Economy & Business

Why it matters: 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.

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Tulsa offering $10,000 for people to move there

Oklahoma's second-largest city has been known as the "oil capital of the world." At right is the BOK Tower, Tulsa's tallest building. Photo: Phil Clarkin/Phil Clarkin Photography

Cities like Tulsa, Topeka and Savannah are paying (certain) people to move there, a way to diversify their communities and attract smart and interesting people.

Why it matters: In the "work from anywhere" world, mid-tier cities are betting they can draw talent and vibrancy from major hubs — and so far it seems to be working.

Scoop: Chime's fee income

Illustration: Aïda Amer/Axios

Chime, a fast-growing online bank most recently valued at $14.5 billion, derives about 21% of its revenue from fees its customers pay for using out-of-network ATMs, according to financial data obtained by Axios.

Why it matters: Banking alternatives like Chime aggressively market themselves to consumers who have been burned too often by bank fees. Chime claims it has "no hidden bank fees," while Varo advertises itself as "online banking with no fees."

Felix Salmon, author of Capital
4 hours ago - Economy & Business

How high-risk traders are using Reddit and TikTok to scalp huge profits

Illustration: Sarah Grillo/Axios

One of the most high-risk, high-return trading strategies of the moment is also the most democratic: Buying the stocks being pumped up on Reddit and TikTok, and then selling them for a huge short-term profit.

The intrigue: While most active trading strategies require expensive professional-grade software, this is a strategy that’s accessible to anybody who's Extremely Online.

Felix Salmon, author of Capital
4 hours ago - Politics & Policy

How the election changed investors

Photo illustration: Brendan Lynch/Axios. Photos: David Hume Kennerly, Alex Wong/Getty Images

50% of Americans changed their investing strategy after seeing the result of the presidential election, according to a Harris Poll survey for Empower Retirement and Personal Capital shared exclusively with Axios.

Why it matters: The election and the intense news cycles following it were perceived, correctly, as an inflection point of historical proportions. Doing nothing is hard in such situations, even if sticking to your long-term plan is what most financial advisers would recommend.

Dan Primack, author of Pro Rata
7 hours ago - Economy & Business

Bain Capital preps a very rapid recap

Illustration: Aïda Amer/Axios

Bain Capital is seeking to partially cash out of U.S. LBM Holdings, a Buffalo Grove, Ill.-based building products distributor that it bought just last month. It would be done via a $400 million dividend recap featuring PIK toggle bonds that are expected to price today.

Why it matters: Dividend recaps are private equity at its most rapacious, enriching sponsors at the expense of portfolio company balance sheets. But this one is somehow even more egregious.

Dan Primack, author of Pro Rata
7 hours ago - Economy & Business

COVID-19 vaccine: Private companies step in to fill logistics vacuum

Illustration: Annelise Capossela/Axios

Last year we wrote several times about how VC-backed companies were helping to fight the COVID-19 pandemic, including vaccine development and innovative testing solutions. Now the same thing is happening when it comes to vaccinations, a process beset by logistics and planning problems since the jump.

Driving the news: Carbon Health, a tech-enabled healthcare startup that recently raised $100 million in Series C funding, is now the primary back-end for vaccinations in the City of Los Angeles, including a massive drive-up program that just launched in the parking lot of Dodger Stadium.

Updated 8 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Aïda Amer/Axios

  1. State of play: New coronavirus cases down, but more bad news ahead.
  2. Politics: Biden set to immediately ramp up federal pandemic response with 10 executive actions — Scoop: Joe Biden's COVID-19 bubble.
  3. World: Biden will order U.S. to rejoin World Health OrganizationBiden to bring U.S. into global COVAX initiative for equitable vaccine access.
  4. Vaccine: Amazon offers to help Biden administration with COVID vaccine efforts.
Dion Rabouin, author of Markets
9 hours ago - Economy & Business

Short seller calls out hydrogen fuel company Plug Power

Data: Investing.com; Chart: Axios Visuals

Plug Power's share price fell 6% on Thursday and slipped another 1% in after-hours trading following a Hindenburg Research-esque short seller report on the company from Kerrisdale Capital.

What they're saying: "We are short shares of Plug Power, a $40 billion provider of hydrogen fuel-cell solutions that’s set to generate a paltry $300 million in revenue in 2020 and trades at 40x its own aggressive revenue projection for 2024."

Dion Rabouin, author of Markets
9 hours ago - Economy & Business

A third of all small business owners say they can't pay rent

Data: Alignable; Chart: Axios Visuals

Nearly half (49%) of all minority small business owners and a third (33%) of all small business owners were unable to pay their rent this month, according to the latest survey from Alignable. 35% of women-owned businesses reported an inability to pay rent as well.

Between the lines: For the first time in the survey's history, at least 40% of respondents in 10 business categories said they couldn't afford to pay their rent.

Dion Rabouin, author of Markets
10 hours ago - Economy & Business

First glimpse of the Biden market

Photo: Jonathan Ernst-Pool/Getty Images

Investors made clear what companies they think will be winners and which will be losers in President Joe Biden's economy on Wednesday, selling out of gun makers, pot purveyors, private prison operators and payday lenders, and buying up gambling, gaming, beer stocks and Big Tech.

What happened: Private prison operator CoreCivic and private prison REIT Geo fell by 7.8% and 4.1%, respectively, while marijuana ETF MJ dropped 2% and payday lenders World Acceptance and EZCorp each fell by more than 1%.

23-year-old poetry phenom Amanda Gorman lights up social media after inauguration

Photo/Patrick Semansky/AP

Amanda Gorman, 23, the country's first National Youth Poet Laureate, referenced everything from scripture to "Hamilton" — and echoed JFK and MLK — in a performance at the Biden-Harris swearing-in that captivated America.

Driving the news: In less than 24 hours, the L.A. resident went from under 100,000 Twitter followers @TheAmandaGorman to 1.1 million. She went from 206,000 Instagram followers to 2.2 million.

Felix Salmon, author of Capital
12 hours ago - Economy & Business

Media trust hits new low

Photo illustration: Sarah Grillo/Axios. Photo: Star Tribune via Getty Images

Trust in traditional media has declined to an all-time low, and many news professionals are determined to do something about it.

Why it matters: Faith in society's central institutions, especially in government and the media, is the glue that holds society together. That glue was visibly dissolving a decade ago, and has now, for many millions of Americans, disappeared entirely.

Guaranteed income programs are proliferating

Illustration: Brendan Lynch/Axios

Cities around the country are starting up guaranteed income programs, which pay low-income residents around $300–$600 a month to help improve their lives.

Why it matters: If successful, backers hope these experiments — which bring the idea of guaranteed basic income from the progressive drawing board to reality — could set the stage for a day when unconditional cash stipends are a ubiquitous national safety net.

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