washingtonpost--2020-04-29--Smallest Lenders Get Their Own Time Slot to Seek Virus Loans

The SBA is accepting only applications from lenders with assets of less than $ 1 billion between 4 p.m. New York time until 11:59 p.m. on Wednesday .
The agency said in an email that it and U.S. Treasury Department “ will evaluate whether to create a similar reserved time again in the future.
” The agency is seeking to improve access to its overwhelmed loan-processing system amid a flood of applications as the program relaunched Monday with an additional $ 320 billion after the initial round of $ 349 billion ran out on April 16 .
While trying to @ @ @ @ @ @ @ just days , the SBA has been facing complaints from all sides -- from business owners to bankers and lawmakers .
“ We ’ ve pivoted , and we ’ ve made it very , very reasonable for all banks to participate in this program , ” SBA Administrator Jovita Carranza said on the “ The DeMaio Report with Carl DeMaio and Lou Penrose ” radio program Wednesday .
After lenders of all sizes complained that the SBA system was inaccessible or kicked them out when the program restarted on Monday , the @ @ @ @ @ @ @ not use robotic systems to help submit applications so the platform “ will be more reliable , accessible , and equitable for all small businesses.
” The SBA is also limiting the number of applications any one lender can submit each hour .
A coalition of trade groups representing the interests of thousands of U.S. banks and credit unions urged the SBA on Tuesday to fix its application system or to explain the problems directly to entrepreneurs .
The data SBA has reported so far suggest small lenders are getting through .
Of @ @ @ @ @ @ @ from more than 960,000 applications processed as of Wednesday evening , more than $ 43 billion came from the smallest financial institutions -- including $ 30 billion that Congress had carved out for them to disburse -- and more than $ 20 billion from mid-size lenders , SBA said .
Lenders with more than $ 50 billion in assets had about 167,000 applications processed worth more than $ 25 billion , according to the agency .
Kevin Fromer , chief executive officer of the Financial Services Forum , said the SBA blocking almost @ @ @ @ @ @ @ eight-hour period will delay relief to thousands of small business owners who use large banks .
“ A better solution would be a fully operational system that allows banks of all sizes to provide support to Main Street , ” Fromer said in a statement .
“ This I don ’ t agree -- many small businesses went to banks over $ 1 billion to help provide for their family , ” Consumer Bankers Association Chief Executive Officer Richard Hunt said in a tweet .
“ There was already a carve out for @ @ @ @ @ @ @ ’ t play favorites with small businesses .
All need a lifeline right now.
” It ’ s a welcome attempt to get loans to the self-employed , independent contractors and smallest firms , according to Paul Merski of the Independent Community Bankers of America .
Meanwhile , lawmakers are complaining that big banks and large companies are getting help at the expense of small firms and are calling for investigations .
Democratic Senators Brian Schatz of Hawaii and Sherrod Brown of Ohio sent a letter to SBA and Treasury on Tuesday saying @ @ @ @ @ @ @ 1 million should be processed first .


washingtonpost--2020-04-29--Analysis | Barclays Traders Lead the Wall Street Pack

Trading at the British bank was off the charts in the first quarter .
Its fixed-income division raked in 1.9 billion pounds ( $ 2.4 billion ) , twice what it earned in the same period last year , and about three times the average gain of its American competitors .
In equities , revenue rose 21 % to 564 million pounds , largely in line with rivals .
And unlike the recent slowdown in trading activity that some competitors have been seeing , Barclays said its second quarter was already well ahead of the same period in 2019 , @ @ @ @ @ @ @ There are some reasons for caution .
The bank took a hit on leveraged loans of about 320 million pounds , offset partially by hedges .
Staley said he was confident that the risk to the bank ’ s high-yield loan book has subsided , with U.S. junk bonds recovering after the Federal Reserve ’ s decision to buy in the market .
But just how many more risks have Barclays traders been taking than their rivals ?
Asked by an analyst about his company ’ s secret sauce , Staley said the @ @ @ @ @ @ @ taking a particular trading position on the markets and the Covid-19 pandemic ’ s impact .
Instead , he said it reflected a sharp increase in client activity during a period of extreme dislocation across asset classes .
“ Everyone here is committed to making sure that this bank is a firewall as we go through this economic crisis , ” Staley said .
With the wind in its sales from trading , Barclays does seem to be provisioning for bad loans more prudently than some of its European peers .
The bank @ @ @ @ @ @ @ for the quarter , more than three times the amount set aside by Deutsche Bank AG .
Most of the Barclays impairment reflects the deteriorating macroeconomic outlook , and it includes a provision for its oil loan book that assumes a 50 % chance of crude prices remaining at $ 20 for the rest of the year .
Crucially , the bank ’ s forward guidance may provide the greater comfort to investors .
Excluding oil and gas , Barclays has a further 26.4 billion pounds of lending exposure to other sectors that @ @ @ @ @ @ @ , from airlines to hospitality .
This makes up about 4 % of its credit-risk exposure .
Assuming that global gross domestic product and unemployment data don ’ t worsen relative to the Barclays models , the bank said its quarterly impairments should run at between 800 million pounds and 1 billion pounds per quarter this year .
That ’ s largely in line with analyst expectations , which estimate that Barclays will remain profitable in 2020 .
Still , income is falling in the bank ’ s British unit and its U.S. @ @ @ @ @ @ @ other half of Barclays ’ s profit and most of the impairment charges .
Lower interest rates are eating into profit margins and customers are spending less .
Overall , Staley will be emboldened in his defense against an activist investor , Edward Bramson , who has tried to get Barclays to shrink its investment bank .
He isn ’ t out of the woods yet , though .
The CEO ’ s personal conduct is the subject of regulatory scrutiny for the second time since he took charge of the lender .
@ @ @ @ @ @ @ of the coronavirus outbreak throwing up new surprises .
As Staley said on Wednesday , this is beyond what we lived through in the financial crisis of 2008 “ by some measure .
”

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washingtonpost--2020-04-21--Analysis | Question Everything You Know About Bonds Versus Stocks

It ’ s not supposed to work that way , as every investor has been told tirelessly .
Bonds are for stability and stocks are for growth .
The price of stability is lower returns relative to stocks , and the price of growth is higher risk relative to bonds .
That trade-off between stocks and bonds is known in technical parlance as the equity risk premium .
The premium was once shockingly reliable over long periods .
From 1926 to 1999 , the longest period for which numbers are available , long-term government bonds beat the S & P @ @ @ @ @ @ @ over rolling 20-year periods , counted monthly .
And all those victories were clustered around a short period from 1948 to 1950 , the aftershock of stocks ’ tumult during the Great Depression .
But the equity risk premium has been less bankable since then .
Bonds have beaten stocks 26 % of the time over rolling 20-year periods ending in 2000 or later .
While it ’ s not easy to draw neat causal lines around markets , there are some obvious contributors to bonds ’ recent success .
The historic decline @ @ @ @ @ @ @ the 1980s to record lows today has bolstered bonds .
Also , stocks stumbled on an unusual succession of extreme shocks , beginning with the bursting of the biggest stock market bubble in U.S. history in 2000 , followed by a near collapse of the financial system in 2008 and now a global pandemic that has shut down the economy .
What is clear is that stocks ’ sagging performance over the last two decades is a challenge to three burgeoning investing theories .
The first is that the cyclically adjusted price-to-earnings , @ @ @ @ @ @ @ vaunted barometer of future stock returns , has lost its predictive power .
From 1881 to 1999 , the average CAPE ratio for U.S. stocks hovered around 15 , according to numbers compiled by Yale professor Robert Shiller .
When the CAPE drifted meaningfully higher during that period , subsequent stock returns tended to be lower than usual , and vice versa .
Then the CAPE seemed to break down .
After the fierce bull market of the late 1990s , the CAPE stood at a record high of 44 when 2000 began @ @ @ @ @ @ @ S & P 500 was cut roughly in half during the ensuing market crash , but the CAPE bottomed at 21 in early 2003 , still well above its historical average .
Nevertheless , a new bull market took hold and , except for a brief period around the financial crisis , the CAPE has been higher ever since .
Those who waited for the CAPE to dip back below its historical average missed the bull market that followed the financial crisis , by some measures the second longest on record .
And @ @ @ @ @ @ @ even the coronavirus has been able to subdue the CAPE , which now stands at 23 .
Many investors have concluded from the last two decades that the CAPE has become more noise than signal .
That now appears to be hasty .
In addition to losing to bonds , the S & P 500 has returned 4.8 % a year over the last 20 years through March , which is roughly half its long-term average .
Perhaps the CAPE ’ s warning rang true after all .
A second and related theory @ @ @ @ @ @ @ a boon for stocks .
When the dot-com bubble popped in 2000 , the Federal Reserve jumped in to dampen the fallout by gradually lowering short-term interest rates to 1 % from 6.5 % , a level not seen in the U.S. since the 1950s .
Subsequent interventions have been more brazen .
The Fed cut rates to near zero and purchased roughly $ 4 trillion worth of bonds during the financial crisis , the most ambitious stimulus effort in the Fed ’ s history .
And in recent weeks , the Fed @ @ @ @ @ @ @ pledged to prop up bond markets , expanding its balance sheet to a record $ 6 trillion .
The third theory is that value investing is dead .
While value stocks have historically paid a premium relative to growth , U.S. growth stocks have beaten value over the last 12 years and have held up better during the current downturn .
For many investors , it ’ s a sign that value stocks can no longer be expected to pay .
But if 12 years of underperformance for value relative to growth means @ @ @ @ @ @ @ what does 20 years of underperformance for stocks relative to bonds say about the equity risk premium ?
Not much , apparently .
Investors have handed a net $ 36 billion to U.S. equity exchange-traded funds since the S & P 500 tumbled from its peak on Feb. 19 , according to Bloomberg Intelligence .
Still , it ’ s early days .
With the CAPE perched at 23 , more than double its financial crisis low , the market appears to be signaling that the coronavirus shutdown will be short-lived .
But @ @ @ @ @ @ @ likely to extend their lead over stocks , and investors may have to second-guess some newly embraced ideas .


washingtonpost--2020-04-21--Analysis | What’s a ‘Term Premium,’ and Where Did Mine Go?

It ’ s the difference between what you get for locking up your money for an extended period and what you would get if you simply kept rolling over short-term instruments for the same amount of time .
Many investors and analysts use the term premium on a Treasury note to help decide if it ’ s worth buying .
By one Fed model , the term premium that 10-year Treasury bonds offer has averaged about 1.56 percentage points since 1961 .
It hit an all-time low of -1.299 percentage points in March .
The longer you lend money to @ @ @ @ @ @ @ , a government ) for , the more time there is for things to go wrong .
Former Fed boss Ben S. Bernanke says that in his analysis the term premium reflects the buffer that investors need to account for two key risks .
One is changes in demand for or the supply of bonds , which can affect prices .
The other is inflation , which would reduce the real value of future bond payments .
When investors feel more uncertain on either point , they demand a higher premium .
Yield @ @ @ @ @ @ @ difference between what someone gets for investing their money for entirely different periods , say for two years versus 10 years .
That gap includes the term premium along with other variables including a premium for liquidity that reflects how hard or easy it is to trade the securities .
In 2019 , it had much to do with demand for Treasuries in a flight-to-safety amid the U.S.-China trade dispute .
In 2020 , there ’ s been an even bigger scramble for the security of Treasuries given fear of a steep global @ @ @ @ @ @ @ the deadly coronavirus .
Fundamentally , you can mostly give blame to the Fed , and the intervention it has done in the past with bond markets known as quantitative easing , or QE .
The U.S. central bank cut its key interest rate to near zero after the 2008 market meltdown .
When the economy failed to revive , it began massive bond purchases with the goal of reducing longer-term rates .
It also swapped short-term debt it held for longer-term debt , in what became known as Operation Twist .
By @ @ @ @ @ @ @ the term premium by 100 basis points on 10-year Treasury yield .
And after spending some time shaving down its debt holdings a bit , the Fed last year began purchasing Treasury bills ; after the pandemic ’ s spread roiled global markets , the Fed greatly expanded its buying of coupon-bearing notes across a range of maturities .
These note and bond purchases aren ’ t a new round of QE , but were undertaken to support market functioning .
The bill buying in 2019 was to combat a sharp spike in @ @ @ @ @ @ @ in the money markets .
It doesn ’ t seem likely , at least at this time .
Wall Street strategists project that the term premium will eventually rise , but not likely back to historical average .
A possible upward force on term premia may come as the Treasury ramps up debt issuance to finance a fiscal shortfall that is ballooning due to the over $ 2 trillion government disaster relief package put in place to support workers and companies affected by the pandemic .
There seems no end in sight for @ @ @ @ @ @ @ .
And an array of Fed support programs are lifting the Fed ’ s balance sheet , with it already having over over $ 6 trillion in assets .
That ’ s well above the roughly $ 900 billion it held before the financial crisis .
And similar debt purchases in Japan and Europe is keeping global debt yields low and demand relatively high for U.S. Treasuries .


washingtonpost--2020-04-21--Analysis | When Small Businesses Get Loans They... Buy Property?

But much to Beijing ’ s dismay , instead of paying salaries or shoring up working capital , these enterprises seem to be using the proceeds to buy real estate .
The People ’ s Bank of China on Monday asked commercial banks in Shenzhen to look into whether their borrowers used property-backed business loans for this purpose during the outbreak .
In March , existing home prices in the tech hub rose 9.7 % from a year earlier , the fastest pace in three years .
This sudden frenzy makes little sense considering the local economy had ground to @ @ @ @ @ @ @ dried out and tech workers lost their jobs .
In the past month , anyone in Shenzhen with an entrepreneurial streak has gone apartment hunting , because rates are simply too low to resist .
This set of borrowers only needs to pay up to 4.5 % , according to Caixin , a financial news outlet .
In addition , the Shenzhen government is offering to reimburse up to 70 % of interest payments , as long as you ’ re a first-time borrower who runs a technology startup .
All told , @ @ @ @ @ @ @ of her existing property ’ s market value at as little as 1.35 % , well below the average mortgage rate of 3.25 % .
Meanwhile , knowing that small enterprises have become Beijing ’ s top policy directive , commercial banks and the Shenzhen municipal government are eager to oblige .
The Big Four lenders are being asked to grow their small and medium business loan books by another 20 % this year , after a 55 % jump in 2019 , so they are approving whatever that comes to their desks @ @ @ @ @ @ @ by property .
As for the Shenzhen government ’ s parameters , almost every company could be eligible for the generous subsidy so long as its research and development expenses exceed 4 % of sales , and over 60 % of revenue comes from the broad industry category of “ high-tech innovative industries and services.
” It ’ s worth asking why entrepreneurs are using the proceeds this way .
An alternative could be to plow into the Shenzhen stock market , which is offering positive returns this year .
Some business owners @ @ @ @ @ @ @ real estate always has a special space in China Inc. ’ s heart .
Of over 3,800 listed non-financial companies in mainland China , more than 40 % hold property as investments , even though their business operations have nothing to do with the sector , data compiled by Bloomberg show .
This certainly isn ’ t the case in the U.S .
In China , owning these assets is essential to survival .
Even by the central bank ’ s own admission , its big lenders have become “ pawn shops , @ @ @ @ @ @ @ private businesses with sufficient physical collateral .
So if you ’ re a technology startup facing a slowdown , but the bank is offering you some cheap cash , the best course of action may be to buy another apartment .
This way , when the economic outlook brightens down the road , you can use that property to take out bank loans .
As for the big banks , you can ’ t necessarily blame them for behaving this way .
They don ’ t make any money at the rates they @ @ @ @ @ @ @ CLSA Ltd. has crunched the numbers : By the end of 2019 , the average loan rate for small and medium-size enterprises was lowered to 4.75 % , but once we account for banks ’ own funding costs ( 1.77 % ) , the money set aside to cover soured loans ( 2.3 % ) and operating expenses ( 0.8 % ) , these financial institutions are barely breaking even .
If they want to lend at all , they naturally prefer to have solid physical assets as collateral .
Offering subsidized small @ @ @ @ @ @ @ directive is a tiresome job for commercial banks everywhere .
In the U.S. , the largest will prioritize their bigger corporate clients .
In China , lenders just want to rubber stamp their decisions and make the tedious task disappear , without checking whether proceeds are being used for their intended purposes .
A lot of heavy plumbing will have to be done on both sides of the Pacific for these programs to work .


washingtonpost--2020-04-21--Stop Trashing the Programs That Help Small Business

The Paycheck Protection Program is designed to provide forgivable loans to businesses with fewer than 500 employees for payroll expenses , rent , utilities and mortgage-interest payments , provided that those companies do not lay off their workers .
It is the most important government effort to stop small businesses from going under and to keep workers attached to their employers .
Media reports have painted a picture of chaos in launching the program .
But it is succeeding to a greater degree than the coverage would have you believe .
Congress allocated $ 349 billion in forgivable loans , @ @ @ @ @ @ @ late last week , less than two weeks after it began .
During that time , nearly 5,000 lenders approved 1.7 million loans .
Eighty-eight percent of the loans were for amounts less than $ 350,000 , and three-quarters were for less than $ 150,000 , suggesting that many are going to smaller businesses .
Fifty-five percent of the total amount of money given to small businesses involved loans under $ 1 million .
But inadequate funding has been a challenge from the start .
The original decision to allocate only $ 349 @ @ @ @ @ @ @ many of the smallest businesses from applying for fear that the money would have been allocated to better-placed firms and would have run out before they had a chance to apply .
And politics stymied efforts last week to appropriate additional financing .
At the time of this writing , it looks as if Congress will allocate an additional $ 310 billion to the program this week .
Along with funding challenges , the Treasury Department ’ s implementation of the program has been rocky , and could leave behind the most vulnerable @ @ @ @ @ @ @ have access to top-shelf financial and legal counsel .
By failing to convince banks that they would not be held financially accountable if borrowers misrepresented themselves on their loan applications , Treasury has encouraged banks to focus lending on their existing customers .
And by creating a requirement that payroll expenses constitute 75 percent of the amount of the loan that is forgiven — a rule that appears nowhere in the law itself — Treasury created arbitrary distinctions between businesses .
For example , a business in a city with high rent — @ @ @ @ @ @ @ loses out .
These regulatory problems can and should be fixed .
The second place small businesses could turn is to the Federal Reserve ’ s new “ Main Street ” lending facility .
The Fed ’ s term sheet for the program allows companies with up to 10,000 employees , or up to $ 2.5 billion in revenue in 2019 , to qualify as eligible borrowers .
Yet this facility is explicitly marketed to Main Street .
When you look under the hood , there are troubling signs that it may not @ @ @ @ @ @ @ small businesses .
The program has $ 75 billion in capital from the Treasury , which the Fed claims will allow it to lend $ 600 billion .
Under the current parameters , this amount of capital and level of lending allow for a default rate of around 13 % .
That loss rate ( and capital buffer ) would only be adequate if the program ’ s portfolio was heavy on companies whose solvency is not in question .
But many truly Main Street businesses — the ones the plan should aim @ @ @ @ @ @ @ risk of insolvency .
This amount of capital may be adequate if the Fed targets companies with closer to 10,000 employees .
The math doesn ’ t work if the goal is to lend to small borrowers , like those eligible for the Paycheck Protection Program .
Rectifying that will expose the Treasury to credit losses , which it likely wants to avoid .
But Congress provided this capital for the purpose of aiding the recovery , and Treasury should be prepared to lose it .
If economic recovery is the goal , @ @ @ @ @ @ @ losses are inevitable .
Indeed , a $ 600 billion program including more genuine small-business lending would likely exhaust the $ 75 billion the Fed has put up in capital .
The $ 2 trillion economic package Congress passed three weeks ago allocated a total of $ 454 billion to support Fed lending in an alphabet soup of new facilities .
The Treasury Department still hasn ’ t decided what to do with $ 259 billion of that fund .
Using it tosupport the Fed ’ s Main Street program would allow for @ @ @ @ @ @ @ which in turn would let the Fed redesign the program to take more risk — and put the Fed in a better position to help mitigate the massive wave of small-business failures that is coming .
In addition , the Fed will need to make sure that regulations don ’ t make banks too wary to lend to these borrowers .
Overall , Congress and the Fed have reacted to the Covid-19 crisis with remarkable speed and with programs that approach the economic challenges in the right way .
As it travels this @ @ @ @ @ @ @ what is working and what needs to be changed .


washingtonpost--2020-04-20--Democrats, GOP Rush to Finish Interim Aid Plan, Vote This Week

The basic outlines of the package include a $ 310 billion infusion for the tapped-out Paycheck Protection Program , or PPP , designed to help small businesses keep workers on their payrolls ; $ 50 billion to $ 60 billion more for a separate Economic Injury Disaster Loan program ; $ 75 billion for hospitals , with a significant portion aimed at those in rural areas ; and $ 25 billion for virus testing .
One of the remaining disagreements is over the testing program , including which agency -- the Centers for Disease Control and Prevention or the National @ @ @ @ @ @ @ , according to one person familiar with the discussions .
Mnuchin and House Speaker Nancy Pelosi both said Sunday the two sides were close to a deal .
President Donald Trump was cautiously optimistic about breaking the deadlock in place all of last week as the Paycheck Protection Program ran through its entire $ 349 billion in funding .
“ We have a good chance of getting a deal , ” Trump said at a briefing on Sunday .
“ A lot of good work has been going on .
We could have @ @ @ @ @ @ @ coming under pressure from her party ’ s liberal wing to wring more concessions , including aid for state and local governments that the GOP is resisting putting in the package .
“ It is going to be very difficult to support a package that doesn ’ t have what we need in terms of help for state and local governments , ” Pramila Jayapal , head of the Congressional Progressive Caucus , said on a conference call .
While the Senate has a pro forma session scheduled for Monday , leaders of @ @ @ @ @ @ @ no senator would object to the agreement in order to pass it by unanimous consent .
That typically would require circulating legislative text .
House Majority Leader Steny Hoyer sent a notice to lawmakers Sunday that the chamber could meet as soon as Wednesday to consider the legislation .
Because an objection to unanimous consent is likely , Hoyer said the House would probably have to convene for a recorded vote .
House Democrats will get an update on the status of the talks during a caucus-wide call with Pelosi and other leaders @ @ @ @ @ @ @ Secretary Sylvia Burwell and former World Bank President Jim Yong Kim will be guests on the call for a discussion on the public health response to the Covid-19 pandemic .
House Republicans were told during a conference call Sunday to expect to vote on the package Wednesday in Washington , and that the Senate likely would act before that .
During the Sunday call with GOP senators , Majority Leader Mitch McConnell and Mnuchin said the agreement won ’ t include aid for state and local governments , according to a Republican aide @ @ @ @ @ @ @ original demands of Pelosi and Senate Democratic leader Chuck Schumer .
Another Democratic proposal , an increase for the food stamp program , also was left out , the aide said McConnell and Mnuchin told the GOP lawmakers on the call , which was joined by Trump and White House Chief of Staff Mark Meadows .
The state and local government aid was a significant part of what the Democrats were seeking and even it was short of what governors and mayors say they need .
Maryland Governor Larry Hogan , a Republican @ @ @ @ @ @ @ , and New York Governor Andrew Cuomo , a Democrat who is the NGA ’ s vice-chairman , said on April 11 that without at least $ 500 billion , states would have to curtail essential services as tax revenue plummets and demand for resources skyrocket .
The additional funding being negotiated is considered an interim step in efforts to prop up a U.S. economy frozen by the nationwide shutdown caused by the spread of the novel coronavirus .
There ’ s general agreement in Congress and at the White House that a @ @ @ @ @ @ @ would be needed , following the $ 2 trillion package approved late last month .


washingtonpost--2020-04-21--Zoom Parties Are So Five Weeks Ago: Hello Virtual Reality

“ Kids don ’ t go to arcades anymore , but they can go to VR arcades , ” said Dunning , who is now offering rentals as low as $ 35 a day .
The tech industry has struggled for years to generate wider adoption of virtual reality .
A major reason is that setting up a high-end home experience still costs well above $ 1,000 .
But the prospect of millions staying home for months during the pandemic and additional renting options might be just what it needed .
Alex Gerasimov , owner of the VR Zone DC @ @ @ @ @ @ @ interest , too .
His company operates virtual-reality play spaces that are temporarily closed because of the virus .
That pushed him to pivot to a new rental model .
Gear , including wipes and masks , is dropped off via contactless delivery .
Setup is done over video chat .
Its social distancing party package ( “ Stay 7 ft. apart and have fun ” ) starts at $ 299 .
Consumers have adopted all kinds of new behaviors during the shutdown , and some will no doubt stick .
There are @ @ @ @ @ @ @ more and realizing they like it .
Millions have evolved into work-from-home experts .
A whole movement around DIY nail salons has emerged .
And VR has a good shot to win more fans .
One big reason is birthday parties .
Gerasimov ’ s company is now working on a new offering for them in which VR headsets are sent to as many as 10 homes .
Attendees then create avatars and compete in multi-player games , like bowling and dodgeball .
The event could end with singing “ Happy Birthday ” @ @ @ @ @ @ @ s easy to see why Gerasimov is doing this .
More than 800,000 Americans turn a year older every day .
Before the virus , they were increasingly spending more on making their special day special ( and then sharing it over social media , of course ) .
Even non-milestone birthdays could mean a destination celebration in a sunny locale .
And kids ’ birthdays , once confined mostly to backyards and basements , have their own ecosystem of play spaces , gyms and eateries to host parties .
Birthday bashes , @ @ @ @ @ @ @ $ 5.4 billion party and events market , have taken a big hit with most of the country in lockdown .
But the desire to celebrate hasn ’ t waned , and has likely only intensified with isolating stay-at-home orders in the U.S. stretching into a second month .
In response , companies are getting more creative by pushing beyond generic Zoom calls , which may help online celebrations live past the outbreak .
It ’ s not hard to imagine a future where two birthday parties are the norm ; one in @ @ @ @ @ @ @ a toy retailer with a handful of locations , is now hosting daily free virtual birthday parties .
Over videoconference , the company ’ s “ camp counselors ” lead sing-alongs , story time and magician shows .
More than 350 kids , as well as some adults , have participated .
It ’ s also hosting private virtual birthday parties with entertainers and is developing an e-commerce gift registry .
Seri Kertzner , founder of New York City-based Little Miss Party , used to throw a handful of functions a month before @ @ @ @ @ @ @ leaning on a smaller part of her business that lets customers purchase ready-made packages for as little as $ 39 , complete with themed cups , napkins and decorations .
Her party boxes , some packed with accessories like capes and garland , are selling like never before , she said .
In a sign of how this is taking off and might stay around , Kertzner said some customers told her birthday parties were a rarity for them before social distancing .
“ Something I really wanted to do was keep people @ @ @ @ @ @ @ able to celebrate without actually having anyone to celebrate with , ” Kertzner said .
She offers plenty of advice on how to put on a spectacular event at a distance .
One example : throw a rainbow theme virtual party and ask attendees to log on wearing a different color .
Even after social distancing measures end , the workarounds may bring permanent change to parties because people will want to keep including out-of-town friends and family , according to Jamil Zaki , associate professor of psychology at Stanford University and author @ @ @ @ @ @ @ ”


washingtonpost--2020-03-26--Analysis | It’s Good to Be a Cable King During a Pandemic

On Tuesday , Comcast submitted a regulatory filing alerting investors that the coronavirus pandemic “ could have a material adverse impact ” on operational results and that management isn ’ t sure to what extent or for how long .
Like Walt Disney Co. , Comcast had to close all of its Universal theme parks in Florida , California and Japan .
Its Universal Pictures studio has had to delay movies that were set to be released soon in theaters , including pushing back “ F9 , ” the latest installment of its money-making “ Fast and the Furious ” @ @ @ @ @ @ @ .
TV and film production all across Hollywood is also at a halt .
Then there ’ s the big cheese : the Olympics .
The International Olympic Committee and Shinzo Abe , the prime minister of Japan , where the 2020 summer games were set to be held , agreed to postpone the event for about a year .
It ’ s a blow both to Comcast ’ s NBC network , which was set to broadcast the Olympics for U.S. viewers , and to Discovery Inc. , which had secured the @ @ @ @ @ @ @ already sold most of its advertising space for the event , more than $ 1 billion that the business will no longer see this year .
It ’ s also a downer for NBCUniversal ’ s upcoming launch of Peacock , an ad-supported streaming-TV service that was going to feature coverage of the Tokyo Olympics in a bid to attract subscribers .
Still , even as the coronavirus is rippling through Comcast ’ s NBCUniversal operations , they represent a relatively small portion of the company ’ s overall profits .
Nearly 70 @ @ @ @ @ @ @ before interest , taxes , depreciation and amortization — about $ 23 billion — came instead from Comcast ’ s cable group .
And increasingly , cable revenues are generated by the more dependable internet side of the business than the shrinking pay-TV side .
Comcast added 1.4 million high-speed internet customers in 2019 , mostly residential .
That outpaced the 733,000 video customers it lost during the year .
It ’ s how Comcast has maintained a grip on subscribers even as more of them turn to streaming apps such as Netflix @ @ @ @ @ @ @ subscribers were the majority , paying for internet , TV and landline phone service ; now a greater portion have just internet .
That makes the “ cord-cutting ” trend a bit of a misnomer .
Comcast and other cable giants are still very much present in our homes because you still need internet access to stream .
A reliable connection is also more important than ever as Americans shelter in place , trying to work and study remotely , often with a single household using multiples devices at once .
What ’ @ @ @ @ @ @ @ and CEO of Comcast , told investors during a conference earlier this month that the company is insured against its expenses tied to the Olympics .
So while there ’ s no profit to be made from an event that doesn ’ t happen , there won ’ t be losses either .
Matthew Harrigan , an analyst for Benchmark & Co. , lowered his forecast for NBC broadcast sales to $ 10.3 billion , which is still a more than 1 percent increase from last year .
He sees revenue for Comcast @ @ @ @ @ @ @ , with Ebitda falling 7 % , in part due to costly upfront investments in the Peacock app .
A recession could drive more people to ditch expensive pay-TV packages and cause advertisers to cut their budgets .
That wouldn ’ t be good for either side of Comcast .
But for now , Comcast ’ s bread-and-butter cable business is providing good insulation .


washingtonpost--2020-03-26--Analysis | Everybody’s Trusting the Bankers Again

It is essential to soften the blow of companies and people not being able to repay their debts , as income evaporates .
Lenders will be in the front line of restarting economic activity , not least in Europe , where bankers — not the capital markets — are the principal backers of business .
But a rush to ease the financiers ’ pain will also mean trusting that they won ’ t repeat the errors , and misdeeds , of the past .
After a slowish start for some , the breadth and depth of regulators ’ interventions in @ @ @ @ @ @ @ The European Central Bank , tackling its first crisis as both the euro zone ’ s monetary authority and its chief banking supervisor , quickly ran through the toolkit at its disposal with a comprehensive plan to inject liquidity , in particular to support lending to small and medium-sized companies .
In Europe and the U.S. , regulators have also given banks room to absorb potential losses by letting them eat into capital cushions that were designed to be built up in the good times and eased in times of need .
That @ @ @ @ @ @ @ potential duration of a downturn that may be the worst since World War II .
Yet additional moves to relax or postpone new accounting rules , which were meant to frontload losses on future bad loans , would be dangerous .
As I argued when the pandemic was worsening earlier this month , letting banks sweep bad debt under the carpet is never a good idea .
European authorities are considering suspending part of the IFRS 9 rulebook , introduced in 2018 , which forced banks to book losses on doubtful loans at @ @ @ @ @ @ @ on Wednesday .
The change might cause investors to lose confidence in banks if they think it hides the risk on balance sheets , according to a document seen by Bloomberg .
Regulators shouldn ’ t underestimate this fear .
European banks are only just emerging from a cleanup of soured loans that reflected , in part , lending practices that weren ’ t fit for purpose .
We don ’ t know whether lenders have truly learned the lessons of the past , and recent bank rescues have illustrated how national governments @ @ @ @ @ @ @ the rules .
In a clear sign of the regulatory weaknesses that persist in this area , the European Union is weighing up whether clearer guidelines are needed so that aid isn ’ t given to a bank that ’ s already breaching capital requirements .
This is why relaxing IFRS 9 is problematic too .
Both the ECB and the Bank of England have said banks can be flexible when using the new accounting standard to estimate loan losses , to help them cope with payment holidays for their customers .
Many @ @ @ @ @ @ @ to repay their mortgages or loans once the economy picks up .
Still , as the European Securities and Markets Authority pointed out this week , it will be left up to the banks to be transparent about how they assess their bad loan situation .
“ Sufficient disclosure needs to be provided in the interim financial statements for investors to understand the significant events and transactions occurring since the end of the annual financial reporting period , ” ESMA said .
Considering the impenetrability of bank balance sheets at the best of @ @ @ @ @ @ @ how they measure bad debt will only add to the opacity .
Banks are balancing their lobbying efforts on non-performing loan forbearance with promises to delay and possibly scrap dividends to preserve capital .
Spain ’ s Banco Santander SA is delaying a dividend payment and its top executives are forfeiting some of their compensation to give to an anti-virus charity .
Bank bosses doing everything within their means to ensure their bank ’ s resilience , including personal financial sacrifices , should be a given in light of the scale of the @ @ @ @ @ @ @ already been granted .
They need to show they ’ ve changed their ways if they ’ re to maintain investor trust .


washingtonpost--2020-03-26--Analysis | ‘Coronabonds’ Could Bail Europe Out, Tie It Together

Pre-coronavirus they were known as euro bonds , and they were something many EU leaders have argued for since the creation of the euro in 1999 : a shared debt instrument to finance borrowing , where the money can be directed to the countries that need it most .
National governments currently sell their own debt to fund projects and annual budgets , but do so at wildly varying costs .
Germany can effectively be paid to borrow , due to its impeccable credit rating and tight spending rules , while Italy -- with its less-stellar credit rating -- has @ @ @ @ @ @ @ at least a full percentage-point more .
Though the idea has failed to garner sufficient support , a coronabond could “ mutualize ” risk among nations , possibly cutting borrowing costs .
While the 19-member euro area has long battled with how to narrow differences between rich and poor members , the coronavirus has exposed those inequalities like never before .
Some of the most indebted nations such as Italy and Spain have been hardest hit , with deaths spiraling into the thousands .
At the same time , the European Central Bank @ @ @ @ @ @ @ by purchasing more than 1 trillion euros ( $ 1.1 trillion ) of bonds this year through its so-called quantitative easing programs .
It also scrapped its self-imposed purchasing limits .
But it may still need to take further steps to calm the volatile markets for government bonds .
A new debt instrument could allow the central bank more flexibility .
President Christine Lagarde is a huge proponent .
Italy is , too .
Germany .
Europe ’ s economic powerhouse has long opposed the idea of euro bonds , wary that it @ @ @ @ @ @ @ financing of poorer nations in Europe ’ s south .
It ’ s less than a decade since the region ’ s sovereign debt crisis threatened to sink the common currency .
Back then , with Greece requiring a series of bailouts , Germany resisted calls for euro bonds .
Any move now to issue such debt would have to be approved by Germany ’ s legislature and there are doubts over whether Chancellor Angela Merkel would be able to secure the required support .
Proponents of coronabonds contend the current crisis is @ @ @ @ @ @ @ solution .
The idea is for a jointly backed bond sale of up to 1.5 trillion euros that would fund government action to contain the virus and reboot euro-area economies .
The leaders of Spain , Italy , France , Portugal , Greece , Belgium , Luxembourg Slovenia and Ireland said the bloc needed to work on such an instrument of sufficient size in order to ensure “ stable long-term financing for the policies required to counter the damages caused by this pandemic.
” Germany and the Netherlands were notable absentees .
There @ @ @ @ @ @ @ such a bond sale would be a one-off measure or a gateway to recurring sales .
But they could possibly help the ECB find more bonds to buy , given there are still constrained by the capital key , which dictates purchases according to the size and population of each country .
Richer countries like the Netherlands , Austria and Germany have long complained that their southern neighbors don ’ t use the good times of solid economic growth to put their houses in order , arguing it ’ s not their fault @ @ @ @ @ @ @ their way out of a crisis .
The “ moral hazard ” argument -- that bailouts encourage further bad behavior -- has long been a roadblock .
This time , though , the damage was not caused by profligate spending but by an unforeseen global health crisis .
That ’ s unclear .
Borrowing costs of the various member nations would probably converge , with yields on German bonds rising and those of riskier nations ’ debt such as Italy ’ s falling .
Much would depend on the size of the program @ @ @ @ @ @ @ a money manager at Aberdeen Standard Investments , the first tranches are likely to be small so Germany could retain control over its fiscal liabilities .
Longer term , Athey says holders of Italian government debt could lose out if coronabonds were judged as being superior , meaning that the holders of those securities would get paid out first in the event of any default .
Governments can of course sell their own debt to fund crisis-response measures , and the ECB ’ s huge bond-buying program will likely keep borrowing costs in @ @ @ @ @ @ @ a disease that does not respect national borders may not be the most efficient strategy .
Alternatives include activating the region ’ s bailout fund , called the European Stability Mechanism , which could make available credit lines worth up to 2 % of each country ’ s output .
That would likely come with strings attached .
Countries may also be reluctant to take the money , worried they ’ ll be stigmatized as weak and potentially subjected to demands for changes in local regulation and other economic reforms .
Another tool @ @ @ @ @ @ @ program known as Outright Monetary Transactions , which has never been used .
Under that program , the ECB could theoretically buy unlimited amounts of sovereign bonds in the secondary market from currency-bloc members that have signed bailout agreements with the ESM .


washingtonpost--2020-03-26--Analysis | How the Stock Buyback Bazooka Has Been Silenced by Virus

The past two years have been the busiest on record , according to a report by S & P Dow Jones Indices .
Companies flush with cash from a 2017 tax cut bought back a record $ 806 billion of shares in 2018 , a figure that slipped to $ 729 billion in 2019 .
For members of the S & P 500 Index , buybacks have exceeded dividends in every quarter since 2010 .
Buybacks started to slow in the beginning of the year , with U.S. repurchases totaling $ 122 billion in January and February , down 46 @ @ @ @ @ @ @ to the report .
This slowdown -- which coincided with a peaking stock market -- gathered pace in recent weeks as a growing number of companies across the world suspended the practice to conserve cash .
The S & P report described second-quarter prospects as “ dismal ” and said buybacks may be slow to come back due to potential government restrictions as well as public-image concerns .
Eight giant U.S. banks responsible for some of the largest buybacks globally in the past year , including JPMorgan Chase & Co. and Bank of @ @ @ @ @ @ @ back their own shares through the second quarter .
The banks had planned to spend a combined $ 119 billion in the four quarters after the Federal Reserve ’ s stress tests last June .
Among Europe ’ s most prolific buyers of its own shares , Royal Dutch Shell Plc , canceled the next tranche of its $ 25 billion buyback program .
For whatever reason , cutting off buybacks removes one more prop of a shaky equities market .
And not just in the U.S. : Barclays Plc strategists wrote in @ @ @ @ @ @ @ that European equities are losing support from buybacks , which “ acted as a crucial backstop during periods of rising market volatility last year.
” In short , it ’ s the horrible optics of a company using money from the government to enrich shareholders .
Buybacks have been denounced by both the right and the left .
President Donald Trump said earlier this month he was unhappy with companies that used money saved from his 2017 tax cut to buy back shares rather than build domestic factories .
A repeat of this @ @ @ @ @ @ @ bailouts , which is to support workers , he said .
Democrats like Senator Elizabeth Warren of Massachusetts pushed to include a permanent ban on buybacks as a condition for government aid .
She and others noted that the five biggest U.S. airlines -- prime targets for government bailout funds -- spent 96 % of their free cash flow on repurchases over the past decade .
A bipartisan bill agreed to in the Senate included a requirement that any company receiving a government loan would be subject to a ban on stock buybacks @ @ @ @ @ @ @ one additional year .
Those companies also would have to limit executive bonuses and take steps to protect workers .
Against the backdrop of President Ronald Reagan ’ s deregulatory drive in the 1980s , restrictions on buybacks were loosened , executives were granted a safe harbor from stock-price manipulation charges and a culture of “ shareholder value ” was born .
A wave of hostile takeovers made sitting on a pile of cash seem dangerous .
And managers ’ bonuses were increasingly tied to stock performance , to align their incentives with @ @ @ @ @ @ @ Buybacks boomed , often paid for with increased borrowing .
Yes .
In the Reagan-era worldview , this was good : Tax breaks made debt a cheaper form of financing , and the need to make regular interest payments could focus executives ’ minds on generating more cash .
Over the next few decades , the stock market ’ s perceived function -- raising money for business ventures -- was turned on its head , as stocks became a vehicle largely for returning money to shareholders .
Any gain in the share price @ @ @ @ @ @ @ long as the shares aren ’ t sold , and capital gains are also usually taxed at lower rates than dividends .
Proponents argue that if managers can ’ t see a better opportunity for profitable investment , perhaps there isn ’ t one .
Buybacks are thus seen as a good vehicle to get funds out of the hands of executives who might otherwise waste them on pet projects and speculative investments .
Some critics , including Warren and U.S. Democratic presidential candidate Bernie Sanders , argue that buybacks are great for @ @ @ @ @ @ @ the long-term growth of the economy and exacerbating inequality .
A different line of criticism says that the widespread use of buybacks isn ’ t good for shareholders either .
With the majority of senior executive compensation tied to company stock , managers often take advantage of the pop that a stock price gets when a buyback is announced to sell some of the shares they ’ ve received through grants or options .
Record-low interest rates make it easier to pile on debt for this purpose , which can prove detrimental in @ @ @ @ @ @ @ .
While the U.S. leads the way in both the amount of buybacks and the intensity of political scrutiny , the practice isn ’ t unknown in Europe or Asia .
In Japan , electronics powerhouse Sony Corp. announced a 100 billion yen ( $ 900 million ) buyback last year -- its first-ever major repurchase -- followed by another one twice as large just months after .
The European Central Bank said earlier this month that it expects banks to take “ prudent decisions ” after unveiling support measures , while Germany @ @ @ @ @ @ @ lenders should avoid buybacks .


washingtonpost--2020-03-26--Analysis | Anybody Need a Management Consultant Right Now? Thought Not

Think for a moment about the jobs or functions that matter most as the coronavirus shuts down ever more parts of our economies , threatening to break supply chains for food , medicine and other essentials .
Is it the management consultant who excels at her Powerpoint presentations ?
Or the mergers-and-acquisitions lawyer who makes money when his client buys a company , then again when the client divests the same business later ?
Don ’ t get me wrong : These really are “ good ” jobs , not only because they pay well but also because they ’ @ @ @ @ @ @ @ social ways .
But in exceptional times , such as the present , they ’ re utterly dispensable .
Nobody will starve , die or suffer in the coming months if the world ’ s white-collar elite works temporarily from home , or suspends work altogether .
That can ’ t be said for an awful lot of other jobs that only a few weeks ago seemed peripheral , and are thus underpaid and undervalued .
Many of us are silently and solemnly impressed by the stoic work ethic of our local supermarket @ @ @ @ @ @ @ word , only by the flimsiest of plastic contraptions , they keep scanning our vittles , occasionally adding a dose of humor to keep up their spirits .
And ours .
On it goes , until the supply chain reaches women and men in the fields , picking the fruit and vegetables we take for granted .
I once joined some of them , plucking grapes in California ’ s Central Valley , to hear their stories .
Even in normal times , many of them teeter on the edge of subsistence .
@ @ @ @ @ @ @ if they ’ re also illegal aliens , as many are — they fear every day for their loved ones as some of us only do now that we ’ re in a pandemic .
Then there are the medical workers , from the ambulance drivers to the doctors and the nurses .
Their stations in 2020 are the front line of what many political leaders describe as a war .
At least some of them , the doctors , have always been compensated in both money and respect .
That ’ s @ @ @ @ @ @ @ who often make a pittance .
For Homo sapiens , our division of labor is part of what makes us fully human , and so successful as a species .
One theory why Cro Magnon prevailed over the Neanderthals is that our ancestors specialized , with the men doing the hunting and the child-bearing women the gathering , whereas the Neanderthals didn ’ t .
Many of our greatest thinkers took this idea further , especially the liberal philosophers .
Adam Smith understood that if we specialize according to our absolute advantage — @ @ @ @ @ @ @ , B is better at picking fruit — and then share , we all end up better off than we would otherwise be .
David Ricardo grasped that this remains true even when A , for example , is better than B at every task , as long as they specialize according to their relative advantage .
And yet , the more sophisticated the division of labor became , the queasier some people felt about it .
Karl Marx , in the era of Manchester capitalism exemplified by the English city ’ s @ @ @ @ @ @ @ workers to the status of machines , leaving them alienated and depressed .
Henry David Thoreau , writing at about the same time but in a very different woodland setting , thought it disconnected humans from both nature and one another .
And they ’ re all right .
We can ’ t and won ’ t give up the division of labor , for that would impoverish us .
That ’ s as true of the global economy as it is of a national one , and applies to every company , @ @ @ @ @ @ @ comprehend these invisible chains as parts of a whole , and ensure that each link , each person , is treated with fairness and dignity .
The pandemic of 2020 reminds us of several things .
First , that we ’ re in our essence offline and analog creatures , not online and digital ones .
We can not bite into bytes , eat algorithms or disinfect with bandwidth .
Somebody has to grow , harvest and deliver our food , somebody has to care for the sick .
If these people quit @ @ @ @ @ @ @ vulnerable .
The virus also reminds us that even though we divide our tasks for efficiency , we are all ultimately equal .
SARS-CoV-2 infects upper , middle and lower classes alike ; it doesn ’ t ask for college degrees , tax brackets , passports or migrant papers .
Why , then , do NBA players and Oscar winners get to skip the line for virus tests , while the garbage collectors who remove our medical waste go last ?
To survive the pandemic , we rely on everybody to show up @ @ @ @ @ @ @ employers prepare their bailouts , they should acknowledge who bears what burden and what risk , and compensate them with respect and money , during the crisis and after .
And we — as voters , consumers , patients and workers — should do our part .
For the ultimate lesson of Covid-19 is this : We ’ re all connected .


washingtonpost--2020-03-26--Mnuchin Says Surge in U.S. Unemployment Claims ‘Not Relevant’

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washingtonpost--2020-03-26--Small Banks Are Struggling Just as the World Needs Them Most

At smaller lenders from the U.S. to Japan to South Korea , profits had already been pressured by historically low interest rates .
The virus adds to their woes , boosting the risk that bad loans will pile up at the smaller businesses they serve .
Four South Korean regional banks were placed on review for downgrade this week by Moody ’ s Investors Service , which said the pandemic will hurt economic growth as well as banks ’ credit quality .
In the U.S. , dozens of small banks called on lawmakers to delay major loan-loss accounting rules they @ @ @ @ @ @ @ .
Regionals are more exposed to “ the plain old squeezing of the margin between where banks borrow and where banks lend , ” Wells Fargo & Co. analyst Mike Mayo said in an interview .
“ As a group they ’ re more exposed ” to the Federal Reserve ’ s recent rate cuts , he said .
Rate cuts worldwide have crimped banks ’ net interest margins , the difference between what they earn from loans and pay for deposits , as well as interest income abroad .
Analysts say that @ @ @ @ @ @ @ jump in China , while more regional lenders in Japan may start to post losses if the central bank there cuts rates further .
“ Rising loan losses would be a chief concern with the virus slowing economic activity globally , ” said Bloomberg Intelligence analyst Herman Chan .
“ The outlook for U.S. regional banks is challenging with loan losses set to rise and revenues weakening after the Federal Reserve rate cuts.
” The KBW Regional Banking Index of 50 U.S. lenders has tumbled more than 40 % this year , with @ @ @ @ @ @ @ as virus fears sap demand and Saudi Arabia and Russia engage in a price war .
Shares of Houston-based Cadence BanCorp , the worst performer in the group , have plunged almost 70 % .
The $ 2 trillion stimulus bill in the U.S. carves out more than $ 350 billion in aid for small businesses , much of which would be in loans through the Small Business Administration and banks , guaranteed by the federal government .
“ What ’ s unique is that it ’ s not one concentration that ’ @ @ @ @ @ @ @ to affect a lot of different types of industries that they lend to , ” KBW analyst Brian Klock said in an interview .
“ They ’ re Main Street lenders , and that ’ s where it ’ s going.
” In South Korea , the asset quality of Busan Bank , Daegu Bank , Jeju Bank and Kyongnam Bank could deteriorate , Moody ’ s said .
That ’ s because they have concentrated exposures to the regions worst-hit by the virus , namely Daegu and North Gyeongsang province , and @ @ @ @ @ @ @ medium-size enterprises in the tourism , services , food and beverage , and retail sectors .
In China , the virus may cause the nation ’ s non-performing loan ratio to more than triple to about 6.3 % , amounting to an increase of 5.6 trillion yuan ( $ 787 billion ) in bad debt , according to S & P Global Ratings .
A deterioration in banks ’ asset quality and profitability are raising concerns that more regional lenders will come under pressure after at least three banks were rescued last year.
@ @ @ @ @ @ @ be more , ” said Logan Wright , a Hong Kong-based director at research firm Rhodium Group LLC .
“ What we are waiting for is a kind of a road map or a path to how these restructuring will take place in the future .
”


washingtonpost--2020-03-26--Analysis | The World Needs Apple’s Annual IPhone Cycle

At stake is more than $ 260 billion in annual procurement ( 1 ) by Apple alone , with satellite companies such as makers of accessories , cases , and software also likely to be affected .
While the world will be sad about putting so much of regular life on hold including the quadrennial Olympic display of citius , altius , fortius , pushing back the annual iPhone cycle could have an impact that goes far deeper than Apple investors and the devotees who line up at dawn to buy a handset .
In the first few years after @ @ @ @ @ @ @ iconic smartphone came out in June before a switch to the late September schedule .
That regularity gives consumers something to look forward to , and also kindly helps fanboys , tech journalists and analysts plan their vacations .
More importantly , for more than a decade hundreds of thousands of people have relied on the tick-tock rhythm of iPhone releases to make a living .
The bulk of them are part of the hardware supply chain in Taiwan , China , Japan and South Korea .
The company has urged suppliers to @ @ @ @ @ @ @ after the Covid-19 outbreak started to dissipate : Foxconn Technology Group , the largest assembler of the devices , expects a return to full capacity by the end of this month .
Humans need to shuttle back and forth — between Cupertino , where Apple is based , and Shenzhen and Zhengzhou , the two major iPhone assembly hubs — to confer on development and manufacturing .
The company sends teams around the world whose sole job is to check in with providers of the minutiae : screws , glue , glass , @ @ @ @ @ @ @ paint .
There are some jobs that simply can ’ t be done over Zoom .
Not only are thousands of Apple staff in California under shelter-in-place conditions , many who arrive in China would be placed in mandatory 14-day quarantine .
Similar restrictions apply for those who travel to other supplier locations , assuming they could get a flight or are even allowed in .
As a result , even if every factory in China , Taiwan , South Korea and Japan were fully operational ( which they ’ re not ) @ @ @ @ @ @ @ that thousands of people — from management and administration personnel to production staff and supervisors — could be left spinning their wheels , waiting to build a product that ’ s not even finalized .
That would mean unemployment for factory workers and reduced salaries or job cuts among the rest , which will have a ripple effect throughout China ’ s economy just as its own virus storm looks to have passed .
Those companies that make iPhone cases , screen covers , and other accessories need a new handset — and @ @ @ @ @ @ @ own revenue .
Any delay could be devastating amid what ’ s already set to be a global economic slowdown .
According to Nikkei ’ s sources , one consideration in a possible delay is that Apple itself is worried the new device may meet a poor reception and that it really needs the first 5G iPhone to be a hit .
I disagree .
Apple can do without this faster connectivity for another year .
Current 5G devices aren ’ t particularly compelling , for various technical reasons , and so a @ @ @ @ @ @ @ in the long run .
Additionally , I don ’ t see Apple delaying launch because of a weak consumer market .
It went ahead with the 3G and 3GS devices amid the 2008-2009 financial crisis .
A better option would be to find ways to jazz up the current design — faster processor , better battery life , software improvements — and come out with a device that doesn ’ t include 5G but does arrive on schedule .
To be sure , tweaking an existing product isn ’ t as simple @ @ @ @ @ @ @ , but it ’ s the kind of scenario that Chief Executive Officer Tim Cook and his team could game plan .


washingtonpost--2020-03-19--Analysis | Retailers Start Usefully Quantifying Virus Impact

Now Next Plc has provided more expansive detail about how it sees the months ahead .
With shares in most retailers in freefall – Next is down about 40 % this year – investors needed to hear something constructive .
While the U.K. fashion chain said it could not give guidance for the full year , it has produced a stress test that outlines potential outcomes .
In a worst-case scenario , full-price sales would be down by about 1 billion pounds ( $ 1.16 billion ) , a quarter of its total , which would mean pre-tax profits of @ @ @ @ @ @ @ year ( against 729 million pounds in the year earlier ) .
The company has also set out how it might cope with the crisis financially , given the possibility of extended store closures .
It could suspend buy-backs and dividends , delay capital expenditure , sell and lease a warehouse and partly securitize customer debts .
Pulling these levers could provide an extra 835 million of cash .
Bringing forward its forthcoming sale , and pushing back deliveries of stock would free up another 100 million pounds .
These projections exclude any @ @ @ @ @ @ @ help pay wages , and Next is conservatively assuming no rent reductions from landlords .
This disclosure dashboard sets a good example for others to follow .
But Next can afford to be upfront with its investors .
It is one of the strongest retailers in the U.K. sector .
Similarly , Burberry Group Plc provided some near-term clarity , warning that fourth-quarter comparable sales in its stores would be down by 30 % , with a 70-80 % decline in the final weeks through to its March 31 financial year-end .
Like @ @ @ @ @ @ @ strong balance sheet , with the company forecasting a cash balance of 600 million pounds before lease obligations .
It is understandable why weaker chains may be less willing to quantify the impact on their businesses .
But their investors will expect a similar assessment of possible scenarios .
And larger , well-resourced chains have no such excuse for not saying more .
Take Inditex SA , the world ’ s biggest clothing retailer .
It said the outbreak had cut its sales by 24 % between March 1 and March 16 .
@ @ @ @ @ @ @ potential full-year impact .
This is from a company with record net cash of 8.1 billion euros ( $ 8.7 billion ) at January 31 .
There will be many more tough announcements over coming weeks as retailers and restaurants outline the financial cost of what is happening now .
But even if they can ’ t make exact predictions , they should learn from Next ’ s example and aim to at least give the market a toolkit for understanding the resilience of their business .
Next shares ’ strong gain in @ @ @ @ @ @ @ is rewarded .


washingtonpost--2020-03-18--Analysis | Do ‘Circuit Breakers’ Calm Markets or Panic Them?

In the world of electronics , circuit breakers cut the flow of electricity when there ’ s an overwhelming surge of power .
In stock markets , they do pretty much the same thing .
Introduced in the U.S. after a 23 % crash in the Dow Jones Industrial Average on Black Monday in 1987 , the U.S. circuit breakers trigger a timeout from trading after prices tumble by a predetermined amount .
An initial circuit breaker , causing a 15-minute pause in market-wide trading , is triggered when the benchmark S & P 500 Index declines 7 % .
@ @ @ @ @ @ @ in the midst of the coronavirus pandemic : On March 9 , March 12 and March 16 the breakers were hit within the first five minutes of trading , while on March 18 , the halt came around midday .
Two other breakers ( which have yet to be triggered ) would force another 15-minute pause when the decline reaches 13 % and end trading for the day when the decline hits 20 % .
Halts are also triggered on stock futures and create breaks on individual securities moving down or up .
@ @ @ @ @ @ @ about 816 single-stock suspensions , according to data from the Nasdaq exchange .
Academic studies generally agree that circuit breakers are prudent but offer little evidence that they reduce volatility after trading resumes or that they cut panic-driven selling .
Critics say the interruptions -- which can cause some trades to be “ busted , ” or unwound after they are executed -- unacceptably interfere with efficient pricing .
There ’ s also the peril of the “ magnet effect , ” when traders actually accelerate their selling to try to execute trades @ @ @ @ @ @ @ adopted circuit breakers after a $ 5 trillion stock rout in 2015 in a bid to to contain the turmoil .
Debuted in 2016 , they lasted just four days and were blamed for feeding panic selling and suspended indefinitely .
Former U.S. Treasury Secretary Nicholas Brady is credited with bringing them to stock markets , part of his committee ’ s recommendations to President Ronald Reagan following the 1987 crash .
Circuit breakers , the committee ’ s report said , provide “ a ‘ time-out ’ to pause , evaluate , @ @ @ @ @ @ @ to attract value traders to cushion violent movements in the market.
” Until March 2020 , U.S. market-wide circuit breakers were activated only once , on Oct. 27 , 1997 , following a 7.2 % plunge in the Dow Jones Industrial Average .
The benchmark for circuit breakers was later switched to the larger S & P 500 , and the boundary limits changed to percentage moves from Dow points .
The so-called flash crash of May 6 , 2010 — when the Dow suffered what was then its biggest intraday point decline @ @ @ @ @ @ @ for individual securities .
In August 2015 , those produced unprecedented disruption as 327 exchange-traded funds experienced more than 1,000 trading halts during a single day .
Countries that have employed circuit breakers for the overall market include Japan , Brazil and South Korea .
Single-security limits have been widely used from the U.K. and Spain to Singapore and India .
Proponents say they act as a speed bump during rapid market declines and that they help to restore calm , and can even build confidence in markets .
Even skeptics agree they @ @ @ @ @ @ @ risk sending markets into a tailspin , particularly as computerized trading proliferates .
According to a 2010 Hofstra University paper , circuit breakers “ serve best to remind us when volatility has become intolerable , but the measures do little in practical terms to stymie insufferable declines.
” The spasms in financial markets in the wake of the coronavirus pandemic fueled a wider debate about whether or not markets should be left open in times of such uncertainty and volatility .
On March 17 , U.S. Treasury Secretary Steven Mnuchin said , “ @ @ @ @ @ @ @ open , ” though he didn ’ t rule out shortening daily trading hours .
Top regulators and executives of exchanges have also come out in favor of keeping trading flowing .
Closing markets “ would not change the underlying causes of the market decline ” and “ would only further compound the current market anxiety , ” NYSE President Stacey Cunningham said in a March 16 tweet .


washingtonpost--2020-03-18--Analysis | You’re Still Buying MLPs? Get a Magnifying Glass

Technically , MLPs aren ’ t actually a sector ; just a particular financing structure that tends to be used for pipelines and other vital logistical bits of the energy business .
Regular readers ( hey , a man can dream ) know I have one or two quibbles with the MLP structure , mainly due to its weak governance resulting in overleveraged companies with insiders and regular investors often at cross purposes — and evaporating unit prices .
As investors have given up , particularly on the institutional side , many midstream companies have abandoned the structure altogether , @ @ @ @ @ @ @ a wider pool of money more comfortable with traditional governance and financial metrics .
Last September , I totted up the market cap and free float of a sample of 83 North American midstream firms ( many of these companies , apart from the C-corps , have a significant sponsor shareholder ) .
Just six months ago , it was striking that the entire sector had a collective market cap of only $ 575 billion , of which just $ 484 billion of was actually traded .
Golden memories , it turns out @ @ @ @ @ @ @ have been acquired , so we ’ re down to 80 .
Their collective market cap as of Tuesday ’ s close : $ 327 billion .
To give a sense of how small that is , it is only slightly bigger than the combined market cap of just three large oil producers , Exxon Mobil Corp. , Chevron Corp. and ConocoPhillips — and that ’ s after their recent , massive sell-offs .
The free float of the midstream group is a mere $ 271 billion .
Moreover , C-corps dominate that @ @ @ @ @ @ @ do the math on what that leaves for MLPs .
As firms have converted to more-liquid C-corps and the entire sector has dropped , the number of barely-there companies has risen .
Six months ago , roughly half the group had an average free float of less than $ 600 million , already too small for any but the most dedicated money managers to bother with .
Today , 58 of the group , or almost three quarters , have an average float of about $ 400 million .
There is a vicious @ @ @ @ @ @ @ predated the latest crisis but has been amped-up by it .
As liquidity in a lot of the sector dries up , so institutional investors are deterred even further , making it worse .
At the same time , as bigger companies have converted to C-corps and been withdrawn from MLP indices , so the latter are rebalanced among the remainder — generally smaller companies with weaker performance , making the sector as a whole even less attractive .
It has been apparent for a while that the larger remaining MLPs , such @ @ @ @ @ @ @ convert to C-corps and access a bigger pool of potential investors as their old pool shrinks .
For various reasons , usually related to insiders ’ control and the tax hit on their low-basis positions in the partnership , some have held out .
Yet the collapse in valuations confronts both rationales with a simple question : How much do you really have to lose at this point ?
Implacable as that is , change is hard .
Just on Wednesday morning , Marathon Petroleum Corp. said it had concluded a strategic review @ @ @ @ @ @ @ decided to retain the MLP structure partly on the grounds it “ will remain an important , through-cycle source of cash ” for the parent .
Against that , MPLX currently sports a distribution yield of 29 % and has consistently yielded north of 10 % since late September , way before coronavirus showed up and OPEC+ imploded .
The abrupt shift in oil supply and demand exposes the overbuilding that resulted from midstream ’ s earlier excesses .
That doesn ’ t mean all assets are suddenly worthless .
But the sheer @ @ @ @ @ @ @ ) of the U.S. energy business that will emerge from this crisis means midstream ’ s fight for capital , which it was losing already , has become even more desperate .
It simply can not afford to remain chained to a structure whose heyday was more than five years ago and is now evaporating in front of our eyes .
Liam Denning is a Bloomberg Opinion columnist covering energy , mining and commodities .
He previously was editor of the Wall Street Journal ’ s Heard on the Street column and wrote @ @ @ @ @ @ @ .
He was also an investment banker .


washingtonpost--2020-02-06--Analysis | When God Appears in Contracts, That’s ‘Force Majeure’

Translated from the French , the term means something like “ superior strength.
” In other words , an external event that is “ unforeseeable and unavoidable , and not the result of the defendant ’ s actions , ” making it impossible for somebody to honor a contract , as Cornell Law School puts it .
Wars , riots , revolutions , explosions , strikes , port blockages , government actions , or natural disasters such as floods , earthquakes and tsunamis can all be force majeure events .
Anyone who can ’ t perform their contractual obligations for @ @ @ @ @ @ @ .
It happens from time to time in energy and commodity markets , for both buyers and sellers .
In Nigeria , where pipelines can be subject to sabotage , oil sales are occasionally subject to the clause .
Australian iron ore and coal mines sometimes flood , prompting producers to declare it .
Then the transaction is usually suspended and you get more time to carry out whatever you contracted to do .
Eventually you have a right to terminate the deal .
They can be stuck .
A seller might have @ @ @ @ @ @ @ suddenly refuses to take delivery of .
Sellers can also declare force majeure , pressuring those who need a commodity to source alternative supplies .
If a party feels that a force majeure declaration is frivolous , it can be challenged .
Many trading contracts adhere to English law , meaning that disputes will sometimes end up in London courts .
The decision may hinge on the specific language in the contract and whose laws apply .
Chinese authorities can issue force majeure certificates , which gives “ a certain authenticity ” to @ @ @ @ @ @ @ a partner at HFW law firm and former head of litigation at Cargill Inc. “ But ultimately you have to establish that a clause is triggered.
” Illness is a very unusual reason for declaring force majeure , but coronavirus isn ’ t a common ailment .
It has quarantined entire cities in China , overwhelming hospitals while leaving streets and workplaces empty .
Some commodity contracts won ’ t include epidemics , Perrott said , although a case could still be argued .
“ The more the measures to contain the virus @ @ @ @ @ @ @ said , the stronger the case .
However , it ’ s a brave trader who turns to the legal system to take on China .
In practice , those doing business with the world ’ s fastest-growing economy may find it easier to negotiate a solution that works for both sides .
It ’ s already happened with liquefied natural gas that China National Offshore Oil Corp. , the nation ’ s biggest buyer of the fuel , had contracted to purchase .
It said the epidemic hampered its ability to accept @ @ @ @ @ @ @ huge buyer of crude oil , iron ore and coal , meaning the longer the coronavirus squeezes the economy , the greater the pressure on those markets .
Traders often talk about “ price majeure , ” which isn ’ t a legal term but a joke about Chinese buyers using any excuse available to walk away from a contract when prices have moved against them .
Take LNG : long-term cargoes are often priced as a percentage of the oil price , meaning that they cost about $ 6 per million per @ @ @ @ @ @ @ , the LNG cargoes can be bought in the spot market for as little as $ 3 per million British thermal units .
The trick for a buyer is to declare force majeure in the long-term supply contract , and turn around and buy cheaper cargoes in the spot market .
If that happens , that ’ s when the sellers call their lawyers .


washingtonpost--2020-02-06--Analysis | There’s No Promised Land for Coal, in Australia or America

To say Peabody is in the middle of a perfect storm would be something of an understatement .
Its primary product , thermal coal , is the tobacco of the energy world , with demand slumping in its domestic market despite the imaginative efforts of President Donald Trump ’ s administration to force it on utilities .
Steel producers , which use higher-value metallurgical , or coking , coal , are also in a funk amid the trade war .
Compounding that , a fire swept through one of Peabody ’ s coking coal mines in Australia in 2018 , @ @ @ @ @ @ @ prices were peaking .
And now coronavirus has ground Chinese industry to a halt , not only taking down demand for energy in general , but hitting already-weak prices for natural gas , making it even more of a cut-throat competitor to thermal coal .
Unsurprisingly , Peabody just announced losses for 2019 , suspended its dividend and cut capital expenditure plans .
Elliott , which gained its stake in Peabody ’ s bankruptcy , has watched the stock plummet by four-fifths since fire was reported at the North Goonyella mine in 2018 @ @ @ @ @ @ @ its own on Peabody ’ s board , including Elliott ’ s head of U.S. restructuring , and they will be joined by an Australian coal veteran .
More importantly , Peabody has agreed to appoint a consultant to review the performance of its Australian mines .
Despite the fire , the Australian mines remain the most profitable part of Peabody ’ s business .
While they only account for a sixth of tonnage , they generated more than half of adjusted Ebitda last year , even after accounting for the costs of @ @ @ @ @ @ @ cash margin per ton of about $ 17 — again , including those fire-related costs — is four times that of the U.S. business .
Indeed , ex-depreciation , the difference is even starker : Peabody says it has had “ a number of inquiries ” about North Goonyella .
However , with the whole Australian portfolio under review , the process could ultimately lead to a sale of more or possibly all of the business .
After all , an activist shareholder is sitting on 30 % of the eviscerated stock and @ @ @ @ @ @ @ If some suitor could be persuaded to put a multiple of just 3 times on the Australian business ’ adjusted Ebitda , that would equate to $ 1.4 billion — not far short of the current enterprise value of the entire company .
A bull might look at that and conclude Peabody is a bargain .
Yet that math has held true for a while , and few seem to be charging in .
By late Thursday morning in New York , the stock had already given back almost half of Wednesday ’ @ @ @ @ @ @ @ Elliott agreement .
The implication is that investors are skeptical of Peabody realizing much value in Australia or , perhaps more likely , see little value in the U.S. operations alone .
Back in June , Peabody announced a joint venture with rival Arch Coal Inc. to combine their assets in the Powder River Basin .
It is a textbook tactic to offset declining volume with cost savings — worth $ 545 million to Peabody , by its own calculations .
Yet the stock has dropped another 60 % since then , and @ @ @ @ @ @ @ $ 823 million .
Even Arch , which has done a good job to date of returning cash to shareholders , has suffered amid weak pricing and an expansion project that will keep capex running high through this year .
Beyond the ultimate result of Elliott ’ s efforts with Peabody , the miner ’ s resort to austerity and its review carry ominous signals for this industry .
The American mines constitute a low-margin , high-volume business in a market where the volume of demand is under sustained pressure .
The cost @ @ @ @ @ @ @ result of shifting attitudes on climate change and falling prices for rival energy technologies .
Peabody ’ s Australian business may yet yield a deal that salves some investors ’ wounds .
But there is no promised land left to which this industry can turn .
Liam Denning is a Bloomberg Opinion columnist covering energy , mining and commodities .
He previously was editor of the Wall Street Journal ’ s Heard on the Street column and wrote for the Financial Times ’ Lex column .
He was also an investment banker .


washingtonpost--2020-02-06--Analysis | Time to Look for Supply-Chain Life Beyond China

Industrial robot orders , an indicator for automation companies , are expected to rise 6 % this year , Japan ’ s Robot Association said last month , before fears about the coronavirus grew pervasive .
Fanuc Corp. outdid performance expectations in its latest results .
That enthusiasm has come to an abrupt halt .
The spreading virus has crippled factories in China and disrupted the supply chains that the machinery companies depend on for servo motors , screw balls , gears and other components that go into making industrial robots , machine tools and factory automation equipment .
Global @ @ @ @ @ @ @ China aren ’ t sure how a disruption in the flow of goods and parts will affect them yet .
No one can say when it will be safe for workers to return and when plants can come back online .
That ’ s cast a pall over machinery makers again .
How long will this last ?
One quarter ?
Two ?
It ’ s no longer the trade-war uncertainties about how expensive tariffs will make supplies or parts .
It ’ s whether there will be supply at all .
Some @ @ @ @ @ @ @ on how dependent they are on China .
Japan ’ s electrical equipment manufacturing industry imports $ 96.6 billion worth of parts and components , or intermediate goods , that go into final products .
Of that , 5.6 % comes from China .
It ’ s a similar picture for machinery manufacturers .
A recent analysis by Nomura Holdings Inc. shows that these industries will face larger production bottlenecks , hampering their ability to supply and sell machinery .
That will have an impact on the hundreds of factories that rely on @ @ @ @ @ @ @ .
China ’ s thirst for high-tech machinery and robots buoyed Japan ’ s industrial machinery giants .
Foreign brands ’ market share is almost double that of domestic rivals .
In its drive to get ahead on the technology curve , Beijing has handed out subsidies to local manufacturers for intelligent technology and factory automation .
But here ’ s the thing .
Demand in China had already been weakening , affected by sentiment around trade , Beijing ’ s fiscal balancing issues and a deleveraging campaign .
A crisis of confidence @ @ @ @ @ @ @ industrial companies were among the first hit .
Their balance sheets were strained and working capital was harder to manage .
Capital expenditure and investment in factory automation dipped because of a shortage of cash and a wait-and-see approach .
In theory , foreign companies should by now have reassessed how much they can lean on China for demand and supply .
Building capacity in other parts of the world eager to move up the value chain , even if they have to swallow the costs , is one way .
Fanuc , @ @ @ @ @ @ @ and found growth elsewhere .
China has proven painful to companies dependent on operating there or that have little choice , like construction machinery maker Komatsu Ltd. or Hitachi Construction Machinery Co. Beijing has pushed its own domestic manufacturers at the expense of foreign competitors as construction activity picked up before the virus hit .
Part of their challenge is that machinery and factory automation-related companies aren ’ t adding capacity in a big way but are upgrading instead .
That means volumes elsewhere can ’ t offset the big numbers lost in @ @ @ @ @ @ @ from the auto and smartphone industries has been volatile because of an evolution toward electric cars and better processing units .
Companies will likely say ( for quarters to come ) that the virus – like the trade war – is a one-off issue .
But it ’ s worth wondering whether they want to wean off China .
With all that past upside of a vast market , demand and government support , there ’ s much to lose now .
Learning to contend with a not-so-reliable China is a smart bet @ @ @ @ @ @ @ regular basis , there ’ s a new normal .


washingtonpost--2020-02-06--Analysis | No, Boeing Isn’t Ruining Trump’s 3% Growth Target

Boeing is the largest U.S. exporter , and a production halt for its grounded 737 Max that took effect in January will undoubtedly be a drag on growth , particularly in the first quarter , and economists have said as much .
Federal Aviation Administration chief Steve Dickson said Thursday that Boeing had discovered yet another new software issue on the Max in the latest reminder that the jet ’ s return remains highly fluid and that the current best estimate for a mid-2020 reintroduction may be realistic rather than conservative .
( 1 ) But to believe Mnuchin ’ @ @ @ @ @ @ @ believe that there was ever a real shot of 3 % growth this year .
Most economists would disagree .
The median forecast of economists surveyed by Bloomberg is for 1.8 % U.S. GDP growth this year .
That number hasn ’ t been above 2 % since May 2018 , almost six month before the first Boeing Max jet crashed off the coast of Indonesia .
The Max wasn ’ t grounded globally until five months after that .
Even the most optimistic of the economists surveyed by Bloomberg haven ’ t @ @ @ @ @ @ @ % -plus since around last March , and there was little indication then that the Max crisis would drag out as long as it did or be as painful for the economy as it will end up being .
Boeing initially said it would have all necessary paperwork in to the FAA by late March and didn ’ t signal it was even thinking about taking the drastic step of shutting down production until July .
For the record , the median forecast for 2021 GDP , when Boeing Max production should be @ @ @ @ @ @ @ .
It feels like Boeing is a convenient scapegoat for an administration that doesn ’ t care to admit its trade war with China dragged the manufacturing sector into a mild recession last year and that expectations for a swift recovery off of the eventual ceasefire signed in January were overblown .
Even after the Max production halt was announced , White House economic adviser Larry Kudlow told CNBC Jan. 21 that U.S. GDP growth would get to 3 % this year .
In reality , plenty of industrial companies that have almost @ @ @ @ @ @ @ downbeat about their growth prospects in the coming year , calling for a still sluggish first half and a second-half recovery that many analysts expect to be relatively muted .
“ It took industrial activity a while to cool off and it will take a while to heat back up , ” Jim Foote , CEO of railroad CSX Corp. , said on the company ’ s earnings call last month .
He didn ’ t mention the Max as a factor .
Emerson Electric Co. and 3M Co. both announced fresh restructuring @ @ @ @ @ @ @ economic environment ; neither of those companies are major suppliers to Boeing .
The trade ceasefire agreed to in January will result in some rollback of tariffs : China said Thursday it will cut levies on some $ 75 billion of American imports later this month , while the U.S. will cut tariffs on about $ 120 billion of more consumer-facing goods .
But the initial tariffs placed by the U.S. on some $ 250 billion of mostly manufacturing-related products from China remain in place .
Meanwhile , China has been wishy-washy about @ @ @ @ @ @ @ in the trade deal actually are , with caveats including market demand , quality and safety standards and , reportedly , the impact of the burgeoning coronavirus crisis .
( 1 ) This particular problem has to do with an alert for the so-called trim system that moves the plane ’ s nose up and down .
It ’ s not clear how much of a delay , if any , will result from this issue and Dickson also indicated a certification flight could occur within weeks .


washingtonpost--2020-02-06--Analysis | China’s Banks Are Going to Suffer. But Not Equally

You wouldn ’ t think so to look at the stock market .
Medium-size lenders China Everbright Bank Co. , Shanghai Pudong Development Bank Co. and China CITIC Bank Corp. have all dropped more than 10 % in Shanghai trading since mid-January , when the spread of the virus started to weigh more heavily on markets .
By contrast , the so-called big four state-owned banks have lost between 4.6 % and 6.6 % , with the steepest fall suffered by Industrial & Commercial Bank of China Ltd. , the biggest .
There are signs already that banks will be @ @ @ @ @ @ @ called “ national service ” — sacrificing their commercial interests to support broader government policy objectives .
On Jan. 26 , the banking regulator issued guidance calling on lenders to give special consideration to borrowers amid the outbreak , such as offering a moratorium to individuals having trouble meeting mortgage , credit-card or loan payments .
They were also told to extend extra support to companies that are essential in combating the virus , such as medical providers , as well as businesses operating in virus-hit areas .
The cost of such support @ @ @ @ @ @ @ biggest financial institutions .
They are the best capitalized and have lower bad-loan ratios than the industry as a whole , even as China ’ s economy has slowed .
For the third quarter , the six largest banks by assets reported a nonperforming loan ratio of 1.32 % .
That number looks sure to rise .
A prolonged health emergency could lead to 5.6 trillion yuan ( $ 800 billion ) in fresh bad loans , causing the system-wide ratio to more than triple to about 6.3 % , S & P @ @ @ @ @ @ @ likely to mean more difficulties for small lenders , adding to funding stresses that have persisted since the bailout last May of Baoshang Bank Co .
The government may be tempted to turn to its largest institutions to stave off any further collapses , as it did in July when ICBC became the largest shareholder of Bank of Jinzhou Co .
Smaller lenders have also been hit hard in the market rout , with the mainland-traded shares of Bank of Nanjing Co. , Bank of Hangzhou Co. and Bank of Xi ’ an @ @ @ @ @ @ @ % since mid-January .
Shares of Bank of Jinzhou remain suspended in Hong Kong after tumbling 65 % late last year .
Besides the threat of having to rescue their weaker brethren , the biggest banks have also increased their exposure to small private companies that are likely to be among the most vulnerable amid the virus-imposed shutdown .
That ’ s a legacy of Beijing ’ s years-long deleveraging campaign , which squeezed the private sector ’ s access to loans .
In response , the government exhorted banks to embrace “ @ @ @ @ @ @ @ comprising ICBC , Agricultural Bank of China Ltd. , Bank of China Ltd. and China Construction Bank Corp. — extended 6.1 % of their gross advances to small and micro businesses in the third quarter , up from 5.2 % in the first .
That ’ s still below the 7.5 % share for the banking sector as a whole .
Midsize lenders are less likely to be used as policy tools by Beijing .
At the same time , the likes of China Merchants Bank Co. , and Everbright Bank have a @ @ @ @ @ @ @ ’ t as dependent on interbank funding as their smaller rivals .
They tend to have strong fee income , insulating them to some extent from troubles in the private sector ( to which they are big lenders ) and making them less vulnerable to the rate cuts analysts expect , which typically undermine bank earnings .
Merchants Bank , for instance , is strong in retail and private banking , while Everbright and CITIC have large credit-card businesses .
Their earnings are also growing faster .
China ’ s 12 joint-stock commercial @ @ @ @ @ @ @ medium-size category ) posted a 12.8 % increase in third-quarter profit from a year earlier .
That compared with a 6.2 % gain for the big state-owned lenders and a 9.9 % decline for city commercial banks , according to CGS-CIMB Research .
Their NPL ratio stood at 1.6 % .
While there may be no escaping the damage that the coronavirus will inflict on China ’ s banking industry , the middle way offers the best hope of a refuge for investors .


washingtonpost--2020-02-06--Analysis | What You Need to Know About China’s Virus Outbreak

It has been described as “ insidious ” because a large portion of infected people are well enough to go about their daily business , potentially spreading it to others .
In just two months , the number of confirmed cases surpassed the 8,096 SARS cases recorded in that entire epidemic , which ran more than a year .
Some disease modeling experts project there are likely 75,000 or more actual cases , as accurate counts from overwhelmed areas -- especially Wuhan and the surrounding Hubei province -- are difficult to come by , partly due to a shortage of @ @ @ @ @ @ @ apparent mortality rate was about 2 % , lower than for SARS , but such numbers are unreliable in the early stages of an outbreak .
Coronaviruses are named for their crown-like shape .
There ’ s a large family of them .
Some transmit easily from person to person , while others do not .
The World Health Organization says that new strains emerge periodically around the globe , and several known versions are circulating in animals and haven ’ t infected humans .
They tend to morph and mutate , which @ @ @ @ @ @ @ can change the longer they circulate in humans .
It ’ s genetically similar to the SARS virus but appears milder in terms of severity and fatality rate .
With SARS , about 9 % of reported cases died .
A related virus , known as MERS-CoV , that ’ s been spreading since 2012 , has led to death in 34 % of the 2,499 cases recorded .
By contrast , an estimated 50 million people died in the 1918 influenza pandemic that had a case-fatality ratio of less than 5 % @ @ @ @ @ @ @ of the world ’ s population .
Most likely by coming into contact with virus-containing droplets that are emitted when an infected person breathes , talks , coughs or sneezes .
These can be transferred directly to someone else in close proximity or via hands and surfaces .
There ’ s a theoretical risk the virus can spread through feces or farther through the air in tiny particles known as aerosols .
People who are still incubating the virus and show no symptoms may spread it .
There have been reports in China @ @ @ @ @ @ @ 10-year-old boy who apparently passed the virus to family members .
However , asymptomatic transmission is unlikely to become a major factor in the spread , Anthony Fauci , director of the National Institute of Allergy and Infectious Diseases in the U.S. , said Jan. 28 .
Epidemiologists try to gauge contagiousness by estimating the number of additional people a person who is infected is likely to infect .
That measurement , called a basic reproduction number , is one indicator of how difficult an epidemic is to control .
The WHO gives @ @ @ @ @ @ @ for 2019-nCoV .
At the high end , that makes it similar to SARS and more infectious than flu .
A group from the Chinese Academy of Sciences in Beijing estimated the number to be 4.08 .
Infections appear to cause a mild illness in children , adolescents and younger adults , and more severe disease in older people .
Frequently reported early signs are fever , dry cough and tiredness -- but not the sneezing and runny nose typical of a cold .
Studies suggest the virus invades cells in the lower @ @ @ @ @ @ @ the lungs , causing difficulty breathing and the inflammation and congestion associated with pneumonia .
In an early study , more than a quarter of hospitalized patients developed a potentially fatal complication known as acute respiratory distress syndrome .
Septic shock , respiratory failure and the failure of other organs have also been seen .
Many of the fatalities have been in patients with underlying illnesses such as cardiovascular disease .
The virus emerged in early December in Wuhan , an industrial city of 11 million .
Early attention focused on a seafood @ @ @ @ @ @ @ , but about a third of the first 41 cases were found to have no link to it .
The viral genome is even more closely related to several coronaviruses found in bats than it is to the SARS coronavirus .
Diseases transmissible from animals to humans , sometimes referred to as “ zoonoses , ” comprise a large percentage of all newly identified infectious diseases .
There is always concern when a new pathogen emerges in people because they typically lack immunity to it and there usually aren ’ t specific treatments @ @ @ @ @ @ @ those not seen in humans before , represent a particular concern because they have been known to spark complicated outbreaks that have sickened thousands of people , like SARS did as it swept across the globe from southern China .
Relatively few cases have been reported outside China .
But in Hubei , thousands of people have been hospitalized in isolation wards and hundreds are being treated in intensive care units , creating what officials there have described as an “ extreme , severe and abrupt public health crisis.
” Richard Horton , @ @ @ @ @ @ @ said the outbreak could strain the capacity of health care systems .
China ’ s government imposed a quarantine on Wuhan and more than a dozen other cities in the region , a travel ban covering in excess of 50 million people .
New hospitals were built from the ground up in days .
Patients were isolated to prevent any spread .
Health officials are looking for , screening and monitoring people the patients had contact with .
School holidays have been extended and work-from-home orders issued .
The WHO has declared the @ @ @ @ @ @ @ designation that can help mobilize international responses .
Anyone caught spreading misinformation was subject to criminal charges in some Asian countries .
The U.S. State Department has advised people not to travel to China and said those already in the country should consider leaving .
Hong Kong , the international financial center that functions with some autonomy from China , announced its own travel restrictions from the mainland .
The U.S. , Australia , India and other countries were denying or restricting entry for non-citizens arriving from China in an attempt to stop @ @ @ @ @ @ @ the WHO has called such measures unnecessary .