Saturday is reading, running, resting, and playing with Amy day. Digital sabbath.

I was tired from the week and slept for ten hours. I also took a 90-minute nap in the afternoon. I had a good, albeit short (4 loops) run in the morning. I ran ten loops this morning, so getting back in the groove after a week of not feeling great.

My book was John Lewis’ Across That Bridge: Life Lessons and a Vision for Change. Amy suggested that I read Walking with the Wind: A Memoir of the Movement, which is in our infinite pile of books (and near the top). Instead, I decided I wanted to read this one first because several other people had suggested it to me after John Lewis died.

It was powerful. While there are elements of memoir in it, Lewis paints a clear vision of the future based on his lifetime of work on civil rights. He regularly tied his vision back to his childhood, his early work alongside Dr. King, and his leadership of organizations like the Student Nonviolent Coordinating Committee.

While I knew of the principles of nonviolence in the Civil Rights movement, I didn’t understand them. I knew the history of the Freedom Riders. Still, I didn’t understand the magnitude of the physical abuse and violence they encountered while operating with the principles of nonviolent protest.

When I read and reflect on this history, I’m embarrassed, horrified, and furious with elements of White America.

Reading the book by John Lewis inspired me on multiple levels. I know that, in addition to reading Walking with the Wind: A Memoir of the Movement, I’m going to add some Gandhi to my reading list. If anyone has a suggestion for a great Gandhi book, toss it in the comments.

John Lewis was an American hero. And, his posthumous OpEd in the NY Times, Together, You Can Redeem the Soul of Our Nation, which starts:

Though I am gone, I urge you to answer the highest calling of your heart and stand up for what you truly believe.

ends with something I wish everyone in the United States would read, ponder, and take action on.

Though I may not be here with you, I urge you to answer the highest calling of your heart and stand up for what you truly believe. In my life I have done all I can to demonstrate that the way of peace, the way of love and nonviolence is the more excellent way. Now it is your turn to let freedom ring.

When historians pick up their pens to write the story of the 21st century, let them say that it was your generation who laid down the heavy burdens of hate at last and that peace finally triumphed over violence, aggression and war. So I say to you, walk with the wind, brothers and sisters, and let the spirit of peace and the power of everlasting love be your guide.

Israeli IoT startup Ecoplant, which builds software that monitors and manages air compression systems used in many industries, has raised $8 million in grant and VC funding to expand its US operations. 

Air compressors, common in agricultural and manufacturing industries, use up massive amounts of energy, and Ecoplant claims its software can reduce wastage. The company has raised $8 million in the form of clean energy grants from the US Department of Energy, Israel's Ministry of Energy (MoE), and the Israel Innovation Authority, plus additional funding from accelerator program Techstars and Ecolab. 

A 2015 report by the US Department of Energy estimated that compressed air systems account for 10% of all electricity and roughly 16% of all motor system energy use in US manufacturing industries — a staggering figure. 

"5% of the world's energy is used by air compressors," Aviran Yaacov, cofounder and CEO of Ecoplant, told Business Insider in an interview. "So much energy is wasted every year from leakages, breaks, and other downtime which our IoT solution is able to help resolve."

Yaacov claims that the company's software saves up to 30% more energy, and halves unplanned downtime. To that end, Ecoplant has signed a partnership with Atlas Machine, a Kentucky-based distributor of industrial air compressors, and agreed to bring Ecoplant's tech to US factories. 

"Our partnership with Atlas allows us to significantly scale through the thousands of factories they service," Yaacov added. "During COVID we managed to install an entire project remotely which was amazing."

Ecoplant's software monitors air compressors through a connection to controllers and pipeline sensors, and automatically manages the system with IoT-tech. Other clients include Nestle, Unilever, Danone, and Elbit.

Check out Ecoplant's pitch deck below:

Bob Behnken and Doug Hurley are on their way home.

The two NASA astronauts departed the International Space Station on Saturday evening, beginning a roughly day-long voyage back to their families on Earth.

Behnken and Hurley left in a vehicle called Crew Dragon "Endeavour," a spaceship designed, built, and operated by SpaceX with about $2.7 billion in government funding. It's SpaceX's second experimental flight of the vehicle, a mission called Demo-2, and the aerospace company's first time putting people on board.

The Demo-2 mission's departure makes SpaceX, founded by Elon Musk in 2002, the first company in NASA's Commercial Crew Program to successfully pull off a visit to the $150 billion, football field-size laboratory.

But Behnken and Hurley's return trip has just begun. Now that they've flown away from the ISS, they must perform a risky descent through Earth's atmosphere — the phase of the flight that Musk has called his "biggest concern."

If the flight successfully lands on Sunday afternoon, it would be the first crewed American spaceship to leave and return to Earth since July 2011, when NASA retired its space shuttle program.

The beginning of the end to an historic 63-day mission

Behnken and Hurley launched to orbit on May 30 and docked to the ISS a day later, beginning their historic 63-day mission chockful of science, space station maintenance, and breathtaking views of Comet Neowise.

But all good things must come to an end, and the crew began loading supplies, experiments, and personal effects — including an historic American flag — into Endeavour early Saturday morning.

Once they were packed up, they said goodbye to the ISS crew members they lived and worked with for two months: NASA astronaut and station commander Chris Cassidy, and Russian cosmonauts Anatoly Ivanishin and Ivan Vagner.

Behnken and Hurley then climbed into Endeavour, donned their spacesuits, closed the hatch, and began preparing to depart. At 7:35 p.m. ET, the spaceship gently shoved off the ISS with a series of small burps of propellant, right on schedule.

"Dragon departing," Hurley said as Endeavour glided away.

"Dragon, SpaceX: Separation confirmed," a mission controller responded on the ground.

The crew then fired departure burns to build up a protective "keep-out sphere" around the space station, to begin their journey in earnest.

"Safe travels, and have a successful landing. Endeavour's a great ship. Godspeed," a mission controller told the crew.

Hurley later tweeted his thanks to the space station crew, called Expedition 63, using Endeavour's Wi-Fi.

"It was an honor and privilege to be part of Expedition 63," Hurley said. "Now it's time to finish our DM-2 test flight in order to pave the way for future Dragon crews. Go Endeavour!"

If all goes well — the path of Hurricane Isaias has allayed early concerns about the safety of landing near Florida — the astronauts will splash down in the Gulf of Mexico on Sunday at 2:48 p.m. ET.

To safely return to Earth, though, the astronauts must perform a series of critical maneuvers with Endeavour over the next 19 hours.

From 17,5000 mph to splash down

The first steps Behnken and Hurley took included firing the spaceship's thrusters to slip into the correct orbit. NASA will perform more remotely while the astronauts sleep.

After they wake up on Sunday, the crew prepare for landing. Around 1:45 p.m. ET, according to a NASA TV schedule, the astronauts will jettison Endeavour's cylindrical trunk. The heavy piece of hardware powered and helped navigate the ship in orbit, but isn't needed during landing. Dumping the trunk is essential to exposing the heat shield of the aerodynamic crew capsule for the next stage of the flight.

Around 1:51 p.m. ET, they'll need to fire Endeavour's built-in thrusters for about 11 minutes to dramatically slow down the capsule, helping it fall from orbit and back to Earth. At this point, the heat shield must absorb blistering 3,500-degree-Fahrenheit heat that's generated by plowing through the planet's atmosphere at about 25 times the speed of sound.

It's this phase that concerns Musk, SpaceX's CEO and chief designer, more than any other.

"The part that I would worry most about would be reentry," Musk told Irene Klotz of Aviation Week ahead of the launch in May.

The spaceship capsule has an asymmetric design to accommodate its emergency launch-escape system thruster pods. And the imbalance caused by those pods — though very unlikely to cause a problem — is the core of Musk's concern.

"If you rotate too much, then you could potentially catch the plasma in the super Draco escape thruster pods," Musk said, adding that this could overheat parts of the ship or cause it to lose control due to wobbling. "We've looked at this six ways to Sunday, so it's not that I think this will fail. It's just that I worry a bit that it is asymmetric on the backshell."

When it's about 18,000 feet above the water, Endeavour should automatically deploy a set of drogue parachutes and slow to about 120 mph. Around 6,500 feet, four large main parachutes should pop out and further decelerate Behnken and Hurley's capsule before they splash into the ocean at around 15 mph. 

NASA and SpaceX are hoping to land Endeavour at a site off the coast of Pensacola, Florida, and immediately greet them with recovery boats and a helicopter that will whisk them back to land. If weather conditions turn poor near Pensacola, the astronauts will try to land at a backup site about 100 miles east, near Panama City.

SpaceX has five other potential landing sites, though Hurricane Isaias has knocked some out of contention. NASA's landing conditions include wind speeds under 11 mph, no rain or lighting, and clear skies.

Along with trying to get home, Behnken and Hurley are performing an essential step in proving that SpaceX's Crew Dragon ship is safe to fly people in the future, including private citizens. NASA and SpaceX plan to finish reviewing data from the experimental mission over the following six weeks, likely resulting in its crucial human-rated certification from the space agency.

In a future mission that NASA recently announced, astronaut Megan McArthur (who is married to Behnken) will ride the same Crew Dragon ship to orbit for a roughly six-month stay. 

Ahead of the Demo-2 mission, NASA estimated a roughly 1-in-276 chance of losing the crew at any point during the flight.

Watch NASA TV's ongoing live coverage of Demo-2 mission:

Do you have a story or inside information to share about the spaceflight industry? Send Dave Mosher an email at This email address is being protected from spambots. You need JavaScript enabled to view it. or a Twitter direct message at @davemosher. More secure communication options are listed here.

Microsoft is pausing negotiations over TikTok's US operations amid hostility from President Donald Trump, The Wall Street Journal reported Saturday.

The Journal, citing people familiar with the matter, reported that Microsoft and the Chinese parent company ByteDance were in "advanced talks" over a potential sale and were "caught off guard" when Trump voiced his opposition to the deal on Friday.

Trump told reporters that evening that he preferred a flat ban on the app and wouldn't support a sale. He had threatened to ban the short-form video app via executive order as early as Saturday.

Reuters reported Saturday that ByteDance agreed to divest its US operations to avoid the app being banned, leaving Microsoft able to take over completely.

One source told The Journal that Trump's opposition to a sale came as a surprise, and another source told the newspaper that the White House had previously appeared to want TikTok to be "American owned."

The deal isn't "dead," according to the Journal's report, but both companies are seeking more information from the White House on the best next steps for the app.

Trump's comment to reporters on Friday came after a month of publicly threatening to ban the app. Trump administration officials such as Secretary of State Mike Pompeo expressed concerns about the app's ties to China and the possible sharing of user data with the Chinese Communist Party. TikTok has denied that it would share user information with the Chinese government.

Tiktok's US General Manager Vanessa Pappas appeared in a one-minute video released Saturday morning in response to Trump's comment about banning the app.

"We've heard your outpouring of support and we want to say thank you, we're not planning on going anywhere," Pappas said to the community of users. "TikTok is a home for creators and artists to express themselves, their ideas, and connect with others across different backgrounds and we are so proud of all the various communities that call TikTok their home."

When NASA astronauts Bob Behnken and Doug Hurley return to Earth on SpaceX's Crew Dragon spaceship, they'll be carrying an American flag with even more symbolism than usual.

The flag first rocketed to orbit on the inaugural space shuttle mission, STS-1. It was left on the ISS by the crew of NASA's final space shuttle flight in 2011, called STS-135, of which Hurley was a member. The idea was that the next astronauts to launch on an American spacecraft from US soil would return the flag to Earth.

But at that time, it wasn't yet clear which company would get there first, or which astronauts would be selected for that mission.

"I understand it's going to be sort of like a capture-the-flag moment here for commercial spaceflight. So good luck to whoever grabs that flag," President Barack Obama said on a phone call with Hurley and his colleagues in 2011.

SpaceX launched Behnken and Hurley toward the International Space Station on May 30, marking the aerospace company's first crewed flight and the first time humans have ever flown a commercial spacecraft to orbit.

Behnken and Hurley docked to the ISS on May 31, then climbed through the hatch into the football-field-sized floating laboratory. In that moment, they put Elon Musk's rocket company on the cusp of winning the nine-year-long game of capture the flag.

Soon after, Hurley held the flag up to NASA's live broadcast cameras beside Behnken and astronaut Chris Cassidy.

"Chris had it right on the hatch where we left it nine years ago," Hurley said in June. "He's got a note: 'Do not forget to take with Crew Dragon.'"

On Saturday, as Behnken and Hurley wrapped up their two-month stay with a goodbye ceremony, the flag came up again.

"I do want to make mention of this very special flag," Cassidy said. "It has deep, deep space history — and getting deeper — as this flag will return to Earth with the Crew Dragon guys, and spend a little bit of time on Earth and, very soon, make a trip to the moon."

Behnken and Hurley are scheduled to undock from the space station at 7:34 p.m. ET on Saturday, then begin a fiery, high-speed journey through Earth's atmosphere. Assuming all goes according to plan, they'll splash down on Sunday at 2:42 p.m., off the coast of Florida. At that point, SpaceX will have successfully captured the flag. (Watch NASA's continuous live coverage of their return flight here.)

"The race isn't over until it's over," Behnken told reporters ahead of the May launch.

The Demo-2 mission is the product of NASA's Commercial Crew Program, a public-private partnership that President Barack Obama started in 2011. The aim was to restore the US's ability to launch its own astronauts into space after the space shuttle program ended. 

Both SpaceX and Boeing made it through the rigorous reviews and testing required by NASA. The space agency has contributed more than $3.1 billion of funding to SpaceX in the nearly decade-long partnership. Boeing has received about $4.8 billion in contracts.

Boeing launched first, but software issues plagued the company's uncrewed test flight to the space station. The close calls triggered a series of required reviews and a forthcoming re-do mission before the company can launch astronauts.

In turn, the lurch opened a window for SpaceX to accomplish its first crewed flight.

If all goes well this weekend, NASA and SpaceX hope to regularly ferry astronauts (and private citizens like Tom Cruise) to and from the station on the Crew Dragon.

"We really are focused on making sure that we ... accomplish the ultimate mission, which isn't winning against Boeing. It's providing this capability to the International Space Station so that we can start rotating crews from American soil," Behnken said before the May launch.

For Hurley, the flag symbolizes that long journey and the dawning new era of commercial spaceflight.

"You can bet we will take it with us when we depart back to Earth," Hurley said as he presented the flag. "The important point is, as I said before, just returning launch capability to the United States to and from the International Space Station. That's what this flag really means."

Susie Neilson contributed reporting for this story. 

This story has been updated with new information. It was originally published on June 2, 2020.

Do you have a story or inside information to share about the spaceflight industry? Send Dave Mosher an email at This email address is being protected from spambots. You need JavaScript enabled to view it. or a Twitter direct message at @davemosher. More secure communication options are listed here.

The ad business has been hurting for influencers in recent months as brands have cut marketing budgets to save on costs and avoid appearing tone-deaf during the coronavirus pandemic.

But the influencer economy isn't going away. Many creators have shifted their focus to alternative revenue streams that have allowed them to continue to earn a living, showing how much the influencer business has expanded in recent years.

Interested in how social-media influencers are making money and what ways they have adapted their businesses during the pandemic? 

Join Business Insider on Wednesday, August 5 at 11 a.m. ET, when BI reporter Amanda Perelli will speak with digital creators Shelby Church (1.5 million YouTube subscribers), Ruby Asabor (176,000 subscribers) and Katy Bellotte (477,000 subscribers) on the state of the influencer economy in 2020.

They'll discuss earning money on YouTube, Instagram, and podcasting; how their businesses have been impacted by the pandemic; and how they have built their online audiences.  

Astronauts Bob Behnken and Doug Hurley have a "go" to return to Earth this weekend and wrap up an historic space mission for both NASA and SpaceX. 

Behnken and Hurley launched to orbit aboard SpaceX's Crew Dragon vehicle on May 30, then docked the spaceship (which they named "Endeavour") to the International Space Station. Their experimental mission, called Demo-2, is the first with humans ever launched by SpaceX, founded by Elon Musk. It also represents a new era of commercially developed and operated space vehicles started by NASA almost 10 years ago.

But before the mission can succeed, the crew must safely land

After a two-month stay in orbit, the men are preparing to undock from the ISS on Saturday at 7:34 p.m. ET. If that procedure goes well, they're due back to Earth on Sunday around 2:41 p.m. ET. (NASA TV's continuous live-streaming coverage, which you can watch at the end of this story, kicks off Saturday around 5:15 p.m. ET.)

NASA is overseeing SpaceX's experimental mission. On Wednesday, the agency gave the company an initial "go" to proceed with its landing plans. But Hurricane Isaias could force the astronauts to stay in orbit a while longer.

The cyclone has already hit Puerto Rico as a tropical storm with high winds and flash-floods, leaving hundreds of thousands without power. It later developed into a Category 1 hurricane, with sustained winds of at least 75 mph. Isaias' current path threatens to bring dangerous weather to several potential landing sites by Sunday afternoon — the planned time for the astronauts' splashdown.

"We won't leave the space station without some good landing opportunities in front of us," Behnken told reporters from the ISS on Friday morning, adding that NASA and SpaceX are keeping him and Hurley informed. "The lion's share that work happens on their end. We don't control the weather, and we know we can stay up here longer."

However, in a blog post published on Saturday afternoon, NASA announced that the astronauts had a "go" to proceed with landing.

"We cannot wait to get Bob Behnken and Doug Hurley back to Earth," Jim Bridenstine, NASA's administrator, said during a press briefing on Wednesday, noting the agency would continue to watch the weather.

Crew Dragon can't land if there's rain, lightning, big waves, or winds exceeding 10 mph

Isaias became a named tropical storm on Wednesday night, when its wind speeds exceeded 39 mph. It reached hurricane status the next day.

The storm could affect several landing areas just as Endeavour is supposed to reenter Earth's atmosphere, deploy its parachutes, and splash into the Atlantic Ocean or Gulf of Mexico. Recovery crews will be waiting to recover astronauts with boats, airplanes, and helicopters.

Three of the seven landing zones that SpaceX and NASA prescribed for the test mission, called Demo-2, lie within the "cone of probability" for the storm's path.

Those splashdown sites (shown below) are located in the Atlantic Ocean off the coasts of Cape Canaveral, Daytona, and Jacksonville. Given current conditions, mission managers are hoping to land Demo-2 in the Gulf of Mexico near Pensacola or, as a backup option, Panama City, NASA said on Saturday.

"This mission will be a bit unusual as timelines will be in flux quite a bit up until undocking as we finalize landing locations," a NASA spokesperson told Business Insider in an email on Friday.

Pensacola is the-westernmost location of the seven options, and Panama City is the second-westernmost. As of Saturday afternoon, the National Hurricane Center does not project that tropical-storm-force winds will affect the area.

Depending on how large the storm grows and how nasty weather conditions become, mission managers may scrub the undocking and landing attempt. Steep waves, rain, lightning, low clouds, poor visibility (for helicopters to fly the astronauts from a SpaceX recovery boat back to land), or even winds stronger than about 10 mph can trigger a "no-go" decision.

"We're going to watch the weather very carefully," Steve Stich, the manager of NASA's Commercial Crew Program, said on Wednesday.

Given the intense preparatory work required to prepare Crew Dragon for its return, NASA and SpaceX have until about 5 p.m. ET to make the final call for undocking, the space agency said.

Behnken and Hurley can stay in orbit another 2 months, if needed

Once the astronauts undock, they have to land within about three days because the spaceship only has enough water and lithium hydroxide — which scrubs carbon dioxide from the air — to last Behnken and Hurley for that long, Stich said.

While docked to the ISS, though, Endeavour can share life support and last much longer. The vehicle has been in space for more than 60 days, but this version of Crew Dragon is designed to last about 120 days due to its solar-panel design, Stich said. In theory, that gives SpaceX and NASA opportunities through most of September to safely get Behnken and Hurley back home.

"We know we can stay up here longer," Behnken told reporters during a briefing on Friday morning. "There's more chow and I know the space station program's got more work that we can do."

Stich noted SpaceX and NASA can make a call as late as an hour before undocking to delay the whole sequence and try again another day.

"If the weather's looking bad that day, we're not even going to try to undock," Stich said. "The beauty of this vehicle is we can stay docked to the space station."

As part of the process to approve a landing, NASA and SpaceX used a robotic arm to survey Crew Dragon's heat shield, which must withstand temperatures of of to 3,500 degrees Fahrenheit during atmospheric reentry, for damage by space debris.

"There were no areas on the vehicle that were any concern for entry," Stich said.

NASA TV will stream around-the-clock coverage of the astronauts' attempt to return to Earth starting around 5:15 p.m. ET on Saturday, August 1. You can watch the agency's broadcast via the YouTube feed below.

Susie Neilson contributed reporting.

This story was originally published July 29, 2020. It has been updated with new information.

Do you have a story or inside information to share about the spaceflight industry? Send Dave Mosher an email at This email address is being protected from spambots. You need JavaScript enabled to view it. or a Twitter direct message at @davemosher. More secure communication options are listed here.

The team at remote-first enterprise startup Seeq put together this montage of some of its remote offices.

Scrolling through YouTube can be overwhelming. Even if you know you're looking for a workout routine or investing tips, the sheer number of options makes it tricky to choose what to watch. Just as tricky: Figuring out how to get viewers to click on your video, among a sea of alternatives. 

Ben Sullins, who makes videos about Tesla and electric vehicles, pays careful attention to the titles and thumbnails on his videos to make sure viewers don't scroll past them.

"It almost should be, you have an idea for a video, and you figure out the title and the thumbnail first before anything, before you shoot the video, before you script the video," Sullins said in an interview with Business Insider.

His strategy is to create an "information gap" by raising a question, either directly or by suggestion, in a way that makes the view want to learn more. Titles for recent videos include "Fixing Model Y Dumbest Flaw for $12" and "Choosing Our Favorite Tesla After Owning All 4." The thumbnail, Sullins said, should amplify the curiosity the title creates. His photos sometimes feature him making an exaggerated expression and text set against a red background.

"The opposite of what you would consider a beautiful photo is what works well on YouTube," he said.

Once a viewer clicks on your video, it's important that you deliver on your premise and keep them hooked; the longer people watch your videos, the more YouTube will share them. To keep the viewer's interest, Sullins uses a technique familiar to playwrights and screenwriters: the three-act structure. His videos begin by setting up his topic, creating a conflict, then resolving that conflict. Doing so makes the viewer more likely to become emotionally invested in the video, even if its topic is far from typical Hollywood fare.

"These storytelling techniques work because they play to our evolutionary heartstrings," he said.

And they have helped Sullins build a subscriber base of over 200,000 people and amass over 38 million views for his videos since he started his channel in 2013.

"Focusing on that information gap — trying to entice people to click in and learn more — and then delivering in a way that's going to keep them engaged," he said, are "the keys to success that not a lot of new creators think of."

The longrunning Showtime series "Shameless" debuted new episodes on Netflix recently, propelling it up Netflix's popularity rankings. 

Netflix introduced daily top 10 lists of its most viewed movies and TV shows in February (it counts a view if an account watches at least two minutes of a title).

Every week, the streaming search engine Reelgood compiles for Business Insider a list of which TV shows have been most prominent on Netflix's daily lists that week. 

ESPN's "Last Dance" docuseries about Michael Jordan and the Chicago Bulls continues to be a hit on the streaming giant.

Below are Netflix's 9 most popular TV shows of the week in the US:

Sheila Bair is intimately familiar with what a financial crisis looks like and how devastating it can be.

So when she says she's worried that we may be heading toward one, it's probably a good idea to pay attention.

Bair, who was a key player in the federal government's response to the financial crisis a decade ago, sees plenty of danger signs of another such calamity, much of it in the form of corporate debt and the collateralized loan obligations that debt gets sliced and diced and reassembled into. She also worries that the big banks are pushing hard to loosen capital requirements right now — and regulators are accommodating them.

"I think the regulators are focusing on the wrong things," Bair told Business Insider in an interview Tuesday. "My worst fear," she continued, "is that what is now a health and economic crisis turns into financial crisis.
And that's what the regulators should be focusing on."

Bair headed up the Federal Deposit Insurance Corporation from 2006 to 2011. While there, she was part of the small group of policymakers that were trying to respond to the emerging crisis. Her job was to oversee the takeover and resolution of the numerous FDIC-backed banks that failed during that period. She also tried and failed to persuade then Treasury Secretary Tim Geithner to use a similar process to deal with the biggest financial institutions at the time, the ones that were later dubbed "too big to fail."

It's perhaps no surprise then that she's again worried about the health of the banks.

Banks are pushing for looser capital requirements

Part of what concerns her is that the big banks are using the pandemic to persuade lawmakers and regulators to address one of their pet peeves: the amount of capital they have to keep on hand. In the wake of the Great Recession, in an effort to prevent another financial crisis, policymakers required banks of all stripes to increase the amount of capital they had on hand as proportion of their total assets, which include loans, investments, and real-estate holdings. Those institutions have been pressing ever since to lighten those requirements, claiming in part that the rules restrict their ability to make loans.

This spring the Federal Reserve announced new regulations that temporarily allow big banks to ignore certain assets when calculating the amount of capital they need to have on hand. The move essentially allows them to keep less capital in reserve or, with the capital they already have on hand, to make more loans or buy up more assets.

But the big banks are also pushing Congress to rewrite the section of the Dodd-Frank financial industry reform law that sets the capital requirements. The change, which Senate Republicans are reportedly planning to include in their next coronavirus stimulus bill, would allow the Federal Reserve to alter an alternate method of calculating the amount of capital banks need to have on hand than the one it already tweaked. The move would have a similar effect — giving banks a freer hand.

Bair, who saw what happened when the big banks had a similarly free hand before the last financial crisis, thinks such changes are both bad and unnecessary. Research shows that well-capitalized banks not only are better for financial stability, they do a better job of continuing to offer credit through economic downturns such as the one the US is going through now, she said.

"I don't want to lower anyone's capital requirements," Bair said.

Looser rules won't necessarily lead to more lending

And lowering the amount of capital the big banks have to keep on hand, won't necessarily spur more lending to consumers and small businesses, she said. 

The banks that typically make loans to those kinds of customers are the regional and local institutions, she said. Those banks wouldn't be affected by the proposed changes.

Meanwhile, the big banks that would be given more freedom could simply use that to do something like invest in US Treasury notes, pocketing the difference between what the government is paying in interest and the paltry amounts they pay their depositors, she said. Indeed, because the new rules the Fed put in place allow banks to exclude Treasury notes when calculating their assets, the regulations essentially encourage them to just park their money there during this and future crises, she said.

"You could do that trade all day long," she said. "I'm not saying it would go to that extreme," she continued, "but I think that's going be the tendency now."

And regulators have and had a much better way to encourage banks to do more lending, Bair said. Rather than allowing the institutions to weaken their balance sheets, they could have ordered them to stop paying dividends to their holding companies during the coronavirus crisis. FDIC-backed banks paid out $32.7 billion in dividends in the first quarter — nearly twice what they earned in the period — just as the pandemic was starting to get into full swing, the Financial Times reported last month. That money could have supported more than a half a trillion dollars in additional deposits, which in turn could have been used to make new loans.

The danger is that with looser capital requirements, the big banks are going to make risky investments or understate the risks they're taking. Either way, the moves could blow up in their faces and pull down the financial system along with, just like what happened 10 years ago.

The huge amount of corporate debt is a jumbo-sized danger sign

And there's already plenty to worry about in terms of existing stresses on the financial system, Bair said. Her biggest concern is the tremendous amount of corporate debt. The total amount of debt held by non-financial companies hit a record $10.5 trillion in the first quarter, according to data from the Federal Reserve Bank of St. Louis. It's unclear exactly how much of that amount is held by banks, but it's almost certainly a large chunk.

As part of its response to the coronavirus crisis, the Fed stepped in to backstop the corporate debt markets, buying up bonds from hundreds of companies. That move helped sparked a new wave of corporate debt issuance this spring.

The Fed can't prop up that market forever, Bair said. If the economy continues to falter, the institution risks impeding structural changes that need to take place and keeping in business companies that are essentially zombies and have no real chance of making a comeback.

Even if the Fed does continue to intervene for the time being in the corporate bond portion of the market, the big banks have other exposure to corporate debt that could hurt them. Many companies, for example, have credit lines with banks or other kinds of lending relationships.

And then there are leveraged loans and the related collateralized loan obligations, or CLOs. Leveraged loans are those made to companies that are already highly indebted or are considered poor credit risks. CLOs are similar to the notorious collateralized debt obligations, or CDOs, that blew up in the financial crisis a decade ago. But instead of being amalgams of mortgages that are then sliced and sold by layers, according to assessed risk, CLOs are collections of leveraged loans, that are similarly sold by layers. 

Banks hold a lot of leveraged loans and CLOs

Both kinds of instruments could prove dangerous for the financial system if the economic situation forces companies to start defaulting en masse.

As of 2018, US banks and their holding companies held more than $110 billion in CLOs that were issued just in the Cayman Islands alone, according to a study last year by the Fed. Its quite likely their overall exposure to those derivatives is much greater than that, as Frank Partnoy pointed out in a recent piece in The Atlantic.

US banks also directly held some $760 billion in leveraged loans, mostly in the form of revolving lines of credit, at the end of 2018 and another $65 billion in such loans that they were in the process of turning into CLOs, according to a report at the end of last year by the Financial Stability Board. All told, for the average big bank in the major financial markets, the combination of CLOs and leveraged loans they held amounted to 60% of their capital.

"If [corporations] start getting into trouble, that could cause a lot of problems for the banks," Bair said.

The fact that regulators are focusing on loosening capital requirements right now instead of taking meaningful steps to shore up bank's balance sheets to help them weather a potential storm of defaults, indicates the degree to which their mindset has been warped, Bair said. They're essentially identifying and empathizing with the companies they're supposed to be keeping in check. Regulators have to recognize that what's in the banks' interest is not necessarily in the public interest, she said.

Banks are in the business of increasing their return on equity. Looser capital requirements helps them do that — but could also get them in trouble.

It's the job of Congress and regulators to protect the broader public from the risk of a financial collapse, Bair said.

"Those [interests] are inherently at odds," she said.

But she's particularly frustrated that the big banks are pushing for such looser regulations right now. With the pandemic still raging, millions unemployed, and jobless benefits running out, Congress in particular has a lot more to worry about than addressing the banks' pet issues.

"I do think a lot of it is cynical," she said. "I think they're using the pandemic to get things that have been on their wish list for a long time. And shame on them."

Got a tip about corporate America? Contact Troy Wolverton via email at This email address is being protected from spambots. You need JavaScript enabled to view it., message him on Twitter @troywolv, or send him a secure message through Signal at 415.515.5594. You can also contact Business Insider securely via SecureDrop.

 

Atlassian began as an idea by college friends Scott Farquhar and Mike Cannon-Brookes in 2002: A company dedicated to making tools for their fellow software developers.

Eighteen years or so later, Atlassian is now Australia's biggest tech success story, valued at $43 billion, with its stock price growing sixfold since its 2015 IPO. As the world continues to turn to software to power everything from finance to fitness, Atlassian has grown accordingly, adding 3,000 new customers in its most recent quarter, and 6,000 the quarter before — even amid the coronavirus pandemic. 

In that quarter, the company reported on Thursday, it booked some $430 million in revenue, up 29% from the same period last year. Its stock is up 44% from the beginning of the year, putting it well ahead of the turbulence that's rocked the stock market.

It all speaks to the momentum that Atlassian has built in the industry: Its flagship product Jira, which is used for tracking software projects, is much stronger than its competitors, says Gregg Moskowitz, managing director at Mizuho Financial Group, who watches Atlassian closely. He expects that its business will only grow more over time, even if Atlassian faces some coronavirus-related impact on smaller customers or customers in travel and hospitality.

Plus, customers will prioritize continuing to pay for Atlassian's products since it helps employees work together remotely, Moskowitz says.

"There can be additional challenges although we really think Atlassian will be more resilient than most software companies," Moskowitz said.

The one company that could possibly pose as a threat over time is Microsoft, as the tech titan gets more into the developer space, Moskowitz says — though he's not too concerned about it, given Atlassian's lead in the specific niches in which it plays. 

"There's a very large technology gap that exists in the market where Atlassian plays," Moskowitz said. "Microsoft has been here longer than Atlassian. There certainly hasn't been anything to derail Atlassian's growth. Customers will unquestionably view Atlassian as a superior offering."

Meet the 15 executives leading Atlassian's growth, even amid the coronavirus pandemic:

Data operations and data engineering have taken off, investors say.

Companies are increasingly collecting vast swathes of data, though it's often fragmented across the silos of their business. This makes tools for processing that data — and staying in line with regulations to keep it private and secure — more necessary than ever, says Derek Zanutto, general partner at CapitalG (formerly Google Capital).

"It's a pretty interesting space now given the pain points you're seeing from large enterprise accounts," Zanutto told Business Insider. 

To glean value from their data, companies are also turning to tools to analyze and process data using AI and machine learning, which can have a "pretty dramatic impact" on an organization, says Louisa Xu, partner at IVP.

"Data science budgets aren't going away anytime soon," Xu told Business Insider.

Zanutto, Xu, and more than a dozen other investors recommended the top 29 data startups they believe will thrive this year and why (all funding data from PitchBook unless otherwise noted):

In the car business, it's often said that brands are grand, but products pay the bills. In other words, you can capture or retain customers with what your company stands for, but long-term, if you don't have great vehicles, you're going to have a problem.

For almost its entire history, more than 15 years, Tesla has inverted that wisdom. A few years ago, the carmaker was barely selling any vehicles relative to its global competitors. Last year, Tesla delivered only about 250,000 vehicles, while General Motors sold almost 8 million.

Investors have decided that this means Tesla should be worth $300 billion in market capitalization, more valuable than GM, Ford, and Fiat Chrysler Automobiles combined — and topping Volkswagen and Toyota, the two biggest automakers on Earth.

Vehicle sales obviously don't add up to $300 billion in value; Tesla's quarterly revenue remains far below a Detroit Big Three car company. It's a bet on the future, and a prediction that Tesla should be able to expand its near-monopoly of the EV market as that market grows from a currently tiny basis, merely 1-2% of worldwide sales.

Investor optimism is that Tesla will maintain a dominant share, increase it scale, and notch enviable profit margins, perhaps more than 10% (high-volume luxury carmakers operate at that level, while mass-market companies run in the single-digit range). 

But for now, the Tesla brand is mighty. Here's how that happened:

Wednesday's nearly six-hour tech antitrust hearing was quite a spectacle.

Republican lawmakers used the opportunity to question the execs on anticonservative bias they say is prevalent on the online platforms. One of them, Rep. Jim Jordan, asked the CEOs for their opinion on cancel culture. Some subcommittee members mispronounced Google CEO Sundar Pichai's name incorrectly (peek-eye.) Amazon CEO Jeff Bezos forgot to unmute himself before talking at one point and took a snack break or two. 

Though highly-anticipated and star studded, Wednesday's Big Tech hearing was just one part of an ongoing congressional investigation into competition in the digital market. And some of the most striking revelations so far come not from the CEO questioning, but from the hundreds of thousands of internal company emails and other documents gathered by Congress.

As Business Insider has reported, the unguarded discussions among company leaders in the emails reveal a pattern of cutthroat actions to snuff out or leapfrog emerging rivals. 

Now it's up to the members of Congress to roll up their sleeves and — taking into account the trove of emails, the CEO's answers at Wednesday's hearing, and the hundreds of hours of other meetings and hearings — reach an agreement about what kind of ground rules are preprepared for the new breed of corporate juggernauts that control powerful and borderless digital platforms.

The antitrust subcommittee is expected to release a report of its investigation in the coming weeks. The end goal is to create new laws, or approve revisions to the original century-old ones, that are better tailored to 21st-century tech companies. The laws as they stand now aren't updated to apply to modern tech business. For example, US anticompetitive laws have to show that consumers are being harmed, and that's more difficult to do in big tech than in other industries in the past, like oil.

As Rep. David Cicilline, the chair of the House Judiciary's antitrust subcommittee, said in his closing statements Wednesday, "This hearing has made one fact clear to me: These companies as they exist today have monopoly power. Some need to be broken up, all need to be regulated and held accountable."

But blanket regulation may not be feasible, since each of the four companies present different concerns with regards to competition. Amazon is primarily being investigated over claims that it gives special treatment to its own brands over third-party sellers. Google is under scrutiny for its dominance in digital ads. Facebook is in the spotlight for acquiring would-be competitors like WhatsApp and Instagram. And lawmakers are looking into Apple's App Store commission rates and whether or not they hurt developers.

So Congress would not only have to lay the groundwork for better antitrust regulation in the tech world but design it in a way that encompasses a broad scope of anticompetitive business practices. That won't be easy, but the hearing and the antitrust subcommittee's upcoming report is a step in that direction.

 

Welcome to Wall Street Insider, where we take you behind the scenes of the finance team's biggest scoops and deep dives from the past week. 

If you aren't yet a subscriber to Wall Street Insider, you can sign up here.

With coronavirus cases still spiking in areas throughout the country and the US this week reporting a record second-quarter GDP slump, there's a growing concern among borrowers and private-equity firms that cash raised in the spring won't be enough to ride out the economic fallout.

And Houlihan Lokey, Wall Street's top adviser to distressed companies, has changed up its outlook: Instead of the sharp but quick downturn the firm initially anticipated, it's now predicting a deeper, prolonged crisis that pushes many more firms to bankruptcy.

"This pandemic is not a short-term blip, and it's going to be something much longer and probably more damaging to the economy," Houlihan CEO Scott Beiser said on an earnings call this week. And as Alex Morrell writes, companies that piled on debt in the early stages of the pandemic may have set themselves up to struggle as the crisis drags on. 

Read the full story here: 

Keep reading for a look at 24 quant power players; WeWork's new strategy to fill space; must-know financial adviser recruiters; and an interview with Betterment's president of retail that sheds light on how the robo is thinking about the Robinhood effect. 

Have a great weekend,

Meredith 

What's next for Carlyle

Kewsong Lee became sole CEO of The Carlyle Group last week after two-and-a-half years running the $221 billion private-equity firm alongside Glenn Youngkin.

Casey Sullivan and Meghan Morris spoke with 20 people who have worked with him, and they painted a picture of a change agent who is unafraid to challenge conventional thinking. During his seven years at Carlyle, he's already wound down underperforming strategies, revamped pay for some execs, and built up new businesses.

Read the full story here:

Must-know financial adviser recruiters

Financial adviser moves in the wealth-management industry haven't slowed during the pandemic — recruiters and consultants say it's just the opposite.

"When you look at the numbers, it's really during tougher times that we see the most movement," one San Diego, California-based recruiter said. Rebecca Ungarino rounded up nine US-based recruiters who are at the center of all the action. 

Read the full story here:

Quant power players

Quants have gone from a niche practice to a dominant player: the largest and most important hedge funds in the world are heavily influenced by, or completely committed to, computer-run strategies. 

But a growing group of experts have been calling for more machine-learning techniques to be incorporated in a move away from the models that made so many people successful. And 2020 has not been kind to quants, as the volatility caused by the pandemic earlier in the year slammed many systematic funds that couldn't keep up.

Bradley Saacks took a look at long-time players, under-the-radar heavy-hitters, and entrepreneurial founders with serious pedigrees who will be guiding quant investing into its next phase.

Read the full story here:

Betterment eyes ways to tap the retail-trading frenzy