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Treasury secretary nominee supports Biden plans that add trillions to U.S. borrowing, a turnabout in economic thinking

A big question hangs over Janet Yellen this week at her confirmation hearing to become U.S. Treasury secretary: How much debt is too much?

In the past four years, U.S. government debt held by the public has increased by $7 trillion to $21.6 trillion. President-elect Joe Biden has committed to a spending program that could add trillions more in the year ahead. At 100.1% of gross domestic product, the debt already exceeds the annual output of the economy, putting the U.S. in company with economies including Greece, Italy and Japan.

When Ms. Yellen served in the Clinton administration as Chairwoman of the White House Council of Economic Advisers, she was among those who pushed for a balanced budget. Today, she has joined, cautiously, an emerging consensus concentrated on the left that more short-term borrowing is needed to help the economy, even without concrete plans to pay it back. Central to the view is the expectation that interest rates will remain low for the foreseeable future, making it more affordable to finance the borrowing.

The Biden administration will now contend with progressives who want even more spending, and conservatives who say the government is tempting fate by adding to its swollen balance sheet. Ms. Yellen’s challenge, if confirmed, will be to keep Democrats together and persuade some Republicans to come along.

Ms. Yellen, who will be a top economic adviser to Mr. Biden, is scheduled to testify Tuesday before the Senate Finance Committee, which will vote on her nomination. She served as top White House economist in the 1990s and Federal Reserve chairwoman in the 2010s. Confirmation of Ms. Yellen as Treasury secretary would make her the first person to achieve such a trifecta of economic leadership roles.

Ms. Yellen would be managing the nation’s debt when the economic consensus has flipped. In the 1990s, economists argued that surpluses would push down long-term interest rates and encourage private-sector borrowing and investment. Government borrowing, this view held, crowded out the private sector. The strategy seemed to work. The U.S. saw an economic boom, with the longest expansion on record at the time, fueled by technology investment.

After years of low inflation and interest rates near zero, more economists say the government should be borrowing to keep the economy going because the private sector isn’t. With borrowing costs expected to remain low and the pandemic-stricken economy still weak, temporary increases in deficits aren’t only tolerable but desirable if they help strengthen the recovery, the thinking goes.

In past times, the Fed carried the load by cutting short-term interest rates, allowing the private sector to borrow cheaply. But it has already cut rates to zero.

Ms. Yellen will tell lawmakers Tuesday that she and Mr. Biden appreciate the scale of the country’s debt burden, according to a copy of her prepared remarks reviewed by The Wall Street Journal. “But right now, with interest rates at historic lows, the smartest thing we can do is act big,” she plans to say.

The strongest advocates of this view are center-left economists, including former Treasury Secretary Lawrence Summers. Republicans have implicitly embraced the idea when in power. President Trump ushered in spending programs and tax cuts that pushed debt sharply higher even before the coronavirus crisis. George W. Bush also raised spending, cut taxes and grew deficits. In the minority, the GOP has tended to revert to fiscal conservatism.

‘Immediate action’

Mr. Biden is embracing the view, as well. On Thursday, he proposed a $1.9 trillion aid package that includes $1,400 stimulus payments to individuals, expanded jobless benefits and paid work leave, aid for schools and hard-hit small businesses and a national vaccination program. Mr. Biden hopes it will be the first in a two-step program, with the second to focus on longer-term investments, such as in green energy and infrastructure.

“Economic research confirms that with conditions like the crisis today, especially with such low interest rates, taking immediate action—even with deficit financing—is going to help the economy,” Mr. Biden said after a Labor Department report this month. It showed that employers cut jobs in December, ending seven months of employment gains. A growing economy will make debt more manageable, he said.

Unaddressed are the twin questions of whether there is a ceiling on the U.S.’s debt load and how the country will pay it back, concerns heard mostly on the right. “At some point we’ll start paying a price for this,” said Michael Boskin, a Stanford University economist. He served as chairman of the Council of Economic Advisers under President George H.W. Bush in the early 1990s, the last time a Republican administration cut deficits.

Mr. Boskin agrees that low interest rates and a weak economy help make the case for limited federal support. He said he favored tax cuts over government spending and warned that immense deficits can’t be carried on without limit. “Eventually rates will rise,” he said.

Mr. Summers said economists have been predicting rising rates for decades, and yet they kept falling. Even today, he said, rates are as likely to go down as up; in Europe and Japan they are negative.

Some economists have worried that a shock to the U.S. economy could drive investors away from government bonds. Government debt as a share of the economy has more than tripled over the past 20 years. That makes it twice as high, relatively speaking, as it was during the Great Depression and approaching levels seen at the end of World War II, when the government turned the economy into a military machine. Counting bonds that the government issues to its own Social Security trust funds, which economists often discount, the debt is even larger as a share of GDP now.

Yet, through economic shocks in the past 20 years, investors have flocked to Treasury securities, seen as a haven in times of trouble. With the help of Fed interest-rate cuts and bond purchases, not only are U.S. short-term interest rates near zero, the government’s borrowing cost for newly issued 30-year debt is below 2%. While U.S. debt is growing faster than the economy, the level of debt “is far from unsustainable,” Fed Chairman Jerome Powell, a Republican who served in the George H.W. Bush Treasury Department, said Thursday.

Despite a $4 trillion increase in debt last year, a 25% increase, interest payments on that debt declined by 8%. The Congressional Budget Office projects rates will stay low for much of the next decade, and that interest costs as a share of GDP will be lower than it forecast before the pandemic.

In an Aug. 13 briefing with Mr. Biden and Vice President-elect Kamala Harris, Ms. Yellen made the case that ultralow interest rates and low inflation gave the government the capacity to keep borrowing to fight the pandemic’s economic fallout.

The President-elect’s spending plans represent a shift from the 1990s, when Ms. Yellen was Mr. Clinton’s top economic adviser, and Mr. Biden was a senator supportive of the president’s fiscal policies.

Back then, inflation was still seen as a threat. Yields on 10-year Treasury notes exceeded 6% for most of the 1990s, as did borrowing costs for even the most creditworthy companies. Large government debt and deficits, the thinking went, would push rates higher and crowd out private investment.

The Clinton administration restrained spending and raised income taxes on wealthy households, balancing the budget in 1998 for the first time since the 1960s. Fiscal discipline helped produce “a strong, investment-driven recovery,” Ms. Yellen wrote in 1999.

New lesson

Starting under President George W. Bush, something unexpected happened. Deficits and government debt rose because of increased spending and tax cuts, but interest rates kept falling.

“I spent most of my career worrying about the effects of government debt, and as I’ve been doing that, interest rates have been falling point by point by point,” said Douglas Elmendorf, who worked with Ms. Yellen at the Council of Economic Advisers in the late 1990s.

There are different theories about why that happened. One is that China’s emergence as an economic power, and the growing wealth of its citizens, created a surge in global saving. Former Fed chairman Ben Bernanke called it a global “saving glut.” Global savers put aside 26% of their money in 2020, up from 24% in 2000, according to the International Monetary Fund. Much of the trillions of dollars in new saving flowed into the U.S. Treasury market.

At the same time, U.S. private-sector investment slowed for reasons economists are still sorting out. Explanations include an aging population and diminishing investment in big machinery as the economy became more service oriented and factories moved to China. In the 1980s and 1990s, private-sector U.S. investment grew 4% a year on average, adjusted for inflation. Since 2000, as interest rates tumbled, private investment growth averaged 2% a year.

By the time Ms. Yellen became Fed vice chairwoman in 2010, battles over large budget deficits consumed Washington once again. Tea Party Republicans, alarmed by surging debt levels, pushed for strict spending curbs as the U.S. recovered from the 2007-2009 financial crisis. “The challenge for U.S. policy makers will be to craft a strategy that puts our fiscal policy on a sustainable path in the longer term while helping support the recovery in economic activity in the near term,” Ms. Yellen said at her 2010 confirmation hearing for Fed vice chairwoman.

Washington went in the opposite direction. Discussions about the long run went nowhere. Short-term spending cuts helped tame deficits for several years but weighed on growth by pulling money from the military and public projects.

Ms. Yellen and others concluded austerity came too soon, stunting the recovery and keeping unemployment higher than it needed to be. Aside from a fracking boom that kicked off in energy states, private investment sagged.

Free lunch

The pandemic has pushed Washington’s tolerance for debt to new levels. Congress last year authorized trillions of dollars in new spending to combat the virus, pushing deficits well beyond records set in the last recession.

Some economists point out that in the long run, interest rates tend to be lower than the economy’s growth rate. The IMF studied data for 55 countries over 200 years and found that more than half of the time, interest rates were lower than growth rates, on average, by 2.4 percentage points in advanced economies and even more in developing economies. That suggests most countries can run modest budget deficits and still reduce the cost of servicing that debt as their economies grow.

Among the skeptics is Valerie Ramey, an economist at the University of California San Diego. She said some economists see the gap between interest and growth rates as a “free lunch,” enabling more borrowing, but that it was more like a “free snack.” The gap tends to be relatively small over time, and now it is trivial compared with the growth of U.S. debt.

“What we are having here is just gluttony in terms of what the government is doing,” she said.

The IMF study’s authors have another warning about running large deficits. Fiscal-policy crises that push interest rates sharply higher tend to come out of nowhere, even when rates are low. “Market expectations can turn quickly and abruptly,” the authors, Paolo Mauro and Jing Zhou, concluded.

While economists on the left and right acknowledge the government has more capacity to borrow than once thought, there is still no consensus on the limits of borrowing over the medium- to long-term, which is a key question facing Ms. Yellen and the Biden administration.

Mr. Summers and Jason Furman, who served as chairman of President Obama’s Council of Economic Advisers, said policy makers should focus on the cost of borrowing rather than debt levels. The U.S. can afford to borrow more as long as net interest payments on the debt are expected to stay below 2% of output over the next decade, they argue. In the most-recent fiscal year, interest payments totaled 1.6% of output. By comparison, in the early 1990s the payments hovered around 3%.

Long-run challenges remain. Even before a new spending plan is launched, U.S. debt is on track to double to nearly 200% of GDP by 2050 because of soaring Social Security and Medicare promises, according to the CBO. Ms. Yellen has said such high levels can’t be sustained. Mr. Biden has proposed tax increases on high-income households to pay for some of his economic policy proposals, which include investments in clean energy and health care. But there is little appetite in Washington for cuts to Medicare or Social Security.

FBI has been briefed on mysterious transactions as it investigates potential foreign funding of far-right groups in the U.S., according to people familiar with the matter

In December 2020, a French computer programmer named Laurent Bachelier donated more than half a million dollars in bitcoin to a variety of right-wing causes. That same day Mr. Bachelier, who suffered from a debilitating medical condition, killed himself.

The donations and their recipients were first described in a report last week by a bitcoin analysis firm, Chainalysis Inc. The Wall Street Journal identified Mr. Bachelier as the donor through online records and interviews with people familiar with the matter.

The Chainalysis report said the donations included 13.5 bitcoins—the equivalent, at the time, of $250,000—to Nick Fuentes, a far-right personality with a large online following. Mr. Bachelier donated a further $272,000 to other right-wing causes—again using bitcoin—giving more than $17,000 to the social-media platform Gab, and a similar amount to the anti-immigration website VDARE.com, according to the report.

Weeks later, Mr. Fuentes and some of his supporters were part of the crowd at President Trump’s rally before the Jan. 6 attack on the U.S. Capitol, according to researchers who have been studying the event and its participants.

The Federal Bureau of Investigation is exploring potential foreign sources of funding for far-right groups in the wake of the Capitol riots, and the agency has been briefed on Mr. Bachelier’s donations, according to people familiar with the matter.

There is no suggestion that the donations were a crime, but as part of their counterintelligence mission federal agencies have sought to better understand whether foreign governments or individuals have played a role in fanning U.S. extremism as a means to destabilize the country or attempt to interfere in elections, one of the people said.

French media outlets have been abuzz over the mysterious transactions. Le Monde, among other publications, asked: “What could have actually pushed a Frenchman to give such sums to American extreme-right militants?”

Mr. Fuentes is a vocal supporter of Mr. Trump’s efforts to overturn the election results and of the Jan. 6 event in Washington D.C. He didn’t return emails seeking comment. On Twitter, where he has more than 128,000 followers, he said that he attended the event but didn’t enter the Capitol.

Bitcoin’s value has nearly doubled since Dec. 8, making Mr. Bachelier’s total donations worth more than $1 million at Sunday’s exchange rate.

Gab Chief Executive Andrew Torba said the donation was all the more important because his company has been cut off by many financial-services providers. “Those who deplatformed people on the right, like me, from traditional financial services are going to end up making right-wing dissidents incredibly rich as bitcoin continues to soar in value,” he said. “There’s a beautiful irony here, and I love to see it.”

Peter Brimelow, VDARE’s founder, declined to comment on the bitcoin transaction; he said the mainstream media is “on a campaign to intimidate patriots.”

Law-enforcement officials have long been concerned that bitcoin could be used to fund extremist groups. Because bitcoin runs on a decentralized network of computers, it is almost impossible to control centrally. It has become a payment form of choice for hackers and digital extortionists.

As Mr. Bachelier’s case shows, Bitcoin’s design is a double-edged sword. It is hard to control, but transactions on the network are also completely public. That made tracking down Mr. Fuentes’ big donor possible, said Maddie Kennedy, a spokeswoman for Chainalysis.

After learning of the $522,000 bitcoin donations from a reporter at Yahoo News, Chainalysis initially pursued whether they might have been part of a foreign-influence operation in support of domestic terrorism within the U.S., Ms. Kennedy said. The trail instead led to Mr. Bachelier, a computer programmer who expressed radical political views online.

Mr. Bachelier’s brother, Fabien Bachelier, said in an interview that his sibling had committed suicide and that the family was in mourning. “We don’t understand. We are just learning about some things,” he said. He declined to comment further.

Mr. Bachelier, born in March 1985 according to one online death notice, was one of the developers of Weboob, a set of tools used to scrape information from websites without having to use a browser. Mr. Bachelier expressed interest in libertarian ideology and had taken some right-wing political positions, according to a review of his online postings as well as a person who studied with him in college.

Mr. Bachelier complained online about French politics, called new copyright rules censorship and said “feminism is a mental illness.”

On Dec. 9, the day after the bitcoin transfers, his blogs published a post with the title “The End” featuring a long letter saying that “If you’re reading this, I’m deceased.”

In the letter, Mr. Bachelier explained that he had for eight years suffered from a condition called trigeminal neuralgia, which left him in constant pain, and detailed the conditions that he says led him to take his own life.

Among them, Mr. Bachelier cited the “decline of Western civilization” and perceived grievances including what he described as “the rejection of our ancestors and our heritage,” as well as civil-liberties restrictions based on Covid-19, which he said was no worse than the flu. He also referenced conspiracy theories around the Sept. 11 terrorist attacks and the Holocaust.

“I care about what happens after my death,” Mr. Bachelier wrote. “That’s why I decided to leave my modest wealth to certain causes and people. I think and hope that they will make a better use of it.”

It couldn’t be determined whether there was any connection between Mr. Fuentes and the late Mr. Bachelier apart from the bitcoin transfer

Mr. Fuentes, 22 years old, is one of the most prominent far-right personalities online, and was banned from YouTube in 2019 for violating its hate-speech policy. Before Mr. Bachelier’s donation, Mr. Fuentes had been averaging about $80 a month in donations to a digital tip jar for bitcoin he set up in October 2017.

The followers of Mr. Fuentes are called Groypers, in reference to a fictional character who is considered the cousin of Pepe the Frog, a comic-strip character that has been appropriated as a racist and anti-Semitic figure by some hate groups. Mr. Fuentes calls his movement “America First,” and some people who marched on the Capitol were carrying “AF” flags, in homage to him, said Megan Squire, a professor at Elon University who tracks extremist groups online.

Prices at record high fuelled by shortage of containers and recovery in consumer demand

The cost of shipping goods from China to Europe has more than tripled in the past eight weeks, hitting record highs as a shortage of empty containers stemming from the pandemic disrupts global trade.

The cost of shipping a 40ft container from Asia to northern Europe has increased from about $2,000 in November to more than $9,000, according to shippers and importers.

Lars Jensen at consultancy SeaIntelligence said: “It’s a bottleneck problem . . . These rates are being driven by customers fighting over a limited resource — containers.”

Thousands of empty containers were left in Europe and the US in the first half of 2020 when shipping lines cancelled hundreds of sailings as coronavirus lockdowns caused a sudden slowdown in global trade. When western demand for Asian-made goods rebounded in the second half of the year, competition among shippers for available containers sent freight rates soaring.

John Butler, president of the World Shipping Council, said: “We've gone from a tremendous drop-off to getting whipsawed into historically high cargo volumes and there's now more than terminals can efficiently handle.”

Congestion at ports is contributing to higher prices, with shipping lines charging extra fees to compensate for longer waiting times, he added.

Since November the cost of shipping to Europe has been exacerbated by the diversion of containers to trans-Pacific routes. By contrast, the cost of shipping from China to the US has plateaued since October, when the Chinese government asked shipping companies to cap their rates.

Philip Edge, chief executive of UK freight forwarder Edge Worldwide, said some businesses were being charged $12,000 per container, up from about $2,000 in October.

The UK’s Association of Manufacturers of Domestic Appliances said in a statement that its members reported increases in shipping costs of up to 300 per cent since the start of 2020, including cases “where the increase in cost of shipping is greater than the retained profit from the goods . . . so these costs will have to be passed on to end users”.

“Producers do not expect to be able to absorb these huge increases in freight costs,” it said.

The owner of an importer of leisure goods based in Manchester, who did not wish to be named, said the container shortage was having “an enormous impact” on business, with some orders placed in November still waiting to be shipped. “The question is, do you pay the $12,000 [cost] now and pass those prices on to customers or wait and risk stocks drying up?”

The disruption and delays are beginning to affect global supply chains, according to economists. “Signs of strains are building up,” said Neil Shearing, chief economist at Capital Economics, who warned that the pressure is expected to “intensify before it eases”.

A recent survey by IHS Markit found that, in December, eurozone manufacturing suppliers’ delivery times reached the worst levels since the height of pandemic-related lockdowns last April, and delays in transportation and general goods shortages at suppliers “were widely reported”.

Surveyed companies said they were running down their stocks of raw materials and semi-manufactured goods, resulting in falling inventories, and reported a rapid increase in input prices.

Bert Colijn, senior economist at ING, said “supply shortages and higher freight rates could dampen trade growth a bit” and contribute to “temporarily higher inflation pressures over the course of the year”.

Shipping lines hope the slowdown in Asian manufacturing that typically accompanies Chinese new year in February will allow carriers to tackle the growing backlog of orders and lead to at least a temporary cooling of prices. 

But Peter Sand, an economist at international shipping association Bimco, said container shortages were likely to continue long into 2021 despite carriers recently placing new orders for containers, which he described as “too little, too late”.

Mr Jensen said that although prices may drop a little, “there is still a huge amount of cargo waiting to be shipped”.

Pressure on maritime supply chains should ease “when people have more options to spend on services” because coronavirus-related restrictions have been lifted, Mr Butler said — but “when that happens is anyone's guess”.

Martin Stapleton focused on corporate failures among European industrial mid-caps

Gladstone Capital, one of London’s most successful hedge funds at betting on falling stocks, has seen the departure of a leading fraud investigator.

Martin Stapleton, a former Goldman Sachs employee who focuses on trying to identify company frauds and failures, is leaving after around four years at the firm, people familiar with the company said. 

Mr Stapleton, who was one of six partners at the firm, previously worked at Steve Cohen’s SAC Capital, and in 2014 was part of a nine-strong team that joined Louis Bacon’s Moore Capital. At Gladstone he has focused on European industrial mid-cap groups.

He has built an extensive database designed to spot corporate failures and spoken at conferences on frauds. One investor described Mr Stapleton as one of the best short-sellers in the hedge fund industry.

Gladstone, a low profile firm founded by former Lansdowne Partners equity analyst George Michelakis in 2005 and which now manages $2.7bn in assets, has quietly emerged as one of London’s top-performing hedge funds in recent years.

Its Lasker fund has delivered double-digit gains in each of the past four years, according to letters to investors and people familiar with its returns. That includes 23 per cent gains both in 2018’s market falls and last year, when it made money in March’s market turmoil.

Returns in recent years have been helped by a swath of successful short bets, including against contractor Carillion, South African conglomerate Steinhoff, German leasing firm Grenke and litigation funder Burford Capital.

It also holds one of the biggest bets against UK defence contractor Babcock International, which on Friday said it may be forced to cut the expected value of contracts and future income, and whose share price has fallen from around 520 pence when Gladstone disclosed its position two years ago to just above 200p. According to data group Breakout Point, Gladstone is the 10th most active short-seller in European stocks.

Short selling, which involves borrowing shares to sell in the market and hoping they fall in price before buying them back, is one of the hedge fund industry’s best-known tactics. However, it is notoriously hard to profit from, particularly during bull markets or periods of high takeover activity.

Lansdowne Partners, one of London’s biggest and oldest hedge funds, told investors in 2019 that since the global financial crisis its short positions had not beaten the market in aggregate, and last year it shut its flagship hedge fund, saying it had become harder to find attractive shorting opportunities.

A person close to the firm said Mr Stapleton was one of several people who fed trading ideas to Mr Michelakis, who decides on Gladstone’s trades. As the firm has grown, it has increasingly focused on large-cap stocks globally in sectors such as technology and financials, and Mr Stapleton’s area of focus has decreased in importance for the firm, the person said.

Last year the firm hired short-selling specialist Matthew Wallis as a partner, focusing on the consumer and diversified financial sectors.

Gladstone Capital and Mr Stapleton declined to comment. Mr Stapleton’s future plans are unclear.

Macron: a banker to gain connections, a politician to get re-election

If a yoghurt maker can be protected in the name of ‘economic patriotism’ in France, then it seems the same logic can be applied to defend the place where that yoghurt is sold. 

That’s DD’s takeaway after Canadian petrol station operator Couche-Tard walked away from a €16.2bn bid to buy France’s dominant retailer Carrefour.

The shortlived affair, which ran into serious problems once France’s finance minister Bruno Le Maire declared his opposition to the deal, has not left any of the parties involved looking too good. 

It has also rekindled memories of France’s sometimes wild interventions into global dealmaking. 

Recall that for over 15 years, France has been trying to shake off its reputation as a country hostile to foreign acquirers ever since its prime minister vowed to protect Danone from a rumoured bid from PepsiCo (back in 2005, then French prime minister Dominique de Villepin said that the food multinational was one of the country’s industrial “jewels”). 

Since then, a number of cross-border deals for French companies including steelmaker Arcelor, telecom gear specialist Alcatel-Lucent, cement giant Lafarge, and energy group Technip have been executed successfully. 

“How can you tell me France is investor-friendly and go and do something like this?” one person involved in the deal told the FT’s Leila Abboud in Paris. “Protectionism may be politically popular but it is bad for the country in the long run.”

This time around, though, the irony is that the country is now run by a politician who spent several formative years striking deals in the Paris office of advisory firm Rothschild & Co. But what Couche-Tard seemingly failed to calculate is that Emmanuel Macron is a politician with huge ambitions. 

His time at Rothschild was intended to ingratiate him in the world of the rich and powerful. One source recalled that Macron didn’t even know what ‘ebitda’ was back when he started at the firm in a senior position, before ascending to even greater heights. 

The mooted takeover of Carrefour, the country’s largest private-sector employer, would have played out dangerously for Macron, as he prepares for a re-election campaign.

Now, dealmakers are left to ponder whether blocking a friendly Canadian bid into the French market was driven primarily by political calculations (and thus whether that stance will shift once elections are over), or whether there has been a narrowing in the sorts of assets that foreign bidders can attempt to buy.

Couche-Tard chief Brian Hannasch on Monday blamed the pandemic and fears over food security for the French government’s reaction. He also suggested that if the government changed its tune the Canadian company would be open to re-engaging. 

In the short-term, none of this is much comfort to shareholders in Carrefour, whose fortunes continue to wane relative to its international competitors.

One Parisian banker offers an alternative view that brings the whole episode closed circle: “If you let Carrefour go, then the next one to fall is Danone.”

Speaking of which, on Monday, Leila reported an activist investor has called for Danone’s chairman and chief executive Emmanuel Faber to be replaced because of its “disappointing” share price performance.

Be it running, cycling or an outdoor HIIT class, get the most out of your workout with weatherproof clothing and accessories

More than a year after the first known outbreak of Covid-19, much of the world remains in some form of lockdown. Here in the UK, tier 4 guidelines announced recentlymean that all gyms, lidos and public leisure centers are closed until further notice. But for the brave few, the chilly outdoors is an opportunity to shake up the now monotonous routine of indoor exercise via apps or Zoom, and provides a chance to escape the confines of home (even if only an hour a day). 

For Jason Leggett, Barry’s Bootcamp master trainer and outdoor running enthusiast, the cold outdoors is the optimal workout environment — as cold air constricts blood flow, making the heart pump harder. Regardless of your chosen sport, be it running, cycling or HIIT training, Leggett stresses that what you wear is important, not only for performance but also for your mental motivation. 

Leggett advises investing in good training or running footwear — something comfortable and durable such as the Nike Pegasus Gore-Tex sneaker (£130, nike.com); a lightweight bag or belt to hold necessary items (like a face-mask and house keys) that won’t distract or feel uncomfortable, such as the Free Train Running vest (£30, freetrain.co.uk), and to purchase good-quality headphones to “keep you focused and energised” (Leggett’s go-to is the Beats Powerbeats Pro £220, beatsbydre.com).

Celebrity personal trainer Henry Ives, director and founder of H+ Performance, based in London, advises beginning your workout inside with a five-minute warm-up. “Start with a simple circuit of lunges, side lunges, glute bridges and planks. This should be good to get you going, so you aren’t starting your workout cold,” he says. His chosen outdoor kit is from Australian label 2XU, which specialises in technical running wear. Its compression tights (from £70, 2xu.com) are breathable and designed to reduce soreness and recovery time, and according to Ives are “next level for comfort, support and warmth whilst not making you too uncomfortably hot”.

So brace yourself for the nippy open air — and also for a great workout — with an edit of cold-weather kit for men and women. 

Three storied auto makers start trading with a new name. It’ll probably grow on you.

The combined businesses of Fiat Chrysler Automobiles NV and Peugeot maker PSA Group made a debut on the Paris and Milan stock exchanges Monday and will start trading Tuesday on the New York Stock Exchange under the name Stellantis.

Stella-what?

The new name has puzzled car-industry experts, dealers and customers since its July unveiling. Why not one or several of the group’s brands, like Jeep, Dodge, Alfa Romeo and Maserati?

The name rang like “a product to ease stomach pain,” wrote the car columnist for The Australian newspaper. An Automotive News story about the unveiling carried the headline: “Take 2 Stellantis and call me in the morning.”

Luis Guzman, based in Austin, Texas, drives a Chrysler 300M sedan from the early 2000s and said he is embarrassed by the name: “I love the car and hate the fact that [Chrysler] is going to be owned by a company called Stellantis.”

Fiat Chrysler and PSA said Stellantis draws on the Latin “stello,” meaning “to brighten with stars.” The Latin root reflects the combined companies’ French and Italian heritage. The name also signifies the “creation of one of the new leaders in the next era of mobility,” the companies said.

“Our thought process was really very simple,” said Mike Manley, former chief executive of Fiat Chrysler, who will lead the new group’s Americas operations. “We have a stable of some fantastic, storied historic brands. We knew from the beginning that we didn’t want to use those brand names as our corporate name.”

Pierre-Olivier Salmon, head of corporate information at PSA, said “We are very, very happy and proud of this name, which already unites us,” declining to discuss the name in detail.

“People don’t know what Stellantis is,” said Jeremy Beaver, president of Del Grande Dealer Group in California, “but this company has changed its name so many times I don’t think it matters to the average customer.”

One advantage to a new name: It avoids disputes about who goes first—something that dogged the 1998 merger of Daimler and Chrysler.

Chrysler’s then-chairman, Robert Eaton, told The Wall Street Journal at the time that the name was the last issue to be discussed before the boards signed off. Daimler’s then-chairman, Jürgen Schrempp, had argued that the names of founders Gottlieb Daimler and Carl Benz had to be first, proposing Daimler-Benz Chrysler. Mr. Eaton countered that Walter P. Chrysler had founded their company and was an American pioneer. His name had to go first: Chrysler Daimler-Benz.

Mr. Schrempp told the Journal at the time that he and Mr. Eaton never considered compromising by creating a name unrelated to their heritage.

For centuries, company names have reflected their founders ( Walt Disney Co. ), products ( Coca-Cola Co. ), industries ( General Electric Co. ) or, sometimes, birthplace ( Cisco Systems Inc. ).

Fiat Chrysler combines Fiat, which Giovanni Agnelli founded in 1899 as Fabbrica Italiana Automobili Torino, and Chrysler, which Mr. Chrysler founded in 1925. Peugeot was created in 1882 when Armand Peugeot broke from the family’s business making bicycles and coffee grinders to bet on the horseless carriage.

Like baby-naming, company-naming has tracked fashion recently. Hip businesses deploy made-up names (Google), sometimes using a made-up verb (Spotify) or adverb (Wonderly), or a prefix (Uber). Rarely do these names betray what the companies do.

In 2001, Andersen Consulting sparked confusion and hilarity when it renamed itself Accenture—officially a contraction of “Accent on the future.” The name became widely recognized.

Mondelez, the name Kraft Foods gave its snacks business in a 2012 spinoff, combined “monde,” derived from the Latin for “world,” and “delez,” a “fanciful expression of ‘delicious,’ ” according to executives.

Then-Mondelez board member Nelson Peltz said at a conference the following year that the name “sounds like a disease.”

Still, “Mondelez just became accepted after a while,” said Erika Troia, senior naming strategist at naming agency PS212. With most new names, she said, “After the initial confusion, it ends up coming to a place of acceptance.”

Except when it doesn’t, as with Tronc. When Tribune Publishing Co. , owner of newspapers including the Chicago Tribune and the New York Daily News, renamed itself Tronc Inc. in 2016, executives said it was short for Tribune Online Content and a banner for its digital future. Some other people said it sounded like nonsense.

The company became Tribune Publishing again two years later.

“The way that words hit our ears affects what we think of them,” Ms. Troia said. “Tronc just has a really unfortunate sound to it.”

One reason to invent names is avoiding trademarks. “Finding something that’s protectable and available hasn’t trumped everything, but it has become a major part of the process,” Jane Geraghty, Global Chief Executive at Landor & Fitch, a branding agency owned by WPP PLC.

“In the old days we could come up with a relatively short list of names that would fit the story that we wanted to tell,” she said. “Now we have to generate thousands of names in the process to find, ultimately, a solution that you’re going to be able to trademark.”

The auto industry is going through a rebranding and renaming phase that largely reflects its move to clean electric vehicles. South Korea’s Kia dropped “Motors” from its name last week, saying it was revamping its brand to further its “vision to create sustainable mobility solutions.”

General Motors Co. has called its battery company Ultium, prompting Morgan Stanley analyst Adam Jonas to ask GM CEO Mary Barra during a July earnings call: “Why not call the company Ultium, the entire company?” Ms. Barra replied that GM was willing to entertain any idea that benefited shareholders.

As Mr. Manley, who will lead Stellantis’s Americas operations, put it in July: “I have to tell you that the naming of a new company is—there’s no doubt—it’s a process for sure.”

There was poetry in Stellantis, he said, “and I’m not a particularly poetic person.”

Biden’s pick to lead Treasury says Congress must ‘act big’ to boost economic recovery, fend off ‘long-term scarring’

WASHINGTON— Janet Yellen, President-elect Joe Biden’s choice for Treasury secretary, plans to tell lawmakers that the U.S. risks a longer, more painful recession unless Congress approves more aid and urge them to “act big” to shore up the recovery.

Ms. Yellen is set to testify Tuesday before the Senate Finance Committee, which is considering her nomination, according to a copy of her prepared remarks that was viewed by The Wall Street Journal.

“Economists don’t always agree, but I think there is a consensus now: Without further action, we risk a longer, more painful recession now—and long-term scarring of the economy later,” Ms. Yellen will say. “Over the next few months, we are going to need more aid to distribute the vaccine; to reopen schools; to help states keep firefighters and teachers on the job.”

Mr. Biden’s nomination of Ms. Yellen positions the 74-year-old labor economist to lead his administration’s efforts to advance the recovery from the destruction caused by the coronavirus pandemic and related shutdowns. She will also play a key role in pushing the administration’s economic agenda on Capitol Hill, a job that will start in earnest Tuesday, said Tony Fratto, a senior Treasury and White House aide in the George W. Bush administration.

Mr. Biden’s $1.9 trillion coronavirus relief package, unveiled last week, provides for another round of direct stimulus payments, extended and enhanced jobless benefits, funding for schools and first responders and the creation of a nationwide vaccination program. It also includes longstanding Democratic priorities, such as raising the federal minimum wage to $15 an hour and expanding paid leave for workers.

Republicans have decried the size and scope of the measure, arguing it would spend more than the economy needs. Some Republicans and Democrats have also expressed concern about the growing national debt, which at $21.6 trillion exceeds the annual output of the U.S. economy.

Ms. Yellen aims to address those concerns in her testimony: “Neither the President-elect, nor I, propose this relief package without an appreciation for the country’s debt burden. But right now, with interest rates at historic lows, the smartest thing we can do is act big.”

The hearing comes at a time of growing uncertainty over the progress of the pandemic, which has killed close to 400,000 people in the U.S., as well as the state of the economy. Retail sales fell for the third straight month in December and employers cut jobs, ending seven months of employment gains.