washingtonpost--2020-06-18--Analysis | Can Huawei Face EU Fines Like Google and Apple?

True to form , Vestager — in partnership with Internal Market Commissioner Thierry Breton — is now aiming at a new antitrust target : unfair government subsidies from outside the EU .
( They ’ re illegal inside the bloc , although the rules have been temporarily relaxed because of the pandemic . )
Historically the preserve of trade lawyers and diplomats shuttling between foreign capitals and the World Trade Organization in Geneva , these subsidies are now seen as a competition problem that the EU ’ s executive arm in Brussels must address .
And it wants expanded powers @ @ @ @ @ @ @ an element of making up for lost time here .
Chinese firms have poured an estimated 160 billion euros ( $ 180 billion ) of investment into the EU over the past decade , according to research firm Rhodium Group , with state-owned enterprises at one point accounting for the lion ’ s share ( it has since fallen ) .
What was initially cheered as a welcome source of funding after the financial crisis has become a source of anxiety over an increasingly one-sided relationship .
German robotics firm Kuka AG is @ @ @ @ @ @ @ is seen by Alstom SA and Siemens AG as a competitive threat ; and telecoms-equipment maker Huawei Technologies Co. has been accused of profiting from as much as $ 75 billion in Chinese state aid , according to the Wall Street Journal .
( The company denies it . )
Back in 2013 , then-EU Commissioner Karel De Gucht accused firms including Huawei of anti-competitive behavior driven by access to cheap capital , but plans for an investigation were shelved .
The case for giving new powers to Vestager ’ s division in @ @ @ @ @ @ @ issue fines , is that nobody else has been able to do much about it so far .
The global trading system has been defenseless in the face of this tide of state support that helps companies undercut local competition .
The WTO ’ s mechanisms are clunky and in need of reform .
U.S. President Donald Trump ’ s barrage of trade tariffs has alienated allies while failing to fix the underlying problem .
An encouraging deal on reforming the WTO was signed in January by the EU , U.S. and Japan @ @ @ @ @ @ @ step .
Paired with the EU ’ s foreign-investment screening tool , an anti-subsidy push would help Europe exert more political clout against Beijing .
Under Xi Jinping , China has been a more assertive geopolitical actor , expanding its influence into Europe with its Silk Road initiative and technology investments .
The Covid-19 crisis has exposed the extent of its supply-chain dependence on China and just how ineffective it is diplomatically .
There ’ s now an opportunity to try to rebalance the relationship , which will be one of the priorities @ @ @ @ @ @ @ in July , according to Eric-Andre Martin of French think tank IFRI .
Still , there are some big unknowns .
Hunting down subsidies isn ’ t straightforward , and the proposed powers would need buy-in from companies and its 27 member states .
They might also aggravate trade wars rather than defuse them — the U.S. and the U.K. could technically be subject to these powers , setting up the risk of future clashes that might bury all hopes of reform .
This mechanism might be seen by the EU as one @ @ @ @ @ @ @ practices under scrutiny after Brexit .
For now , though , we should take the proposal at its word .
The aim isn ’ t to punish all subsidies but decide on a case-by-case basis whether they distort the market or not .
If the EU move leads to tougher oversight of state aid payments globally , that would be a worthwhile result , according to Bloomberg Intelligence analyst Aitor Ortiz .
After unity within the EU almost completely broke down early in the Covid-19 crisis , this kind of proposal helps answer @ @ @ @ @ @ @ is the bloc for ?
If the 750 billion-euro pandemic recovery plan shows the economic benefits of pooling resources , a creative push to punish trade distortions shows how it can protect its market abroad .
If Vestager ’ s stance is anything to go by , Europe is serious about asserting itself on the world stage .


washingtonpost--2020-06-18--Congressional Watchdog Asks If Fed Should Stop Bond Buying

Yet several of the lending facilities that are aimed to help smaller businesses aren ’ t fully in operation , a report released Thursday by the Congressional Oversight Commission found , and only one state has received a loan .
The panel said it ’ s an “ open question ” whether the central bank should continue using public funds to purchase some corporate bonds , and urged the Fed to instead do more for small businesses , states and cities .
“ In some areas of the economy , such as the ability of larger companies to issue debt @ @ @ @ @ @ @ actions have had a clear and powerful impact , ” the report says .
“ There is less evidence that the actions of the Treasury and the Federal Reserve have been as beneficial for small and mid-sized businesses and state and local governments.
” In all , the Treasury and Fed have tapped just $ 6.7 billion of the half-trillion dollar pandemic rescue package that Congress authorized them to tap in March , the panel found , leaving lots of cash still to flow into the economy .
The report is the second @ @ @ @ @ @ @ overseeing $ 500 billion in grants and loans from the Treasury Department and the Fed to help struggling businesses , including airlines , during the coronavirus pandemic .
The panel said it plans to meet with Treasury and Fed officials later this month .
“ The agencies should bear in mind that the Federal Reserve ’ s emergency lending powers are statutorily limited to ‘ unusual and exigent circumstances ’ , ” the report said .
“ The Covid-19 crisis clearly created such circumstances .
However , it is important that the Federal @ @ @ @ @ @ @ powers not extend for a longer period of time than is necessary.
” In April and May , U.S. corporate bond issuance , including investment grade and high-yield bonds , totaled over $ 300 billion each month , far outpacing the $ 105 billion and $ 130 billion in issuances in April , according to the report .
The Fed has launched its secondary market lending facility , purchasing $ 1.3 billion in exchange traded funds by mid May .
The central bank also has a primary credit program , which has not @ @ @ @ @ @ @ , small businesses have not yet been able to tap the Main Street lending programs that just opened on Monday to support three facilities in lending up to $ 600 billion to small and mid-sized businesses .
The loans will go to businesses with as many as 15,000 employees or $ 5 billion in revenue last year , and the loans will range in size from $ 250,000 to $ 300 million .
The program is an alternative to the popular Paycheck Protection Program , which will stop accepting applications at the end @ @ @ @ @ @ @ for airline loans has yet to be distributed , according to the report .
American Airlines has said it applied for a $ 4.75 billion loan , and several other airlines , including United Airlines , Southwest Airlines and Jet Blue Airways , have said they are planning to tap some of the money , according to the report .
The Treasury Department has issued loans and grants to airlines through a separate package meant for payroll assistance .
The Treasury Department is considering delaying distribution of the $ 17 billion for national @ @ @ @ @ @ @ Electric Co. eventually need the money .
The loan program was created with those two defense giants in mind , according to Treasury Secretary Steven Mnuchin .
But so far both companies have taken a pass .
The congressional oversight panel has four members but still lacks a chairman .
House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell are supposed to choose that person jointly but have yet to announce an agreement .
Pelosi said earlier this month that a selection was “ imminent.
” The rest of the congressional panel @ @ @ @ @ @ @ Senate Democratic leader Chuck Schumer and House Republican leader Kevin McCarthy .
The members are Democratic Representative Donna Shalala of Florida ; GOP Senator Pat Toomey of Pennsylvania ; Bharat Ramamurti , a former aide to Senator Elizabeth Warren of Massachusetts ; and Representative French Hill , an Arkansas Republican .
The panel , one of three oversight bodies created by Congress to oversee the government ’ s coronavirus response spending , is not alone in facing delays in becoming fully operational .
Trump removed the official who was supposed to head a @ @ @ @ @ @ @ inspector general , confirmed earlier this month , is facing pushback from Democrats who express doubts he can act independently because he was previously a White House lawyer .

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washingtonpost--2020-04-17--Analysis | For Luxury Brands, It’s Too Early to Pop Open the Champagne

LVMH , hit by a 17 % decline in first-quarter sales excluding currency movements and acquisitions , said late Thursday that Chinese consumers were once again enthusiastically embracing its brands , including Louis Vuitton and Christian Dior .
And my Bloomberg News colleagues reported that sales at LVMH stores on the mainland were up 50 % year-on-year in the past three weeks .
Cosmetics maker L ’ Oreal SA also pointed to a recovery in the region ’ s demand for beauty products .
Of course , that may be a function of what ’ s called the “ lipstick @ @ @ @ @ @ @ tough consumers tend to buy smaller treats rather than more expensive items .
But the signs do bode well for demand from Chinese consumers , who could account for 44 % of luxury spending this year , according to analysts at Jefferies .
First of all , there ’ s no guarantee that the rebound will be sustained .
What ’ s more , during normal times the Chinese make the majority of their vanity purchases when they travel abroad .
In this new post-coronavirus era , there has been an initial trend @ @ @ @ @ @ @ could accelerate further .
But bigger impulse purchases are still more likely to happen when people can finally visit cities such as Paris or Milan .
With airplanes still grounded in many places and borders closed , travel is set to be severely constrained for some time , and that will be a drag on industry growth .
Meanwhile , stores in Europe and the U.S. remain closed .
When they finally reopen , brands will find it very difficult to compensate for fewer Chinese visitors .
Massive job losses and all of @ @ @ @ @ @ @ means they won ’ t be able to count on local shoppers to make up the difference .
Consultants Bain & Co. estimate that global personal luxury goods sales could fall as much as 35 % this year , with a mid-point scenario at 22-25 % .
This would be the worst decline in modern luxury industry history .
Despite the inevitable industry downturn this year — one that will possibly stretch into 2021 — LVMH looks to be one of the best-placed luxury groups .
With revenue of 52 billion euros ( @ @ @ @ @ @ @ more than three times that of its nearest rivals , LVMH has significant scale and a strong stable of brands , led by Louis Vuitton and Dior but also including Fendi and Celine in fashion and the Sephora beauty stores .
The 10 % decline in fashion and leather goods sales , excluding currency movements and acquisitions , is better than might have been expected .
The company run by billionaire Bernard Arnault also has a diverse portfolio , both geographically and in terms of products , which include spirits and beauty lines @ @ @ @ @ @ @ cut costs , but also , crucially , to invest when competitors may be weakened .
There are some worries .
For example , the $ 16 billion acquisition of American diamond-jewelry icon Tiffany & Co. will now be more of a challenge .
( LVMH indicated on Thursday that it would still go ahead with the deal . )
And it also has exposure to travel retail through major duty-free chain DFS , which may be depressed for some time .
So LVMH won ’ t be immune from the continued disruption @ @ @ @ @ @ @ it demonstrated in the first quarter it should be more than able to hold its own .


washingtonpost--2020-05-21--Most Small Firms That Got Covid-19 Aid Struggle With Loan Rules

The findings may add pressure on Congress to loosen the rules and make loan forgiveness easier for owners who are struggling to keep their business afloat .
Efforts are under way in the House and the Senate to amend those criteria , although for now the proposals don ’ t align and it ’ s unclear whether the two chambers will come to an agreement .
“ Small businesses continue to face many challenges in operating their business in these difficult times , ” Holly Wade , NFIB director of research & policy analysis , said in a release .
@ @ @ @ @ @ @ authority to further lighten the burden for many of their immediate concerns , especially in offering more flexibility for PPP loans.
” Of the 80 % who applied for a PPP loan , 90 % had funding deposited in their bank account as of May 18 , according to the NFIB survey .
That ’ s up from 61 % who reported getting funding in a May 1 survey and 20 % in April 17 poll .
The latest result is much higher than a separate , larger survey by the U.S. Census @ @ @ @ @ @ @ 75 % of small businesses had requested a PPP loan , but 67 % had received assistance .
The centerpiece of the $ 2.2 trillion relief package that Congress enacted in March , PPP allows loans of as much as $ 10 million that can be forgiven if a business spends proceeds within eight weeks , mostly on payroll .
The loan-forgiveness rules were designed as a stopgap to help small firms keep their workers employed during what was then expected to be a short-term crisis as a result of shutdowns .
Two @ @ @ @ @ @ @ businesses have said they need more time to spend the funds because they won ’ t be ready to reopen or be fully functional at the end of eight weeks .
Others want to relax the 75 % payroll rule so they can use more funds for expenses such rent or utilities .
Republican Senator Marco Rubio of Florida said he wants the Senate to vote on a bill as soon as Thursday to extend the loan-forgiveness period to as much as 16 weeks , and the House is expected to vote next @ @ @ @ @ @ @ lengthen the period to 24 weeks and make other changes , including relaxing the 75 % payroll spending rule .
Treasury Secretary Steven Mnuchin said Thursday the administration supports extending the eight-week period , which would require action by Congress .
But he defended the 75 % payroll spending rule , which the administration could change on its own .
Speaking at an online event hosted by the Hill newspaper , Mnuchin said the 75 % rule matches the intent of the law .
The NFIB survey found that 47 % of firms @ @ @ @ @ @ @ get their employee headcount back to pre-crisis levels , one of the conditions for having PPP loans forgiven .
Almost 20 % said employees have declined a job offer to return to work because they ’ re getting getting $ 600 payments in unemployment benefits .
The survey also showed that 36 % of small firms have requested low-interest loans under the separate Economic Injury Disaster Loan initiative , or EIDL , and 76 % have sought advances that don ’ t have to be repaid .
Sixty-five percent reported receiving EIDL advance @ @ @ @ @ @ @ ’ ve gotten loan funding .
The survey was conducted by email on May 18 with a random sample of the NFIB membership database of about 300,000 small businesses owners , with 685 usable responses .


washingtonpost--2020-05-21--Analysis | Banks Get a Glimpse of the Post-Coronavirus Future

A survey of retail bank customers in France , Spain , Italy , Germany , Portugal and the U.K. , carried out by McKinsey & Co. in mid-April , shows that online bank use rose in all of the countries , from a 7 % increase in Italy to 19 % in Portugal , with a similar pattern in mobile access .
More than one in five customers in Spain and Britain tried online banking for the first time .
A shift to digital use of this magnitude would probably have taken at least a couple of years without the @ @ @ @ @ @ @ .
Equally telling is how notes and coins were easily replaced .
Though largely imposed by the need to prevent the coronavirus ’ s transmission , the trajectory toward more digital payments has been set .
In a BCG survey of U.K. clients that captured activity during three weeks in April , 63 % of respondents said they ’ d reduced their use of cash since the start of the crisis , while 43 % sent more payments through social media messaging apps .
What ’ s more , one in five respondents @ @ @ @ @ @ @ to stop using them altogether after the crisis .
For the more affluent customers , dealings with relationship managers jumped almost threefold , according to the BCG study .
Why go to a branch if you can get the same advice on a video chat from the comfort of your home ?
Under its Covid-19 recovery scenario , in which the euro zone ’ s gross domestic product would drop by 11 % in 2020 , McKinsey sees European banks suffering a bigger setback than in the aftermath of the financial and sovereign @ @ @ @ @ @ @ % once the cost of risk is included as loans sour .
Banks may not return to their pre-pandemic revenue and profitability levels until 2024 .
Capital injections seem inevitable .
Although some parts of banking will be more resilient than others , and the severity of credit losses will determine banks ’ individual strategies , the industry as a whole will need to cut expenses while maintaining investments in technology — not an easy task .
Banks might consider acquisitions as a quick way to add new apps and services .
After @ @ @ @ @ @ @ cheaper as company valuations fall in the crisis .
But integrating new technology platforms with older systems isn ’ t straightforward , and being able to keep the best tech talent isn ’ t a given .
Shrinking or reusing the banks ’ branch networks are other obvious opportunities to lower costs and support investments .
As much as 40 % of lenders ’ costs derive from the sale of products , which includes expenses related to branches , according to McKinsey .
The industry has been cutting its brick and mortar presence @ @ @ @ @ @ @ , but there ’ s plenty more to do .
In Italy , France and Germany , bank branches on average offer services to fewer than 3,500 locals .
That might not justify keeping those sites open , especially when you consider the average number of inhabitants per branch is three times higher in the Netherlands .
If banks can ’ t remove branches quickly because of political opposition , or leases delay closures , those spaces could be used differently .
During the pandemic , local staff were redeployed to offer remote @ @ @ @ @ @ @ investment banker who ’ s no longer going into the city-center skyscraper might use that suburban branch office instead .
Banks have been experimenting for a while with different branch formats , from micro outlets to cafe-style venues .
The need for lenders to accelerate their adoption of technology is hardly new , but it ’ s even more pressing now .
Banks should seize on what they ’ ve learned over these past few months .


washingtonpost--2020-05-20--Analysis | Why China’s Debt-Loaded Companies Face a Reality Check

Chinese defaults actually dropped by 26 % as of late May from a year earlier , to 35.2 billion yuan ( $ 5 billion ) , according to Bloomberg-compiled data .
That ’ s because as the pandemic shut down most economic activity , at least a dozen companies managed to relieve pressure by delaying bond repayments , swapping bonds or canceling early repayment .
However , such short-term measures often end up just buying time , while the credit risk remains .
The trend has been obvious : In 2019 , onshore defaults totaled more than 140 billion yuan @ @ @ @ @ @ @ with 2018 ’ s high of 122 billion yuan , which itself was more than quadruple the level in 2017 .
Private-sector firms accounted for more than 80 % of defaults in 2019 , data compiled by Bloomberg show .
Investors and banks historically have favored state-backed borrowers and are reluctant to extend credit to smaller , private companies .
On top of that , the government ’ s surprise seizure of Baoshang Bank Co. in May 2019 -- the first such takeover in two decades -- cut many investors ’ tolerance for @ @ @ @ @ @ @ broader economy had been losing steam long before Covid-19 emerged , and weaker companies can be subject to funding squeezes and higher repayment pressure .
The pandemic hit transportation , tourism and retailing especially hard .
In 2016 , most were in industries with excess capacity such as coal and steel .
This time , delinquencies have been coming from a wider range .
In February , Peking University Founder Group Corp. ’ s failure to make good on a local bond came after a court in Beijing agreed to a key creditor @ @ @ @ @ @ @ under debt restructuring .
In December , Tewoo Group , a major commodities trader based in Tianjin , restructured $ 1.25 billion of debt in an unprecedented deal in which most investors accepted heavy losses .
It was the biggest dollar-bond default among state-owned companies in 20 years .
Earlier in 2019 , China Minsheng Investment Group Corp. , a conglomerate with assets including property , aviation and health care , came under pressure from its $ 34 billion debt pile .
Known as CMIG , it embarked on a mission to free @ @ @ @ @ @ @ offloading assets .
Yes .
To counter the economic squeeze from the virus , China ’ s central bank is providing hundreds of billions of yuan in loans and regulators have created a “ green passage ” for companies to sell “ anti-epidemic bonds ” if they meet certain criteria .
The central bank has also provided a lending facility to commercial banks with a lower interest rate .
More broadly , officials have been easing some of the stress for the past two years , for instance by injecting liquidity into the @ @ @ @ @ @ @ banks ’ required reserve ratios .
Regulators have offered banks cash and asked them to lend more to help small firms , and urged big banks and brokerages to provide liquidity support to smaller peers , which are the main buyers of corporate debt .
In draft rules released in December , China ’ s central bank , economic planning agency and securities regulator jointly vowed to improve the mechanism for dealing with bond defaults and resolving credit risk more effectively .
Chinese companies have been piling on debt for at least a @ @ @ @ @ @ @ under Xi ’ s predecessor responded to the global financial crisis by going on a borrowing binge .
That kept China ’ s economy chugging , but at a cost .
The corporate debt to GDP ratio surged to a record 160 % at the end of 2017 , from 101 % 10 years earlier .
Xi and his lieutenants vowed to rein it in , issuing directives in 2017 on how money was to be loaned and managed .
A particular goal has been to curb China ’ s $ 10 trillion @ @ @ @ @ @ @ , Chinese local government financing vehicles , which were established to fund infrastructure projects , have already defaulted on many trust loans ( which were part of that system ) , but had yet to suffer a bond default as 2020 began .
Given signs that authorities are more comfortable letting borrowers renege on payments both in the domestic market and offshore , potential investors are reassessing risks .
They ’ ve also grown more skeptical about the quality of Chinese issuers ’ financial reporting .
In one case , the China Securities @ @ @ @ @ @ @ Group Co. , a laminating film and equipment maker in Jiangsu province , had fabricated 11.9 billion yuan of profits during 2015-2018 .
Meanwhile , China has seen a booming market for junk bond investors .
A fast-expanding pool of souring debt and a new generation of risk hunters also helps create a more diverse market where creditworthiness is better reflected in pricing .
In the current process , troubled companies get as long as nine months from when the court accepts a bankruptcy reorganization filing to agree on a restructuring plan with @ @ @ @ @ @ @ company can be declared bankrupt , triggering liquidation .
Concerns exist about the government ’ s heavy involvement in major restructuring cases and the reluctance of banks to pursue court-supervised plans because they don ’ t want to bear losses .
In practice , the process can drag on beyond nine months and foreign investors have had limited enforcement rights on some state-owned assets , according to Pacific Investment Management Co .


washingtonpost--2020-05-21--Analysis | How to Get Rich? Make a Lot or Save a Lot?

Frugality , as I mean it , is the pursuit of a full life with the minimum consumption necessary to achieve it .
It ’ s a habit of always asking whether less is more , or at least good enough .
Is life any worse without a daily $ 5 latte , or a new car every two to three years or a 6,000 square-foot house ?
The answers will necessarily be different for different people ; the important part is asking the questions .
And many are asking those questions now that coronavirus has stripped life to its @ @ @ @ @ @ @ discovered that they consume more than they need or even want .
The pandemic spending recess is an opportunity to reset .
First , the big things : Your education , your career choice , your work ethic , who you marry , who you work with , your skill set , your compensation , your health , your outlook , how you think about the world and the commitment you make to yourself about continually learning and improving .
NK : We agree on what ’ s important , in your parlance @ @ @ @ @ @ @ , however , that not only do the little things not take care of themselves , they often get in the way of the big ones .
Most of us have limited resources .
Every dollar thoughtlessly spent means less savings , and in many cases more debt .
Having some financial cushion is often the difference between being stuck in an undesirable job and having the freedom to pursue more education or work that is more fulfilling or challenging .
There are also lots of people who can ’ t afford to @ @ @ @ @ @ @ their paycheck supports a big house or fancy cars or seemingly trivial expenses that quickly add up , even as the job takes a toll on their health or family .
The things we own , and more broadly the lifestyle we lead , often end up owning us .
And what happens when the career runs its course or vanishes along the way ?
People often assume they can spend freely indefinitely , but that ’ s rarely true .
It ’ s better to seek a full life that is sustainable @ @ @ @ @ @ @ the money dries up .
For example , gone are my work commute , breakfast and lunch at the office , dry cleaning , etc .
It costs money anytime you step into a gym , or on to a golf course or tennis court ; take a lesson and that ’ s extra .
Gone too are our Friday date nights , dinners out and the occasional show , concert , theater or stand-up comedian .
Saturday nights used to be dinner with friends , family , etc .
No longer .
@ @ @ @ @ @ @ saving on gas and other expenses .
Gone too are the occasional weekend brunch and vacation plans are out .
It adds up .
But even when I was spending more , my formula was simple : Spend less than you make , preferably much less .
It is a mistake to focus on absolute spending as opposed to spending relative to earnings and savings .
This is what so many spending scolds get wrong .
I pay off the credit cards in full each month , prepay my 3.99 % mortgage , @ @ @ @ @ @ @ , have other stock and bond investments .
I live well within my means , invest smartly and carry almost no debt other than a mortgage .
And even if I sometimes spend what appears to be a lot of money on fun or nonsense , it is all well within what I can afford .
Avoid the hedonic treadmill and you will be much better off .
That said , no one on their deathbed looks back and says , “ Boy , am I glad I did not buy that sailboat @ @ @ @ @ @ @ what they didn ’ t do than what they did .
NK : The irony is that you ’ re a good example of the mindful consumption I ’ m advocating .
You focus your spending on the things and experiences you find meaningful , and you spend much less than you make , all of which allows you to save and pursue the big things .
In my experience , you ’ re the vast exception .
NK : But let ’ s not forget the other side .
Owning lots of @ @ @ @ @ @ @ lifestyle can also be exhausting .
The trick , of course , is to find the balance .
This shutdown is forcing everyone to momentarily lead a simpler life .
Perhaps some will discover it ’ s an improvement .
BR : I hear what you say , but I ’ d like to would wrap up with this reminder : Spend what you want , but preferably on experiences rather than stuff .
But there is no reason not to buy the occasional shiny object , as long as you can afford @ @ @ @ @ @ @ the key to a successful financial life .


washingtonpost--2020-05-21--Analysis | AstraZeneca Is Caught Up in Delicate Vaccine Politics

Many drugmakers are racing to find a vaccine , often funded by U.S. cash .
AstraZeneca will be mindful of the controversy caused by Sanofi , its French peer , whose chief executive officer said recently that the U.S. would get priority for its vaccine because of the country ’ s financial support for risky research and development .
The Oxford project has so far been a mainly British affair , with funding in the tens of millions of pounds from the U.K. government .
Its ambitions have always been global , but Britain has been implicitly first among equals @ @ @ @ @ @ @ the U.S. now rank ?
AstraZeneca got involved last month .
That provided a global manufacturing and distribution partner .
Vaccines aren ’ t its core business .
As a big pharma group , it ’ s adept in running the large , late-stage drug trials required here .
But AstraZeneca ’ s involvement is not about financial resources ; the money is coming from state actors .
Now the U.S. Biomedical Advanced Research and Development Authority is providing $ 1 billion to the program .
American involvement suddenly ramps up the scale @ @ @ @ @ @ @ partly fund a phase-three trial involving 30,000 patients .
The U.S. Department of Health and Human Services says it ’ s working with the company to secure 300 million doses .
Previously , the expectation was for 100 million doses across Britain .
Small wonder AstraZeneca set out to reassure investors on Thursday , saying that “ expenses to progress the vaccine are anticipated to be offset by funding by governments.
” With the costs getting so big — AstraZeneca is talking about possibly 1 billion doses — that was a necessary clarification @ @ @ @ @ @ @ a clinical success — and there is no guarantee that it will be — AstraZeneca says it won ’ t make a profit from it during the pandemic .
That allows for the making of money from annual vaccine programs once the crisis has eased — just like the drugmakers who produce regular flu vaccines .
This won ’ t displace AstraZeneca ’ s core work of fighting cancer .
But the company is now involved in a delicate political situation .
AstraZeneca is talking about parallel agreements with the U.K. and U.S. @ @ @ @ @ @ @ equitable supply of any working vaccine to the world .
The Oxford tie-up is also about making a drug accessible for low- and medium-income countries .
Altogether , it implies various national governments ’ orders for this vaccine can be met simultaneously .
That ’ s a laudable aspiration .
Whether it can be achieved remains to be seen .
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners .
Chris Hughes is a Bloomberg Opinion columnist covering deals .
He previously worked for @ @ @ @ @ @ @ Financial Times and the Independent newspaper .


washingtonpost--2020-03-26--Analysis | The Dollar Crunch Is Europe’s Gift to Asia

The dollar squeeze is evident , as one of us wrote Monday , in the hefty premiums South Korean banks must fork out to borrow the U.S. currency — a reliable indicator of trouble in the past .
It also appears that China ’ s banks may be less eager or able than before to fund the dollar needs of their corporate borrowers , Bloomberg Opinion ’ s Anjani Trivedi noted Wednesday .
For Asia , the crunch is an unwanted gift from European lenders , whose departure from the region post-2008 , as well as regulations that reined in @ @ @ @ @ @ @ a funding hole .
Japan ’ s banks have expanded and lenders like BNP Paribas SA have scaled up trade finance , but they ’ re yet to fill the void , especially as troubled Deutsche Bank AG shrinks .
The German lender was in the top five corporate banks in Asia in 2014 ; last year , it wasn ’ t even in the top 10 , according to Greenwich .
Some countries like Korea have felt the loss more keenly than others .
U.K. banks ’ exposure to Korea has dwindled @ @ @ @ @ @ @ billion in the first quarter of 2008 .
German lenders ’ claims have fallen to $ 13 billion from $ 36 billion .
Japan ’ s lenders have taken up part of the slack .
Driven by negative interest rates and aging demographics at home , they have dished out funds aggressively in Southeast Asia as well as to global deal-chasing clients like SoftBank Group Corp .
The large U.S. operations of megabanks like Mitsubishi UFJ Financial Group Inc. also provide them with liquidity , as does their stack of fully convertible , @ @ @ @ @ @ @ lenders have piled into off-balance sheet products , which suck liquidity in times of stress .
Japan ’ s Norinchukin Bank , a lender to farmers and fisherman , was one of the world ’ s largest buyers last year of collateralized loan obligations , bundled U.S. leveraged loans .
When the Fed extended emergency swap lines to South Korea , Australia , Singapore and New Zealand last week to ease the worldwide dollar shortage , a step that our colleague Shuli Ren called for here , it was a sign that the @ @ @ @ @ @ @ , the Fed gave temporary access to nine authorities in addition to the five that it has permanent arrangements with for making dollars available .
( 2 ) Emerging economies like India , Indonesia , Chile and Peru , though , have seen their requests for swap lines rebuffed in the past .
The U.S. only helps those it sees as important to the stability of its own banking system .
So what can Asia do ?
Start with the most extreme case .
Australia needs U.S. dollar funding not just for foreign-currency @ @ @ @ @ @ @ .
That ’ s because the domestic deposit base is small , compared with the size of the banking industry .
The average loan-to-deposit ratio of Macquarie Bank Ltd. and other major Australian lenders was 126 % versus 68 % for the top Asian banks , namely DBS Group Holdings Ltd. , Mizuho Financial Group Inc. , MUFG , Standard Chartered Plc , and HSBC Holdings Plc , according to banking analyst Daniel Tabbush , founder of Tabbush Report .
Offshore funding sustains around one-third of major Australian banks ’ total worldwide operations @ @ @ @ @ @ @ others have flagged the reliance on foreigners as problematic , the Australian regulators have so far refrained from discouraging lenders to borrow abroad .
Yet , the fact that the country had to seek dollars from the Fed during the epidemic upheaval and auction them to its banks will call into question the sagacity of this relaxed approach .
In rest of Asia , one lesson from the dollar squeeze is to shun protectionism .
Well-capitalized regional banks like Singapore ’ s DBS could supplement the three traditionally entrenched foreign lenders : HSBC @ @ @ @ @ @ @ a big cash management bank for Western multinationals .
DBS could emerge as an Asian global bank , though in good times its expansion has been stymied by regulators playing to nationalist political sentiment , as we saw when it wasn ’ t allowed to buy Indonesia ’ s PT Bank Danamon in 2013 .
The next step may be to seek more intermediaries with scale .
JPMorgan Chase & Co. is pumping top dollar into serving corporate treasuries as a safeguard against the fickle fortunes of investment banking .
Japan ’ s @ @ @ @ @ @ @ is already one of the region ’ s most aggressive lenders and has the historical advantage of having a dollar clearing license , like HSBC .
Unlike 2008 , this isn ’ t a credit contagion yet , though that could change if large , messy financial bankruptcies were to erupt .
But beyond the current crisis , the regulators must plan for the next squeeze .
Since not everyone can rely on the Fed , the dollar supply chain is each country ’ s responsibility .
At least until a credible alternative @ @ @ @ @ @ @


washingtonpost--2020-03-26--Former Twitter CEO and Pals Help Restaurants Dish Out Free Meals

Che Fico ’ s investors saw the post and reached out .
Dick Costolo , the former chief executive officer of Twitter Inc. and partner in Index Ventures Inc. , texted the chef : “ What can I do to help ?
” Nayfeld put some numbers together .
Besides furloughing employees and paying for temporary health care , he saw the opportunity to feed people in need .
He texted Costolo back : $ 2,000 a night would be enough “ to blunt the edge ” and to set the restaurant up to start serving to-go meals to needy @ @ @ @ @ @ @ .
For the former tech chief , it was a chance to help a community that suddenly found itself in crisis .
For a successful entrepreneur , he said in a phone interview , “ There ’ s an expectation that you are going to be there for society.
” He even built the accompanying website for the new initiative .
“ I haven ’ t touched code in forever , ” he added .
Costolo tweeted his support for the # CheFicoFamilyDinnerFund to his 1.5 million followers .
Egon Durban , co-CEO @ @ @ @ @ @ @ to Costolo on Twitter : “ Our family will match you to fund dinner for 40 families per night during this difficult period .
Let ’ s help our community .
Let ’ s go.
” The next day , Allison Rose , founder of Rose Culinary in Palo Alto , Calif. , and a restaurant-oriented venture capitalist , chimed in with another $ 15,000 per week for the first two weeks .
“ I can ’ t do $ 2,000 for everyone , ” she said .
“ The reason I focused @ @ @ @ @ @ @ doing something amazing.
” That brought Che Fico a commitment of $ 6,000 per night .
What started as 40 to-go meals nightly quickly expanded to more than 300 .
Each is enough for two to three people ; the program is now feeding more than 700 people a day .
The meals are free to customers in need and cost $ 50 for those who can afford it ; on average , two-thirds of the meals have been free .
Recent menus include tri-tip steak with roasted root vegetables and salsa verde @ @ @ @ @ @ @ .
They have also included such extras as beer donated by Temescal Brewing , wine from Seventy Five Wine Co. , and chocolate bars from Charles Chocolates .
Nayfeld has been able to keep his six managers on the payroll .
The remainder of his staff is on furlough ( enabling them to receive health-care benefits ) .
He ’ s brought back around 10 hourly employees to cook in the kitchen , and he ’ s rotating dishwashers nightly .
On Sunday , with Costolo ’ s help , the chef hosted @ @ @ @ @ @ @ map with other chefs around the country who are interested in replicating the model .
At the virtual town hall , Nayfield discussed how to get the ball rolling , mistakes he ’ s made , and ways to simplify the process .
( First and most important : Have deep-pocketed investors . )
Sixty miles north of Che Fico , at the three Michelin-starred SingleThread in Healdsburg , Calif. , partners Kyle and Katina Connaughton were also wondering how to help their Sonoma community and support their 84-person staff , 50-seat restaurant @ @ @ @ @ @ @ with Nayfeld , the couple started a local meal donation program with a similar dine-out component .
People who can afford it can pick up a two-to-four person meal for $ 75 , purchased in advance on Tock .
Several local winemakers have funded the first few weeks , including Anne and Joe Wender of Colgin Cellars and Three Sticks Winery .
The coronavirus has ignited Nayfeld ’ s inner activist .
“ What this entire catastrophe should tell us is that we are putting way too much burden of cost on small @ @ @ @ @ @ @ , ” he says .
Costolo shares that sentiment .
” It would be great to see some systemwide federal reaction , ” he adds .
“ We can wait for that to happen , or we can jump in and act decisively .
”


washingtonpost--2020-03-26--Analysis | The World’s Airports Are Fast Becoming Ghost Towns

The sudden collapse of air travel triggered by travel restrictions and customer fears of coronavirus is having a severe impact on airport cash flows .
The fees they get from airlines have been cut to the bone , as have commercial revenues from services like car-parking .
If retail concessions or car rental agents go bust , another source of income could be wiped out .
European airport operators estimate that they face a 14 billion euro ( $ 15 billion ) hit to revenues .
Like their airline customers , the world ’ s airports are calling on governments @ @ @ @ @ @ @ justified — not least because airports play a vital role in transporting essential medical supplies .
But for privatized airports , like those in the U.K. , it could be more difficult to convince authorities that help is merited .
International investors who ’ ve funded a massive expansion of global airport capacity in recent years may have to make sacrifices too .
Where airports remain in public hands , as in the U.S. , bailouts aren ’ t so controversial : airports are due to get a $ 10 billion handout as @ @ @ @ @ @ @ 2 trillion rescue plan .
Without it , they worry they won ’ t be able to service a combined $ 100 billion debt load .
A default would push up borrowing costs across the sector .
The main Paris and Frankfurt airports , though part of listed groups , also have public anchor shareholders , which guarantees them a sympathetic ear should the need arise .
French president Emmanuel Macron has wanted to sell down the state ’ s 50 % shareholding in Aeroports de Paris but hasn ’ t made much @ @ @ @ @ @ @ taxpayer help for airports is more sensitive because much of the infrastructure is owned by international investors who ’ ve piled on debt and reaped large profits .
Heathrow ’ s co-owners , which include Qatar Holding , the Government of Singapore Investment Corporation and China Investment Corporation , have lately collected about 500 million pounds ( $ 592 million ) annually in dividends .
London Gatwick ’ s owner Global Infrastructure Partners pocketed a 640 million pound dividend before selling a majority stake to French infrastructure group Vinci SA for 2.9 billion @ @ @ @ @ @ @ the much smaller London City Airport to a Canadian-led consortium in 2016 for 2 billion pounds .
Willie Walsh , the boss of British Airways owner International Consolidated Airlines Group SA , described the sky high price as “ foolish ” .
After its temporary closure this week , Walsh probably wouldn ’ t revise his opinion .
It ’ s no wonder the new U.K. finance minister Rishi Sunak is playing hardball .
Writing to airlines and airports this week , Sunak told them to first try to raise money from shareholders @ @ @ @ @ @ @ asking the public for help .
Because of favorable regulation and the asset-heavy nature of the business , airports have been thought capable of supporting higher than average debt loads .
Heathrow has 12.4 billion pounds of net debt , or 6.5 times ebitda ( an imperfect measure of cash earnings ) .
But it ’ s still a risky business .
The danger that a global pandemic could sap future demand for air travel is clearly spelled out in airport loan documents .
The financial health of airports is also intertwined with @ @ @ @ @ @ @ British Airways contributes more than 40 % of Heathrow ’ s airline-related income , while Lufthansa provides Frankfurt airport with about 60 % of its passengers .
Both are now grounding the bulk of their fleets .
For now , U.K. airports have stopped short of asking for government cash or loans .
Some are better placed to cope than others .
Heathrow says it has 3.3 billion pounds in liquidity , sufficient for at least a year of cash needs .
In contrast , Gatwick held only about 15 million pounds of @ @ @ @ @ @ @ facility , according to the most recent accounts .
But its new majority owner Vinci has 14.5 billion pounds of cash and undrawn credit facilities .
Instead , U.K airports are calling for a reduction in regulatory and policing costs , relief from business taxes and that lenders be required to not enforce loan covenants temporarily .
European peers are saying all aviation taxes should be suspended until the end of the year .
This is controversial stuff .
Until a few weeks ago , politicians in Europe were leaning toward making air @ @ @ @ @ @ @ emissions .
Still , there are decent arguments for why airports , even those in the U.K. , should be cut some slack .
In recent weeks their workers have braved crowded terminals to get passengers home , risking contracting the coronavirus themselves .
And when the virus is defeated , we ’ ll need airports around the world to help kick-start an export recovery .
After warning that its financial performance would be “ significantly impacted , ” Heathrow has announced a variety of steps to cut costs , including cancelling executive @ @ @ @ @ @ @ Frankfurt airport operator Fraport AG , which is scrapping shareholder payouts , Heathrow has been oddly reticent about dividends .
A clear statement that these payouts will now end might make Sunak more sympathetic to the industry ’ s plight .


washingtonpost--2020-03-07--Analysis | U.S. Is Lagging in Coronavirus Tests, and It’s Not Even Close

If you look only at a list of confirmed novel coronavirus cases , you wouldn ’ t think the U.S. @ @ @ @ @ other countries currently have more infections , and some have many more .
Don ’ @ @ @ @ @ The lower case count doesn ’ t mean Americans are doing a better job of @ @ @ @ @ , it reflects the fact that the U.S. is badly behind in its ability to @ @ @ @ @ for Disease Control stopped disclosing how many people it has tested as of Monday , @ @ @ @ @ Atlantic could only confirm 1,895 tests .
Switzerland , a country with fewer residents than @ @ @ @ @ nearly twice as many people .
The U.K. , which has far fewer cases , @ @ @ @ @ This gap is particularly worrisome given evidence of community spread in a number of different @ @ @ @ @ count , both of which suggest the number of cases will jump as more tests @ @ @


washingtonpost--2020-03-07--Analysis | SARS Lessons Inoculate Hong Kong Against Epidemic

Take me .
I still compulsively wash my hands , 17 years after the outbreak .
I have friends that have been using toothpicks to press elevator buttons for years .
Some use tissues to open the doors of public washrooms , or carry spare masks in their handbags in case they catch the sniffles .
This is all evidence of the indelible impact SARS has had on Hong Kong ’ s psyche .
For many of us , advice from health officials on how to minimize the risk of Covid-19 infection has been superfluous .
Born in Hong Kong @ @ @ @ @ @ @ city from a five-year spell in London in late 2002 , a couple of months before SARS first appeared in China .
People in Hong Kong became aware of the disease the following March after a visiting doctor from Guangdong , the adjoining mainland province , infected visitors on his hotel floor .
He later died .
For months between the first infection , of a farmer in southern China , and mid-March when the World Health Organization issued a global alert , we were in the dark about the appearance of this @ @ @ @ @ @ @ to eat out , hold new year ’ s celebrations , and mingle freely .
The fear that ensued when the spread of this deadly disease became public knowledge engendered habits many of us still can ’ t shake off .
Restaurants and bars largely emptied , and stayed that way until SARS receded in the middle of the year .
That pattern is repeating itself .
Restaurants are suffering , especially after a hotpot dinner led to multiple infections among one family .
On the other hand , Hong Kong ’ s @ @ @ @ @ @ @ seek open spaces and fresh air where the chance of infection is lower .
Reminders of SARS are everywhere , from the ubiquitous face masks and near-empty subway carriages to the daily news flow .
Officials ordered engineers to inspect toilets at a public housing complex in the city ’ s northwest after coronavirus infections emerged .
That recalled the tragedy at Amoy Gardens , a cramped 19-block apartment development where 329 residents contracted SARS and 42 died after defective plumbing helped to spread the virus .
The vigilance instilled by these memories @ @ @ @ @ @ @ relatively low number of Covid-19 infections : 97 and two deaths , out of a population of 7.4 million , as of Friday .
( 2 ) Singapore ( population : 5.6 million ) had 117 confirmed cases and no fatalities .
South Korea , with 6,593 infections and 42 fatalities , is the second-worst hit country after China , while Italy had 3,858 cases and 148 deaths , the most deaths after the mainland .
Focus has also turned to the spread of the disease in the U.S. , where authorities reported @ @ @ @ @ @ @ Friday .
It ’ s debatable how much credit the Hong Kong government deserves for the low infection rate .
Arguably , mistrust of the government has played a bigger role in shaping behavior .
The administration of Chief Executive Carrie Lam , who has record-low approval ratings after months of anti-government protests last year , resisted public pressure to seal the border with mainland China , feeding suspicions that she was doing Beijing ’ s bidding rather than placing the safety of the local population first .
The government has also given @ @ @ @ @ @ @ of face masks , as my colleague Clara Ferreira Marques has pointed out .
Hong Kong imposed a quarantine on visitors from the mainland eight days after Singapore .
The government has played a part in encouraging social distancing , and has taken some draconian measures , most notably by closing schools until the middle of April at least .
Still , the part played by individuals can ’ t be overlooked .
With a traditionally laissez-faire economic system and little in the way of social welfare , the people of Hong Kong @ @ @ @ @ @ @ themselves rather than waiting for the guiding hand of the state .
It ’ s that spirit — and the scars left by SARS — that have inoculated Hong Kong against the worst of the latest coronavirus outbreak .


washingtonpost--2020-04-26--JPMorgan to Unlock Trillions of Liquidity With Tech Partnership

While the partnership has been in the works since last fall , it comes at a compelling time now as global supply chains have been upended by the coronavirus pandemic , forcing governments to take unprecedented actions to prop up large and small businesses alike .
Through Taulia ’ s network , JPMorgan will be able to help smaller firms access capital at a cheaper rate and in less time than otherwise possible , said Stuart Roberts , the bank ’ s global head of trade .
“ We ’ re taking a relatively short-term risk on larger companies , @ @ @ @ @ @ @ ’ t think of a safer way to inject liquidity into a credit-stressed small- or medium-sized business right now.
” Businesses complete more than $ 120 trillion worth of transactions a year , but at any point in time , $ 20 trillion of that total is waiting in the supply chain to be paid , said Taulia Chief Executive Officer Cedric Bru .
Clients can get on-boarded within 90 seconds , compared to the days or even weeks it takes small businesses to access credit from local banks at expensive interest rates @ @ @ @ @ @ @ two months , investment-grade companies globally have accessed hundreds of billions of dollars through bond markets and credit lines at a relatively low cost , but smaller firms have fewer -- and more expensive -- options .
While the U.S. high-yield bond market has opened up , it ’ s still quiet in Europe .
In leveraged loans , the few that have come are marketing , and often pricing at double-digit interest rates .
Private credit markets have been dormant .
U.S. junk bond spreads have compressed to 775 basis points from @ @ @ @ @ @ @ March , but current levels are still more than double what they were in February .
The widening gap caused many companies to lose access to capital , said James Fraser , JPMorgan ’ s global head of structured solutions within global trade .
“ Being able to leverage the strength of a large , investment-grade buyer for a small supplier went from an attractive financing option to a lifeline , ” he said .
JPMorgan had a legacy tech platform that was due for an upgrade .
The bank looked at various @ @ @ @ @ @ @ its own .
It opted for San Francisco-based Taulia instead , given its AI capabilities , Roberts said .
The partnership , expected to be announced formally this week , will help JPMorgan become the biggest global supply chain finance bank , he said .
For more articles like this , please visit us at bloomberg.com


washingtonpost--2020-04-26--SBA Sets Cap on Amount of Relief Loans That Banks Can Process

The SBA sent an email to lenders on Sunday limiting the maximum dollar amount of loans each bank can issue at 10 % of funding authority of the Paycheck Protection Program .
The goal of the cap is “ to ensure equitable access , ” according to a copy of the email seen by Bloomberg News .
It wasn ’ t clear from the email what the dollar amount of the cap would be .
Last week Congress added $ 320 billion to the program , including $ 10 billion for bank processing fees .
It also earmarked $ 60 @ @ @ @ @ @ @ .
The SBA didn ’ t immediately respond to a request for comment .
The program , which relaunches Monday after the initial funding of $ 349 billion ran out in just 13 days , allows for loans of as much as $ 10 million per borrower and is meant to help small businesses affected by the coronavirus pandemic keep workers on their payrolls .
The rollout of the program caused an uproar when it emerged that big national chains including Potbelly Corp. and the operator of Ruth ’ s Chris steak houses @ @ @ @ @ @ @ in loans thanks to a loophole , while millions of very small businesses were left stranded when the program ran out of money .
Advocates for small businesses are concerned the additional funding could also be exhausted in a matter of days , won ’ t be enough to meet demand , and might not reach the entities that need it the most .
Applications are processed on a first-come , first-served basis -- a procedure criticized on Sunday by Bank of America Corp. CEO Brian Moynihan .
The largest U.S. lenders have @ @ @ @ @ @ @ since the first round of the program ended April 16 .
JPMorgan Chase & Co. , which arranged the most loans in the first round at $ 14 billion , had fully processed about $ 13 billion or more as of Wednesday .
Wells Fargo & Co. has said it invited more than 450,000 customers to apply for a total of about $ 50 billion of financing , after arranging a mere $ 120 million in the first round .
“ We have mobilized thousands of employees and launched new technology to assist @ @ @ @ @ @ @ ” Wells Fargo spokeswoman Kate Pulley said in a statement .
Bank of America has about $ 50 billion worth of requests , Moynihan reiterated Sunday on CBS ’ s “ Face the Nation.
” The firm had only arranged roughly $ 5 billion when the initial funding was depleted , people with knowledge of the matter have said .
The Independent Community Bankers of America supports the change to ensure available funding is spread among the more than 5,000 lenders approved to participate in the program , said Paul Merski , who @ @ @ @ @ @ @ Congress .
The changes SBA announced on Sunday also include allowing lenders to send at least 15,000 applications in one batch to help pace the processing of loans .
The agency ’ s E-Tran system was overwhelmed by the volume during the initial round and was often inaccessible , delaying the processing of some loans .


washingtonpost--2020-03-05--Analysis | Slowing a Pandemic — What We Know About Coronavirus Containment

Shortly after China first officially declared the outbreak in Wuhan , a city in central Hubei province , researchers around the world gained access to the genetic fingerprint of the virus .
Testing kits were rapidly produced , though countries including China , Japan and the U.S. stumbled in providing enough of them in the early days .
At the start of March , the WHO said the world had the capacity to produce over 1.6 million testing kits per week .
Expanded testing not only lets doctors identify those with the disease , now labeled Covid-19 , but allows @ @ @ @ @ @ @ has spread and where the risk of outbreaks is greatest .
Patients infected with coronavirus who are at greatest risk of becoming gravely ill from the disease it causes , called Covid-19 , are put in special wards where health care workers use greater levels of protection to keep from becoming ill themselves or spreading the virus outside .
Other patients are asked to isolate themselves at home –- something that was described as common in Wuhan and other hard-hit parts of China , where hospitals at least initially were unable to keep @ @ @ @ @ @ @ officials acknowledge that this practice can put family members in danger , and recommend precautions to reduce the risk of infection .
Some places are working to set up special areas for patients who don ’ t have a safe place to recover .
For example , Seattle plans to buy a motel and set up modular housing to quarantine infected homeless people who don ’ t need hospitalization .
When a new case is identified , it ’ s important to map out two potential chains of infection : those who may @ @ @ @ @ @ @ , and those who may have been exposed to the virus by the patient .
Exposure is defined as being within 6 feet ( roughly 2 meters ) for at least 10 minutes .
People who are identified –- often family members -- are placed under isolation at home under medical observation , meaning regular temperature checks .
Health workers should check in daily via telephone calls , texts or in-person visits with people who were potentially exposed for 14 days following their last known close contact with an infected person .
Other @ @ @ @ @ @ @ passengers on public transportation , and people who attended the same social events , shopped or visited doctors at the same time .
Quarantine -– the voluntary or involuntary sequestering of individuals or groups believed to be infectious -– is one of humanity ’ s oldest defenses against disease and remains one of the most controversial .
In China , the government imposed the most extensive quarantine in known history , locking in place the residents of Wuhan and more than a dozen other cities in the region , a travel ban covering @ @ @ @ @ @ @ recent years , the opinion of many health experts has been that quarantines have yielded limited results and can sometimes be counterproductive .
But according to the WHO , China ’ s strict quarantine likely averted many infections and bought the rest of the world two to three weeks to prepare for the virus .
Other countries have used more targeted measures , quarantining those who were repatriated from the outbreak ’ s center in Wuhan or exposed on a cruise ship .
Public health experts and government officials worldwide are acknowledging that @ @ @ @ @ @ @ avoid transmission of the virus through simple -- if difficult to implement -- efforts to keep people apart .
The process known as social distancing involves potentially extreme measures like shutting down schools , businesses and big community gatherings like concerts , sporting events and conferences where thousands of people come together and perhaps pass the virus along .
They are also pushing steps that individuals can take to potentially break the chain of transmission , including coughing into your elbow , washing your hands frequently and avoiding handshakes and hugs , as @ @ @ @ @ @ @ touch your face .


washingtonpost--2020-03-05--Analysis | This Airline Needed More Than Richard Branson’s Magic Touch

But Flybe had problems even before the outbreak .
It was acquired in January 2019 for 2.2 million pounds ( $ 2.8 million ) , or a penny a share .
The buyer was Connect Airways , a venture including Branson ’ s Virgin Atlantic Airways Ltd. , and airport operator Stobart Group Ltd. , each with a 30 % stake , as well as private equity firm Cyrus Capital with 40 % .
Together they invested about 110 million pounds .
Flybe was Britain ’ s most important carrier for routes outside of London .
But it ’ s @ @ @ @ @ @ @ regional aviation market .
Passenger numbers are limited , and even the smaller planes have significant fixed costs .
The airline avoided liquidation in January when Prime Minister Boris Johnson ’ s government came out in support of state intervention and its owners agreed to inject another 30 million pounds , of which 25 million has been invested .
It was able to defer some taxes , but a vital 100 million-pound loan , cuts to U.K. flight taxes in this month ’ s budget and state support for some specific routes were @ @ @ @ @ @ @ could not be agreed upon .
There was a case for state support given Flybe ’ s role in connecting more remote corners of the country .
But the government was also probably mindful of the risk in rescuing failing firms .
After all it didn ’ t step in to save the 178-year-old British tour operator Thomas Cook Group Plc last autumn .
As my colleague Therese Raphael noted in January , there was a danger that even a restructured Flybe wouldn ’ t have taken off as its owners hoped , @ @ @ @ @ @ @ rescue later on .
Branson ’ s Virgin group could also have provided more funding , particularly as the British billionaire ’ s net worth has been rocketed because of the increase in the value of suborbital space travel company Virgin Galactic Holdings Inc .
Through Virgin Atlantic , the group has provided about 60 million pounds of Connect Airways ’ funding to Flybe over the past year .
But it now has its own problems .
New bookings have fallen between 40 % and 50 % over the last 10 days .
@ @ @ @ @ @ @ 50 million pounds from the failure , also wasn ’ t in a position to do more , having suspended its dividend in November , and pledged to sell off non-core assets .
While the collapse is devastating for Flybe employees , propping up regional routes just isn ’ t viable with the world mindful of flying ’ s environmental impact .
In the short term , funding would be better used to mitigate the impact of Flybe ’ s demise on workers , and in the longer term , invest in alternative @ @ @ @ @ @ @ ’ s also worth casting the mind back to the collapse of Thomas Cook .
Images of stranded tourists raised questions as to why the government didn ’ t step in there .
But that reluctance now looks wise .
If Thomas Cook had received a bailout , with the coronavirus ’ s potential hit to tourism in the impending spring and summer travel season , the government would have been facing a potentially even bigger headache than that for a regional airline .


washingtonpost--2020-03-05--Analysis | Bankers Are Staring Into the Abyss, Again

There are some minor measures that ECB President Christine Lagarde could try to mitigate the pain , especially if she decides to cut the benchmark deposit rate deeper into negative territory ( a nightmare for banks trying to squeeze a profit from lending ) .
At the very least , the ECB should protect lenders from any increased cost of depositing their excess reserves at the central bank by sweetening the terms of the “ tiering ” regime that it adopted in September .
That change lifted about 800 billion euros ( $ 892 billion ) of commercial bank reserves @ @ @ @ @ @ @ % deposit rate tier — where banks are paying for the privilege of storing their money — and toward a slightly less punishing zero rate .
Separately , the ECB is already considering whether to offer banks even more super-cheap loans — known as targeted long-term repurchase operations , or TLTROs .
This is wise .
It will be vital for maintaining the liquidity of cash-strapped corporates ; about three-quarters of European company borrowing comes via bank loans .
But there are justified doubts about the effectiveness of TLTROs in getting money to @ @ @ @ @ @ @ quarter of last year , companies ’ demand for loans dropped in the euro zone .
Even more laser-focused funding is needed specifically for small and medium-sized companies to prevent a credit crunch in the backbone of the region ’ s economy — with even more attractive rates to encourage banks to participate .
TLTROs are no magic wand if there ’ s no demand and banks are hesitant to lend .
A more controversial measure would be to adapt the ECB ’ s 190 billion-euro ( $ 211 billion ) corporate bond-buying @ @ @ @ @ @ @ debt too .
That might lower banks ’ funding costs , which have risen since the virus hit Europe .
Unfortunately , there are huge conflicts of interest in directly financing banks , which are regulated by the ECB .
Germany would certainly balk .
Last decade ’ s euro crisis was exacerbated by the doom loop , where certain banks held too many of their nation ’ s bonds — intensifying the riskiness of the sovereign debt and the country ’ s banking system .
A move that established new ties between @ @ @ @ @ @ @ bring its own fears .
In the wake of the virus outbreak , the Italian lenders ’ association is already pleading for forbearance to allow the nation ’ s banks not to record past bad loans .
But the ECB should stand firm .
Such a move might help shield the lenders ’ profit and capital in the short term but it would undermine confidence in an industry that ’ s still trying to win back investor trust .
It never works to let banks sweep bad debt under the carpet .
European @ @ @ @ @ @ @ post-crisis cleanup that took years , getting bad debt levels back to more manageable levels ( they ’ ve dropped by almost half to 543 billion euros ) .
Banks have also steadily built capital buffers .
Regulators could let them eat into these ratios , but such hard-fought improvements mustn ’ t be reversed lightly .
The continent ’ s banks were already in for an unhappy time before the virus hit , given the euro-area economy ’ s struggles .
Now the industrial heartland of Italy has ground to a halt @ @ @ @ @ @ @ be more exposed .
A Europe Commission briefing note , seen by Bloomberg News , has warned that the virus could plunge Italy and France into recession .
The paper spoke specifically of a possible increase in bad loans “ to leveraged companies operating on a tight cash flow ” and a decline in the bank asset values that “ may trigger a vicious sovereign-bank loop .
”


washingtonpost--2020-03-04--Analysis | What’s an Airline Nightmare? No Spring Break

Like most major airlines , United had already suspended service to China and Hong Kong while cutting certain routes to Japan , Singapore and South Korea .
But we ’ re now seeing a pivot away from the hot spots of the virus outbreak – many of which were under travel advisories or outright bans – toward just generally weaker interest in going anywhere near an airplane .
Joel Szabat , the Transportation Department ’ s acting under secretary for policy , told a Senate committee Wednesday that the virus is already causing people to reconsider airline travel .
Global @ @ @ @ @ @ @ % to 6 % on the outbreak , he said , citing industry analysts .
United ’ s domestic capacity reductions will involve a rollback in flight frequency on certain routes , capacity cuts in cities served by multiple hubs and a pivot to smaller planes in some cases .
Some of the international cuts involve service to Europe and Latin America , giving a sense of just how global this new reticence toward flying has become .
In Europe , Deutsche Lufthansa AG is grounding 150 of its 763 aircraft due to @ @ @ @ @ @ @ as much as a quarter of its short- and medium-haul flights across all of its brands .
This travel-wariness comes at an inopportune time for airlines .
Spring breaks are imminent , and then comes the Easter holiday .
Many people are starting to plan their summer vacations .
While some may be willing to try their luck and lock in low prices , quite a few might be tempted to skip that trip to Italy , or even Florida for that matter , and explore the wonders of their own backyard .
@ @ @ @ @ @ @ more troubling for airlines because that is where they make most of their money.And if people aren ’ t traveling , they ’ re not spending money at their destinations and potentially avoiding crowded places or concert venues at home .
Not to mention the airline employees on unpaid leave will have fewer dollars to spend .
This can spiral very quickly .
Should the cutbacks in inter-European and U.S. domestic travel become more pronounced , there will start to be serious questions about airlines ’ s demand for aircraft .
Jet-leasing company @ @ @ @ @ @ @ seen deferral requests out of Europe and the U.S. the way it has in Asia and the Middle East , but that ’ s likely an “ inevitability ” given the spread of the virus and the current facts , CEO Domhnal Slattery said in an interview Wednesday .
He sees a slow recovery over the course of a couple quarters .
The market for widebody jets that ferry large amounts of passengers along international routes was already soft as carriers struggled with the dent to global growth from the U.S.-China trade war @ @ @ @ @ @ @ t seen a commercial order from China in more than two years , has twice rolled back the production rate for its 787 Dreamliner , and there ’ s skepticism about the demand for its 777X jet once that finally enters service in 2021 .
Separately on Wednesday , Bloomberg News reported that Airbus SE is considering a cut in production of its A330Neo widebody jet after the plane ’ s biggest customer – AirAsia X – said it would defer deliveries because of the coronavirus ’ s impact on travel .
This @ @ @ @ @ @ @ February announcement that production of the A330 model would decline to 40 planes in 2020 , compared with 53 last year , with the 2019 rate partly inflated because of delayed deliveries .
The U.S. domestic and inter-European capacity cuts raise the prospect of the narrow-body market getting dragged down , too .
Those jets are the lifeblood of the aerospace industry , and demand for them had remained resilient .
Should that change , there are wide-ranging repercussions for an aerospace supply chain already rocked by the grounding and production halt for @ @ @ @ @ @ @ plane is expected to re-enter service in mid-2020 , assuming no major new regulatory hurdles emerge .
Many airlines are going to look at that fresh capacity and say “ please not now , ” Slattery said .
That raises the prospect of Boeing taking longer than expected to clear out its inventory of parked jets and delaying , or perhaps never reaching , its pre-crisis production pace .
Again , there ’ s so much we still don ’ t know about this virus .
Markets were calmed on Wednesday by a @ @ @ @ @ @ @ to fund the U.S. government ’ s response to the coronavirus .
But if spring breakers start bailing on Florida , it ’ s time to worry .


washingtonpost--2020-01-31--Analysis | A Trader Without Information Is a Dangerous Thing

This creates a problem for investors : With China ’ s real economy practically shut down , they don ’ t know how to trade or position themselves .
That could make things more volatile .
Consider how this is playing out in the hardware supply chain .
Until recently , this sector was a shining star , as investors bet that consumers would rush to buy 5G phones later this year .
The coronavirus outbreak has completely changed the calculus .
In the smartphone-manufacturing provinces of Zhejiang and Guangdong , the government has forced employees to stay home until @ @ @ @ @ @ @ coming ; these two areas are the hardest-hit after Hubei , the epicenter of the virus .
How can smartphone makers and their suppliers fill demand – if there is any – when factories are closed ?
And then there ’ s the trouble of earnings reports .
While the U.S. market is getting propped up by solid corporate profits from the likes of Amazon.com Inc. , we may not see anything out of China for weeks , if not months .
Because of strict travel restrictions , auditors may not be able @ @ @ @ @ @ @ work .
The Hong Kong bourse , which hosts more than 1,000 mainland companies , may have to extend the March 31 deadline for 2019 reports .
That leaves investors only with broad-brush data on the outbreak .
Depending on their mood , those reports can be read as glass half-full or half-empty .
For example , the number of new patients in Hubei has been roughly steady for three consecutive days .
Optimists could see that as evidence of China ’ s bureaucratic machine effectively controlling the disease , while pessimists might @ @ @ @ @ @ @ Diagnosis tool kits are in short supply , so conceivably , thousands of infected people are just waiting to be tested positive .
You might ask why China is willing to open its financial markets so soon , with businesses closed and factories quiet .
To its credit , Beijing has learned a thing or two after the stock rout of 2015 , when it put indefinite trading halts on as many as half of mainland-listed firms .
In a stroke , public markets were practically transformed into a private one .
Not @ @ @ @ @ @ @ it also delayed MSCI Inc. ’ s decision to include A-shares in its well-tracked indexes .
So we ’ re unlikely to see a repeat performance , even if bureaucrats do conduct window guidance now and then to stem a selloff .
Beijing is left with few good options , with a viable vaccine possibly months or even years away .
Still , the government can do more to improve transparency .
It could , for instance , open up its medical-supply database so the public can assess the severity of test-kit shortages @ @ @ @ @ @ @ prove its bureaucratic apparatus works – and a lot more urgently than in 2003 , when the economy was operating at full steam .
Until then , we ’ re left with wild guessing games .


washingtonpost--2020-01-31--Analysis | Exxon Mobil and Chevron Help Fuel Investor Revolt

My colleague Nathaniel Bullard and I wrote last year about how energy ’ s dividend yield had recently reversed a decades-long relationship with that of utilities by rising above it .
On Friday , the spread widened to a record , with energy ’ s yield of 4.3 % now a full 1.5 percentage points higher than utilities .
Short-term factors are at play here , of course ; coronavirus , especially , has pushed money toward perceived havens like utilities and away from oil .
But that is exacerbating an existing revolt as investors have looked at Big Oil @ @ @ @ @ @ @ and demanded more of it back .
Exxon ’ s fourth-quarter results stoked that backlash in spades .
Performance was weak across the board .
Exxon ’ s integrated model took hits on oil and gas prices in the upstream business and weak margins in both refining and chemicals .
Meanwhile , a counter-cyclical investment spree promises great things in areas such as Guyana ’ s offshore discoveries and improvements in refinery performance , but right now it is a cash sink .
Exxon ’ s cash from operations failed to cover capital @ @ @ @ @ @ @ quarter in a row in which the company resorted to asset sales or borrowing to cover its dividend .
The underlying , and continuing problem , is weak returns .
Exxon ’ s return on equity was notably less than its 5.6 % dividend yield — itself the highest since the merger that formed the company two decades ago ; investors have backed away and thereby raised the threshold demanded .
Rival Chevron also had a bad morning , albeit better in key respects .
Return on equity of 7.5 % for the @ @ @ @ @ @ @ it needs to be , but it was still roughly 2 percentage points higher than Exxon ’ s .
Moreover , Chevron covered its capex and about two-thirds of its dividend payment from cash flow .
With this year ’ s capex budget held flat , the company has more flexibility , raising its dividend by 8.4 % .
Throw in $ 5 billion of buybacks , and Chevron ’ s all-in payout yield for 2020 of 7.2 % compares with Exxon ’ s prospective yield of less than 6 % .
Exxon @ @ @ @ @ @ @ program , which used to be its calling card , is a big reason its traditional premium has plunged .
Exxon ’ s price-to-book ratio used to be roughly double that of its peers , but the suspension of buybacks in 2016 coincided with a big relative decline in the multiple placed on its book value by investors .
Exxon would respond that its buybacks are for excess cash and that it is investing in growth assets to generate future returns .
Its problem is that energy investors ’ benefit of the doubt @ @ @ @ @ @ @ so , Exxon retains a premium that is looking ever harder to defend .
It was notable that Chief Executive Officer Darren Woods joined the earnings call Friday .
Yet his demurral in response to a question about the price assumptions the company uses for budgeting — referring the analyst to the company ’ s energy outlook for clues — carried an echo of the old days when Exxon ’ s solid financial performance allowed it to brush off such requests .
Today , with Big Oil ’ s relative position in the @ @ @ @ @ @ @ it feels like a relic of a bygone age .
As former supermajor ConocoPhillips demonstrated a couple of months ago , this is a time to over-deliver — not just cash , but information .
It ’ s the only way to keep investors on board .
Liam Denning is a Bloomberg Opinion columnist covering energy , mining and commodities .
He previously was editor of the Wall Street Journal ’ s Heard on the Street column and wrote for the Financial Times ’ Lex column .
He was also an investment banker @


washingtonpost--2020-01-31--Analysis | Markets Are Ignoring Manufacturers’ Glum Message

“ We expect continued global uncertainty ” in 2020 , Caterpillar CEO Jim Umpleby said in a statement .
That will push demand among end-users of its equipment down as much as 9 % and encourage dealers to continue chipping away at existing inventory stockpiles rather than replenish them .
The company predicted a decline in residential and non-residential construction markets in North America and continued weakness in oil and gas , offset somewhat by a pickup in mining equipment , calls that have wide-reaching implications for much of the industrial sector .
Sales in China may decline as much @ @ @ @ @ @ @ Andrew Bonfield told Bloomberg News .
Honeywell ’ s earnings guidance was in line with analysts ’ estimates , but the range was fairly wide for the company , with a 40-cent swing between the best and worst case .
Honeywell is “ remaining cautious ” on the macroeconomic outlook and the risks to its businesses that are among the first to reflect changes in activity .
It warned sales may be flat in 2020 after backing out the impact of M & A and currency swings .
Honeywell has a history of @ @ @ @ @ @ @ heard comments like this from a variety of industrial CEOs over the past few weeks , including CSX Corp. ’ s Jim Foote , W.W. Grainger Inc. ’ s DG Macpherson , DuPont de Nemours Inc. ’ s Marc Doyle and 3M Co. ’ s Mike Roman .
Most are expecting the growth environment to remain lackluster – and for some markets , to get a bit worse – in the first half of the year before improving in the back end .
But for many companies , that “ improvement ” has @ @ @ @ @ @ @ any true demand spike .
We ’ ve also seen this movie before , and forecasts for a back-end-weighted recovery rarely play out as hoped .
Heading into the year , CEOs listed the risk of a recession as their top concern for 2020 , according to a global Conference Board survey .
While the trade deal improved sentiment , corporate profits need to pick back up to drive increased spending , note Bloomberg Economists Andrew Husby and Yelena Shulyatyeva .
There are a variety of complicating factors on the horizon , including @ @ @ @ @ @ @ ramifications of the burgeoning coronavirus epidemic .
And don ’ t forget , U.S. tariffs remain in place on some $ 360 billion of Chinese goods .
For now , business investment remains muted , with orders for non-military equipment falling 0.9 % in December , excluding aircraft , according to data from the Commerce Department released this week .
Arguably , one benefit of elevated stock prices is that buybacks are untenable and that may drive more CEOs to put their money to work on capital investments once the uncertainty clears .
@ @ @ @ @ @ @ back a minimum of 1 % of its shares and spending as much much as $ 150 million on capital expenditures in 2020 .
But for industrial companies as a group , earnings gains appear to rely more heavily on continued cost-cutting and productivity improvements rather than true fundamental growth .
Caterpillar , which is currently predicting a second straight year-over-year decline in profit , said Friday it has a $ 200 million placeholder for strategic restructuring and is “ prepared to respond quickly to any positive or negative changes in customer demand.
@ @ @ @ @ @ @ increase in below-the-line benefits and earnings adjustments , even at the typically clean Honeywell .
Below-the-line items are expected to be as much as a $ 250 million benefit in 2020 , compared with a $ 57 million drag in 2019 , the company said .
This impacts perceived quality , notes Gordon Haskett analyst John Inch .
And yet investors seem only mildly concerned .
After initially sliding as much as 3.2 % , Caterpillar shares were at times little changed and were down only about 1.5 % as of mid-morning .
@ @ @ @ @ @ @ stock was down about 2 % , but it ’ s still within spitting distance of an all-time high hit earlier this month .
Investors may have the luxury of being more optimistic than CEOs , but I ’ d listen to the guys who have to make the actual decisions when it comes to hiring and spending .
And those guys ( yes , they ’ re all men ) are still waving the yellow flag of caution .


washingtonpost--2020-01-31--Analysis | What You Need to Know About China’s Virus Outbreak

It has been described as “ insidious ” because a large portion of infected people are well enough to go about their daily business , potentially spreading it to others .
In just two months , the number of confirmed cases surpassed the 8,096 SARS cases recorded in that entire epidemic , which ran more than a year .
Most cases of the new virus have been in Wuhan and surrounding Hubei province .
Around a fifth overall have been severe , and many people have died .
As of late January the mortality rate was about 2 % , @ @ @ @ @ @ @ in the early stages of an outbreak .
It ’ s likely the virus has caused only mild or no symptoms in a large number of people .
Coronaviruses are named for their crown-like shape .
There ’ s a large family of them .
Some transmit easily from person to person , while others do not .
There ’ s growing recognition of the role of coronaviruses in severe cases of pneumonia .
The World Health Organization says that new coronaviruses emerge periodically in different areas globally , and several known versions @ @ @ @ @ @ @ t infected humans .
They tend to morph and mutate , which means the level of risk they pose can change the longer they circulate in a humans .
Diseases transmissible from animals to humans , sometimes referred to as “ zoonoses , ” comprise a large percentage of all newly identified infectious diseases .
Various studies have found that 2019-nCov is at least 70 % similar in its genetic makeup to the SARS virus but “ appears clinically milder ” in terms of severity and fatality rate .
With SARS , about @ @ @ @ @ @ @ A related virus , known as MERS-CoV , that ’ s been spreading since 2012 , has led to death in 34 % of the 2,499 cases reported .
By contrast , an estimated 50 million people died in the 1918 influenza pandemic that had a case-fatality ratio of less than 5 % , but infected up to a third of the world ’ s population .
Most likely by coming into contact with virus-containing droplets that could be emitted by an infected person ’ s cough and transferred to their hands or @ @ @ @ @ @ @ a theoretical risk that it could spread through fine aerosol particles and feces .
Chinese authorities have said it ’ s possible people who are still incubating the virus and show no symptoms may spread it .
One such case emerged in Germany linked to a company training event that was attended by an employee visiting from China who had no symptoms of disease during her stay .
There have been cases reported where the virus has spread along a four-person chain , indicating that it ’ s more transmissible than earlier thought @ @ @ @ @ @ @ estimating the number of new cases a person who is infected is likely to generate .
That measurement , called a basic reproduction number , is one indicator of how difficult an epidemic is to control .
The preliminary reproduction number of 2019-nCoV is 1.4 to 2.5 , according to the WHO , meaning that every case could infect 1.4 to 2.5 people .
( For comparison ’ s sake , the reproduction number of SARS was 2.76 in Beijing and 3.01 in Guangzhou . )
Neil Ferguson , renowned for his work @ @ @ @ @ @ @ , and his colleagues at Imperial College London estimated the number for 2019-nCoV to be 2.6 , making it similar to SARS and more infectious than flu .
If that ’ s correct , controlling the outbreak would require preventing at least 60 % of cases from spreading to another person .
Another group from the Chinese Academy of Sciences in Beijing estimated the number to be 4.08 .
Infections appear to cause a mild illness in children , adolescents and younger adults , and more severe disease in older people .
Frequently @ @ @ @ @ @ @ cough and tiredness -- but not the sneezing and runny nose typical of a cold .
Studies suggest the virus invades cells in the lower respiratory tract and migrates from there to the lungs , causing difficulty breathing and the inflammation and congestion associated with pneumonia .
In an early study , more than a quarter of hospitalized patients developed a potentially fatal complication known as acute respiratory distress syndrome .
Septic shock , respiratory failure and the failure of other organs have also been noted in severe cases .
Fatalities have mostly @ @ @ @ @ @ @ , many of whom have had chronic illnesses , such as cardiovascular disease or diabetes .
Wuhan , where the virus emerged in early December , is an industrial city of 11 million .
Early attention focused on a seafood market where live animals were also sold , but about 13 of the first 41 cases were found to have no link to it .
Maria Van Kerkhove , head of the Outbreak Investigation Task Force at the Institut Pasteur and an adviser to the WHO , said animal tests at the market @ @ @ @ @ @ @ samples were positive .
The viral genome has been sequenced , and these results in conjunction with other reports show that 2019-nCoV is 75 % to 80 % identical to SARS-CoV and even more closely related to several coronaviruses found in bats .
There is always concern when a new pathogen emerges in people because they typically lack immunity to it and there usually aren ’ t specific treatments or vaccines available .
Novel coronaviruses , those not seen in humans before , represent a particular concern because they have been known to @ @ @ @ @ @ @ of people , like SARS did as it swept across the globe from southern China .
The SARS outbreak that began in late 2002 in Guangdong province is thought to have spread indirectly from bats to humans via masked palm civets and other species in live-animal markets .
The WHO issued a global health alert in March 2003 and didn ’ t declare the outbreak contained until that July .
China ’ s tourism , transportation and retail sectors were heavily hit as people stayed home ; domestic consumption fell sharply , as @ @ @ @ @ @ @ .
The epidemic subtracted an estimated 0.8 percentage point from gross domestic product growth in China in 2003 , according to a China Daily report that cited a National Bureau of Statistics official .
A 2003 academic study estimated the global economic cost at close to $ 40 billion or more .
The U.S. State Department advised people not to travel to China and said those already in the country should consider leaving .
Richard Horton , editor of The Lancet medical journal , said the outbreak could strain the capacity of health @ @ @ @ @ @ @ the first 41 hospitalized patients in China found 13 ( 32 % ) needed intensive care ; four required invasive mechanical ventilation and two were put on a heart-lung bypass machine in a last-ditch effort to keep them alive .
Six died .
Across Hubei , thousands of people have been hospitalized in isolation wards and hundreds are being treated in intensive care units , creating what officials there have described as an “ extreme , severe and abrupt public health crisis.
” The WHO has declared the outbreak a global health emergency @ @ @ @ @ @ @ international responses , provide more resources and focus government attention .
China ’ s government imposed aquarantine on Wuhan and more than a dozen other cities in the region , a travel ban covering in excess of 50 million people .
Authorities dispatched medical personnel from the military to help out at hospitals .
Patients were isolated to prevent any spread .
Health officials are looking for , screening and monitoring people the patients had contact with .
Hong Kong , the international financial center that functions with some autonomy from China , @ @ @ @ @ @ @ Outside China , airports began screening some arriving passengers for symptoms .
Doctors in China have started using a combination of AbbVie Inc. ’ s HIV drugs ritonavir and lopinavir at hospitals .
A clinical trial is assessing whether the combination , sold under the brand name Kaletra , is more effective in treating patients than an antiviral medicine known as interferon-alpha 2b .
Other medications , including some already on the market for fighting HIV and preventing organ rejection , show promise in lab studies against a number of coronaviruses .
Pharmaceutical @ @ @ @ @ @ @ say they have begun work on a potential vaccine .
Health officials say a version might be available for the first stages of human testing in as little as three months .
But developing an effective vaccine generally takes years .


washingtonpost--2020-03-03--How the ECB Can Fight the Coronavirus Crisis

Philip Lane , the ECB ’ s chief economist , had initially assumed that the impact of Covid-19 on the currency area would probably be “ V-shaped.
” That forecast is looking optimistic .
The epidemic has hit Europe hard : Italy has recorded more than 2,000 cases and numbers are climbing in France and Germany .
The OECD expects the euro area to expand by just 0.8 % this year , down from 1.2 % in 2019 — and that ’ s in a relatively benign scenario .
A sudden shock risks hitting small and medium enterprises especially hard @ @ @ @ @ @ @ .
A turbulent week in the stock market had already prompted the U.S. Federal Reserve , the Bank of Japan and the Bank of England to say that they stood ready to intervene if needed .
The ECB ’ s response was initially less vocal .
Lagarde told the Financial Times last week that she was monitoring the outbreak “ very carefully , ” but that the situation wasn ’ t yet at a point where it would have an impact on inflation .
The sudden change of tone on Monday night won @ @ @ @ @ @ @ as a decisive fire-fighter , but it ’ s good she changed her mind .
The economic shock from the coronavirus outbreak is certainly hard to assess .
We don ’ t know know how long the epidemic will last , and whether it will cause more damage to global demand or to supply ; this would have very different implications in terms of the inflation impact and a suitable policy response .
It ’ s possible too that the ECB wants national governments to announce their budgetary response before it acts .
@ @ @ @ @ @ @ Germany have failed to use their large fiscal capacity to support the euro area and have placed an enormous burden on the central bank .
Lagarde might well be acting strategically .
However , the ECB needs to be careful that it doesn ’ t get back its old crisis-era reputation as the major central bank that ’ s least willing to act .
Policymakers in Frankfurt didn ’ t launch a scheme of quantitative easing until 2015 , several years after the BoJ , the BOE and the Fed .
Making the @ @ @ @ @ @ @ central achievements of Mario Draghi , Lagarde ’ s predecessor .
If the situation worsens , the ECB should spell out what it can do to help the euro zone economy .
Three tools appear particularly useful .
First , it could launch new rounds of targeted refinancing operations for banks , aimed at keeping liquidity flowing to small- and medium-sized enterprises .
This would make sure that businesses don ’ t die simply because of credit constraints .
The use of the word “ targeted ” in Monday ’ s statement suggests @ @ @ @ @ @ @ of defense .
Second , Lagarde could cut interest rates further .
This would help devalue the euro , which has appreciated recently , further punishing the region ’ s exporters .
Third , in extremis , it could increase the pace of its asset purchase program .
This would create additional space for a fiscal response from governments , especially in the more fragile countries .
For now , interest rates remain very low , but in Italy they ’ ve been climbing over fears that a sharp slowdown would add to @ @ @ @ @ @ @ .
The ECB may be right in its cautious choice of words .
It ’ s possible that investors have made yet another display of irrational behavior .
Maybe economies in the euro zone will rebound relatively quickly .
For once , the fiscal response from government could prove timely and effective .
Ferdinando Giugliano writes columns on European economics for Bloomberg Opinion .
He is also an economics columnist for La Repubblica and was a member of the editorial board of the Financial Times .


washingtonpost--2020-03-03--Analysis | Financial Traders Are Getting Their Coronavirus Test

Grappling with an outbreak that could become a global pandemic is adding unprecedented complexity to the day-to-day running of banking institutions that are vital to facilitating the exchange of financial assets .
Banks everywhere have been testing the ability of their traders to work at specially designated offshoot offices away from city centers , or from home .
But with governments talking about more possible lockdowns , this may soon become essential .
The breaking up of hubs to shield traders from the virus would be a huge test of the operational resilience of an industry that accounts for at @ @ @ @ @ @ @ banks ’ revenues .
Trading depends on access to cutting-edge technology , demands tight regulatory oversight and thrives on the physical proximity of staff .
Regulators will also have to decide how far they ’ re willing to soften controls — by allowing people to trade from home or elsewhere — to ensure the uninterrupted functioning of markets .
A serious pandemic would give trading risk a fresh dimension .
Calamities such as the 9/11 terrorist attacks on New York have already prompted securities firms to plan for anything from wars , to @ @ @ @ @ @ @ activities .
But a pandemic is different , given its global nature : Banks have suddenly found themselves having to think about reorganizing businesses on two continents .
Shanghai , Hong Kong and Seoul have been at the forefront of these deliberations , with Milan joining them last week .
London and New York could follow , with cases emerging in the financial system ’ s two most important centers .
This isn ’ t to say that pandemic planning has been ignored .
In the U.S. , the Federal Financial Institutions Examination @ @ @ @ @ @ @ plans for more than a decade .
For the past couple of weeks , some big banks have been rotating teams of trading staff to work remotely to make sure the systems and checks are robust .
But this hasn ’ t been a full real-world test yet .
Even if banks can move staff to different venues , away from virus hot spots , to handle transactions typically executed under one roof , they might not be able to process the same volume of deals .
Firms may have just one or @ @ @ @ @ @ @ their main operations .
Currency and equity trading rely heavily on electronic execution , which needs state-of-the art communications .
Working from home would be harder still .
Access to office trading platforms via virtual private networks requires ultra-reliable , high-speed internet connections and cyber-security resilience .
Then there ’ s the issue of controls and compliance .
While bankers advising on mergers or fund-raisings can liaise with clients from remote locations , traders operate under strict oversight .
Their phone calls are taped in the event of any mistakes , and their @ @ @ @ @ @ @ be a point beyond which firms ’ compliance authorities may constrain their ability to break up groups .
Some European banks are already in talks with regulators to allow traders to work from home , according to the Financial Times .
In Hong Kong , the Securities & Futures Commission has invited firms to speak up should they have operational difficulties .
“ There are regulatory oversight challenges associated with working from remote locations , ” the Association for Financial Markets in Europe , an industry body , said by email .
Regulators @ @ @ @ @ @ @ on confidence and liquidity that shutting down parts of the market would have if traders were out of commission , versus the risk of letting banks ease up on their surveillance .
The market-rigging scandals that embroiled firms and the multi-billion dollar losses of rogue traders at Societe Generale SA and UBS Group AG will be fresh in supervisors ’ minds .
There ’ s a good reason why traders rub shoulders in large , open-plan offices where information flow helps avoid mistakes and behavior is monitored .
It could well be that @ @ @ @ @ @ @ , and that trading can continue largely unaffected .
In China , equity and debt markets haven ’ t been affected much by remote working .
But the splintering of traders will increase costs and vulnerabilities .