washingtonpost--2020-06-17--Analysis | The Fed Is Headed in the Same Direction as the ECB

The chief lessons from the ECB are that it ’ s easier to start doing this than to stop and that the immediate benefits of these monetary tools wear off over time .
Fed Governor Jay Powell has also learned the need for clarity .
By using its own eligibility index , the Fed ’ s decision on which bond issuers qualify should be easy to understand .
This sounds like a more transparent approach than the ECB ’ s , which provides a lot of backward-looking information that isn ’ t much use for analyzing what it owns or @ @ @ @ @ @ @ s efforts should help keep U.S. corporate bond yields in check , or push them lower , which will mean cheaper borrowing for companies and a better chance of economic recovery as America starts to emerge from the pandemic .
Expect a flood of new issues .
That has been the case in Europe this year , where corporate issuance is keeping pace with the usually larger U.S. market .
Getting this going will be the easy part , however .
Stopping these quantitative-easing programs will be harder , as the Fed knows @ @ @ @ @ @ @ of government bonds .
To see how this might work out for the U.S. , the experience of the ECB ’ s corporate bond-buying scheme that ran between 2016 and 2018 is instructive .
As investors anticipated the program ’ s winding up at the end of 2018 , credit spreads — the difference between corporate bond yields and their benchmark — blew out again , so they were as wide as they ’ d been three years earlier .
So while it was nice for those companies that issued all of the @ @ @ @ @ @ @ ECB , the effects were transitory .
The central bank was forced to restart its QE programs in November last year because of fears of a euro-area recession , and it has massively increased them to respond to Covid-19 .
The corporate program has taken a backseat to more urgent government bond buying , particularly of Italian bonds , but the ECB is steadily restoring the balance where it can .
One area where the Fed has taken the lead is buying the bonds of “ fallen angels , ” the companies that @ @ @ @ @ @ @ since the coronavirus first hit .
ECB President Christine Lagarde may well follow Powell ’ s lead at some point , as it seems unfair to penalize otherwise healthy corporates , marked down through no fault of their own .
In other areas , the ECB is being bolder than the Fed .
For example , the U.S. central bank will only buy corporate bonds of up to five years ’ maturity , and will only take up to 10 % of any company ’ s outstanding debt — whereas the ECB has @ @ @ @ @ @ @ buy .
This is just the Fed ’ s first foray into buying corporate paper , and its plans may well evolve .
The real lesson from the ECB is that it ’ s unlikely to be a one-time deal .


washingtonpost--2020-06-17--If Zombie Companies Don’t Die, We’ll Pay a Price

But there ’ s a growing worry in some quarters that all of this lending will create a wave of zombie companies .
Zombies are businesses that have to borrow to survive and don ’ t make enough profit to cover debt-service costs .
The number of such companies has been increasing steadily in developed nations during the past 20 years .
The reason , presumably , is low interest rates , which allow zombies to sustain themselves on borrowed money rather than exit the market .
Zombies are a problem for two related reasons .
First , they tend @ @ @ @ @ @ @ that can survive by borrowing instead of finding ways to increase profits can become complacent and inefficient .
A team of economists found in 2018 that as French manufacturers borrowed on increasingly lax terms , they became less productive .
This might not be a problem if other , more efficient companies could pick up the slack .
But zombies tend to consume scarce resources -- personnel , office buildings and capital -- and thus leave less for healthy companies .
Another research team found in 2018 that in countries with more zombies @ @ @ @ @ @ @ .
The most famous site of a zombie outbreak was Japan , where unprofitable companies famously became prevalent after a financial crisis in 1990 .
A well-known analysis by economists Ricardo Caballero , Takeo Hoshi and Anil Kashyap found that Japanese banks engaged in so-called evergreening of past-due loans to underperforming companies .
As expected , industries that experienced more zombification had lower productivity growth , and at the same time financial capital was diverted away from healthy businesses .
Other research confirmed the finding .
Now many worry that the U.S. , @ @ @ @ @ @ @ will fall victim to a plague of the corporate living dead in the aftermath of the coronavirus .
In a recent interview , for example , Deutsche Bank Chief Economist Torsten Slok acknowledged that the Fed ’ s lending programs were economically necessary , but worried that they would interfere with the process of creative destruction .
In a healthy economy , bad companies die and good companies replace them and new industries rise while old ones fade .
But if the Fed keeps all of the bad companies on life support , @ @ @ @ @ @ @ .
If the moratorium on creative destruction lasts only a year , until Covid-19 is eliminated by treatments or vaccines , the amount of resource misallocation will probably not be too bad .
The danger is if unprofitable companies are supported for years .
The pandemic probably will increase the need for creative destruction .
Lockdowns and supply-chain disruption will create long-lasting shifts in both consumer and corporate demand that render some businesses and even entire industries unviable .
The minute the Fed cuts off the spigot of cheap money , those companies @ @ @ @ @ @ @ investment , putting the economy in danger .
There will be strong political pressure from both elected officials and from the general public to keep corporate borrowing rates low forever .
Central bankers might believe that the Fed is strong and independent enough to resist such pressure .
In our recent conversation , for example , former Fed chair Ben Bernanke expressed confidence that the end of the pandemic would see the central bank step back and let the market take over .
The reality might not prove so easy .
Interest rates @ @ @ @ @ @ @ decline since the early 1980s , with each peak lower than the last : That might reflect a slowdown in the economy ’ s natural rate of interest , but it might also reflect Fed reluctance to cause a new recession by raising rates to the level that preceded the previous downturn .
A long-term continuation of the Fed ’ s pandemic lending programs might , therefore , be seen as a continuation of the long-term reduction in interest rates .
Standard economic theory holds that if the Fed keeps monetary policy too @ @ @ @ @ @ @ result .
But if easy money reduces productivity growth substantially , that would reduce the natural rate of interest , meaning that continued Fed targeting of low corporate borrowing rates might not cause inflation .
The result would then be a new slow-growth equilibrium -- unproductive legacy companies kept afloat on cheap debt provided by a Fed more concerned with short-term politics than long-term productivity .
At this point , all of this is conjecture ; until the pandemic is over , the Fed shouldn ’ t let up on its lending programs @ @ @ @ @ @ @ have a concrete plan for how to clear out the corporate deadwood once the coronavirus is no longer a threat .

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washingtonpost--2020-06-17--Watchdog Says Fast Paycheck Protection Loans Could Lead to Fraud

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washingtonpost--2020-06-17--Analysis | Even 35,000 Won’t Be Enough for HSBC Now

The London-based bank has restarted its cost reduction program , according to a memo from Chief Executive Officer Noel Quinn , having placed it on pause in March as the pandemic spread .
The plan calls for HSBC to eliminate those jobs over three years and shed $ 100 billion in risk-weighted assets by shrinking its underperforming U.S. operations and European businesses and cutting back on its investment bank .
Few expected HSBC to hold out indefinitely .
The longer the virus lasts , the more bad loans will accumulate and the heavier will weigh its network of 235,000 employees @ @ @ @ @ @ @ a major player in trade finance , warned in February that it could face more credit losses from disruption to supply chains .
Since then , worsening geopolitical tensions between China and the U.S. have added a further negative .
A strong first quarter for fixed-income and foreign-exchange trading will be hard to sustain .
Improving its paltry 1.9 % return on equity is a priority .
JPMorgan Chase & Co. , comparable in size with a workforce of 257,000 , has an ROE of 15 % .
The controversy over Hong Kong @ @ @ @ @ @ @ push ahead with its transformation .
The bank has upset the U.S. and the U.K. by its stance on the security bill , with HSBC ’ s Asia head Peter Wong signing a petition this month in support of the legislation that China is imposing on the former British colony .
Hong Kong contributes 54 % of profit and a third of global revenue .
Most of the job cuts are targeted at less profitable or money-losing units in other regions .
HSBC has made its choice and may as well follow through @ @ @ @ @ @ @ pivot to Asia ” begun under Quinn ’ s predecessor Stuart Gulliver five years ago .
Granted , HSBC can not afford to give up its global footprint or alienate Washington .
Its status as a dollar-clearing bank is valuable , and many of China ’ s biggest banks use HSBC ’ s system to trade in the U.S. currency .
Multinational clients may be less inclined to stick with HSBC for European and U.S. business as it scales back .
At the same time , it has an opportunity to strengthen its @ @ @ @ @ @ @ operating in China .
Challenges remain even in the market on which HSBC has bet its future .
The bank is still a target of suspicion in China after providing U.S. prosecutors with information that led to the arrest of Huawei Technologies Co. ’ s chief financial officer in late 2018 .
Having sided with authorities over the security bill , it also risks alienating a large part of its customer base in Hong Kong .
HSBC already drew the ire of pro-democracy protesters in the city after closing an account linked to @ @ @ @ @ @ @ axing of its dividend in April stung the bank ’ s base of small shareholders in Hong Kong .
Walking that tightrope is unlikely to get any easier .
In the meantime , HSBC has plenty of tasks to get on with elsewhere in the world .
The bank is already looking for a buyer for its French retail operations .
A tiny U.S. retail presence and sub-scale businesses in countries such as the Philippines and New Zealand are among unneeded units that could go .
Hong Kong , at least , can @ @ @ @ @ @


washingtonpost--2020-06-16--Analysis | Japan’s New Wave: Cash, Bankruptcies and Inequality

Bankruptcies at large Japanese companies have fallen .
So it ’ s curious that risk-averse , mom-and-pop outfits sitting on cash are falling victim faster everywhere , not just where they make up a majority of firms , such as restaurants and small retailers .
Years of low investment and failure to grow equity capital have made them more vulnerable .
An analysis by Goldman Sachs Group Inc. shows that while larger companies have been able to build their equity buffers , the tiniest haven ’ t .
Businesses with capital of more than 1 billion yen ( $ 9.3 @ @ @ @ @ @ @ around 30 % and have broadly trended upward ; they can stand to absorb losses .
The ratios of those with less than 10 million yen are close to 15 % and have stayed flat over the last couple of decades .
The moment earnings get hit , they face a wipe out .
Low tolerance for losses means micro-enterprises throw in the towel at any semblance of a prolonged downturn .
At slightly larger firms , the acceptance of taking a hit even if working capital is insufficient “ has increased substantially @ @ @ @ @ @ @ bankruptcy .
What of the cash cushions ?
Those are a strategic asset right now and will hold Japanese companies in good stead .
After struggling through previous financial crises , they turned to hoarding cash and started switching their preferred funding away from debt .
As a percentage of gross domestic product , firms ’ liquid assets have risen from 103 % in 2003 to 136 % last year , according to Capital Economics.Micro-enterprises have been the bigger savers and kept more in cash .
That gave them more discretion on where @ @ @ @ @ @ @ were uncertain , as now , they could hold back ; if money was flowing in , then put it toward spending on fixed assets .
The impetus to grow was largely lost .
As Goldman Sachs ’ Tomohiro Ota says , the root of the problem for micro-enterprises is low productivity and profitability .
A survey in April showed that Japanese companies were decreasing investment because “ the future can not be foreseen.
” Sure , the size of companies going under is small , and so will be the total liabilities @ @ @ @ @ @ @ impact on the macro economy may not feel that severe to start .
But if the numbers rise sharply , things could turn sour soon — and deepen the challenges for micro firms , where some 24 % of employees in Japan work .
This situation points to a more persistent problem : access to credit for micro-enterprises .
Japanese banks , even with their low loan to deposit ratios , tend to rely on hard , fixed assets for collateral .
That ’ s a setback for little companies , and means @ @ @ @ @ @ @ ’ t as easy .
Small remains small .
Since February , the government has doled out trillions of yen in aid , including tax breaks and refunds , employment subsidies , cash grants and interest-free , unsecured loans .
Yet despite such largesse , when things go bad , they do so quickly .
Bankruptcies are expected to rise .
Larger companies tend to have far better access to commercial paper and bond markets , and find ways to leverage stimulus loan programs .
Smaller ones get caught up in bureaucratic and @ @ @ @ @ @ @ A crisis brings the future into focus .
Many of these businesses are family-owned , and succession planning – whether that ’ s selling , handing it over or closing — is harder in the midst of Covid-19 .
Much like in the U.S. , where the Chapter 11 process of reorganizing firms and their balance sheets suits larger companies , shutting down is just the cheaper and less cumbersome option .
The incentive increases as Japan ’ s population ages and businesses don ’ t have a successor .
In the past @ @ @ @ @ @ @ have been liquidations .
Japan ’ s small-firm problem has become structural .
Even if government support helps contain bankruptcies , it may ultimately lead to the preservation of low-margin companies without boosting their profitability or productivity , as Goldman ’ s Ota says .
The “ measures to bolster capital could prove a double-edged sword over the long term , ” the report notes .


washingtonpost--2020-06-17--SNB’s Furious Crisis Response Is Happening Behind the Scenes

Instead , they ’ ve ramped up currency interventions , selling the franc at the fastest pace in years to stem its advance .
Its haven status saw it appreciate to a five-year high against the euro last month , pushing down inflation and undermining exporters .
The strategy is not without risks , including possibly being labeled a currency manipulator by Donald Trump ’ s administration .
The U.S. Treasury has already put Switzerland on a watch list and the next update is due shortly .
Even with that threat , “ the SNB will continue to intervene , @ @ @ @ @ @ @ at Zuercher Kantonalbank .
“ Lowering rates further would mean they counteract their other crisis measures to boost liquidity.
” The SNB launched a refinancing facility for government-backed loans to small and medium-sized businesses in March to encourage banks to keep credit flowing .
According to Jordan , the pandemic has caused “ enormous ” pressure on the franc .
While the SNB says it can cut rates again if needed , interventions are doing the work so far .
Data suggest it ’ s already spent more this year than in 2015 @ @ @ @ @ @ @ cap on the currency , and the franc briefly touched parity with the euro .
The deposit rate has been at a record low since then , and the policy has been supplemented with interventions and officials ’ refrain that the franc is “ highly valued ” to deter investors .
Economists in a Bloomberg survey expect the main interest rate to remain at its current level at least through 2021 .
Although Switzerland ’ s virus outbreak hasn ’ t been as severe as in neighboring states , the economy has still @ @ @ @ @ @ @ of 8.5 million , companies filed government furlough applications for more than a million workers , and unemployment is expected to rise .
“ An appreciation of the franc would hit the Swiss real economy hard , ” the KOF Swiss Economic Institute noted in its most recent forecast .
“ As such the SNB is setting strong monetary policy impulses.
” There ’ s been some relief for the SNB recently thanks to the announcement of a joint European Union recovery plan .
The franc has weakened slightly again after pushing close @ @ @ @ @ @ @ But the currency is still stronger than it was at the start of the year .
It ’ s averaged 1.06 in 2020 , compared with 1.13 in the first half of 2019 .
“ Clearly the SNB was quite relieved by the fact that the franc went back to close to 1.09 per euro , ” said Gero Jung , an economist at Geneva private bank Mirabaud & Cie. “ They ’ ll continue with this two-pillar approach of negative interest rates and interventions .
”


washingtonpost--2020-06-17--Analysis | In a Dismal Year for Funds, a Winner Is Emerging in Pandemic

The shares of asset management companies typically mirror the broader stock market , rising and falling as a proxy for equities generally .
Before the novel coronavirus outbreak trashed markets toward the end of February , DWS was handily leading its rivals .
Since equities have recovered , the Frankfurt-based company has rebounded to become the only European asset manager in positive territory for the year .
Cost is one of the few variables a fund-management company is able to control , and investors are rewarding DWS , which manages 700 billion euros ( $ 791 billion ) , for @ @ @ @ @ @ @ Officer Asoka Woehrmann has been on a cost-cutting drive since his appointment as head of the company in October 2018 , seven months after Deutsche Bank AG sold and listed about a fifth of the business , retaining an 80 % stake .
Earlier this month , Woehrmann shrank his management board to six members from eight as part of efforts to save at least 150 million euros a year .
For asset managers ’ cost-to-income ratios , the direction of travel matters at least as much as the absolute level .
DWS @ @ @ @ @ @ @ by the end of the first quarter , down from 70.9 % at the end of 2018 and more than 74 % in mid-2018 .
It promises more to come .
“ We can still expand our savings efforts , ” DWS Chief Financial Officer Claire Peel said in an interview published by Boersen-Zeitung last week .
At the asset-management business of M & G Plc , which oversees 323 billion pounds ( $ 407 billion ) , the cost-to-income ratio worsened to 63 % at the end of last year from 59 @ @ @ @ @ @ @ those additional expenses came as it adjusted to life as a stand-alone company , after being spun out from Prudential Plc in October .
M & G has pledged to cut spending by an annual 145 million pounds in the next few years .
In March , the London-based firm introduced a voluntary redundancy program aimed at trimming personnel expenses by 10 % this year , but the virus may have blown that off track .
Amundi SA , Europe ’ s biggest asset manager , with 1.53 trillion euros of assets , @ @ @ @ @ @ @ with its cost-to-income dropping below 50 % at the end of March , down from an already impressive 53 % at the end of 2018 .
But that leaves limited scope for further savings at the Paris-based company .
Both DWS and Amundi have sizable suites of index-tracking products available , enabling them to ride the wave of investor enthusiasm for lower-cost passive products while their peers are stuck trying to extol the benefits of active strategies .
As I wrote in May , stock pickers were unable to beat their benchmarks in @ @ @ @ @ @ @ a whole — a period of market convulsions that should have been the time for active management to shine .
It ’ s a lackluster performance that will only exacerbate the shift to index tracking .
The fund management industry has faced straitened circumstances for several years .
This year ’ s share-price action suggests shareholders will continue to favor those firms best able to play the parsimony game .
With the income side of the equation looking as fragile as ever , more belt-tightening lies ahead .
Mark Gilbert is a Bloomberg @ @ @ @ @ @ @ previously was the London bureau chief for Bloomberg News .
He is also the author of “ Complicit : How Greed and Collusion Made the Credit Crisis Unstoppable .
”


washingtonpost--2020-03-29--Mnuchin Says Small Business Loans Up and Running This Week

“ Any FDIC bank , any credit union , any fintech lender will be authorized to make these loans ” to a small business subject to certain approvals , Mnuchin said .
Meanwhile , Agustin Carstens , head of the Bank for International Settlements , called on banks worldwide to suspend dividend payments , for now , to focus on what he called “ the last mile ” of getting money out to small businesses .
Mnuchin was the White House ’ s lead negotiator on a $ 2 trillion economic stimulus package signed into law by President Donald Trump @ @ @ @ @ @ @ wide-scale shutdown and joblessness as the coronavirus swept through the country .
The magnitude of the economic devastation being wrought by the coronavirus pandemic was laid bare on Thursday when the U.S. government reported an unprecedented surge in the number of people seeking jobless benefits .
In a separate interview on CBS News ’ s “ Face the Nation , ” Mnuchin said the stimulus package should provide economic relief to workers and business for about eight to ten weeks .
Unlike the Troubled Asset Relief Program , where the Treasury compelled banks @ @ @ @ @ @ @ financial crisis , Mnuchin told CBS , “ We are not going to force money on any companies.
” The firms have to request aid , he said , and the Wall Street banks helping to manage the assistance will be working for “ very reduced rates.
” Lawmakers are urging the administration to get the funds out quickly .
Senator Mike Crapo , an Idaho Republican who is chairman of the Senate Banking Committee , wrote to Federal Reserve Chairman Jerome Powell and Mnuchin Saturday , urging both to “ work quickly @ @ @ @ @ @ @ businesses -- including small and medium-sized businesses -- states , municipalities and Tribes , understand what programs and facilities are available.
” The Fed has announced its intention to launch a Main Street Lending Facility to loan directly to medium-sized businesses while the stimulus bill recommends support for the markets that finance states and municipalities .
Carstens , chief executive officer of the BIS , a coordinator for global central banks based in Basel , Switzerland , said banks worldwide should suspend all dividend and stock buyback programs to retain more capital for @ @ @ @ @ @ @ of credit support .
“ The U.S. Federal Reserve ’ s decision to enter the corporate bond market marks a bold step in the right direction , ” Carstens wrote in a column for the Financial Times this weekend .
“ But more may still be needed to build the last mile to the small businesses at the end of the line.
” Carstens recommended a government-guaranteed loan program equal to the amount of taxes small businesses paid in 2019 that could be securitizes and then refinanced through the central bank .
The @ @ @ @ @ @ @ be conducted for small business and lists payroll costs as one criteria .


washingtonpost--2020-03-29--Analysis | Welcome to a Truly Free Oil Market

It would be impossible for any small group of producers to mitigate that kind of impact by reducing output , unless Saudi Arabia and Russia were both to slash their production to almost zero .
And that ’ s not going to happen .
The trouble is that I suspect what Pompeo meant is for Saudi Arabia to cut its production unilaterally , rather than trying to bring together a short-term “ coalition of the willing , ” including the U.S. , to work together to confront a global problem .
After all , that ’ s always what ’ @ @ @ @ @ @ @ for example the response to the Asian financial crisis .
In February 1999 , then President Bill Clinton ’ s energy secretary , Bill Richardson , expressed U.S. concerns over oil prices that had fallen below $ 10 a barrel .
Two months later the Organization of Petroleum Exporting Countries agreed to its third successive output cut and by the end of the year Brent crude had recovered to $ 25 a barrel .
It ’ s no surprise that Saudi Arabia was willing to take the lead back then , and to @ @ @ @ @ @ @ .
It , too , wanted higher oil prices .
Those were the days when oil was regarded as a depleting asset whose value would only rise in the future , as demand outstripped available supply .
Cutting production would leave oil in the ground that would appreciate in value .
But that was a long time ago .
That view no longer holds sway — battered both by the tsunami of crude extracted from shale rocks and the growing awareness of the need to reduce carbon dioxide emissions that has seen concerns @ @ @ @ @ @ @ ( for producers ) of peak oil demand .
Oil left in the ground now is at risk of never being produced at all .
Of course back in 1999 , it would have been unreasonable to expect America to join in the output reduction effort .
The U.S. was pumping a little over 6 million barrels a day — less than half its current production — and the gas-guzzling nation imported about 10 million barrels a day more crude and refined products than it exported .
But 2020 is not 1999 .
@ @ @ @ @ @ @ s biggest crude producer , pumping 13 million barrels a day — more even than Saudi Arabia can supply if it opens its taps fully .
And so far this year it has exported more oil than it has imported .
As it stands at the moment , OPEC is not due to meet until early June , and whether the cartel ’ s external allies including Russia join them in an enlarged OPEC+ shindig remains to be seen .
No matter , any action agreed then wouldn ’ t have an impact @ @ @ @ @ @ @ Even an agreement reached tomorrow would have little impact until May , with April crude sales now largely completed .
By then storage tanks around the globe will be close to capacity ; ships full of unwanted oil will be floating in safe anchorages ; and producers will be forced to shut wells because they have simply run out places to put any crude they pump out of the ground .
Without output cuts , production shut-ins are inevitable .
Consultants IHS Markit see a surplus of 1.8 billion barrels of crude building @ @ @ @ @ @ @ , and yet there ’ s only 1.6 billion barrels of storage capacity available .
The window to distribute those cuts in an orderly manner between producers has closed .
OPEC had its last chance in March and America ’ s leaders subsequently squandered their chance at leadership .
As it now stands , production cuts will be distributed by the market on the basis of who has access to storage tanks and who is losing money by pumping .
Welcome to the free market .


washingtonpost--2020-03-29--Analysis | How Coronavirus Is Shaking Up the Moral Universe

Many westerners are Rawlsians without knowing it .
Fifty years ago , the Harvard philosopher John Rawls tried to work out how people would construct their society if the choice had to be made behind what he called a “ veil of ignorance ” about whether they will be rich , poor or somewhere in-between .
Faced with the risk of being the worst off , Rawls posited , humans would not demand total equality , but would need to be assured of the trappings of a modern welfare state .
The assurance of basic necessities and the opportunity to @ @ @ @ @ @ @ social and political justice and provide the ability for people to assert themselves .
Rawls ’ s monumental 1971 book , “ A Theory of Justice , ” is now regarded as the clearest moral and intellectual justification for modern center-left mixed economies .
But the idea comes from somewhere deeper .
Rawls was not religious , but his philosophy is essentially in line with the golden rule handed down by the Old Testament prophets and by Jesus , that we should do as we would want to be done by .
Some @ @ @ @ @ @ @ presented by the coronavirus just as Rawls would , by taking treatment of the worst off as the criterion for social action .
The most famous libertarian thought experiment was conducted by another Harvard philosopher , Robert Nozick , in a riposte to Rawls .
He imagined what kind of political state would be built , and how much personal liberty citizens would surrender , if everyone were dropped into a utopian landscape with no social structures .
The novelist William Golding gave one answer in “ The Lord of the Flies.
” @ @ @ @ @ @ @ the schoolboys of Golding ’ s novel endure , Nozick , in “ Anarchy , State and Utopia , ” reckoned that people would set up a very limited state dedicated to self-defense and the protection of individual rights — but nothing more .
But wait .
There have been objections to lockdowns on the libertarian basis that they infringe on rights .
Critiques are appearing saying that politicians haven ’ t proven that such drastic measures are necessary .
Before the coronavirus , the U.S. suffered a measles epidemic as the result @ @ @ @ @ @ @ that put parents ’ right to choose not to vaccinate their children above the state ’ s attempt to defend other parents ’ right to expect that their own children wouldn ’ t have to mix with unvaccinated peers .
Panic buying , and hoarding of medical equipment also show that many people are following Rand ’ s idea of self-determination and putting themselves first .
Such ideas may grow more appealing after a few more weeks of self-isolation .
Libertarians are not only found on the political right .
As the crisis @ @ @ @ @ @ @ Liberties Union made a statement accepting that civil liberties must “ sometimes ” give way when it comes to fighting a communicable disease — but “ only in ways that are scientifically justified.
” It said , “ The evidence is clear that travel bans and quarantines are not the solution.
” The right to walk in a park looks like a flash point .
New York Governor Andrew Cuomo was furious to see crowds expressing libertarian sympathies — whether they saw it that way or not — by gathering in parks .
@ @ @ @ @ @ @ Cuomo said .
“ It ’ s self-destructive .
It ’ s disrespectful to other people .
And it has to stop and it has to stop now !
” New Yorkers are organizing to keep the parks open .
In these conditions , individual choices become freighted with moral significance .
How , for example , will society eventually judge behavior like that of Kentucky Senator Rand Paul ?
Arguably the most prominent libertarian in the U.S. , he continued to socialize as normal for a week after being told that he @ @ @ @ @ @ @ positive for the coronavirus .
He had no symptoms .
Recall that there are many elderly members of the Senate .
Last weekend , after a workout in the Senate gym , he discovered that he had himself tested positive .
Yet another approach is based on the notion that everyone derives their identify from the broader community .
Individual rights count , but not more than community norms .
These notions go back to the Greeks , but in modern times , the philosophy is most widely connected to the sociologist Amitai @ @ @ @ @ @ @ ’ s “ Liberalism and the Limits of Justice ” is another riposte to Rawls , arguing that justice can not be determined in a vacuum or behind a veil of ignorance , but must be rooted in society .
He sets out a theory of justice based on the common good .


washingtonpost--2020-04-04--Wells Fargo, Other Lenders Miss Debut of Rescue for Small Firms

The roll-out has been plagued by uncertainty , partly because of its magnitude and the urgency to get money to financially distressed small business owners before they ’ re forced to shut down permanently .
After the government announced that the program would launch Friday with potentially millions of applications that could be processed quickly -- even the same day -- lenders said they lacked enough guidance .
Some smaller banks also said they ’ re weren ’ t ready until they got more guidance about processing the loans from Treasury and the SBA , the agency in charge of @ @ @ @ @ @ @ a national , non-bank lender that specializes in SBA loans , won ’ t be participating on Friday because the guidance so far is still “ insufficient to most in the lending community , ” said Chris Hurn , founder and chief executive .
The initiative , called the Paycheck Protection Program , is meant to help small businesses keep workers on payrolls by offering loans of as much as $ 10 million with the portion used for payroll costs , mortgage interest , rent and utility payments for two months forgivable if @ @ @ @ @ @ @ number of Americans applying for unemployment benefits surged on Thursday and reached about 10 million over the last two weeks .
Wahid Nassar , who runs a restaurant in the Highlands , New Jersey , said he tried going online Friday morning to apply for the loan through his lender , Bank of America , but repeatedly got error messages .
“ There ’ s so much confusion and hard to get a straight answer from anyone right now , ” he said.But Joseph Colangelo , the chief executive officer of Boxcar Inc. @ @ @ @ @ @ @ whose app offers parking and bus service , had better luck .
He said he found the application online , and since he was already logged into the Bank of America website , it took him only 10 minutes to complete .
The site said the bank would be in touch with him if it needed further information , he said.
“ It was so slick , ” Colangelo said .
“ I was very impressed.
” At International Quality Consultants Inc. in Butler , Pennsylvania , Chief Executive Officer Gail Paserba was @ @ @ @ @ @ @ a loan after seeing about half the company ’ s business stall .
As of midday Friday , its financial institution , PNC Financial Services Group Inc. , needed to send an email to continue the process , she said.Paserba said the company , which does inspections and audits for heavy industry , has been reducing hours for some its 67 employees the past two weeks but decided to pay them the full amount in anticipation of receiving federal assistance .
While she ’ s worried about the loan being delayed , she @ @ @ @ @ @ @ from financial institutions and business groups.
“ As crazy as it has been , the information has been consistent , ” Paserba said .
“ I have a headache ; it ’ s not a migraine.
” Earlier in the week , there were doubts about how many lenders would participate because they originally believed they would be able to charge interest of as much as 4 % and were dismayed when the government set the rate at 0.5 % -- a rate below many banks ’ own costs of funds , said @ @ @ @ @ @ @ LLC , an SBA lender backed by a nonprofit community development group .
By Thursday , Mnuchin announced the government had bumped up the allowable interest rate to 1 % .
Advocates for small businesses have also said the $ 349 billion won ’ t be nearly enough to meet demand , and that many firms -- especially mom-and-pop shops that don ’ t have an established relationship with a lender -- could get beaten out for funding .
Some lenders have said they ’ ll only take applications from existing clients .
@ @ @ @ @ @ @ SBA as its most active lender , has been gathering payroll information from its 4,000 existing customers and processed its first loan at 4 a.m. on Friday , President Huntley Garriott said in an interview .
The bank plans focus on its existing customers first “ and we will address the rest of the world second , ” Chief Executive Chip Mahan said in the interview .


washingtonpost--2020-04-03--U.S. Jobs Data, Small Business Aid, Shadow Economies: Eco Day


washingtonpost--2020-04-03--Analysis | Why Leveraged Loans, CLOs Feed Worries in Virus Slump

When the pandemic triggered an extended economic shutdown , attention turned to companies that could face a squeeze and supercharged debt bets that could quickly sour .
Leveraged loans are inherently risky and the market has boomed in the past 10 or so years .
The securities have been a magnet for investors in an era of low interest rates .
But the market has also been prone to bouts of volatility , even as its total size topped $ 2 trillion .
The loans offer financing to companies that have shaky credit ratings because they have a lot of @ @ @ @ @ @ @ .
CLOs have been likened to collateralized debt obligations , or CDOs , which became famous for melting down in the 2008 financial crisis .
While it ’ s a comparison the market dislikes , both are structured products created by pooling assets to create new securities .
While CDOs cover a wide array of debt , CLOs are built from leveraged loans .
They ’ ve become a big part of financing corporate America -- about 60 % of loans to sub-investment-grade firms are folded into CLOs .
While the downgrade of @ @ @ @ @ @ @ damage a CLO ’ s ability to pay investors , a deluge of them around the same time certainly could .
Still , there ’ s a debate .
CLOs fared well in the 2008 crisis , with none of the highest-rating tranches defaulting .
Prices for U.S. leveraged loans trading in secondary markets plunged 13 % in the first quarter as the virus took hold , reaching levels not seen since 2008 .
On April 2 , the benchmark index stood at 83 cents on the dollar , after recovering somewhat from @ @ @ @ @ @ @ , when stock and bond markets were all in freefall .
( It hit an all-time low of 61.7 at the end of 2008 , according to data from Standard & Poor ’ s and the Loan Syndications and Trading Association . )
Market-watchers are predicting a wave of defaults , saying that investors could recover some 55 cents to 60 cents for each dollar they invested .
Probably not directly .
Wall Street regulators have discussed ways they could help the leveraged-loan market by , say , relaxing lending guidelines to make @ @ @ @ @ @ @ financing to troubled companies .
The U.S. Federal Reserve has taken steps to keep liquidity flowing to the corporate debt market and relaxed regulatory requirements on bank capital .
Short term , banks are providing support by ensuring access to so-called revolving credit lines .
Longer term , though , more companies will likely face trouble .
The Fed , the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. have limited reach into the leveraged-loan market , because much of the riskiest financing has been provided by credit @ @ @ @ @ @ @ don ’ t directly regulate .
Investors are attracted by their higher returns -- leveraged loans returned about 8 % in 2019 .
In the credit market , non-investment-grade , or so-called junk bonds have traditionally gotten the bulk of attention .
But if a borrower defaults , leveraged loans are likely to recover more money because they typically rank ahead of bonds in bankruptcy proceedings .
The money raised by leveraged loans was used to do things like fund buyouts by private-equity firms , pay shareholder dividends and refinance borrowings .
They @ @ @ @ @ @ @ a Moody ’ s credit rating of Ba1 or lower or S & P rating of BB+ or lower .
Typically , an asset manager or an asset management arm of a bank buys 100 to 350 loans , sometimes more .
The loans are packaged into bonds in groups , or tranches , representing different risk and return .
The highest-ranking tranches have first dibs on the cash flow generated by the underlying loans , but also have lower returns .
The riskiest but potentially most lucrative layer of a CLO is @ @ @ @ @ @ @ is last in line to receive cash flows but the first to realize losses .
While CLOs are sold globally , 75 percent of the market is U.S.-based .
The U.S. CLO market has more than doubled since 2008 , growing to about $ 670 billion in outstanding debt .
The biggest issuers include the likes of Blackstone ’ s GSO , CIFC Asset Management , PGIM Inc. and Credit Suisse Asset Management .
Insurance companies , pension funds and banks are big buyers ; Wells Fargo & Co. , JPMorgan Chase & @ @ @ @ @ @ @ largest holders of U.S. CLOs , according to Citi research .
( There ’ s also a significant Asian market , with Japan ’ s Norinchukin Bank and Japan Post among the big buyers . )
Wells Fargo said in a March 25 note that AAA CLO notes paid spreads above benchmarks in the mid-to-high 300 basis point area , meaning an extra 3 percentage points in return .
A similarly rated corporate bond paid about 142 basis points more than its benchmark on the same date .
Another part of the appeal @ @ @ @ @ @ @ leveraged loans and the CLO bonds have floating interest rates , meaning they generate higher yields as rates go up , unlike most corporate bonds .
In some ways , CLOs have gotten safer since the last financial crisis : they have more of a buffer between the value of the loan pool and the value of the debt , known as over-collateralization , among other tests designed to shield investors from losses .
The industry also points to the diversity of loans CLOs hold , making them less susceptible to collateral damage @ @ @ @ @ @ @ gets hammered , the way the energy sector was in 2015 and 2016 , stronger areas of the economy could make up for it .


washingtonpost--2020-04-04--Trump Calls Virus Relief ‘Flawless’ Despite Bankers’ Struggles

The president ’ s rosy assessment came even as some small businesses said they were worried funding for the Paycheck Protection Program -- a tent-pole of the $ 2.2 trillion coronavirus stimulus package signed into law March 27 -- might be exhausted before their loans were approved .
The Trump administration didn ’ t release new rules until late Thursday , hours before the program launched , and some banks , including Wells Fargo & Co. , said they weren ’ t ready to accept applications .
Small business owners reported frustration trying to get answers from their banks and @ @ @ @ @ @ @ was a lot of confusion -- you had the Treasury secretary tweeting out how well it was going , but what I was seeing was that most banks couldn ’ t get on the system , ” David Steen , a top executive at Bridge Community Bank in Iowa , said in a phone interview .
Trump said that within 24 hours , the Small Business Administration and over 1,200 local lenders had processed over 28,000 loans .
Treasury Secretary Steve Mnuchin said over $ 5.4 billion had been processed on the program @ @ @ @ @ @ @ that more lenders would be ready to accept applications next week .
Trump earlier tweeted that he “ will immediately ask Congress for more money to support small business ” if the funds run out , as many people expect .
Larry Kudlow , the White House ’ s top economic adviser , said that could come through “ supplemental assistance.
” With the U.S. payrolls report released Friday shattering records -- even without capturing the full extent of jobs lost due to the coronavirus lockdown -- members of the Trump administration and @ @ @ @ @ @ @ aid .
“ We needed to make sure we put money in to the pockets of small business quickly -- this was going to do no good if we waited three or four months , ” Mnuchin said late Friday on Fox Business Network .
He has said that his team has worked until 4 a.m. on some days , and headed back to the office within three hours , to launch the brand new loan facility within one week of Trump signing it into law .
Banks and other lenders reported spotty @ @ @ @ @ @ @ portal , called E-Tran , on Friday .
Overall , the several billion dollars in loans that went through was evidence the portal worked , at least for some , said Julie Huston , chairwoman of the National Association of Government Guaranteed Lenders .
However , other banks witnessed the portal crash repeatedly and were locked out of the system , said Paul Merski , an executive vice president at the Independent Community Bankers of America .
Banks that haven ’ t done SBA loans previously -- accounting for 60 % of lenders @ @ @ @ @ @ @ they have to essentially set up an account with the agency .
The fear is that big banks with established SBA units may eat up the lion ’ s share of government funds , to the detriment of many rural businesses , Merski said .
Mnuchin heard about some of these frustrations Friday afternoon during a call with House Republicans , according to one person familiar with the conversation .
The Treasury chief ’ s main message to the group of lawmakers was : “ We ’ re working on it , ” @ @ @ @ @ @ @ they ’ re worried that the $ 349 billion will run out too soon .
Mnuchin has repeatedly said that if that happens , he ’ ll ask Congress for more money .
The House and Senate aren ’ t scheduled to be back in session before April 20 .
It ’ s possible to pass legislation without a roll call vote , as long as there are no objections .


washingtonpost--2020-05-21--Analysis | Why BlackRock Has a Role in the Fed Bond-Buying Spree

The Fed ’ s stimulus plan extends aid to U.S. companies and local governments borrowing money as an increasing number of American businesses screech to a halt .
It vowed to buy unlimited amounts of Treasury bonds and mortgage-backed securities , to keep borrowing costs cheap .
The central bank reached even further , offering direct support for companies , pushing into territory typically reserved for federal government spending , or fiscal policy .
The Fed ’ s plans include buying newly issued corporate bonds , existing investment-grade bonds and exchange-traded funds that are based on highly rated debt .
@ @ @ @ @ @ @ lower interest rates to near-zero levels , an emergency step that encourages investment and spending .
The Fed is turning to New York-based BlackRock to oversee three separate debt-buying efforts .
It will buy and manage portfolios of newly issued bonds from U.S. companies as well as portfolios of investment-grade bonds and ETFs , according to the Federal Reserve Bank of New York .
( BlackRock is the world ’ s largest issuer of ETFs . )
BlackRock will also oversee purchases of packages of mortgages on commercial real estate guaranteed by one @ @ @ @ @ @ @ Mortgage Association ( Ginnie Mae ) , Federal National Mortgage Association ( Fannie Mae ) , and Federal Home Loan Mortgage Corp. ( Freddie Mac ) .
Still to be determined is how much money BlackRock will direct in these efforts .
Parts of the Fed ’ s bond-buying program fit more squarely in an asset manager ’ s wheelhouse than its own .
While the Fed ’ s main job is to set big-picture monetary policy by purchasing Treasury debt , a fund firm like BlackRock can be tapped for its expertise @ @ @ @ @ @ @ debt , like portfolios of corporate bonds -- something that ’ s not a main skill set of the central bank .
BlackRock Financial Markets Advisory , an arm that consults with government agencies and institutions , will manage the projects .
Aladdin , the risk-monitoring software that BlackRock will use in the process , already watches over more than $ 20 trillion , with a client base including insurers , pensions and fellow asset managers .
( Bloomberg LP , the parent company of Bloomberg News , sells financial software that competes @ @ @ @ @ @ @ Yes .
In the aftermath of the 2008 financial crisis , the Federal Reserve turned to BlackRock to oversee $ 130 billion in distressed debt formerly on the books of Bear Stearns Cos. and American International Group .
Back then , BlackRock wasn ’ t nearly as large a force in global finance as it is today .
The firm oversaw a total of $ 1.3 trillion at the end of 2008 .
At the end of March 2020 , it had about $ 6.5 trillion in assets under management .
The firm @ @ @ @ @ @ @ 48 million per year for its work on behalf of the Fed , according to filings .
That compares to approximately $ 4.5 billion it earned in profit in 2019 -- but the project comes with clout .
Following the 2008 financial crisis , BlackRock drew some objections for its involvement in the clean-up .
“ Why is it that BlackRock is the only firm qualified to manage the assets of special-purpose vehicles ?
” Senator Chuck Grassley , the top Republican on the Senate Finance Committee , asked at a January 2009 @ @ @ @ @ @ @ awarded to the firm .
( “ They come with a world-class reputation , ” answered Timothy Geithner , who was then the Treasury secretary . )
In a step that could help manage potential conflicts of interest this time around , BlackRock will waive investment advisory fees on all ETFs it buys on behalf of the Federal Reserve Bank of New York .
The firm will also credit any other associated fees it would have collected from purchases of its own ETFs in the program .
Also worth noting : The Fed @ @ @ @ @ @ @ of the assets of any ETF , nor will it purchase more than 10 % of any individual issuer ’ s outstanding bonds .


washingtonpost--2020-05-20--Analysis | Did Europe Just Agree to Joint Borrowing? Not Exactly

Broadly speaking , southern European countries , most notably Italy and Spain , have been the hardest hit by the coronavirus .
These are also the nations that came into the crisis with weaker economies and higher levels of debt and unemployment .
The European Commission -- the EU ’ s executive arm -- has warned that the unevenness of contractions and recoveries will deepen divisions within the bloc and could put at risk stability in the euro area , whose 19 members share the common currency .
Deep-pocketed member states such as Germany have showered their firms with state @ @ @ @ @ @ @ Italy can ’ t match that spending power .
That is distorting the level-playing field between companies in the EU ’ s vast single-market .
Social discontent could destabilize governments and fuel anti-European sentiment in countries that are struggling the most .
In short , the EU ’ s future is at stake .
The EU is not a country .
It doesn ’ t have a common treasury that ’ s expected to support regions in need , the way the U.S. Treasury pours funds to states hit by hurricanes .
Nor @ @ @ @ @ @ @ in its relatively meager common budget to deal with a crisis on this scale .
Even in the euro-using core , the monetary union is not backed by real economic or banking unions .
As the EU ’ s devastating debt crisis of 2010 showed , in tough times money tends to fly to the continent ’ s safe harbors , exacerbating liquidity crunches in the economically weaker countries as their borrowing costs surge .
During the debt crisis , countries in the bloc ’ s south proposed what they called eurobonds , @ @ @ @ @ @ @ borrowing power .
The idea was that by issuing jointly backed debt , the financial solidity of countries like Germany and the Netherlands would allow all countries to borrow more cheaply .
This year , that idea has been revived in proposals for what have been termed coronabonds .
But a group of richer , northern leaders were firmly against that , refusing to put their taxpayers on the hook for the liabilities of their southern neighbors .
The EU ’ s initial response to the crisis came mainly in the form of @ @ @ @ @ @ @ that countries in the south argued would only increase their debt burden and weigh on future economic growth .
In response , German Chancellor Angela Merkel and French President Emmanuel Macron agreed to support a 500 billion-euro ( $ 550 billion ) aid package financed through the issuance of bonds by the European Commission on behalf of the EU as a whole .
If the package is approved by EU states , proceeds from the so-called Recovery Fund would be distributed to countries most affected by the crisis in the form of grants @ @ @ @ @ @ @ budget , where Germany contributes the lion ’ s share .
The proposal marked a dramatic shift for Germany , which initially opposed any form of mutualized borrowing .
Germany says the recovery fund does not represent debt mutualization .
First of all , it ’ s a one-off concession for the duration of the crisis .
Second , if coronabonds were issued , the danger for Merkel could be like that faced by someone who signed a lease when a roommate can ’ t pay their share of the rent -- Germany @ @ @ @ @ @ @ bigger chunk than it expected .
But in the Merkel-Macron plan , Germany wouldn ’ t be liable for the entire 500 billion envelope , only for its share of the budget , an amount that corresponds to its share of EU economic output .
On the other hand , Germany is the main contributor to the EU budget , so it will repay most of the funds , whatever the debt instruments are called .
“ The Franco-German deal is a real step towards creating the first meaningful EU debt , ” @ @ @ @ @ @ @ Brussels-based Bruegel think tank .
“ The debt service of federal debt always depends on contributions from all regions but those contributions are relative to the economic size of the regions.
” Debt mutualization is not .
Article 125 of the Treaty on the Functioning of the European Union says that neither the EU nor individual member states can be liable for the debts of other governments .
A so-called “ Hamilton moment ” -- as happened in the U.S. in 1790 -- whereby obligations across the 27-nation bloc are mutualized would require @ @ @ @ @ @ @ in some cases referendums .
In a nutshell , sharing more risk can only come when countries agree to cede more sovereignty on their finances .
So far , there ’ s no sign of a majority backing for a reform that would give a central authority the power to raise taxes and decide how money is spent throughout the EU or even the euro area .
In practice , the bloc ’ s members are progressively sharing increasing levels of risk and have bailed each other out in times of need .
@ @ @ @ @ @ @ -- the euro area ’ s crisis fund -- has raised hundreds of billions on debt markets , which it then lent to Greece on terms normally reserved for countries with AAA credit rating , allowing the EU ’ s most indebted state to make billions in savings from interest payments .
The same arrangement is also available now for countries wishing to draw up to 240 billion euros from the fund to finance costs related to the pandemic .
Also , the European Central Bank has been buying massive amounts of debt @ @ @ @ @ @ @ of that is held by national central banks , a good chunk is on the ECB ’ s own books , making its shareholders -- euro-area members -- in theory liable for any losses .
In a way .
The EU , through the European Commission , has long been able to borrow , as have other European institutions .
This ability rests on the backing and commitment of member governments to the EU project .
All European institutions have a stellar credit rating , on the assumption of such backing from the @ @ @ @ @ @ @ , these nations lend their fiscal muscle to the EU , allowing its institutions to carry out transactions on concessional terms for the benefit of weaker members .
It may not be debt mutualization , but it ’ s European solidarity in practice .
It ’ s unclear .
A group of other rich nations , including Austria , the Netherlands , Sweden and Denmark , strongly object to joint debt issuance , even if it ’ s a temporary thing .
Some argue against disbursing money in the form of grants , @ @ @ @ @ @ @ when the European institutions borrowed to bail out nations in the debt crisis .
Separately , Eastern EU members are worried that the proposed recovery fund will channel cash to the pandemic-hit south and they will be left out , since their healthcare crisis was contained .
Tough negotiations will follow , and unanimity is required for any decisions to be taken .
Meanwhile , Europe will rely on asset purchases from the ECB to keep borrowing costs low , and on national spending measures to keep its businesses afloat while economies nosedive @


washingtonpost--2020-05-22--Analysis | Who’s Succeeding Against the Coronavirus and Why

Early testing is paramount .
Countries that rolled out good diagnostics in January -- including South Korea and Germany -- have managed their crises comparably well , since it enabled policy makers to react quickly to the growing threat and convinced people of the danger at hand .
The picture was grimmer for countries that failed to put early testing into effect , including the U.S .
There , the virus spread largely unchecked through February .
When cases exploded , hospitals in hot-spots such as New York City were overwhelmed , states had to compete with each other for @ @ @ @ @ @ @ to conflicting , often highly politicized messaging about the stakes of the twin health-care and economic crises .
While the virus obeys no borders , it spreads only where humans are allowed to go .
That ’ s enabled island nations such as Japan , Iceland , New Zealand and Australia to reduce new daily confirmed cases to extremely low numbers by fully isolating themselves .
The number of visitors to Japan , for example , fell 99.9 % in April compared to a year ago .
It remains to be seen whether @ @ @ @ @ @ @ countries start allowing more arrivals .
Geography can also pose challenges .
China , where the pandemic began , acted swiftly and curbed its outbreak .
But in re-opening its economy , it ’ s had to take special precautions to prevent case spillovers along its borders with Russia , which has one of the biggest outbreaks in Europe , and North Korea , which has yet to report any infections .
Once the virus begins circulating , a new set of questions arises : Are those who develop bad cases of Covid-19 @ @ @ @ @ @ @ medical workers have sufficient personal protective equipment to safely care for the sick ?
Are there enough ventilators and intensive-care beds to accommodate the worst cases ?
Public-health officials and policy makers all over the world have long discussed the probability of a pandemic like this one .
Now that it ’ s here , the impact of the decisions that were made -- or postponed -- are glaringly obvious .
In Brazil , where cases have soared , the public health system was already under strain before the pandemic , and the @ @ @ @ @ @ @ coherent strategy to stop the spread .
In Taiwan , by contrast , a combination of early health screening for arrivals to the country , thorough testing and contact tracing , and widespread medical mask usage has brought new domestic infections close to zero .
China raised eyebrows globally when it locked down tens of millions of people in January to stanch the spread of the virus .
The effort worked , and was soon copied by countries on other continents .
As China re-opens , it ’ s raising eyebrows again -- @ @ @ @ @ @ @ too intrusive .
For example , authorities use data from government departments , phone carriers , locations and transactions to assign citizens a color-coded risk level .
Millions of people have to show they have a green code on their mobile phone before being allowed into hotels , restaurants , shops and subways or out of their residential compounds .
The codes are updated frequently .
Just visiting a shopping mall where an infected person also went can change one ’ s code to yellow , which forces mandatory home isolation , as @ @ @ @ @ @ @ who are infected .
Less restrictive measures have also succeeded .
In Japan , whose outbreak didn ’ t really arrive until April , the government declared a state of emergency and instituted stay-at-home requests .
By mid-May , rates of new infections had fallen and the government lifted its state of emergency for 39 of Japan ’ s 47 prefectures , although Tokyo and other dense economic centers remained under heavy restrictions .
Similarly , Germany has maintained a relatively permissive quarantine regime .
And it ’ s begun opening up again @ @ @ @ @ @ @ to a robust contact tracing program that it has maintained throughout its outbreak .
Thanks to some of the world ’ s toughest privacy laws , the country ’ s 375 local health authorities couldn ’ t rely on digital surveillance for help .
Instead , they recruited teams ranging from medical students to firefighters , who work via email , telephone , and sometimes even fax .
Their work is considered a key reason Germany has about a third the number of coronavirus deaths per capita as the U.S .
The credibility @ @ @ @ @ @ @ when citizens are flooded with news , scientific research ( some of it bad ) and often conflicting messages about how to support both public health and the economy .
Countries with lower levels of trust in authorities are especially vulnerable to conspiracy theories that some are calling the “ Infodemic.
” Distrust of the government in Iran , after it lied to cover up the military ’ s mistaken downing of a civilian airliner Jan. 8. , led citizens to ignore directives not to travel during the Persian New Year , in @ @ @ @ @ @ @ poll from April 2019 , fewer than 1 in 5 Americans said they trusted the federal government to do the right thing ; in the 1960s , it was around 4 in 5 .
Meanwhile , trust in the government is high in Germany and South Korea .
The same is true in Singapore , which had early success containing the virus that was set back by an outbreak among foreign workers .


washingtonpost--2020-05-22--Analysis | Why a Second Wave of Covid-19 Is Already a Worry

Pandemics are caused by new pathogens that the vast majority of humans have no immune protection against .
That ’ s what allows them to become global outbreaks .
Pandemics are uncommon , but influenza is one of the more frequent causes .
What often happens is that a novel variant of flu virus spreads around the world and then recedes , kind of like a tsunami .
A few months later , it comes back and spreads around the world , or large parts of it , again .
There have been hints in Asia that a second wave @ @ @ @ @ @ @ imposed on more than 100 million people in China ’ s Jilin province , near the North Korean border , after dozens of cases were detected in cities there in May -- a month after China ’ s first lockdown ended in far-away Wuhan .
Schools were shut and tens of thousands of people in Jilin were quarantined .
Small clusters also flared up in South Korea and Hong Kong in May .
Much of the rest of the world is still struggling to get the current wave under control .
Most countries @ @ @ @ @ @ @ slows the virus ’ s spread but leaves many people vulnerable to infection once they begin to venture out again .
Influenza pandemics can be temporarily beaten back by the change of seasons , moving to the southern hemisphere when the northern half of the globe heats up during its summer , and vice versa .
The virus may also have infected a huge portion of people in most areas , giving them immunity from re-infection and possibly creating so-called herd immunity , which protects those who haven ’ t been infected by @ @ @ @ @ @ @ In the case of the coronavirus that causes Covid-19 , countries around the world have adopted movement restrictions on an unprecedented scale and social-distancing measures that together keep people far enough apart so that the virus can ’ t easily spread .
There are a number of possibilities .
In the case of influenza , there ’ s the onset of cool weather , a factor that may affect the coronavirus , too .
Or the pathogen can mutate .
This is another feature of flu , which evolves more or less constantly @ @ @ @ @ @ @ a second wave of the historic influenza outbreak occurred and caused most of the deaths in the pandemic .
Some researchers believe it was brought about by a mutation that made the virus again unrecognizable to most people ’ s immune systems .
Another important variable is the movement of the virus to populations that haven ’ t been exposed before and don ’ t have immunity .
In addition , the World Health Organization said on April 24 that there ’ s no evidence yet that people who have recovered from Covid-19 @ @ @ @ @ @ @ second infection .
The WHO has recommended lifting movement restrictions in stages to test the effect of each before moving to greater openness .
In any case , experts say , the key to keeping infections low without locking down everyone is to scale up testing and contact tracing .
Health authorities need to find infected people , isolate them and identify their recent contacts , so they can be tested as well and isolated if necessary .
Eventually , it ’ s possible that enough people will become exposed to the coronavirus @ @ @ @ @ @ @ will stop spreading , or that a vaccine against it will be licensed .
The 2002-2003 outbreak of severe acute respiratory syndrome in Asia never reached the scope of a pandemic .
Though caused by a coronavirus , it wasn ’ t as contagious as the one responsible for Covid-19 .
Its spread was mainly restricted to hospitals and other settings where people came in close contact with the body fluids of infected patients .
Ebola is another pathogen relatively new to humans .
There have been periodic outbreaks in Africa , but @ @ @ @ @ @ @ some settings , it hasn ’ t been sufficiently infectious to spread around the world like the coronavirus .


washingtonpost--2020-05-22--Analysis | Alibaba’s Lost Magic Is a Warning for the Future

Then there ’ s those hot new areas that should enjoy strong demand from the stay-at-home economy .
Cloud computing is the obvious beneficiary .
Companies , consumers and educators have been rushing to online solutions to fill in for in-person events .
At Alibaba , that business climbed 58 % from a year earlier .
That sounds like a huge number but is in fact the slowest level in at least two years .
Rather than drive growth , the pandemic seems to have hindered it .
This matters because Alibaba is doubling down on cloud computing in recognition @ @ @ @ @ @ @ and is absorbing continued losses .
If it ’ s unable to leverage such an opportunity , then other challenges including competition and regulation pose potential headwinds .
Another supposed opportunity comes from digital media and entertainment , which includes streaming service Youku , Alibaba Music and TMall TV .
Collectively , this category climbed a mere 5 % for the quarter and only 12 % for the year and remains the single biggest drag on earnings .
If growth is stalling , even as consumers are stuck at home and well before @ @ @ @ @ @ @ how long Alibaba is going to let this business burn a hole in the earnings statement .
It ’ s easy to dismiss all these items as one-offs , ready to be overcome once sunny skies return .
Yet the macro picture for Alibaba is not rosy .
Growth is slowing everywhere .
Active annual consumer numbers climbed a mere 2.1 % , and China ’ s government earlier Friday scrapped its annual GDP target , an admission that the broader economy is going to suffer .
Although investors want to believe that @ @ @ @ @ @ @ will be like a wave of the wand for its tech titans , Alibaba is no magician .
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners .
For more articles like this , please visit us at bloomberg.com/opinion


washingtonpost--2020-05-22--Analysis | Fleeing the City? You’ll Be Back

If the movie was remade today , there would be even more dystopian elements of 21st-century life to add : Overvalued real estate totally out of whack with workers ’ earnings and a Covid-19 pandemic that has turned densely populated and vibrant cities into barren spaces where human contact is avoided .
Simple pleasures like going to a concert now mean wearing a mask and doing a temperature check .
If 1960s New York had been like this , Bob Dylan might very well have stayed in Minnesota .
Small wonder that city dwellers , emerging from months of lockdown @ @ @ @ @ @ @ quit their urban homes and search for leafy utopias .
Properties for sale are flooding the market in Paris and London , and prospective buyers are increasingly looking for homes with gardens — the kind of place where you ’ d be glad to work remotely — rather than apartments with an average area of 30 to 40 square meters ( 323 to 431 square feet ) .
Nearly a third of Americans are considering moving to less densely populated areas , according to an April survey by Harris Poll .
Wealthy New @ @ @ @ @ @ @ anyone quitting the vibrant city for a McMansion and manicured lawn , are doing exactly that .
While it ’ s clear that metropolises simply aren ’ t set up for a life of lockdowns and social distancing , it seems very pessimistic to imagine these are long-term phenomenons .
It supposes human ingenuity will totally fail to treat , vaccinate against or find better ways to live with Covid-19 .
Cities have bounced back from deadlier epidemics , like cholera or the plague , and some of the greatest achievements in urban @ @ @ @ @ @ @ waste systems — were responses to disease .
A vaccine is obviously more complex than , say , the removal of a handle from a pump that halted cholera in 1850s London .
But finding one is not impossible .
As for remote work , it seems very optimistic to imagine that permanently working from a grassy suburban lawn far from the office is going to be a breeze .
White-collar workers who have job security or a successful self-employed career might find it easy .
Single mothers and women in couples who @ @ @ @ @ @ @ childcare and housework during the lockdown might not .
One French survey of more than 1,500 people found that a fifth of under 30s — whom you ’ d expect to be the most at ease with Zoom and least interested in water-cooler gossip — wanted to go back to the office .
A good proportion of those starting out on the career ladder prefer face-to-face training , networking and socializing to brainstorms by Slack .
And the jury ’ s still out on what widespread remote working does to employee motivation , @ @ @ @ @ @ @ , for example , the internet search company Yahoo !
banned working from home , saying it hurt “ speed and quality.
” Companies clearly expect to save office and staff costs ( why pay city wages to suburban workers ? )
but there are downsides too .
The old trade-offs involved in moving to the exurbs or suburbs aren ’ t going to disappear overnight .
France ’ s Gilets Jaunes stormed Paris precisely to protest the decaying quality of life outside cities .
The typical U.S. city resident lives near almost @ @ @ @ @ @ @ typical suburbanite , according to the Brookings Institution .
Those jobs pay better , too , with average wages per worker in urban areas some 46 % higher than lower-density suburbs .
So it ’ s likely that making the move will mean trading subway rides for car commutes .
And when journeys get longer , there ’ s generally less inclination to travel to enjoy the fun stuff — the so-called “ friction of distance.
” And make no mistake , the fun stuff will be around as long as cities can @ @ @ @ @ @ @ .
In the 1980s and 1990s , metropolises like London and New York reversed decades of decline by focusing on services such as finance and leisure rather than factories .
While it ’ s true that excessive property speculation turned them into playgrounds for the rich , threatening their draw as diverse and creative melting pots , things could change for the better .
The next reinvention , according to urbanism expert Laurent Chalard , will be about making cities less dense and more livable : More cycling , fewer cars , bigger @ @ @ @ @ @ @ may end up less green and less convenient .
The great cities of history — Athens , Rome , Baghdad , Constantinople — showed the tremendous network effects of mixing commerce , art , science and power in one place .
It would take a truly radical shift to make cities obsolete .
Maybe once society really values the online agora of Twitter or the marketplace of Amazon over the physical versions , the city ’ s ability to compress space and time might look pointless .
But that sounds depressing enough to @ @ @ @ @ @ @ Metropolis — to be streamed safely away from the crowds , of course .


washingtonpost--2020-06-10--Analysis | The U.S. Fed Has Stamped All Over Volatility

For Fed Chairman Jay Powell , dampening down volatility in the financial markets was the key to bringing things back under control .
Only by taming the wild swings of March , when investors kept lurching from hope to despair , was it possible to tempt people back into risk assets such as equities and corporate bonds .
The action by the central bank means we ’ ve just been through the shortest bear market in history .
As the Fed can ’ t buy stocks , it had to manage this market rescue act by controlling the volatility of @ @ @ @ @ @ @ markets .
This gave investors enough of a feeling of security to start buying shares again , rather than sticking to haven assets .
By pumping in excess dollars and increasing so-called swap lines for foreign central banks — letting them deliver U.S. dollar funding to their country ’ s banks in a time of extreme market stress — Powell was also able to calm the sharp movements in currencies , which might otherwise have started an emerging markets crisis as investors fled to the greenback .
Using a similar playbook to the @ @ @ @ @ @ @ decade ago , although on a far bigger scale , the monetary authorities have successfully reflated financial valuations in all asset classes .
That in turn should help restore economic confidence and lessen the depth and length of the recessionary impact of the lockdown .
It ’ s to be hoped that last week ’ s surprisingly robust U.S. jobs data was an indicator of better times .
The biggest lesson from the last two crises is that the plumbing of the money markets is vital to stopping panic .
This time , @ @ @ @ @ @ @ lend longer than overnight and that was causing a breakdown in confidence across all asset classes , as well as that stampede into dollars .
Even stable major currencies such as the U.K. pound were affected .
The Fed has increased its balance sheet by 70 % to more than $ 7 trillion to fix these problems , so it might be time to rein back on some of the stimulus as the trade-weighted value of the dollar is turning lower at last , and the first phase of the pandemic eases in @ @ @ @ @ @ @ t relax his guard entirely .
While equity volatility has fallen , it is still higher than at any other time since 2011 .
With Treasury bond yields rising sharply again last week , the Fed ’ s job isn ’ t over .
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners .
Marcus Ashworth is a Bloomberg Opinion columnist covering European markets .
He spent three decades in the banking industry , most recently as chief markets strategist at Haitong Securities in @ @


washingtonpost--2020-06-10--Analysis | Bankers Loving the Boom Are Missing the Profits

That ’ s a boon for the city and its stock-exchange operator , after China ’ s plans to impose a national security law raised questions over Hong Kong ’ s future as an international financial center .
The NetEase and JD.com offerings were both heavily oversubscribed by retail and institutional investors , showing the strength of demand for U.S.-traded Chinese tech companies .
These and upcoming deals may not deliver the windfall to investment bankers that such a pipeline would usually promise , though .
For one thing , secondary listings earn a lot less in fees than initial @ @ @ @ @ @ @ banks that worked on its Hong Kong flotation just 0.25 % of the proceeds , compared with a standard rate for IPOs of 2 % to 3 % , as my colleague Julia Fioretti notes .
Such deals earn less because the companies are already listed , meaning less work is required from banks to introduce their businesses to investors .
Secondly , not all companies eligible to sell shares in Hong Kong can be expected do so .
There are 42 Chinese companies in the U.S. that qualify for Hong Kong secondary @ @ @ @ @ @ @ Group AG .
Should they issue 5 % of their stock over the next 12 months , that would mean $ 27 billion in funds raised .
The actual amount may come in far short of that .
Blame the fall of Luckin , the Starbucks competitor that faces delisting from Nasdaq after acknowledging that it fabricated sales .
The episode has damaged the reputation of Chinese companies overseas and is having a cautionary impact on investors , banks and potential listing candidates .
Unlike Hong Kong , the U.S. market has a @ @ @ @ @ @ @ delisting — easier .
Investors subject to corporate fraud can seek redress through class-action lawsuits ( Luckin and its IPO arranger , Credit Suisse Group AG , have both been sued ) .
Lacking such legal safeguards , Hong Kong has a gatekeeper for its market , with regulators vetting listing candidates .
Companies and their sponsoring banks need to factor in this added scrutiny .
As for investors , they may feel they ’ ve already had the pick of the U.S.-listed Chinese contingent .
Alibaba Group Holding Ltd. , the first @ @ @ @ @ @ @ and NetEase are three of the four biggest by market capitalization ( the other is Pinduoduo Inc. ) .
They are all well known and with track records as listed companies stretching back years .
As the list goes down to encompass smaller and lesser-known enterprises , investor enthusiasm may wane .
Not all businesses can match the excitement of the tech trio .
Will investors flock to Yum China Holdings Inc. , operator of KFC outlets in the country , for example ?
American investors have taken to Yum , which has @ @ @ @ @ @ @ among the group .
This investor base may be unwilling to switch to Hong Kong shares , a factor that may affect demand and post-listing liquidity .
Then there ’ s online travel agency Trip.com Group Ltd. , also on the roster of upcoming secondary listings .
It has the technology sheen , but will investors be able to overlook the hammering that the world ’ s tourism companies have taken from the coronavirus pandemic ?
The reality is that while secondary listings are good business , “ there are bigger opportunities in @ @ @ @ @ @ @ region , ” according to Amrit Shahani , London-based research director at analytics company Coalition Development Ltd .
First-quarter IPO fees for the top 12 investment banks that Coalition follows in the region , from Goldman Sachs Group Inc. to Citigroup Inc. , were around $ 150 million , Shahani said ; they made a combined $ 1.5 billion from foreign-exchange trading during the period .
So things are looking up after all .
Just not in the place you might expect .


washingtonpost--2020-06-10--Analysis | France Needs More than $17 Billion to Save Airbus

Nothing like this has been seen since the “ Boeing Bust ” of the early 1970s , when defense cutbacks , airliner belt-tightening and a consumer recession led to losses and bailouts across the industry .
Boeing survived , but its hometown of Seattle was scarred by layoffs .
A billboard was put up to reflect the mood : “ Will the last person leaving Seattle turn out the lights.
” French President Emmanuel Macron is understandably keen to avoid this kind of bust hitting Toulouse , where Airbus and other aerospace firms such as Latecoere SACA are based .
@ @ @ @ @ @ @ of measures , totaling 15 billion euros ( $ 17 billion ) , to support the aviation industries , including loan guarantees , wage subsidies for furloughed workers and an investment fund for small businesses .
For all the government ’ s talk of creating new , greener aircraft of the future , this is really about protecting the economy and strategic pride : There are 300,000 aerospace jobs in France , and the industry is a key export that posted a trade surplus of 31 billion euros in 2019 .
One has @ @ @ @ @ @ @ $ 17 billion is enough .
Almost half the aid will go to Air France-KLM , in the form of loans and guarantees , in return for a reduction in carbon emissions and services on its domestic routes .
Although the state has asked the carrier to be a “ good customer ” of Airbus , you can ’ t really force an airline to keep buying planes in a demand-led recession .
As for the rest of the package , while it does offer some form of safety net for workers and @ @ @ @ @ @ @ offset the need for cuts .
Jefferies analysts expect net aircraft orders ( orders minus cancellations ) at Airbus and Boeing to be -1,500 this year and zero the next .
There ’ s also the risk that the scale of the damage , along with greater state intervention , will fan the flames of trade wars .
We aren ’ t yet at the stage of nationalizations like that of Britain ’ s Rolls-Royce Plc in the 1970s , but the current combination of central-bank and fiscal stimulus does point to ever-more @ @ @ @ @ @ @ the sector ’ s woes get worse .
Boeing was recently in line to receive a whopping $ 60 billion in U.S. government aid — which it ended up turning down , but it may not have that luxury next time .
In Europe , politicians are increasingly keen to invoke “ sovereignty ” on the world stage as a reason to step in to boost domestic industry , especially with Donald Trump imposing trade tariffs in response to a 16-year spat over aircraft subsidies .
“ We don ’ t intend to @ @ @ @ @ @ @ , ” French Finance Minister Bruno Le Maire said on Tuesday , referring to global protectionist trends .
To be sure , there are some glimmers of hope out there , and for Airbus in particular .
It can at least claim to be in a relatively stronger position than Boeing , which was at a “ huge disadvantage ” going into this crisis , according to Teal Group ’ s Richard Aboulafia .
Airbus ’ s hugely successful A320 single-aisle planes look well placed for a world of downsizing , where less @ @ @ @ @ @ @ has the unenviable baggage of high debt levels and the huge reputational damage of the MAX aircraft catastrophe .
But trying to preserve Airbus ’ s lead may clash with the reality that aerospace recoveries are slow and painful for everyone .
Nick Cunningham , an analyst at Agency Partners , expects aircraft deliveries to remain depressed for years , with none of the usual growth levers — such as emerging-market demand — helping .
Supply chains have been strained by the virus , and the wheels of visa-free travel in Europe still @ @ @ @ @ @ @ and technological assets are worth fighting for , but they ’ re not saved yet .


washingtonpost--2020-06-10--Analysis | Pandemic Turns Simon’s Mall-Merger Math Upside-Down

A portfolio of higher-end malls in urban areas that cater to domestic and international tourism was one reason Simon agreed to pay a 70 % premium for rival Taubman in February .
Those same outposts are now a liability as the pandemic turns consumers off from crowded indoor venues and grinds travel to a halt .
And that may give Simon the argument it needs to successfully walk away from the merger .
Simon said Wednesday it ’ s seeking to terminate the $ 3.6 billion deal , arguing that Taubman had experienced a “ material adverse event ” amid @ @ @ @ @ @ @ under the merger agreement by failing to make “ essential ” cuts in expenses to deal with the fallout .
While the agreement stipulates that a pandemic doesn ’ t on its own give Simon the grounds to walk away , there ’ s an exception if the company can prove Taubman has experienced a “ disproportionate adverse effect ” relative to others in the industry .
That ’ s where those higher-end , urban malls come into play .
While the pandemic is far from over , there appears to be a @ @ @ @ @ @ @ are less risky than indoor ones .
The owners of the largest open-air strip centers collected 50 % to 65 % or more of rent due in April , compared to just 10 % to 30 % for mall and outlet owners , Bloomberg Intelligence analyst Lindsay Dutch observed in a recent note .
It also helps that many of those strip centers are anchored by grocery stores or other outlets that were allowed to stay open through the pandemic because they sell essential items .
CNBC reported that Taubman intends to contest @ @ @ @ @ @ @ and legal claims and will move ahead with a shareholder vote on June 25 .
Is this short-sighted ?
Maybe .
The idea that we are forever destined to favor strip malls in suburban areas over luxury malls in cities strikes me as debatable .
Indeed , Simon shares fell nearly 10 % at one point on Wednesday and were still down about 3 % in the early afternoon , suggesting shareholders believe something is being lost here .
As my colleague Tara Lachapelle wrote in February when the deal was first announced @ @ @ @ @ @ @ balance sheet should be an asset in mall owners ’ quest for survival .
But it ’ s still the right move for Simon to get out of the Taubman combination if it can .
The all-cash deal and assumption of Taubman ’ s debt would have significantly inflated Simon ’ s leverage at the worst possible time , given the company ’ s own struggles to extract rent from shuttered retailers .
Simon earlier this month sued Gap Inc. , claiming the company failed to pay $ 65.9 million in rent for @ @ @ @ @ @ @ hit to the retail environment , the deal may have boosted Simon ’ s debt to 7.5 times its Ebitda , SunTrust Robinson Humphrey analyst Ki Bin Kim estimated in a report on Wednesday .
Simon ’ s argument for getting out of the deal is logical “ in the court of common sense , ” Bin Kim wrote .
But in the court of law , “ we don ’ t know.
” The second half of Simon ’ s argument — that Taubman has breached the covenants of the merger agreement @ @ @ @ @ @ @ is arguably trickier .
While Simon has said it ’ s suspended or eliminated more than $ 1 billion of capital development projects , cut executive salaries and implemented temporary furloughs , Taubman has been more measured , announcing the deferral of as much as $ 110 million of expenditures .
But aggressive job cuts and cost-control measures by Taubman could have given Simon more ground to argue the business was in a disproportionately dire situation , Bin Kim writes .
“ It could have been one of those things that ` you @ @ @ @ @ @ @ and you ’ re damned if you don ’ t , ’ ” he said .
That should be something of a motto for a mall industry that feels perpetually stuck on the wrong side of trends .


washingtonpost--2020-06-10--Endangered Restaurants Say $120 Billion Aid Would Pay for Itself

The group was formed to address the economic devastation to independent restaurants , giving a voice to smaller businesses that are privately owned and have fewer than 20 establishments .
The industry , which says it employs 11 million workers directly , has faced millions of job losses during the shutdowns , severe hits to revenue and the likelihood that occupancy restrictions will imperil firms for months more even as the economy reopens .
Among other findings , the analysis estimates that : • Independent restaurants ’ revenues fell by more than 70 % in the last two weeks of @ @ @ @ @ @ @ year and remain 60 % lower on average than last year ’ s levels .
In its early response to the crisis , Congress put a provision into its initial small-business aid package to broaden access for restaurants and hotels .
And lawmakers last week passed further changes to the relief to address calls by restaurants and other industries for more flexibility in the timing and types of expenses allowed under the initiative , the Paycheck Protection Program .
Yet restaurateurs say they still face waves of closures without hundreds of billions more @ @ @ @ @ @ @ it won ’ t begin considering its own alternative to a $ 3.5 trillion aid package passed by the House until late July .
Its ambitions will be much more limited as well , with a price tag closer to $ 1 trillion , particularly in light of surprise job growth in May .
President Donald Trump has said he ’ d like additional stimulus for restaurants but has floated ideas such as restoring a tax deduction for business entertainment expenses erased by his 2017 tax law that restaurants have said won ’ @ @ @ @ @ @ @ , independent restaurants need additional financial assistance to bridge the battle to contain the virus -- and they need it now , ” the analysis concludes .
Economic studies that paint a dire picture and insist public spending will reap benefits elsewhere are a key tool in advocacy , but other sources of data suggest the situation is bleak in the restaurant sector .
Food services and drinking places employed more than 12.3 million in February , according to the U.S. Bureau of Labor Statistics ; that number was just 7.6 million by @ @ @ @ @ @ @ say a quarter of restaurants could shut permanently .
Many restaurants operate on thin margins in normal times .
With the pandemic ongoing in the U.S. , they now face several months during which they ’ ll have to limit seats even as their costs for labor and protective equipment grow .
Independent restaurant revenues are down more than 50 % from last year , the analysis estimates .
Other groups representing eateries have come to similar conclusions .
The National Restaurant Association , which represents thousands of restaurant owners and chains including @ @ @ @ @ @ @ Grill Inc. , has called for $ 240 billion in aid .
“ There ’ s a lot of hard work to be done , ” said Representative Earl Blumenauer , an Oregon Democrat who plans to release a bill setting up a $ 120 billion grant program through the Treasury Department to support independent restaurants .
He said he ’ s aiming to unveil the legislation in the next week or so and has worked with other lawmakers , including Republican Senator Roger Wicker , to get “ comfort with this funding @ @ @ @ @ @ @ several data points that may be designed to pressure lawmakers , particularly Democrats , to take up the cause : More than 1 million single mothers work in the $ 760 billion broader restaurant industry , according to the study , while 60 % of chefs are minorities .


washingtonpost--2020-06-10--Analysis | Why Europe Had to Get Creative to Pay Pandemic Bills

The typical method in Europe for raising funds is via an auction -- think Sotheby ’ s -- whereby a country sells an amount of debt at a given time on a given day .
Like at an art auction , investors make bids and prices fluctuate according to demand .
Far less common is the private placement , in which debt management offices sell directly to investors , often for more obscure issues such as a 100-year Irish bond .
The other way is via syndication , which involves appointing a group of banks to underwrite a sale .
@ @ @ @ @ @ @ new or ultra-long bonds to the market and have become a popular choice for funding coronavirus recovery plans .
They cost a nation more but are guaranteed to raise the cash .
After a country ’ s Treasury works out its borrowing needs , its debt management office plans how to fund it -- usually through a mix of auctions and syndications .
The latter involves finding a set of banks who will take responsibility for securing investors and who agree to purchase any unsold securities .
There is a premium to pay @ @ @ @ @ @ @ stash will move .
A recent Italian syndication racked up more than 100 billion euros ( $ 113 billion ) of orders , mainly because the bonds were offered with yields nearly 10 basis points more than those in the market .
The process is a highly profitable one for banks , assuming they manage to sell everything .
Europe is facing unprecedented borrowing needs .
Bond sales across the 19-nation euro area are set to total around 1.2 trillion euros this year , according to Bloomberg Intelligence , up from around 870 @ @ @ @ @ @ @ countries still easing their way out of lockdown , governments can ’ t afford to come up short in providing the desperately needed support to businesses and citizens .
Conventional auctions can be unreliable , potentially failing to sell all the bonds on offer , hence the demand for syndications .
JPMorgan Chase & Co. estimates they account for around 30 % of this year ’ s government debt issuance , a third more than usual for the time of year .
For now it seems like they can , and then some @ @ @ @ @ @ @ record demand , largely thanks to the European Central Bank .
While the institution can not buy bonds straight from a Treasury , its growing presence in the secondary market means that investors know they can always offload securities .
At its June meeting , the ECB increased its pandemic purchase program to 1.35 trillion euros .
This doesn ’ t guarantee syndications will continue to be met with strong demand , of course .
A second wave of the coronavirus pandemic , for example , might make such sales more challenging for @ @ @ @ @ @ @ are often used by companies to sell bonds , as well as by emerging-market nations , regional governments and development funds .
But the world ’ s biggest seller of bonds -- the U.S. -- doesn ’ t offer them at all .
While the U.S. Treasury has considered syndications , citing the success of other countries , concerns have been raised over the possible appearance of playing favorites with particular banks and to disrupting the predictability of market supply .
What ’ s more , there hasn ’ t really been a @ @ @ @ @ @ @ the world ’ s largest and most liquid government bond market has underpinned demand , including from foreign investors .
Right now , the syndication process is working .
Even on a day when the U.K. , Spain , Ireland and Greece all conducted such sales , investors laid down nearly $ 300 billion of offers , showing that fixed-income demand is remaining robust for the time being .
There may be longer-term risks to how the market functions , with central banks mopping up so much of the supply .
Japan ’ @ @ @ @ @ @ @ to such an extent that there have been days when not a single bond traded on the open market .
If Europe went the same way , a bigger proportion of the day-to-day work for rates desks may be spent conducting profitable syndications , rather than actually buying and selling securities .
The danger is liquidity could all but dry up .


washingtonpost--2020-06-03--Analysis | Globalization’s Winners Are Prime Pandemic Tax Targets

Eventually , though , the question of who will ultimately foot the bill will need to be answered — particularly outside of the U.S. , which is relatively protected by the dollar ’ s global clout .
Some assume a future economic rebound will be strong enough to comfortably repay debts over time while central banks keep rates low .
But this is a hope , not a guarantee .
The risk of lower growth and higher rates is real , necessitating all sorts of painful budget choices , as economist Willem Buiter wrote last month .
Taxation is bound @ @ @ @ @ @ @ Everybody knows that raising taxes in a recession can produce an entirely unhelpful outcome by further hurting demand , as seen in countries that pursued austerity .
But governments clearly reckon they can get away with taxes that target specific sectors , companies or people , especially those that are seen as having come out of this crisis relatively well-off .
Hence the plans by several Latin American countries to raise taxes on high-income earners , and Indonesia ’ s move to raise value-added tax on digital platforms — because , in the @ @ @ @ @ @ @ their sales have soared amid the Covid-19 outbreak.
” It ’ s not just the developing world : The European Union is mulling a series of taxes , to be raised directly by its executive arm in Brussels , to help fund the pandemic recovery in the 27-nation bloc .
They include a tax on high-carbon-emission imports , a tax on digital firms and a tax on 70,000 large multinational companies that access the EU ’ s single market and its 450 million consumers .
These efforts should be taken seriously .
Not @ @ @ @ @ @ @ , as the EU ’ s 27 member states are protective of their tax powers , but if done right they can have benefits .
Efforts to introduce a digital tax aim to restore fairness to a corporate tax system that has seen the likes of Apple Inc. and Alphabet Inc. ’ s Google get away with paying very little .
“ Don ’ t try to be too smart , ” Internal Market Commissioner Thierry Breton told Facebook Inc. ’ s Mark Zuckerberg recently .
“ Pay taxes where you have to @ @ @ @ @ @ @ would combine the EU ’ s clout as a trading zone with its Green Deal ambitions .
And while a levy on big EU firms might seem like a job killer , it would go towards funding a 750 billion-euro ( $ 840 billion ) recovery plan that pours cash back into the bloc .
There ’ s a clear pro-growth side to these tax proposals , Axa SA Chief Economist Gilles Moec tells me .
The risk , however , is that in shifting more of the burden of recovery funding onto @ @ @ @ @ @ @ top two being the U.S. and China — the EU could end up creating new geopolitical and trade headaches .
President Donald Trump ’ s administration is starting investigations into digital taxes from the EU to India that could lead to retaliatory export tariffs .
Targeted taxes don ’ t raise as much money as broad-brush hikes , and if other governments start rolling out tit-for-tat measures , their benefits will be smothered .
But it ’ s worth trying , especially if we want to create a better world beyond the coronavirus @ @ @ @ @ @ @ thing if tax systems become more progressive and if public spending spreads the wealth around .
If the future is anything like the society that emerged from the rubble of post-war Europe , there will be a focus on investment , big projects , and rebuilding .
There are fewer constraints on government finances right now , as Goodbody Stockbrockers Chief Economist Dermot O ’ Leary points out : Bond vigilantes have scattered , and austerity advocates are quiet .
The smoke signals of higher taxes are going to get more visible as @ @ @ @ @ @ @ as drivers of the world economy .
But there ’ s no free lunch , either .
Along with politically popular taxes , expect stealthier ones that aren ’ t , financial repression and other tactics to shake more money out of the private sector .
And a Trump administration ready to hit back .