1.04pm EST13:04
      Reddit CEO and Reddit user involved in r/WallStreetBets forum testify

      12.12pm EST12:12
      House committee hears testimony from those involved in trading controversy

      Live feed

      Show

      4.19pm EST16:19

      Representative questions whether it is reckless to gamify investment
      Cindy Axne of Iowa targeted Tenev with questions about the Robinhood app’s design and the consequences of gamifying trade. She asked who truly stands to benefit from the rise of Robinhood, which Tenev has repeatedly asserted aims to “democratize” investment.
      “Your clients are not your customer – the users are the product, your customer is sitting next to you – it’s companies like Citadel securities that stand to make a fortune on retail order flow,” Axne said.
      Axne noted that Robinhood incentivizes inviting friends to the app and gamification of trading, “adding gaming elements that look like gambling.”

      Updated
      at 4.45pm EST

      4.08pm EST16:08

      Robinhood took from its customers to boost its own business model, lawmaker alleges
      Michael San Nicolas of Guam, a Democrat, congratulated the small investors who orchestrated the short squeeze: “Robinhood made that possible,” he said.
      But he also questioned Tenev about the $3bn shortage, and where the money borrowed to cover it came from. Tenev said he got $3bn from venture capitalists, which San Nicolas argued means Robinhood materially benefited from the shareholders.
      San Nicolas said Robinhood’s Silicon Valley ethos of “move fast and break things” led it to value scale over anything else.
      “That’s where I have a serious concern,” he said. “Your business model causes you to take extraordinary risks, and you took from customers to protect your position. That is very, very troubling.”

      Updated
      at 4.20pm EST

      3.59pm EST15:59

      Tenev admits Robinhood did not have the collateral to back the huge increase in trade

      Vlad Tenev admitted during questioning on Thursday that Robinhood halted buying on the platform because it did not have the funds to back the huge influx of trading in the Reddit frenzy.
      Robinhood is required to place a deposit using its own funds at a clearinghouse to cover risks until trades are settled between a buyer and seller. On 28 January, the company was informed by its clearing house, NSCC, that it had a deposit deficit of approximately $3bn – up from $124m just days before.
      Anthony Gonzalez, a Republican from Ohio, asked if Robinhood indeed had that $3bn of collateral at the time.
      “At that moment, we would not have been able to post the $3bn of collateral,” Tenev said.
      Gonzalez said that proves Robinhood was “unprepared to protect his constituents and customers from non-consensual liquidation” and “barely avoided disaster”.
      “In a sense, I love your company,” Gonzalez said. “At the same time, I believe a vulnerability was clearly exposed.”

      Updated
      at 4.23pm EST

      3.36pm EST15:36

      Reddit CEO is asked if financial advice on the forum can be trusted
      Steve Huffman, CEO of Reddit, conceded in questioning on Thursday that users on the forum responsible for the GameStop buy-up are an “eccentric” bunch but that they did not breach any of the platform’s terms of service.
      He said financial advice on Reddit, in fact, is better than what is seen on TV because each post has been vetted by its voting process, which requires endorsement by hundreds and even thousands of users before it is widely visible. Huffman:

      On Reddit you’re seeing retail investors who are giving authentic advice based on their knowledge, and you would not call into question positions they may hold before they talk about it on television.

      3.31pm EST15:31

      Are Robinhood users better off than the average investor?

      One issue that has come up repeatedly in today’s hearing is what Robinhood has to offer consumers, besides ease of entry into the investment space.
      Lawmakers’ questioning has offered a rare look into the profit model of Robinhood and just how much customers have made and lost on the app.
      Jim Himes, a Democratic representative of Connecticut, asked Robinhood CEO Vlad Tenev whether customers would make more if they had bought a low-cost S&P 500 index fund rather than individual stocks on Robinhood’s app.
      Tenev said that Robinhood customers have made $35bn in profits, but is unwilling to say what rate of return that represents. Himes said that number means little without more context.

      Updated
      at 3.46pm EST

      2.53pm EST14:53

      Did Reddit’s coordinated buying represent market manipulation? Expert says no
      The meteoric rise of GameStop stocks was fueled largely by a frenzy on Reddit community r/WallStreetBets. Arkansas Republican Representative French Hill asked Thursday whether that constituted “market manipulation” – artificially impacting the price of a security or otherwise influencing the market for personal gain.
      Keith Gill, who is also speaking on Thursday’s panel, has been sued in a class action lawsuit accusing him of exaggerated claims and misrepresented posts as part of his role on Reddit in kicking off the GameStop market frenzy, which personally netted him more than $30m.
      “I think there’s little evidence at this time that there’s any false or deceptive conduct taking place,” said Jennifer Schulp, director of financial regulations studies at the Cato Institute speaking on the forum.
      She did say due to the anonymous nature of Reddit it is possible there is some “deceptive behavior” that could not readily be determined. Other have argued that Robinhood’s freezing of GameStop stocks in response to the buy-up itself represented market manipulation.

      Updated
      at 3.32pm EST

      2.44pm EST14:44

      Tenev addresses the suicide of a former customer

      Robinhood chief executive officer Vlad Tenev addressed in the hearing on Thursday the suicide of a 20-year-old man that was tied to the trading platform.
      The family of Alex Kearns is currently suing Robinhood in a California court after the newbie trader took his own life believing he owed $730,000 due to a glitch on the app, a year before the Reddit investing frenzy that caused many to gain or lose huge sums of money in a very short time.
      His death led to former SEC chair Jay Clayton and current lawmakers calling for better legislation to prevent such losses from happening in the future.
      In Thursday’s hearing, Congressman Emanuel Cleaver II of Missouri asked Tenev to explain how someone with no experience could invest such a potentially devastating amount of money in such a short time. Tenev again cited Robinhood’s mission of “democratizing finance for all”. His full response below:

      The passing of Mr. Kearns was deeply troubling to me, and to the entire company. We have taken a series of very aggressive steps to make our products safer for our customers, including adding additional education, as well as strengthening and tightening the requirements for getting options and bettering our customer support line. It was a tragedy and we went into immediate action to make sure that we are not just the most accessible option for trading for our customers but the safest as well.

      Updated
      at 3.33pm EST

      1.57pm EST13:57

      Everyone is shouting
      Representative Brad Sherman, Democrat from California, had some pointed questioning for Citadel owner Ken Griffin regarding how the average trader on Robinhood is treated compared to more wealthy Wall Street traders and larger firms.
      He asked about payment for order flow – a controversial practice in which stock brokers get a kickback for essentially selling the ability to execute trades. This allows some larger customers to avoid paying higher transaction fees. Sherman said it is a means for hiding the true costs of trading.
      Griffin kept attempting to skirt the question: “Congressman, I believe that’s an excellent question – the execution quality that we can provide as measured by terms of price improvement is heavily related or correlated to the size of the order we receive.”
      “Everybody I’ve talked to in this industry says when you’re a broker being paid for order flow, you get a worse execution,” Sherman replied, referencing the dealing in which Robinhood is paid for its customers’ trades by market-makers like Citadel.
      Finra fined Robinhood $1.25 million in December 2019 for this practice, saying it sent customer trading orders to broker-dealers without guaranteeing the best price.
      Griffin defended the payment for order flow practice, saying “it has allowed the American retail investor to have the lowest execution cost they’ve ever had in the history of US financial markets”.
      Sherman also repeatedly asked if the average Robinhood customer gets the same deals and prices as larger firms like Fidelity.
      “Is the Robinhood customer getting the same price as the Fidelity customer?” Sherman asked Griffin.
      Griffin wouldn’t say, talking around the answer and explaining that it can’t be determined “because the Robinhood community tends to be smaller in quantity” before getting cut off again.
      “You’re evading questions by making up other questions,” Sherman shouted. “You are doing a great job of wasting my time. If you want to filibuster you should run for the Senate.”

      Updated
      at 2.28pm EST

      1.42pm EST13:42

      ​Tenev defends decision to freeze buying of GameStop

      Tenev, Robinhood’s CEO, said customers would have been very angry if it had prevented them from selling off GameStop shares.
      During the Reddit-fueled meltdown, Robinhood banned the purchase of GameStop buying, but not selling. Many have speculated this was done at the behest of hedge funds who stood to lose millions from the buy-up, which Tenev disputed.
      “Preventing customers from selling is a very difficult and painful experience where customers are unable to access their money,” Tenev said. “We don’t want to impose that type of experience on our customers unless we have no other choice.”

      Updated
      at 3.24pm EST

      1.34pm EST13:34

      Lawmakers roast Robinhood CEO
      In addition to comments from Waters, Robinhood CEO Vlad Tenev faced intense criticism from other lawmakers.
      Carolyn Maloney, a Democrat from New York, accused Tenev of recklessly handling customers’ money.
      “You reserve the right to make up the rules as you go along,” she said.
      “I’m sorry for what happened,” Tenev replied. “I’m not going to say that Robinhood did everything perfect.”

      Updated
      at 1.47pm EST

      1.10pm EST13:10

      Chairwoman Maxine Waters is reclaiming her time
      Maxine Waters, the chairwoman of the House committee on financial services, took a stern tone with executives involved in the hearing on Thursday.

      manny
      (@mannyfidel)
      Maxine Waters: yes or noRobinhood CEO: pic.twitter.com/3oDUwsdD7P

      February 18, 2021

      She frequently interrupted Robinhood CEO Vlad Tenev, demanding he actually answer the questions she was posing as he meandered around the point. Waters stated “yes or no, answer the question” a minimum of ten times in the first hour of the hearing.

      Emily Stewart
      (@EmilyStewartM)
      Maxine Waters to the Robinhood CEO: “I don’t have time, I just need a yes or no answer.” Tattoo it on my arm.

      February 18, 2021

      Updated
      at 1.16pm EST

      1.04pm EST13:04

      Reddit CEO and Reddit user involved in r/WallStreetBets forum testify

      Reddit CEO Steve Huffman explained in his opening statement how Reddit moderation works, what the r/WallStreetsBets community is, and how Reddit dealt with the January stock buy-up.
      He said WallStreetBets is a “real community” with real users.
      He added that Reddit’s content policy prohibits “hate, harassment, bullying and illegal activity” and that threats or harassment of Plotkin and others were removed.
      “A few weeks ago, we saw the power of community in general and of this community in particular when the traders of WallStreetBets banded together at first to seize an investment opportunity not usually accessible to retail investors, but later more broadly to defend all retail investors against the criticism of the financial establishment,” Huffman said.
      Later, a member of that community testified. Reddit user “Roaring Kitty”, real name Keith Gill, started his opening statement by telling lawmakers “I am not a cat”.
      He stressed that he is simply an individual talking about this investment choices, not making suggestions for investments in any official or professional capacity. The goal of his posts, and of the Reddit community, was to make trading more understandable and accessible to the average person.
      “It’s alarming how little we know about the inner workings of the market,” Gill said.

      Updated
      at 3.25pm EST

      12.48pm EST12:48

      Melvin Capital CEO Gabriel Plotkin claims the company was not looking for a bailout
      Gabriel Plotkin, CEO of one of the hedge funds hit by the coordinated Reddit trades, claims Melvin did not coordinate or ask for Robinhood’s ban on trading.
      The GameStop frenzy targeted hedge funds like Melvin with huge short positions in GameStop, which had bet the share price would fall and stood to cash in when it did so. After the Reddit-fueled surge, the fund lost 53% in January. It reportedly received a $2bn+ capital infusion from Citadel as its losses grew.
      “To be sure, Melvin was managing through a difficult time, but we always had margin excess and we were not seeking a cash infusion,” Plotkin said.
      He says he was the subject of antisemitic and threatening posts on Reddit surrounding the markets incident.
      “I want to make clear at the outset that Melvin Capital played absolutely no role in those trading platforms’ decisions,” said Plotkin. “In fact, Melvin closed out all of its positions in GameStop days before platforms put those limitations in place.”

      Updated
      at 1.16pm EST

      12.38pm EST12:38

      Citadel owner Ken Griffin: we had ‘no role’ in Robinhood’s decision to restrict certain stocks
      Ken Griffin is the billionaire owner of hedge fund Citadel and high-speed trading firm Citadel Securities, which works with Robinhood.
      He said in testimony on Thursday that the firm provided securities to meet investors’ needs during the unprecedented surge of trading of GameStop stocks, but had “no role” in the decision made by Robinhood to restrict trading of those stocks.
      The incident “reflects the competence of our firm’s ability to deliver in all market conditions”, he said.

      12.33pm EST12:33

      Opening statements: Robinhood, Citadel, and Melvin Capital CEOs
      We are off running with some opening statements from the biggest players in the Reddit-fueled stock market meltdown.
      First, Robinhood CEO Vlad Tenev spoke about how he came to found Robinhood, talking of his childhood in Bulgaria, where the financial system was “on the verge of collapse”. Tenev said he wanted to give more people access to financial systems.
      “We created Robin Hood to economically empower all Americans by opening mutual markets to them,” he said.
      He referenced just how much money has been created by Robinhood investments, saying “the total value of our customers’ assets on Robinhood exceeds the net amount of money they have deposited with us, over $35bn”.
      Next, Citadel CEO Kenneth Griffin and Melvin Capital CEO Gabriel Plotkin will speak.

      Updated
      at 1.13pm EST

      12.12pm EST12:12

      House committee hears testimony from those involved in trading controversy

      Executives from the investing site Robinhood, the social media site Reddit, and other tech companies are testifying on Thursday in the first public hearing in an investigation into a recent public trading meltdown orchestrated on social media.
      The House financial services committee will hear testimony from parties involved in the recent trading in GameStop, AMC cinemas and other companies whose share values soared to astronomical levels as small investors piled into the stocks.
      We’ll follow the hearing live throughout the day – stay tuned.

      Updated
      at 12.19pm EST More

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      in US Politics

      GameStop hearing: Robinhood founder defends halt to trading

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      Robinhood’s chief executive defended the app’s decision to halt trading in GameStop shares at a congressional hearing on Thursday, calling allegations that the company acted to help hedge funds that were hemorrhaging money “absolutely false”. The comments triggered accusations the company is creating a “smokescreen” to deflect blame.Vlad Tenev and other players in the GameStop saga appeared before the House financial services committee in the first public hearing in a wide-ranging investigation into trading in GameStop, AMC and other companies whose share values soared as small investors piled into the stocks.“The buying surge that occurred during the last week of January in stocks like GameStop was unprecedented, and it highlighted a number of issues that are worthy of deep analysis and discussion,” Tenev said.Tenev once again apologized for the trading ban. “Despite the unprecedented market conditions in January, at the end of the day, what happened is unacceptable to us,” Tenev said.The sometimes fractious hearing was largely divided along party lines, with Democrats calling for more oversight and Republicans arguing against more regulation.“Don’t you see something has gone terribly wrong here?” said Democrat congressman David Scott. He called social media-led stock market bubbles “a threat to the future of our financial system”.Republican Bill Huizenga called the hearing “political theater”, a comment that drew admonition from the committee chair, Maxine Waters.GameStop’s shares surged 1,600% in January as small investors worldwide – many coalescing on the Reddit forum WallStreetBets – piled into the troubled retailer’s shares betting against Wall Street hedge funds that had bet the share price would collapse – a practice known as short-selling. At one point, short-sellers had borrowed far more of GameStop’s shares (140%) to sell short than were available on the market.According to Tenev, Robinhood and other brokers had no choice but to suspend trading in GameStop and other hot investments during this period of “historic volatility”.Robinhood is required to place a deposit using its own funds at a clearinghouse to cover risks until trades are settled between a buyer and seller. On 28 January, the company was informed by its clearing house, NSCC, that it had a deposit deficit of approximately $3bn – up from $124m just days before.With trading in hot stocks suspended, Robinhood moved to raise $3.4bn from investors and trading was resumed.But the suspension triggered a firestorm of criticism among small investors and in Washington, with Republicans and Democrats attacking Robinhood and accusing it of backing the losing hedge funds over small investors.Christopher Iacovella, the chief executive of the brokerage-industry group American Securities Association, dismissed Tenev’s explanation and said the system had worked as it should to defend the US’s financial system.“As the GME [GameStop] short squeeze unfolded, the clearinghouse recognized that an inadequately capitalized broker-dealer could pose a risk to our markets and it took the action necessary to protect the system,” Iacovella said in a letter to the House committee. “Attempts to blame the clearinghouse or the timing of the settlement cycle for what happened during the short squeeze are a smokescreen.”Thursday’s hearing, titled Game Stopped? Who Wins and Loses When Short Sellers, Social Media, and Retail Investors Collide, is the first of a series and addressed a number of issues including the “gamification” of investing, the role of social media and potential conflicts of interest.The representatives questioned the role of Citadel, an investment firm that executes Robinhood clients’ trades and also invested in Melvin Capital Management after the hedge fund’s bets against GameStop collapsed.Both Citadel’s founder, Ken Griffin, and Melvin’s founder, Gabe Plotkin, testified at the hearing. In his testimony, Plotkin denied that Citadel “bailed out” Melvin. “It was an opportunity for Citadel to ‘buy low’ and earn returns for its investors if and when our fund’s value went up,” he said.Plotkin said January’s frenzied trading in GameStop was “untethered to fundamentals” and quoted racist messages aimed at him and others, including antisemitic statements such as “it’s very clear we need a second Holocaust, the Jews can’t keep getting away with this.”“The unfortunate part of this episode is that ordinary investors who were convinced by a misleading frenzy to buy GameStop at $100, $200, or even $483 have now lost significant amounts,” said Plotkin.GameStop’s share price has now collapsed from a high of $483 on 28 January to just over $44. But one of the small investors who helped drive the stock to dizzy heights is still a believer.In his testimony Keith Gill, a trader variously known online as Roaring Kitty and DeepFuckingValue, said his investments had made him a millionaire.“GameStop’s stock price may have gotten a bit ahead of itself last month, but I’m as bullish as I’ve ever been on a potential turnaround. In short, I like the stock,” he said. More

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      in US Politics

      Why is Texas suffering power blackouts during the winter freeze?

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      Millions of people in Texas have spent days in below-freezing temperatures without power in what officials have called a “total failure” of the state’s electricity infrastructure. How did oil- and gas-rich Texas – the biggest producer of energy in the US – get here?While there are many factors that led to the power outages in Texas, the state’s power grid has come under intense scrutiny in light of the storm. Here’s what we know so far about Texas’s power grid and the role it played in the state’s winter disaster.Who controls Texas’s power grid?The “Lone Star” statelikes to go it alone when it comes to delivering power to its residents. Texas is unique among the 48 contiguous US states in that it relies on its own power grid. The other 47 states are all part of the two power grids that service the eastern and western halves of the country.The Electric Reliability Council of Texas, known as Ercot, manages the state’s power grid. Ercot is technically a non-profit corporation, and while it functions independently from the state’s government, the corporation is overseen by a state agency called the Public Utility Commission of Texas. Members of the commission are appointed by the state’s governor.Texas is the only state in the country, besides Alaska and Hawaii, that is not part of either the Eastern Interconnection or Western Interconnection, the two main power grids in the US. This means that Texas is not regulated by the Federal Energy Regulatory Commission (Ferc), the agency that oversees interstate electric transmission. Instead, Texas is basically “an electrical island in the United States”, as described by Bill Magness, CEO of Ercot. While this means that Texas has more control over electricity in the state, it also means there are fewer power plants the state can rely on for power.Parts of Texas are not serviced by Ercot. El Paso at the western tip of the state gets power from the Western Interconnection, which is why the city has been saved from the most brutal effects of the power outages.Why are so many people without power?Ercot turned off power for millions of customers after several power plants shut down due to the below-freezing temperatures the state is experiencing. Officials at Ercot said the equipment at the plants could not handle the extreme, low temperatures. The choice was either shutting down power for customers or risking a collapse of the grid altogether.Why is Texas on its own power grid?For as long as electricity has existed in Texas, the state, which prides itself on its independence has relied on itself for power. Officials in the state have long had a stubborn will to stay out of the hands of federal regulators.While Magness, Ercot’s CEO, said that the shutdown was due primarily to “reasons that have to do with the weather”, critics have said Texas’s energy market incentivizes cheap prices at the cost of delaying maintenance and improving power plants. In 2011, the state experienced similar blackouts, though for a shorter period of time compared with what has been seen this week.Following those blackouts, the Ferc gave a series of recommendations to Ercot to prevent future blackouts, including increasing reserve levels and weatherizing facilities to protect them from cold weather.Ed Hirs, an energy fellow at the University of Houston, told the Washington Post that Ercot “limped along on underinvestment and neglect until it finally broke under predictable circumstances”.Did renewable energy play a role in the grid’s malfunction?While Republicans have been blaming frozen wind turbines for the state’s blackouts, officials and experts say that malfunctions in natural gas operations played the largest role in the power crisis.Ercot said all of its sources of power, including those from renewable sources, were affected by the freezing temperatures. The state largely relies on natural gas for its power supply, though some comes from wind turbines and less from coal and nuclear sources.Natural gas can handle the state’s high temperatures in the summer, but extreme cold weather makes it difficult for the gas to flow to power plants and heat homes. Michael Webber, an energy resources professor at the University of Texas Austin, told the Texas Tribune that “gas is failing in the most spectacular fashion right now”.With the climate crisis likely to trigger more freak weather events like the one Texas is suffering it is noteworthy that there are places that experience frigidly cold weather that rely heavily on wind turbines and manage to have electricity in the winter. In Iowa, a state which sees freezing temperatures more often than Texas, nearly 40% of electricity is generated by wind turbines.What are officials doing to prevent future blackouts?With millions still without power as of late Wednesday, officials in Texas remain focused on getting power back to residents and remedying the damage from the storm. Politicians from both major parties have criticized Ercot for its handling of the storm, but officials have steered clear of providing examples of specific fixes. Texas’s governor, Greg Abbott, has called for an investigation into Ercot, declaring it an emergency item for the state’s legislative session.But some Texas leaders have made it clear that they believe Texas should remain independent from the national power grids. Rick Perry, a former governor of the state who also served as Donald Trump’s energy secretary until 2019, said: “Texans would be without electricity for longer than three days to keep the federal government out of their business.” More