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Treasury Wants More Funds for Small Business Loans: Live Updates Treasury Wants More Funds for Small Business Loans: Live Updates
(32 minutes later)
Treasury Secretary Steven Mnuchin said he has asked lawmakers for another $250 billion to supplement a new program created to help small businesses secure loans from banks, in response to an overwhelming demand for assistance through the program.Treasury Secretary Steven Mnuchin said he has asked lawmakers for another $250 billion to supplement a new program created to help small businesses secure loans from banks, in response to an overwhelming demand for assistance through the program.
Mr. Mnuchin, in a Twitter post Tuesday afternoon, said that he had reached out to top Democrats and Republicans “at the direction” of President Trump to try and secure additional funds. Mr. Mnuchin said he had spoken with Senators Mitch McConnell of Kentucky, the majority leader, and Chuck Schumer of New York, the minority leader, along with Speaker Nancy Pelosi and Representative Kevin McCarthy.Mr. Mnuchin, in a Twitter post Tuesday afternoon, said that he had reached out to top Democrats and Republicans “at the direction” of President Trump to try and secure additional funds. Mr. Mnuchin said he had spoken with Senators Mitch McConnell of Kentucky, the majority leader, and Chuck Schumer of New York, the minority leader, along with Speaker Nancy Pelosi and Representative Kevin McCarthy.
Mr. McConnell and Mr. Schumer were negotiating the possibility of approving the additional funding during a procedural session on Thursday, without the full chamber present.Mr. McConnell and Mr. Schumer were negotiating the possibility of approving the additional funding during a procedural session on Thursday, without the full chamber present.
“It is quickly becoming clear that Congress will need to provide more funding or this crucial program may run dry,” Mr. McConnell said in a statement Tuesday. “That cannot happen. Nearly 10 million Americans filed for unemployment in just the last two weeks. This is already a record-shattering tragedy, and every day counts.”“It is quickly becoming clear that Congress will need to provide more funding or this crucial program may run dry,” Mr. McConnell said in a statement Tuesday. “That cannot happen. Nearly 10 million Americans filed for unemployment in just the last two weeks. This is already a record-shattering tragedy, and every day counts.”
“Congress needs to act with speed and total focus to provide more money for this uncontroversial bipartisan program,” he added.“Congress needs to act with speed and total focus to provide more money for this uncontroversial bipartisan program,” he added.
A spokesman for Mr. Schumer said that Mr. McConnell had not reached out to discuss the possibility of approving the additional funds.A spokesman for Mr. Schumer said that Mr. McConnell had not reached out to discuss the possibility of approving the additional funds.
Larry Kudlow, the top White House economic adviser, said Tuesday morning that the program had funded 178,000 loans at a value of $50 billion so far.Larry Kudlow, the top White House economic adviser, said Tuesday morning that the program had funded 178,000 loans at a value of $50 billion so far.
Congress has allocated $349 billion to the effort, known as the paycheck protection program, which was created as part of the $2 trillion economic stabilization package signed into law last month.Congress has allocated $349 billion to the effort, known as the paycheck protection program, which was created as part of the $2 trillion economic stabilization package signed into law last month.
Economists who pushed for the creation of the program in the economic rescue package that passed two weeks ago have consistently warned that small businesses will need three times as much money as Congress initially authorized — or more — to avoid a wave of bankruptcies.Economists who pushed for the creation of the program in the economic rescue package that passed two weeks ago have consistently warned that small businesses will need three times as much money as Congress initially authorized — or more — to avoid a wave of bankruptcies.
U.S. stocks rose on Tuesday and global markets extended Wall Street’s rally from the day before amid continued signs that the coronavirus outbreak may be peaking in a number of hard-hit places.U.S. stocks rose on Tuesday and global markets extended Wall Street’s rally from the day before amid continued signs that the coronavirus outbreak may be peaking in a number of hard-hit places.
The S&P 500 was up more than 3 percent, before shedding some of its gains in afternoon trading.The S&P 500 was up more than 3 percent, before shedding some of its gains in afternoon trading.
The performance added to a fairly strong, if disjointed, rebound that has lifted stocks from their lowest point in March. Initially fueled by Washington’s $2 trillion effort to counter the economic effect of the pandemic, the rally has now taken on a more hopeful tone — reflecting glimmers of progress in the fight against the virus’s spread in the United States and Europe.The performance added to a fairly strong, if disjointed, rebound that has lifted stocks from their lowest point in March. Initially fueled by Washington’s $2 trillion effort to counter the economic effect of the pandemic, the rally has now taken on a more hopeful tone — reflecting glimmers of progress in the fight against the virus’s spread in the United States and Europe.
In total, through Monday, the S&P 500 was up 19 percent from its March 23 low. (It’s still more than 20 percent below its high, reached on Feb. 19.)In total, through Monday, the S&P 500 was up 19 percent from its March 23 low. (It’s still more than 20 percent below its high, reached on Feb. 19.)
In New York, the center of the global outbreak, Gov. Andrew M. Cuomo offered some signs that the city was beginning to make progress in controlling the crisis. And China reported its first day since January with no deaths.In New York, the center of the global outbreak, Gov. Andrew M. Cuomo offered some signs that the city was beginning to make progress in controlling the crisis. And China reported its first day since January with no deaths.
Still, the global economy still faces daunting challenges before it can get back on track, and many companies continue to announce furloughs of employees and sustained shutdown of operations in the wake of an uncertain path forward. For example, the homebuilder D.R. Horton said Tuesday that it had withdrawn its previous financial forecasts for 2020.Still, the global economy still faces daunting challenges before it can get back on track, and many companies continue to announce furloughs of employees and sustained shutdown of operations in the wake of an uncertain path forward. For example, the homebuilder D.R. Horton said Tuesday that it had withdrawn its previous financial forecasts for 2020.
Major European markets rose about 2 percent Tuesday after Asian markets picked up steam later in their trading day.Major European markets rose about 2 percent Tuesday after Asian markets picked up steam later in their trading day.
There were signs of improved investor confidence in other markets. U.S. Treasury bond prices fell, signaling sharper appetite for riskier investments. Oil prices rose on hopes that Russia and Saudi Arabia could reach a price war truce. On Monday, investor optimism drove U.S. stocks sharply higher. The S&P 500 rose 7 percent, its biggest gain since March 24.
On Monday, investor optimism drove U.S. stocks sharply higher. The S&P 500 rose 7 percent, its biggest gain since March 24, when it climbed more than 9 percent.
Still, there was a strong defensive tilt to trading. The utilities sector — typically an area dominated by risk-averse investors — was one of the best performing in the S&P 500, with a gain of almost 8 percent.
That suggests investors still see plenty of reason to be cautious.
Robert S. Kaplan, president of the Federal Reserve Bank of Dallas, said in a wide-ranging interview with The New York Times that the central bank’s upcoming program to help midsize businesses is “still in the design phase,” and that officials need to determine how to make it work for both companies and banks.Robert S. Kaplan, president of the Federal Reserve Bank of Dallas, said in a wide-ranging interview with The New York Times that the central bank’s upcoming program to help midsize businesses is “still in the design phase,” and that officials need to determine how to make it work for both companies and banks.
The details of that program, announced on March 23, remain mostly a mystery, though the Fed has made it clear that it plans to use it to help companies that are too big for small business loans but too small to access the corporate bond market.The details of that program, announced on March 23, remain mostly a mystery, though the Fed has made it clear that it plans to use it to help companies that are too big for small business loans but too small to access the corporate bond market.
The Fed is “trying to determine what would be most useful to business, and trying to make it so that the banks would want to make those loans,” Mr. Kaplan said.The Fed is “trying to determine what would be most useful to business, and trying to make it so that the banks would want to make those loans,” Mr. Kaplan said.
When it comes to the Fed’s anticipated municipal bond program, which has yet to be announced, he said that it should be “analogous” to the Fed’s already-announced corporate bond programs, which the Fed will use to buy bonds via an intermediary.When it comes to the Fed’s anticipated municipal bond program, which has yet to be announced, he said that it should be “analogous” to the Fed’s already-announced corporate bond programs, which the Fed will use to buy bonds via an intermediary.
“I don’t think we’re set up to go directly,” he said. “Our job is to set the criteria and work through an intermediary.”“I don’t think we’re set up to go directly,” he said. “Our job is to set the criteria and work through an intermediary.”
While the reserve bank presidents are consulted on design and implementation-related issues for the Fed’s emergency lending programs, they do not have a vote on them. That falls to the Federal Reserve Board in Washington, with signoff and financial backing from the Treasury Department.While the reserve bank presidents are consulted on design and implementation-related issues for the Fed’s emergency lending programs, they do not have a vote on them. That falls to the Federal Reserve Board in Washington, with signoff and financial backing from the Treasury Department.
The federal stimulus bills enacted in March, including a $2 trillion economic relief plan, offer help for the millions of American small businesses affected by the coronavirus pandemic.The federal stimulus bills enacted in March, including a $2 trillion economic relief plan, offer help for the millions of American small businesses affected by the coronavirus pandemic.
Cash grants. Low-interest loans. Payments to offset some payroll costs for businesses that keep or rehire workers. There are also enhancements to unemployment insurance and paid leave.Cash grants. Low-interest loans. Payments to offset some payroll costs for businesses that keep or rehire workers. There are also enhancements to unemployment insurance and paid leave.
Here are the answers to common questions about these programs. And we will update this article as we learn more about the details.Here are the answers to common questions about these programs. And we will update this article as we learn more about the details.
More information on help, including details on the stimulus checks that many people will be receiving, can be found in our F.A.Q. for individuals about stimulus relief and our Hub for Help. If you have questions, or have applied for small business aid and can tell us how the process went, we’d love to hear from you.More information on help, including details on the stimulus checks that many people will be receiving, can be found in our F.A.Q. for individuals about stimulus relief and our Hub for Help. If you have questions, or have applied for small business aid and can tell us how the process went, we’d love to hear from you.
WeWork on Tuesday sued SoftBank, the company’s dominant shareholder, in an attempt to force it to go through with a purchase of stock from other shareholders.WeWork on Tuesday sued SoftBank, the company’s dominant shareholder, in an attempt to force it to go through with a purchase of stock from other shareholders.
SoftBank last year offered to buy up to $3 billion in WeWork stock from the shareholders as part of its rescue of the troubled office space company, which has come under increasing strain during the coronavirus pandemic. But it declined to buy the shares by an April 1 deadline.SoftBank last year offered to buy up to $3 billion in WeWork stock from the shareholders as part of its rescue of the troubled office space company, which has come under increasing strain during the coronavirus pandemic. But it declined to buy the shares by an April 1 deadline.
The case, which was filed in the Delaware Court of Chancery, was brought by a special committee of WeWork’s board established in October to negotiate with SoftBank. The lawsuit asserts that SoftBank, which is facing its own financial pressures, “began to invent a variety of reasons as to why it did not have to close the tender offer.”The case, which was filed in the Delaware Court of Chancery, was brought by a special committee of WeWork’s board established in October to negotiate with SoftBank. The lawsuit asserts that SoftBank, which is facing its own financial pressures, “began to invent a variety of reasons as to why it did not have to close the tender offer.”
For the offer to close, WeWork had to fully acquire a joint venture in China. In the suit, the special committee members contend that SoftBank took steps that effectively stopped the acquisition from being completed on the terms agreed to previously. SoftBank had also argued that it could pull out of the share purchase because of government investigations into WeWork. But the suit contends that “none of those investigations or lawsuits can be reasonably expected to create any material liability to the company or SoftBank.”For the offer to close, WeWork had to fully acquire a joint venture in China. In the suit, the special committee members contend that SoftBank took steps that effectively stopped the acquisition from being completed on the terms agreed to previously. SoftBank had also argued that it could pull out of the share purchase because of government investigations into WeWork. But the suit contends that “none of those investigations or lawsuits can be reasonably expected to create any material liability to the company or SoftBank.”
Adam Neumann, WeWork’s co-founder and former chief executive, was eligible to sell nearly $1 billion in stock to SoftBank. Mr. Neumann declined to comment.Adam Neumann, WeWork’s co-founder and former chief executive, was eligible to sell nearly $1 billion in stock to SoftBank. Mr. Neumann declined to comment.
In a statement Tuesday, SoftBank said several conditions for the offer had not been met and said the lawsuit was an attempt “to rewrite the history of the past six months.”In a statement Tuesday, SoftBank said several conditions for the offer had not been met and said the lawsuit was an attempt “to rewrite the history of the past six months.”
Cruise ship companies have virtually no revenue. They have become symbols of deadly contagion. And despite assurances from President Trump, they were left out of the $2 trillion stimulus package Congress passed last month.Cruise ship companies have virtually no revenue. They have become symbols of deadly contagion. And despite assurances from President Trump, they were left out of the $2 trillion stimulus package Congress passed last month.
The Carnival Corporation, which serves nearly 11.5 million travelers a year, or roughly 50 percent of the global cruise market, is at the center of the crisis. Over the last couple of months, the company has had highly publicized outbreaks on several of its ships, including the Diamond Princess and the Zaandam, which has been trying to unload sick passengers in Florida.The Carnival Corporation, which serves nearly 11.5 million travelers a year, or roughly 50 percent of the global cruise market, is at the center of the crisis. Over the last couple of months, the company has had highly publicized outbreaks on several of its ships, including the Diamond Princess and the Zaandam, which has been trying to unload sick passengers in Florida.
Since the beginning of the year, the company’s share price has plummeted more than 80 percent, though it rose to $10.21 a share on Monday after Saudi Arabia’s state investment fund said it had acquired an 8 percent stake in the company. And last week, Carnival, which has already drawn on bank credit lines, began an attempt to raise $6 billion by selling stock, bonds and other securities. It was selling some of those bonds with a suggested 12.5 percent interest payment to investors, a strikingly high figure.Since the beginning of the year, the company’s share price has plummeted more than 80 percent, though it rose to $10.21 a share on Monday after Saudi Arabia’s state investment fund said it had acquired an 8 percent stake in the company. And last week, Carnival, which has already drawn on bank credit lines, began an attempt to raise $6 billion by selling stock, bonds and other securities. It was selling some of those bonds with a suggested 12.5 percent interest payment to investors, a strikingly high figure.
Carnival’s chief executive, Arnold Donald, said in an interview that the sale would generate enough cash for the company to survive without revenue for the rest of the year and into 2021.Carnival’s chief executive, Arnold Donald, said in an interview that the sale would generate enough cash for the company to survive without revenue for the rest of the year and into 2021.
“If you run out of cash, you lose the company, and we can’t live with that,” Mr. Donald said. “So we want to make sure we’re prepared for an extreme case.”“If you run out of cash, you lose the company, and we can’t live with that,” Mr. Donald said. “So we want to make sure we’re prepared for an extreme case.”
The two major cruise lines besides Carnival — Royal Caribbean and Norwegian Cruises — are also looking for cash. Norwegian has tapped an existing $1.55 billion credit line. In March, Royal Caribbean secured a $2.2 billion loan, using its ships as collateral, an unusual step for a cruise line.The two major cruise lines besides Carnival — Royal Caribbean and Norwegian Cruises — are also looking for cash. Norwegian has tapped an existing $1.55 billion credit line. In March, Royal Caribbean secured a $2.2 billion loan, using its ships as collateral, an unusual step for a cruise line.
Stuck at home during the coronavirus pandemic, with movie theaters closed and no restaurants to dine in, Americans have been spending more of their lives online.Stuck at home during the coronavirus pandemic, with movie theaters closed and no restaurants to dine in, Americans have been spending more of their lives online.
A New York Times analysis of internet usage reveals that our viewing and browsing habits have shifted, sometimes starkly, as the virus spread and pushed us to our devices for work, play and connecting.A New York Times analysis of internet usage reveals that our viewing and browsing habits have shifted, sometimes starkly, as the virus spread and pushed us to our devices for work, play and connecting.
The new data suggests we are hungry for news (especially local news) and seeking out new ways to connect (most of all through video) at a time when we are not allowed to see each other in person.The new data suggests we are hungry for news (especially local news) and seeking out new ways to connect (most of all through video) at a time when we are not allowed to see each other in person.
We are, of course, also seeking out streaming entertainment, but we are turning away from our phones and remembering the joys of using an old-fashioned computer instead of a tiny smartphone screen. The changes in behavior give an indication of some of the more subtle ways the current crisis is changing the way we live.We are, of course, also seeking out streaming entertainment, but we are turning away from our phones and remembering the joys of using an old-fashioned computer instead of a tiny smartphone screen. The changes in behavior give an indication of some of the more subtle ways the current crisis is changing the way we live.
The European Central Bank announced new measures Tuesday intended to make it even easier for people and businesses in the eurozone to get cheap loans.The European Central Bank announced new measures Tuesday intended to make it even easier for people and businesses in the eurozone to get cheap loans.
The measures apply to money that commercial lenders are allowed to borrow from the central bank at zero percent interest, or in some cases even negative interest. Banks must post collateral in case they cannot repay the money.The measures apply to money that commercial lenders are allowed to borrow from the central bank at zero percent interest, or in some cases even negative interest. Banks must post collateral in case they cannot repay the money.
The central bank said Tuesday that it would temporarily lower the standards it applies to such collateral, accepting assets such as Greek government bonds, which had been considered too risky. The looser standards should greatly expand the amount of money that banks can borrow on very favorable terms.The central bank said Tuesday that it would temporarily lower the standards it applies to such collateral, accepting assets such as Greek government bonds, which had been considered too risky. The looser standards should greatly expand the amount of money that banks can borrow on very favorable terms.
Credit guarantees issued by governments will also be eligible as collateral, the central bank said, a boon for Italy and other countries that are backing loans to businesses but are themselves strapped.Credit guarantees issued by governments will also be eligible as collateral, the central bank said, a boon for Italy and other countries that are backing loans to businesses but are themselves strapped.
The restaurant company Darden, which owns Olive Garden and LongHorn Steakhouse, said on Tuesday that same-store sales had declined 39.1 percent so far in its fourth quarter. It also announced it was furloughing some employees and slashing executive pay by 50 percent.The restaurant company Darden, which owns Olive Garden and LongHorn Steakhouse, said on Tuesday that same-store sales had declined 39.1 percent so far in its fourth quarter. It also announced it was furloughing some employees and slashing executive pay by 50 percent.
Japan said on Tuesday that it would move forward with a nearly trillion dollar stimulus package. Direct spending will come to 39.5 trillion yen ($362 billion), as the country makes cash payments to families and small businesses and invests in its ability to battle the virus. The balance will come from other measures such as tax breaks and interest free loans.Japan said on Tuesday that it would move forward with a nearly trillion dollar stimulus package. Direct spending will come to 39.5 trillion yen ($362 billion), as the country makes cash payments to families and small businesses and invests in its ability to battle the virus. The balance will come from other measures such as tax breaks and interest free loans.
Exxon Mobil said Tuesday it would reduce its 2020 capital spending by 30 percent, to $23 billion from $33 billion, as the company responds to the steep drop in oil prices. The oil giant said it would also lower cash operating expenses by 15 percent.Exxon Mobil said Tuesday it would reduce its 2020 capital spending by 30 percent, to $23 billion from $33 billion, as the company responds to the steep drop in oil prices. The oil giant said it would also lower cash operating expenses by 15 percent.
WhatsApp, the Facebook-owned messaging app, announced a new limit on message forwarding on Tuesday in an attempt to slow the dissemination of misinformation. Users will be allowed to send a frequently-forwarded message to only one chat at a time, instead of five.WhatsApp, the Facebook-owned messaging app, announced a new limit on message forwarding on Tuesday in an attempt to slow the dissemination of misinformation. Users will be allowed to send a frequently-forwarded message to only one chat at a time, instead of five.
Reporting was contributed by Jack Ewing, Alan Rappeport, Emily Cochrane, Jim Tankersley, David Yaffe-Bellany, Ella Koeze, Nathaniel Popper, Ben Dooley, Ivan Penn, Aaron E. Carroll, Geneva Abdul, Carlos Tejada, Daniel Victor, Jason Karaian, Kevin Granville and Austin Ramzy.Reporting was contributed by Jack Ewing, Alan Rappeport, Emily Cochrane, Jim Tankersley, David Yaffe-Bellany, Ella Koeze, Nathaniel Popper, Ben Dooley, Ivan Penn, Aaron E. Carroll, Geneva Abdul, Carlos Tejada, Daniel Victor, Jason Karaian, Kevin Granville and Austin Ramzy.