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BlockFi bankruptcy filing claims Alameda defaulted on $680M in loans

Fintech

After a record economic expansion, the coronavirus pandemic sent the U.S. economy into a recession as unemployment soared to staggering heights. The country now faces urgent questions about how much stimulus is needed for reeling consumers and businesses, and what a recovery might look like.

Economy & Business

Musk threatens war with Apple

Twitter

From the Valley to D.C., Big Tech players like Facebook, Google and Amazon are under more scrutiny than ever as new technology develops and privacy and antitrust concerns grow in lockstep with companies’ ambitions.

Technology

China maintains zero-COVID despite unprecedented protests

China

China is becoming the most formidable rival America has faced, and the risk of confrontation with Russia, North Korea or Iran still looms. Authoritarians are rising, the chaotic Afghanistan exit revealed the limits of U.S. power, and the pandemic, climate change and other critical challenges continue to pose grave threats.

World

MyPillow CEO says he is running to chair RNC

Republican National Committee (RNC)

President Biden has made the COVID-19 crisis and a post-Trump return to national unity and traditional democratic ideals his top priorities. From vaccinations to stimulus to schools, Biden is seeking bipartisan compromise while showing a willingness to use executive authority and bare Democratic majorities in the U.S. House and Senate to implement his policies. Republican leaders are navigating deep party divisions over if and how to move beyond former President Trump.

Politics & Policy

GOP lawmakers hushed on Trump's dinner with white nationalist

White nationalism

U.S. soccer coach apologizes for altered Iranian flag post

world cup

Shifts in technology and media are changing the way we play, watch and understand sports. Business models are adapting and social change is forcing those in charge of teams and leagues to reconsider decades-old practices.

Sports

HLTH: Tight market puts companies' mission under the microscope

Health care

The U.S. faces a range of health care flashpoints — unaffordable drugs, opioids, vaping — as we debate whether to adopt universal care. For now, the Affordable Care Act is the law of the land, but Republicans want to issue it a final death blow.

Health

How a blank piece of paper became the symbol of China's protests

Axios Media Trends

Elon Musk on Monday fired off a series of tweets aimed at Apple for allegedly threatening "to withhold Twitter from its App Store" and for pulling most of its ad spend on Twitter. 

Why it matters: The tweets are part of a broader narrative Musk is trying to paint that Apple is a monopoly and uses its power to censor voices and charge "a secret 30%  tax" on transactions in its App Store. 

Musk has used a similar playbook to put pressure on advertisers that have threatened to pull ad dollars from Twitter in recent weeks, alleging they are trying to "destroy free speech."

Details: On Monday, Musk asked in a tweet if Apple hates "free speech in America?" for mostly stopping advertising on Twitter. 

In another series of tweets, Musk called out Apple's 30% cut of transactions through its app store — a longstanding arrangement that has also sometimes raised objections from other tech companies, and has been the subject of a major lawsuit between Apple and Epic Games.

Musk said last week that he would build his own smartphone if Apple pulled Twitter from its app store for violating its rules. But doing so would take enormous resources and time. 

Apple did not respond to a request for comment on Musk's complaints. 

Be smart: As Musk tries to drum up engagement on Twitter and fulfill his promises to reduce the platform's limits on speech, he has shown that he's not afraid to alienate two of his most important business stakeholders: App stores that distribute Twitter and advertisers that fund it.

More than half of smartphone users in the U.S. use Apple devices. 

The vast majority of Twitter's revenue comes from advertising. 

New data from MediaRadar, an advertising intelligence firm, finds that Apple has spent nearly $40 million on Twitter ads this year.

Between the lines: Google, like Apple, enforces content moderation policies for app eligibility in its Google Play store (which serves Android devices), but as of now, the company has yet to contact Twitter about any potential violations or issues, a source told Axios. 

Still, the source said, Google is monitoring developments around content moderation changes at the company.

The big picture: Musk isn't the first Big Tech executive to go after Apple, alleging it misuses its market power. 

Companies like Meta and Spotify have also recently called out the iPhone maker for its app store policies. 

What to watch: Apple has shown no reluctance to ban apps, including several that cater to far-right users, if it determines that they do not operate effective content moderation policies to screen child sex abuse materials, threats to personal safety and other objectionable content.

If Twitter's scaled-back content moderation team and chaotic new policies lead to more such content making it past the service's filters, all eyes will be on Apple. 

Twitter's owner is upset with Apple's reduced ad spend and its App Store fees.

Elon Musk tweet showing a fork in a road with a sign reading "pay 30%" one way and "Go to War" the other

Elon Musk

Axios China

Despite stunning nationwide protests, China's government is sticking with the zero-COVID policies that have rocked the economy and deeply damaged people's trust.

Why it matters: Skyrocketing COVID cases in China mean that Chinese leader Xi Jinping will likely be forced to choose between plunging his country back into the draconian lockdowns — or abandoning his signature pandemic policy as crowds of protesters call for him to step down.

The state of play: Chinese state media continued to praise zero-COVID measures on Monday, signaling no change in official policy.

Chinese authorities have not yet taken strong measures to crush the protests, such as mass arrests or the widespread deployment of security forces, though residents and police clashed in Shanghai.

Online censors, usually efficient at sanitizing dissent from Chinese social media, are struggling to delete the deluge of posts and videos criticizing the government's policies.

Worth noting: Authorities in several cities on Monday announced the easing of some public health restrictions. In Beijing, city officials said they would no longer erect gates to cordon off access to apartment blocks where COVID cases had been detected, AP reported.

A city official in Beijing said passages should remain clear for "medical transportation, emergency escapes and rescues,” per AP.

In Guangzhou, a major manufacturing hub and hotspot in the country's latest infection resurgence, authorities said some residents would no longer need to undergo mass testing due to a need to conserve resources, per AP.

Urumqi, the capital of the Xinjiang region, announced that public bus service would resume and that markets and other businesses located in areas considered low risk for COVID infection would be allowed to reopen.

Reality check: Although protests of this scale are unprecedented since Xi assumed power in 2012, China is a long way from anything like regime change.

The Chinese ruler has full control of the political apparatus and the military, and there's no meaningful organized opposition.

What they're saying: "Our message to peaceful protesters around the world is the same and consistent: People should be allowed the right to assemble and peacefully protest policies or laws or dictates that they take issue with," National Security Council spokesperson John Kirby said Monday at a press briefing.

"The White House supports the right of peaceful protest," he added when asked if the White House supports the protesters.

What's happening: Outrage boiled over in cities across China after a fire last Thursday killed 10 people in a locked-down residential compound in Urumqi, Xinjiang, where some residents have been in quarantine for more than 100 days.

The deadly incident was only the latest in a string of deaths linked to lockdowns when residents were denied timely access to emergency services and medical care, including a 4-month-old who died earlier this month.

A candlelight vigil on Friday night in Shanghai turned into a demonstration against COVID restrictions. On Saturday and late into the night on Sunday, protests spread across at least eight cities, including Beijing and Wuhan.

While most protesters demanded an end to the arbitrary restrictions, some went further by calling for Xi to step down, according to videos posted on social media — a remarkably rare public attack against a leader who has spent the past ten years crushing dissent.

What to watch: The next few days are key. If protests keep spreading, the Chinese Communist Party's governing logic will demand a crackdown to — in the words of Mao Zedong — prevent a single spark from becoming a prairie fire.

Editor's note: This story has been updated with additional developments.

State media continued to praise zero-COVID measures on Monday, signaling no change in official policy.

People hold white sheets of paper in Beijing yesterday to protest COVID restrictions.

Protesters hold white sheets of paper in Beijing yesterday in a demonstration against COVID restrictions. Photo: Thomas Peter/Reuters

MyPillow CEO Mike Lindell announced Monday that he is running to chair the Republican National Committee.

Driving the news: "I am 100% running for the RNC chairman against [current chair] Ronna McDaniel," Lindell told Steve Bannon, an ally to former President Trump and ex-White House strategist. 

"I'm all in ... and one of the things that one of the big donors said to me, he said, Mike, everybody wants you to be head of the RNC, some of them just don't know it yet," he said. 

Axios reached out to the RNC for comment.

State of play: Lindell, also a Trump ally and a 2020 election denier, has not talked to the former president about his decision to run, he told Axios. 

"I did not call him and say, 'What do you think about this?'" he said. "This is my decision."

Lindell, who has repeatedly pushed false claims of election fraud, said that "all of this country needs .... look into the election integrity." 

The big picture: The majority of RNC voting members have endorsed McDaniel's re-election as chair of the committee, the Hill reports.  

McDaniel earlier this month signaled her plans to run for reelection to the leadership role, Politico reported, but she could face another potential challenge from Rep. Lee Zeldin (R-N.Y.), who lost the New York gubernatorial race to incumbent Democratic Gov. Kathy Hochul.

McDaniel, who was Trump's pick to lead the committee after the 2016 election, won the chair position in 2017.

The next RNC chair term will run through the 2024 presidential election. 

Between the lines: Lindell's announcement comes amid a GOP civil war at nearly every level of the party, triggered by a worse-than-expected performance in the midterm elections. 

Go deeper... MyPillow CEO Mike Lindell sanctioned over election suit

Editor's note: This story has been updated with additional background.

Twin Cities

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Get smarter, faster about what’s happening in your backyard with local reporter Torey Van Oot.

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"I am 100% running for the RNC chairman against Ronna McDaniel," he said.

EO of My Pillow Mike Lindell waves to supporters of former U.S. President Donald Trump as they arrive for a rally at the Dayton International Airport on November 7, 2022

CEO of My Pillow Mike Lindell waves to supporters of former President Trump before a rally at the Dayton International Airport on Nov. 7. Photo: Drew Angerer/Getty Images

Republican lawmakers have largely remained silent in the wake of former President Trump's dinner with antisemitic rapper Ye and white nationalist Nick Fuentes, reviving a tactic they frequently relied on during his presidency.

Driving the news: Spokespeople for nearly two dozen House and Senate Republicans — including party leaders, co-chairs of caucuses and task forces focused on Judaism or antisemitism and sponsors of legislation to combat antisemitic hate crimes — did not respond to requests for comment.

Why it matters: The dynamic highlights the stranglehold Trump still has on the Republican Party outside a small group of vocal critics, even in the aftermath of poor performances by his handpicked candidates in the midterm elections.

What's happening: Democrats have challenged their Republican colleagues to condemn Trump's dinner with Fuentes, an extremist who frequently promotes racist and antisemitic conspiracy theories.

Rep. Debbie Wasserman Schultz (D-Fla.) said in a statement to Axios: "Republicans who continue to remain silent become complicit in legitimizing bigotry and hate when the leader of their own party mainstreams fringe white nationalists and antisemites."

Wasserman Schultz is a co-chair of the Caucus on Black-Jewish Relations, which condemned antisemitic comments by Ye, formerly known as Kanye West, last month. Her fellow co-chair, Rep. Lee Zeldin (R-N.Y.), did not respond to a request for comment.

"I don’t give a &$#! what some republicans are saying off the record about Trump dining with antisemites," tweeted Sen. Brian Schatz (D-Hawaii), "At this point anything less than a clean, public break is just taking us all for fools."

The other side: Only a handful of Republican members of Congress have condemned the dinner. 

Sen. Bill Cassidy (R-La.) said President Trump hosting Ye and Fuentes "encourages other racist antisemites," adding, "These attitudes are immoral and should not be entertained. This is not the Republican Party."

Rep. Liz Cheney (R-Wyo.) called it "indefensible," while Rep. Adam Kinzinger (R-Ill.) tweeted: "[H]as [House Minority Leader Kevin McCarthy] condemned this yet? Or nah?" Both are vocal Trump critics leaving office in January.

Rep. Don Bacon (R-Neb.), the GOP co-chair of the Caucus for the Advancement of Torah Values, told Axios of the dinner: "I am appalled."

Rep. James Comer (R-Ky.), likely the next chair of the House Oversight Committee, told NBC's "Meet the Press" that Trump "needs better judgment in who he dines with."

The big picture: Some Republican groups and figures outside Congress have weighed in — though mostly in vague terms that bypass direct criticism of Trump. 

The Republican Jewish Coalition said in a statement: "We strongly condemn the virulent antisemitism of Kanye West and Nick Fuentes and call on all political leaders to reject their messages of hate and refuse to meet with them."

Republican National Committee chair Ronna McDaniel said in a statement: "As I had repeatedly said, white supremacy, neo-Nazism, hate speech and bigotry are disgusting and do not have a home in the Republican Party."

Several potential Republican candidates for president in 2024 also spoke out:

Trump administration Secretary of State Mike Pompeo called antisemitism a "cancer" in a tweet on Saturday but made no specific references to the dinner.

Former New Jersey Gov. Chris Christie responded more directly, saying the meeting is "another example of an awful lack of judgment" and makes Trump an "untenable" candidate to retake the White House.

Arkansas Gov. Asa Hutchinson said on CNN: "What Donald Trump did and his failure to condemn it is really the minority of the party. It's the extreme side of it. That's what you've got to distance yourself from, and he failed to do that."

"I am appalled," said one House Republican.

Nick Fuentes. Photo: Zach D Roberts/NurPhoto via Getty Images

Donald Trump

Axios World

Young people protesting harsh COVID-19 restrictions in China have held aloft the most innocuous of objects: a blank sheet of paper.

The big picture: Blank signs were previously displayed during the Hong Kong protests in 2020 and the demonstrations in Russia earlier this year against the invasion of Ukraine. As one protester in Beijing told Reuters, "The white paper represents everything we want to say but cannot say."

Driving the news: Over the weekend, images and videos of students at prestigious universities in Beijing and Nanjing protesting with blank pieces of paper spread widely online.

Blank sheets of paper were also seen Sunday at a vigil in Shanghai for the victims of a fire in Xinjiang. The fire sparked the protests due to claims, denied by authorities, that COVID lockdown measures impeded the emergency response.

The blank paper has quickly become a symbol of the protests. Results for "blank sheet of paper" and "white paper" have been censored on the Chinese internet, according to the BBC.

“I think the white paper is itself a form of protest about the lack of freedom of expression in China," Maya Wang, senior China researcher at Human Rights Watch, tells Axios. When any protest message could get you in trouble, "displaying sheets of white paper is kind of like the ultimate protest against this fear," she says.

Flashback: Protesters in Hong Kong turned to blank signs after a national security law imposed from Beijing meant displaying pro-democracy slogans could be deemed an act of sedition or terrorism. 

One 16-year-old who took part in one such protest at a Hong Kong shopping mall told AFP that while their signs were blank they still carried a message, as "people's minds are not blank."

While the Hong Kong demonstrators brought the tactic to international attention, an activist and blogger named Aslan Sagutdinov had filmed himself holding a blank sign in the city of Uralsk, Kazakhstan a year earlier, in 2019.

Sagutdinov correctly predicted he'd be arrested, saying: “I want to show that the idiocy in our country has gotten so strong that the police will detain me now even though there are no inscriptions, no slogans, without my chanting or saying anything."

After the invasion of Ukraine, there were also scattered incidents in Russia of individuals being detained after standing in public squares with blank signs — or, in one instance, miming that they were holding "invisible" signs. 

Others held signs showing only asterisks after the Kremlin made it illegal to call the war a "war," rather than "special military operation."

A handful of free speech protesters in the U.K. also adopted the blank sign tactic this year after several individuals were arrested or escorted away by police for holding anti-monarchy signs during events marking the death of Queen Elizabeth II.

What to watch: In China, where public dissent is often quickly suppressed, protesters standing in silence with blank signs pose a more subtle challenge to the authorities. 

"There was definitely nothing on the paper, but we know what's on there," one protester in Shanghai told the BBC.

"There was nothing on the paper, but we know what's on there."

Protesters hold blank pieces of paper in Beijing on Sunday. Photo: Bloomberg via Getty Images

Multiple school districts and colleges in Houston were closed Monday in response to a city-wide boil water notice after a power outage at purification plants.

Why it matters: The city's more than 2 million residents are under the advisory, which means water for drinking, cooking, washing hands and faces and brushing teeth should be boiled for at least two minutes.

What they're saying: Houston Mayor Sylvester Turner said on social media early Monday that the city believes the water is safe but was required to issue the notice after the drop in water pressure at the plants, which serves approximately 2.2 million customers daily.

Turner said water sampling done by the Texas Commission on Environmental Quality began on Monday and that the notice would be lifted 24 hours after the city is told the water is safe.

"We are optimistic the results will come back clean," he said. "And it is our hope that we can get a positive word at least late, late tonight or early tomorrow morning, because we'd love to see schools resume and businesses continue to function or open up if they have had to close."

Details: Turner said during a news conference Monday that power was restored hours after the outage occurred Sunday. The outage had led to a brief dip in water pressure at multiple monitoring sites.

The big picture: The closed school districts and colleges included Houston Independent School District (ISD), Aldine ISD, Pasadena ISD, Spring Branch ISD, Houston Community College and Lone Star College - Greenspoint and Victory.

Houston ISD is one of the largest school districts in the U.S.

Go deeper: Ambulance shortage strikes Houston

This story has been updated with additional developments.

Houston

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Houston closes schools as power outage affected city's water supply

The closures included the eighth-largest school district in the U.S.

Houston in March 2022. Photo: Aaron M. Sprecher/Bloomberg via Getty Images

The white gunman who killed 10 Black people in a racist mass shooting at a Buffalo supermarket in May pleaded guilty to state charges on Monday, including one count of domestic terrorism motivated by hate, according to the Erie County district attorney. 

The big picture: Payton Gendron, 19, faces a mandatory life sentence for perpetrating what the FBI has called a case of racially motivated violent extremism.

 Context: The 25-count state court indictment included 10 first-degree murder charges and three counts of attempted murder as a hate crime.

The domestic terrorism count carries life without parole — no maximum or minimum.

Gendron had initially pleaded not guilty, but attorneys for victims' families said earlier this month they had been informed that he planned to change his plea and waive his right to appeal.

Don't forget: Gendron, who was 18 at the time of the shooting, allegedly drove over 200 miles to carry out the attack in the predominantly Black neighborhood. Eleven of the 13 people he shot were Black.

The semiautomatic rifle he used had been inscribed with a racial epithet and the number 14, a white supremacist numeric symbol.

He also live-streamed the shooting on Twitch for about two minutes, allowing for screenshots that circulated online in the following days.

State of play: Historically, Black people have been the most targeted group for hate crimes in most cities.

Attacks on Black and Asian people drove much of the increase in hate crimes in the 2020 fiscal year, which saw the highest number of reported hate crimes in 20 years, according to the FBI.

What's next: Gendron has a sentencing hearing for the state charges scheduled for Feb. 15, though he still also faces 27 federal charges — 14 hate crimes charges and 13 firearms charges.

"Gendron's motive for the mass shooting was to prevent Black people from replacing white people and eliminating the white race, and to inspire others to commit similar attacks," prosecutors in the U.S. attorney's office for the Western District of New York wrote in a June court filing.

"He selected the Tops store because it is where a high percentage and high density of Black people can be found,'" U.S. Attorney General Merrick Garland said at a press conference in June.

Worth noting: The New York attorney general's office said in an investigative report last month that Gendron "was first indoctrinated and radicalized" through online platforms where he consumed "explicitly racist, bigoted, and violent content."

The case has led to renewed scrutiny of social media platforms' moderation and policy enforcement.

 Editor's note: This story has been updated with additional developments. Jacob Knutson contributed reporting.

Buffalo shooter pleads guilty to domestic terrorism motivated by hate, and other charges

Payton Gendron, 19, faces a mandatory life sentence.

Photo of a flower memorial positioned with the Tops sign standing in the background

A makeshift memorial outside of Tops supermarket on May 15, 2022, in Buffalo, N.Y., after a gunman opened fire at the store. Photo: Scott Olson via Getty Images

Mass shootings

Axios Generate

The 2021 heat wave in the Pacific Northwest, which killed hundreds of people in the U.S. and Canada, was a harbinger of a new generation of climate disasters to come, a new study finds.

Why it matters: In the most comprehensive analysis to date of what made the heat wave so extreme, scientists ruled out the possibility this was a "black swan" event, which is unpredictable and unlikely to recur.

The big picture: Instead, the new study in Nature Climate Change shows that amplifying feedbacks between factors such as unusually dry soils and a highly contorted jet stream added to the effects of long-term climate change.

This dialed up the heat to unprecedented levels for the region.

The wavy jet stream pattern, itself tied to climate change, helped give rise to a record-strong heat dome that parked itself over British Columbia and the Northwest U.S. in early summer.

The study finds that in the Northwest but likely other areas as well, multiple trends are pushing the climate into a zone where such extremes are far more likely.

“The background warming, the atmospheric dynamics, and the soil moisture deficiency interacted in a way that amplified this event beyond a normal extreme,” study coauthor Kai Kornhuber, a senior fellow at the German Council on Foreign Relations, tells Axios in an interview.

Between the lines: In the 1950s, the study states, the prospect of such a heat wave occurring in the Pacific Northwest was virtually impossible, but climate change had transformed that into a 1-in-200-year event by 2021.

Part of the reason for this is the gradual drying seen across the region.

"Our study is the first to pinpoint how warming-induced land drying has transitioned the Pacific Northwest from a wet region without effective soil moisture-temperature feedbacks to a transitional climate between wet and dry," said study coauthor Mingfang Ting of Columbia University.

"That can strengthen land-atmosphere feedbacks and thus large temperature swings."

Kornhuber says that while it is "encouraging" that models used for weather forecasting captured the heat wave's likely development and severity, climate models used to conduct risk assessments for heat hazards in coming decades may be flawed.

If they are missing some of the feedbacks the study identifies, climate models could underplay the risk of a repeat or even worse event.

Looking ahead, if climate change is held to 2°C above the pre-industrial average, 2021-type Pacific Northwest heat events are likely to take place at a frequency of about once every 10 years.

Yes, but: Even if all existing emissions pledges are met, the world is currently headed for greater than 2°C of warming.

What they're saying: "Our study supports a very direct conclusion that extreme heat like this will only become more and more likely — both in this region and across the globe, especially where heat stress is already extremely high — as more fossil fuels are burned," lead author Samuel Bartusek of Columbia University told Axios via email.

The 2021 Pacific Northwest heat wave was a climate change warning

This event was not a black swan event, the study finds.

Illustration of a thermometer shaped like an upwards arrow, with the mercury rising.

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