What’s Up? (Dec. 11-17)
Criminal Charges for Sam Bankman-Fried
Sam Bankman-Fried, the founder of the failed cryptocurrency exchange FTX, was expected to appear before the House Committee on Financial Services last Tuesday — one of the many efforts to investigate the exchange’s collapse. But the day before, he was arrested in the Bahamas after U.S. prosecutors filed criminal charges. He faces eight counts, which include several fraud charges and conspiring to defraud the United States and violate campaign finance laws. Separately, the Securities and Exchange Commission filed civil charges, accusing Mr. Bankman-Fried of misleading investors who committed some $2 billion to FTX, among other charges. It was not long ago that the voluble crypto mogul was discussing his role in the downfall of FTX with reporters at The New York Times and elsewhere.
Musk and Twitter
It began with private planes. Last week, Elon Musk suspended 25 accounts on Twitter that were dedicated to keeping tabs on the planes of government agencies, billionaires and other prominent figures, including Mr. Musk. (His flights were tracked by the account @ElonJet using public data.) Shortly after completing his purchase of Twitter in October, Mr. Musk said he would allow the account to remain on the platform, holding up this move as the apotheosis of free speech. But on Wednesday, Mr. Musk suspended not only @ElonJet but two dozen similar accounts. Soon after, he suspended the accounts of half a dozen journalists who wrote about the suspension of the private-plane trackers or who had written critically about Mr. Musk’s ownership of Twitter. But early Saturday, he said he was reinstating the accounts of several journalists.
Inflation Eases, but the Fed Holds Steady
Inflation data for November brought good news for policymakers at the Federal Reserve, but it wasn’t enough to alter the central bank’s plans to press on with its campaign to raise interest rates. The Consumer Price Index fell to 7.1 percent last month, down from 7.7 in October and far from its most recent peak of 9.1 percent in June. Nonetheless, the day after the release of that data, the Fed made clear that it intended to continue its campaign to cool an overheated economy. Officials did slow the pace of interest rate increases — raising rates by half a percent point instead of three-quarters, the size of the last four consecutive increases — but they signaled that rates would continue to rise in the new year. The Fed is still intent on hitting its target of 2 percent inflation, and Jerome H. Powell, the central bank’s chair, said the plan included “probably high rates, probably held for longer.”
What’s Next? (Dec. 18-24)
Holiday Cheer, Deeply Discounted
Inflation may be beginning to moderate, but the inflationary mind-set persists. For holiday shoppers, that could mean continuing to be more conscious about spending, as recent data about retail sales in November seemed to foretell. U.S. retail sales fell 0.6 percent from October, even with the Thanksgiving rush, when nearly 200 million Americans shopped over a five-day period that included Thanksgiving Day, Black Friday and Cyber Monday. Some analysts suggested that customers might be spending more now on travel, entertainment and other in-person experiences and less on traditionally popular gift categories like clothing and sporting goods. Some presents under the tree could be replaced with gift cards or tickets to events, for example. And many consumers will probably continue to seek deep discounts when shopping for loved ones, as they account for tighter budgets than in recent years.
Replenishing the Country’s Oil Reserves
To account for the tightening oil supply that resulted from Western sanctions on Russia, the Biden administration relied heavily this year on tapping the country’s emergency reserves to keep oil flowing and ease prices at the gas pump, particularly ahead of the midterm elections. As a result, the reserve was reduced to its lowest level in four decades after the Energy Department released more than a quarter of its stockpile, or nearly 200 million barrels of crude, since March. Now the White House is preparing to replenish it in the new year: On Friday, the Energy Department announced that it would begin repurchasing crude, starting with three million barrels in February. The department framed the plan as a good deal for American taxpayers, because the administration would be repurchasing the crude at a lower price than it was sold for. The move comes as gas prices continue to moderate; the national average on Friday was about $3.18, according to AAA, below where it was a year earlier. .
Efforts to Halt a Union
Results are expected this week from the National Labor Relations Board on an effort by Amazon to overturn the results of an April union election at the Staten Island warehouse known as JFK8. The unionization effort had been something of a long-shot bid by an independent union. But it clinched a victory by more than 10 percentage points, the first union victory at an Amazon in the United States. In its filing to the N.L.R.B., the company argued that the labor board had conducted the vote unfairly and that the union had used improper methods to secure workers’ support. But a federal labor official who presided over Amazon’s challenge said these claims had little basis. This year, The New York Times reported that Amazon relied on mandatory anti-union sessions to argue that the union had not “delivered for its members” and to provide sometimes misleading information about changes to wages if a union were voted in.
The Aftermath of FTX’s Downfall
The sudden collapse of the crypto exchange has left the industry stunned.
- A Spectacular Rise and Fall: Who is Sam Bankman-Fried and how did he become the face of crypto? The Daily charted the spectacular rise and fall of the man behind FTX.
- How FTX Operated: FTX called itself an exchange. But it was vastly different from stock exchanges, which are highly regulated and barred from engaging in many of the activities that the crypto company pursued.
- Parental Bonds: Mr. Bankman-Fried’s mother and father, who teach at Stanford Law School, are under scrutiny for their connections to their son’s crypto business.
The U.S. State Department announced a new round of sanctions on prominent Russians last week. A new report found that a 13-year-old just joining TikTok would encounter recommended posts related to self-harm and eating disorders within 30 minutes. And the latest data from the Personal Consumption Expenditure index, the Fed’s preferred inflation gauge, will be released on Friday.