washingtonpost--2020-03-11--British Firms Imperilled by Virus Look to Budget for Help

“ If we lock down schools , companies should be subsidized to support their staff to look after their children , ” he said .
“ We can ’ t afford a situation where we ’ re paying for our staff to not come to work for a month .
That ’ s beyond what is reasonable.
” For many businesses , the government ’ s budget on Wednesday holds the keys to their survival , whether that be relief from business rates , short-term financing aid or emergency childcare support .
Less than a month into the job , @ @ @ @ @ @ @ had to rapidly pivot from delivering Johnson ’ s victorious electoral manifesto to fighting a global pandemic which has shut down countries and infected over 110,000 people .
“ If we can ’ t sell bikes we ’ re going to have to adjust our plans , our capital investment , everything , ” said Butler-Adams .
He ’ s preparing a ‘ Plan B ’ for a worst-case scenario , which will see the company cancel moves to open stores in San Francisco and Paris and hire an additional 50 people.The global @ @ @ @ @ @ @ the U.K. by disrupting supply chains and encouraging both customers and employees to stay at home .
Across Europe countries are stepping up precautions : Italy has restricted travel out of the country , Ireland has scrapped its St. Patrick Day ’ s celebrations and schools have closed in Madrid .
In comparison , the U.K. ’ s response has been muted , with Johnson urging the public largely to continue as usual and wash their hands .
That could be set to change soon , as Chief Medical Officer Chris Whitty said @ @ @ @ @ @ @ might be asked to start self-isolating in the next two weeks .
“ Clearly the Chancellor will need to ready measures at Wednesday ’ s Budget aimed at supporting small firms and the self-employed should the situation escalate , ” said Mike Cherry , national chairman of the Federation of Small Businesses .
“ Targeted interventions for small firms involved in international supply chains that are struggling with cashflow will probably be needed very soon , ” he said .
Global markets sounded the alarm on Monday when Saudi Arabia and Russia shattered @ @ @ @ @ @ @ the bottom on oil prices .
Later that same day , the Italian premier effectively shut down national borders .
European equities cratered and Wall Street trading was temporarily suspended to keep the stock market from collapsing .
In the heart of the City of London ’ s financial center , Shamim Rahman wondered where all his customers had gone .
Opening his Curry Leaf restaurant at midday , he waited for City workers who usually streamed in for lunch .
But they never arrived .
“ I had 30 customers -- that @ @ @ @ @ @ @ 100 customers .
If I don ’ t get at least 70 every day for the next week , I ’ ll be in trouble.
” By the evening , when some were already calling the day ‘ Black Monday , ’ the price of Rahman ’ s food stock had already gone up .
“ I ’ ve been in the business since 1986 , we ’ ve seen ups and downs with recessions , ” said Rahman .
“ But nothing that ’ s affected us this much.
” During the @ @ @ @ @ @ @ the government ’ s decision to cut Value Added Tax as one of the measures which saved his restaurant .
Since then , in the last three years he ’ s seen his business rates double .
“ The main way the government can help us is to reduce those rates , ” he said .
Sunak has vowed to small firms that the budget will support them through the worst of the crisis .
Potential gifts to businesses including expanding discounts on business rates to small retailers , and making it easier @ @ @ @ @ @ @ to access financing .
Brexit , the dominant concern for British business in recent years , has unexpectedly saved the day for several companies , who stockpiled orders in expectation of friction following the U.K. ’ s departure from the European Union .
Brompton ’ s Butler-Adams invested one million pounds in such supplies , which have helped him weather the storm from the coronavirus .
Yet he ’ d far rather see lingering Brexit uncertainty than what he faces now .
For fitness nutrition company Bio-Synergy , it ’ s a problem @ @ @ @ @ @ @ customers in Asia have “ effectively got all orders on hold ” for the quarter , said founder Daniel Herman .
The same has happened in Italy , and he fears the trend may replicate across Europe as the virus spreads , crushing consumer demand and upping small businesses need for government support .
“ People are just not going out , not going to the gym and are concerned about catching it , ” he said in an interview .
“ If there were some kind of short-term support , low interest @ @ @ @ @ @ @ starts flowing again , that would be helpful.
” The Federation of Small Businesses has a list of demands for the government to help , including temporaily cutting VAT and following Japan ’ s example by making interest-free loans available to small firms.With 373 cases and six deaths in the U.K. by the latest count , businesses are aware that they haven ’ t yet seen the worst.
“ It ’ s a big problem for us , huge : we need government support , ” said David Keyte , founder of Universal @ @ @ @ @ @ @ suede jackets and cardigans , with 38 stockists in Italy .
“ Fear is gripping everything right now .
”


washingtonpost--2020-03-11--Hotels in U.S. Take Severe Beating With Virus Hitting Travel

Those fears have only increased in recent days as the number of virus cases increase across the U.S. , further crimping demand for travel as companies hunker down and spring break travel plans get canceled .
Room revenue has been particularly bad in markets that cater to international travelers .
RevPar was down 46 % in San Francisco , 35 % in Seattle and 20 % in New York , according to STR data cited in a note from Robert W. Baird & Co. “ If you look at 9/11 or the Great Recession , we didn ’ t come @ @ @ @ @ @ @ re getting from this one , ” said Vijay Dandapani , chief executive officer of the Hotel Association of New York City .
“ It ’ s like a triple punch to the gut.
” Earlier this week , President Trump included the hotel industry among the businesses that would be included in a potential stimulus package designed to stunt the negative effects of the outbreak on the U.S. economy.Hotel companies , from Hilton Worldwide Holdings Inc. to Host Hotels & Resorts Inc. , have withdrawn financial forecasts .
Owners and operators are @ @ @ @ @ @ @ groups seek to reassure Americans that it ’ s still safe to travel , while also lobbying the federal government for support .
Meanwhile , things are still getting worse .
Over the last few days , there ’ s been a sharp increase in the number of families asking about canceling spring break vacations , said Jack Ezon , managing partner of luxury travel agency Embark Beyond.
“ One hundred percent of them are at least thinking about it , ” he said .
On March 10 , a group of 150 @ @ @ @ @ @ @ Hotel & Lodging Association and the U.S. Travel Association , published a letter arguing that it ’ s still safe for most Americans to travel .
“ While no one knows exactly how long this this public health situation will last , what we do know is that the impact to our industry is already significant , ” said Brian Crawford , executive vice president of government affairs executive at AHLA .
“ We are asking the White House and Treasury to take immediate action to give small business owners access to capital @ @ @ @ @ @ @ comes at the end of a long growth cycle for the hotel industry .
Even with occupancy near record levels , new hotel openings and greater price transparency from online travel agencies had made it hard to increase rates .
Hotel companies have relaxed cancellation policies as the coronavirus spreads , especially for trips to and from countries where governments have restricted travel .
Marriott International Inc. has waived all cancellation fees for travel to or from more than 20 countries affected by the virus , mostly in the Asia-Pacific region .
The @ @ @ @ @ @ @ so that members who live in China don ’ t lose perks because they have been unable to travel enough to earn status.At hotel properties , the challenges are mounting .
Managers are reducing costs by cutting amenities like executive lounges and room service , said Chad Crandell , CEO at asset manager CHMWarnick , which has more than 29,000 hotel rooms in its portfolio .
Owners will also likely reduce labor costs by freezing new hires , limiting overtime , and letting go of part-time staff .

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washingtonpost--2020-03-11--China Policy, Trump Response, Australia Fiscal Stimulus: Eco Day

• President Donald Trump is expected to take a series of executive actions to deliver economic relief from the coronavirus , including paid sick leave for hourly workers and extending tax-filing deadlines for small businesses .
House Speaker Nancy Pelosi meanwhile is pressing ahead with plans to vote on a response .
The Fed is ramping up cash injections to as much as $ 505 billion in a bid to keep short-term financing markets functioning through quarter-end • Australia is planning a multi billion-dollar fiscal stimulus plan to buttress the economy from the coronavirus outbreak that threatens to tip the @ @ @ @ @ @ @ • The battle for control of the global oil market intensified again on Wednesday as Saudi Arabia promised to increase production capacity and the U.A.E .
said it plans to pump as much as possible next month • Christine Lagarde will bid to prevent the coronavirus outbreak from sparking a repeat of the 2008 financial turmoil when the ECB unveils its monetary response at today ’ s meeting .
Europe is starting to show resolve led by its 2008 crisis veterans • The U.K. pledged a 30 billion pound emergency boost to spending @ @ @ @ @ @ @ to protect the economy , joining the BOE that cut rates in an emergency announcement • There ’ s growing expectation that Taiwan ’ s central bank will join the wave of emergency rate cuts from global central banks , putting end to its on-hold stance of fourteen straight quarters • Prime Minister Giuseppe Conte deepened the Italian government ’ s intervention , ordering all shops to close except for grocery stores and pharmacies • The coronavirus is now a pandemic , the WHO declared , urging governments to step up containment efforts @ @ @ @ @ @ @ exceeded 4,300 • Nearly 75 % of U.S. companies have experienced supply chain disruptions because of virus-related transportation restrictions • Organizers of the Tokyo Olympics reiterated that the games are going forward on schedule following a report that one official plans to propose delaying the event because of the coronavirus • The virus battering small businesses in South Korea , which has one of the world ’ s highest ratios of self-employed workers within its labor force


washingtonpost--2020-03-11--Analysis | The Bear Is Back With Less Regard for Sentiment

It ’ s the second longest stretch between bear sightings on record .
The S & P 500 last entered bear territory on July 7 , 2008 , after a 20 % drop from its pre-financial crisis peak on Oct. 9 , 2007 .
Only the period between the 1987 crash and the burst of the dot-com bubble in 2000 was longer , by just a handful of weeks .
The market is no stranger to the bear , but as others will undoubtedly point out , a lot has changed since the last one .
The explosion of financial @ @ @ @ @ @ @ of Americans access to markets for the first time , many of them Millennials and members of Generation Z who have never navigated a severe downturn .
And there ’ s social media , which gives everyone a platform to express their angst and circulate scary charts .
The prospect of millions of inexperienced investors triggered by hyperconnectivity-induced panic sounds like the making of a market crash .
And for some , it may conveniently explain the speed of stocks ’ recent descent .
During the previous bear market , it took 186 @ @ @ @ @ @ @ 500 to decline 20 % from its peak .
This time it took just 15 .
But the real threat to markets isn ’ t individual investors — it ’ s companies themselves .
In fact , investors have been shockingly resilient since the market began to tumble from its peak on Feb. 19 .
My Bloomberg Intelligence colleague Eric Balchunas compiles asset flows for exchange-traded funds typically used by traders and asset allocators for exposure to stocks and high-yield bonds .
The idea is that traders are regularly in and out of @ @ @ @ @ @ @ the highest liquidity , whereas allocators tend to be buy-and-hold investors , so they value ETFs with the lowest fees .
The numbers show that traders have been in and out of markets as expected .
But amazingly , the basket of ETFs favored by allocators experienced net inflows every week since the sell-off began , including Monday , when the S & P 500 slid nearly 8 % .
And this isn ’ t the first time .
There have been four corrections , or market declines of more than 10 % @ @ @ @ @ @ @ .
In every case , the basket of ETFs favored by allocators experienced net inflows .
So ordinary investors don ’ t appear to be pushing the market lower .
A better explanation is that other participants such as traders and money managers are trying to anticipate the impact that coronavirus — and possibly other threats such as the escalating oil-price dispute between Saudi Arabia and Russia — will have on corporate earnings .
And for good reason .
The just-ended bull market was propelled by earnings growth , not by investors piling @ @ @ @ @ @ @ the total return generated by the S & P 500 during the last decade can be attributed to higher profits , while valuation expansion , or the willingness of investors to pay more for stocks , contributed just 6 % .
These days , in other words , as earnings go , so goes the market .
Just how vulnerable are earnings ?
Even analysts , who are famously reluctant to cut estimates , have been forced to trim their expectations for S & P 500 earnings by 1.6 % for 2020 , @ @ @ @ @ @ @ But the market appears to be signaling a deeper cut .
One way to gauge how deep is by holding valuation constant and teasing out what lower stock prices imply about the expected level of earnings .
For example , the S & P 500 traded at a forward price-to-earnings ratio of 19.5 at its peak on Feb. 19 .
Based on that multiple and the index ’ s intraday low of 2,707 on Wednesday , earnings per share dip to $ 139 , or roughly 10 % lower than the S & @ @ @ @ @ @ @ of $ 152 .
Of course , if the coronavirus outbreak proves to be worse than feared — keeping workers , consumers and revelers at home for an extended period — earnings will almost certainly fare worse .
This is where a further adjustment may be prudent , such as the one used in the cyclically adjusted price-to-earnings , or CAPE , ratio .
The CAPE calculates the average of inflation-adjusted earnings over the previous 10 years , which often results in an earnings number that more closely approximates long-term earnings growth and @ @ @ @ @ @ @ earnings are too optimistic .
By that measure , the earnings target is probably closer to $ 116 , according to Bloomberg data .
And again , assuming investors are content to pay 19.5 times for U.S. stocks , that implies a price of 2,262 for the S & P 500 , or an additional 18 % decline from Wednesday ’ s closing price .
The magnitude of this bear market won ’ t be determined by how investors feel but by how companies perform .
Every downturn has an epitaph , and @ @ @ @ @ @ @ “ Thrive by earnings , wither by earnings .
”


washingtonpost--2020-03-11--Analysis | Coronavirus Stock Sell-Off Isn’t a Repeat of 2008

With renewed fears that the coronavirus will spark an economic shock echoing the global financial crisis without urgent action , as European Central Bank President Christine Lagarde warned late Tuesday , it ’ s worth pointing out again that this is not 2008 .
What made 2008 so devastating for investors was not the financial crisis per se but that they had chased stock prices to excessive levels in the years leading up to the crisis , ignoring that exogenous shocks come along with surprising frequency to bring stock prices back to earth .
There are few signs of that @ @ @ @ @ @ @ the U.S. in regions such as Europe , developed Asia and much of the developing world .
In many of those places , investors haven ’ t stopped fretting since 2008 .
My preferred gauge for stock valuations is the cyclically adjusted price-to-earnings , or CAPE , ratio because it accounts for both the growth of earnings and stock prices .
Consider this : At the peak of the global stock market before the financial crisis in October 2007 , the CAPE ratio for the MSCI World ex USA Index , a basket @ @ @ @ @ @ @ the U.S. , was 26 , according to Bloomberg data .
Today that ratio is 16 , or nearly 40 % lower .
The difference in emerging markets is even starker .
The CAPE ratio for the MSCI Emerging Markets Index peaked at 29 before the financial crisis .
Today it ’ s at 15 , or nearly half as expensive .
The U.S. is a mixed bag , as some segments , such as growth stocks in the technology , communications and health-care sectors , have been hugely successful since the financial @ @ @ @ @ @ @ ratio for the Russell 1000 Growth Index is more than 20 % higher than it was before the crisis — 38 compared with 31 in October 2007 .
U.S. value stocks , on the other hand , have mostly languished along with the rest of the world .
The CAPE ratio for the Russell 1000 Value Index was 19 in October 2007 .
Today it ’ s 16 , a haircut of roughly 15 % .
Many investors , particularly those in the U.S. , probably don ’ t need reminding .
They @ @ @ @ @ @ @ stocks struggle to rise for more than a decade as numerous concerns along the way have prevented their rise .
But here ’ s the flip side : If the coronavirus does spark a broader crisis , the predictable repricing of stocks now underway is likely to be far less severe than it was in 2008 .
The valuation of emerging-market stocks , for example , would need to contract by 22 % to reach the financial crisis low .
Granted , that ’ s no picnic , but it ’ s a @ @ @ @ @ @ @ from peak to trough during the crisis .
The same is true , to a lesser degree , about U.S. value stocks and those in developed countries outside the U.S .
The notable exception is U.S. growth stocks .
Their valuation would have to contract by 62 % to reach the financial crisis low , or 8 percentage points more than their peak to trough contraction during the crisis .
Even so , looking at global stocks as a whole , investors are far more sober today than they were in the years @ @ @ @ @ @ @ which also means there ’ s less room for disappointment .
Nir Kaissar is a Bloomberg Opinion columnist covering the markets .
He is the founder of Unison Advisors , an asset management firm .
He has worked as a lawyer at Sullivan & Cromwell and a consultant at Ernst & Young .


washingtonpost--2020-03-27--The U.S. Needs Social Insurance More Than Stimulus

This has ethical as well as economic implications .
It ’ s not enough simply to ask whether the stimulus is the right size for macroeconomic purposes .
Any policy should take special care to protect this growing army of public servants .
Commentators are calling the enormous coronavirus-relief bill that finally passed the Senate this week a stimulus package .
Headlines focus on the price tag , a little over $ 2 trillion , and there is already talk that it isn ’ t big enough to fill the hole in demand caused by the pandemic .
But this @ @ @ @ @ @ @ to judge the plan .
Ordinary recessions are demand-driven .
In 2008 , financial distress pushed spending below the economy ’ s capacity to produce , resulting in lower output and higher unemployment .
The answer was to stimulate demand .
It still wasn ’ t straightforward , because the usual way of expanding demand ( lower interest rates ) ran out of road .
But the goal wasn ’ t disputed .
You needed stimulus .
This time is different .
The goal shouldn ’ t be to hold demand to the @ @ @ @ @ @ @ began .
That would be self-contradictory — and , remote as this possibility might seem at the moment , there ’ s a danger in trying too hard .
If too much demand meets a persistent , deliberately engineered collapse in supply , it would result in higher inflation , not full employment .
To be sure , stimulus still matters .
Over the coming weeks and months , demand is likely to fall by more than the output sacrificed to fight the pandemic , so there ’ ll be a gap to @ @ @ @ @ @ @ public health has lifted , the economy might require a further shot of demand .
Right now , though , delivering broad-based support for demand isn ’ t the first order of business .
The main thing is to throttle the economy judiciously while supporting as fully and quickly as possible those who are being sacrificed to this policy .
Whatever this platinum-level social insurance costs is what America should commit to spend .
Depending on how events unfold , the outlays might amount to a smaller macroeconomic stimulus than the economy turns @ @ @ @ @ @ @ add other kinds of stimulus .
If they ’ re more than the economy needs in macroeconomic terms , raise taxes to spread the burden fairly .
In these extraordinary circumstances , the commitment to protect takes precedence over any calculation of the correctly sized fiscal stimulus .
Judged this way — not just by magnitude — the Senate ’ s plan gets only a passing grade .
It provides some of what ’ s required .
Among the plan ’ s many components is a $ 350 billion loan program for small @ @ @ @ @ @ @ loans can become grants if the businesses maintain the same number of employees and pay them at least 75 percent of their pre-pandemic wages .
It includes a temporary $ 600 weekly increase in unemployment benefits , with help extended to the self-employed and contract workers .
And the bill provides one-off payments of $ 1,200 per person ( plus $ 500 per child ) that phase out for incomes between $ 75,000 and $ 99,000 .
In principle , the forgivable-loan plan could keep a lot of people on the payroll .
@ @ @ @ @ @ @ and is much bigger than anything the Small Business Administration has ever managed .
The boost to unemployment benefits will dramatically narrow the gap between income from working and unemployment .
In some cases , workers will briefly be better off unemployed than they were while working ; that ’ s the price of rolling out help as quickly as possible .
But the plan is blunt and too short-term .
The one-off payments should be relatively quick and easy to deliver , but they ’ re more about supporting overall demand than @ @ @ @ @ @ @ .
A more comprehensive strategy — committing the federal government to pay the wages and health-care costs of most laid-off , furloughed and short-time workers for the duration of the crisis — would better serve the principle of social insurance .
Developing such a plan won ’ t be easy , but it should be a top priority .
The main obstacle is the one that caused the Senate plan to fall short : Existing programs for the workers hit hardest by this emergency are divided in complicated ways between the federal government @ @ @ @ @ @ @ has its own policies in place .
The entity with effectively unlimited fiscal resources stands at arm ’ s length from the level of government that identifies and administers the needed relief .
This divide also exists in other policy areas , of course , such as infrastructure or health care .
But the pandemic — and the state-against-state competition to acquire testing materials and personal protective equipment — has thrown it into stark relief .
The fundamental mismatch between what states are tasked to do and the resources available to them has @ @ @ @ @ @ @ is , among other things , a stress test of the federalist principles that govern America .
How they will fare remains to be seen .
In the meantime , help for America ’ s public servants should come first .


washingtonpost--2020-03-27--Analysis | What Wuhan Can Teach New York

It may be tempting to compare this chaos with Wuhan ’ s draconian , but apparently effective , response .
Two months after locking down the city ’ s 11 million residents , China declared victory over the coronavirus this week , saying ground zero of the pandemic will reopen for business by April 9 .
( President Donald Trump would have liked this Easter deadline . )
Despite a staggering 50,006 cases and 2,531 deaths , Wuhan ’ s numbers have stabilized .
Meanwhile the U.S. has just overtaken China for the most cases worldwide .
Behind China ’ @ @ @ @ @ @ @ sprawling bureaucracy that needs constant plumbing .
Local officials often misread President Xi Jinping ’ s priorities , while jostling each other for power and chiding underlings who dare break rank .
Just like the animals in H.G .
Wells ’ s “ Island of Doctor Moreau , ” these characters need to be operated on every few days , or they quickly morph back into their primitive forms .
New York isn ’ t the only place struggling to get surgical masks and testing kits .
To preserve protective gear , medical @ @ @ @ @ @ @ and avoid bathroom breaks so they didn ’ t have to change .
Yet Hubei province , where Wuhan is the capital , of all places shouldn ’ t be this short of supplies .
Xiantao , another provincial city , is a major manufacturing hub for the non-woven products used in surgical masks .
But local officials told factories there that unless their goods had been cleared for sales within China — many only made masks for export — they couldn ’ t reopen .
Xiantao officials were more concerned about limiting @ @ @ @ @ @ @ a helping hand to Wuhan .
Eventually , Beijing had to intervene .
Then consider testing kits .
Until Jan. 19 , weeks after the first signs of an outbreak , Hubei still couldn ’ t conduct any of its own tests .
Officials sent patients ’ samples all the way to Shanghai — the equivalent of shipping vials from Toledo , Ohio to Manhattan — when Wuhan boasts one of China ’ s best virology institutes .
When asked by local media why the province took so long to declare the coronavirus @ @ @ @ @ @ @ sweeping emergency powers , Wuhan ’ s mayor said Hubei needed to receive Beijing ’ s approval first .
That ’ s a paltry excuse : Such hoops didn ’ t stop the coastal provinces of Zhejiang and Guangdong from declaring an emergency before Hubei .
This series of missteps led to a purge of Communist Party heads in Hubei in mid-February .
Even after that , the local government continued to make bad judgment calls .
On Feb. 24 , Wuhan said it would ease a sweeping lockdown of the city , @ @ @ @ @ @ @ .
Provincial officials misread Beijing again : While Xi ’ s speech at the latest Politburo meeting was widely interpreted as a call for China ’ s businesses to reopen , it didn ’ t apply to Wuhan .
Other gaffes are downright laughable .
Earlier this month , Hubei ’ s government posted on its website a warning that the coronavirus could cause an inflammation of the testicles , which could reduce sperm count and possibly lead to infertility .
A source of mine , originally from Wuhan , quipped that this @ @ @ @ @ @ @ folks sick , but also annihilating his family tree .
The notice was taken down a few hours later after a social media uproar .
To be sure , some officials are savvy enough to curry favor with Beijing , which can pay handsome dividends both personally and for the local economy .
When he was the mayor of Shanghai , Ying Yong launched an energetic recycling campaign last July in response to Xi ’ s call for environmental protection .
He was recently promoted to become Hubei ’ s new party secretary @ @ @ @ @ @ @ governments need Beijing ’ s money to oil the fiscal engines .
Most of them are bleeding cash .
Last year , municipal revenue rose by just 3.2 % , the lowest in a decade , amid tax cuts and slower economic growth .
Municipalities are also reliant on “ cash transfers ” from Beijing , which reallocates the value-added tax revenue it collects — by far China ’ s largest source of fiscal inflows .
Of course , favored local governments are first in line for more generous handouts .
And if @ @ @ @ @ @ @ gap with new bonds , it needs Beijing ’ s approval first .
This is where New York State ’ s governor differs from Hubei ’ s bumbling local leadership .
Cuomo has been careful not to antagonize Trump directly for the federal government ’ s anemic response to the virus .
So far , it has paid off .
Vice President Mike Pence stepped in and pledged to send 4,000 ventilators to the state .
Mayor de Blasio ’ s very public swipes at Trump , by contrast , haven ’ t @ @ @ @ @ @ @ headlines flying from New York are overwhelmingly negative right now , while Wuhan is starting to look smart .
The reality , however , is a lot more nuanced .
Wuhan shows that mega cities can survive this virus , even with incompetent officials .
All isn ’ t lost for New York .


washingtonpost--2020-03-24--Analysis | When Will Tokyo 2020 Olympics Go Ahead? Not This Year

That is still unclear .
Beyond 2020 but no later than summer 2021 .
That ’ s what the International Olympic Committee and Tokyo organizers said in a statement announcing the unprecedented postponement on March 24 .
Hardly .
It raises numerous logistical headaches , from how to treat athletes who already qualified for the world ’ s biggest multisports event to the status of tickets and sponsorships already sold .
A raft of sponsorship agreements are set to expire in 2020 .
Then there are possible clashes with other sporting events , such as the 2021 global track-and-field championships @ @ @ @ @ @ @ now be moved to 2022 .
The scale of next year ’ s Olympics also has yet to be decided , according to the senior Japanese organizer .
That implies not all of the 339 events in 33 sports are assured a place .
Not according to Japanese Prime Minister Shinzo Abe .
While postponement is a painful blow , it ’ s far preferable to cancellation for organizers , sponsors , broadcasters and others that have billions of dollars invested in the games .
Japan has spent an estimated $ 26 billion @ @ @ @ @ @ @ could knock about 1.4 % from gross domestic product , Nikko Securities Inc. Chief Economist Junichi Makino wrote in a recent research note .
A one-year delay would trigger about 641 billion yen ( $ 5.8 billion ) in economic losses , according to an estimate by Katsuhiro Miyamoto , an honorary professor at Japan ’ s Kansai University .
A large part of the economic stimulus may have already been delivered by the massive infrastructure spending laid out to get Tokyo ready for the games .
Five Olympic Games were scrapped , @ @ @ @ @ @ @ summer games were canceled in 1916 , 1940 and 1944 as were the winter games in 1940 and 1944 .
The 1940 games were initially postponed , but then canceled .
Organizers said they want the games to stand as a beacon of hope and the Olympic flame to become the ” light at the end of the tunnel in which the world finds itself at present.
” Therefore , it was agreed that the Olympic flame will stay in Japan and the event will keep the name Tokyo 2020 , according to @ @ @ @ @ @ @ Health Organization and sports federations discussed the possibility of staging the event without spectators , the New York Times reported .
Keeping fans out in this way has never happened at an Olympics , but multiple major sporting events including Japanese sumo wrestling have in recent weeks gone ahead “ behind closed doors.
” Given the global spread of the coronavirus , there were no realistic alternative venues .
The only time an Olympics got switched was when the 1976 winter games were moved to Innsbruck , Austria , from Denver after locals @ @ @ @


washingtonpost--2020-03-27--Analysis | Want to Escape a Lockdown? Try Sweden

Under her country ’ s rules , she couldn ’ t be tested for Covid-19 , and she technically doesn ’ t belong to a group that ’ s at risk — yet the 17-year-old used her platform to warn young people of the “ enormous responsibility ” they had in not spreading the disease to others .
The teenage Thunberg ’ s advice is harder-hitting than her own government ’ s .
Sweden — ranked the most “ free ” country in the world along with Finland and Norway — is dealing with a virus that ’ s seen @ @ @ @ @ @ @ draconian lockdowns to force people to self-isolate .
The 10 million-strong Swedish population looks no more immune to it than its neighbors : Sweden has 2,510 cases and 42 deaths , according to data compiled by Bloomberg , compared with 2,916 cases and 12 deaths in Norway and 2,014 cases and 34 deaths in Denmark .
Yet the Danes have shut schools and many businesses , banned large gatherings , and handed the government sweeping emergency powers ; Sweden has gone down a more laissez-faire route .
Schools , bars and cafes are @ @ @ @ @ @ @ , but only those aged over 70 or otherwise at risk are asked to stay home .
Why would a country take such a relaxed stance amid warnings of a brewing “ storm ” of hospitalized patients in Stockholm , where the military is helping out ?
There may be some economic self-interest at work .
Sweden ’ s open and trade-dependent economy is already facing its worst recession in living memory , and its leaders probably don ’ t want to crush domestic demand on top of that .
Swedish industrialist Jacob @ @ @ @ @ @ @ to 20 % -30 % unemployment rates .
But public trust is clearly at play , too .
Sweden ’ s health authorities are highly politically independent — if their official view is that a lockdown is unnecessary , that resonates .
Unlike in the U.K. , where public fears played a big role in reversing a similar position held by Prime Minister Boris Johnson , some Swedes still seem more worried by the breakdown of order that shutting schools or panicked policy might provoke .
There ’ s trust in the government @ @ @ @ @ @ @ to do the right thing .
Still , as inspiring as it may be to imagine 10 million people independently looking out for each other in a pandemic , there are some pretty glaring risks involved .
The problem with the Swedish strategy is twofold .
First : It looks a lot like “ wait and see , ” as Torbjorn Isaksson , an analyst at Nordea in Stockholm , puts it .
This isn ’ t just a bet on behavioral science but on viral science , namely how the infection curve @ @ @ @ @ @ @ hoping that the virus ’ s spread and severity won ’ t be as bad as the ( admittedly divergent ) worst-case scenarios ; that hospitals won ’ t buckle under the pressure ; and that existing social-distancing guidelines will be enough .
“ I ’ m deeply concerned , ” virology professor Fredrik Elgh told state broadcaster SVT .
Epidemiologist Joacim Rocklov told the FT it was “ a huge experiment ” that could go “ crazily ” wrong .
Mathematician Marcus Carlsson , less politely , said it amounted to “ @ @ @ @ @ @ @ protect the economy and preserve social trust , but it isn ’ t leading to proactive alternatives that have worked elsewhere .
For example , countries in Asia that controlled their outbreak without resorting to lockdowns — such as South Korea — radically stepped up testing , tracing and targeted quarantines as a more precise alternative method to slow the virus ’ s spread .
Sweden has deployed tests but , on a per-capita basis , South Korea , Germany and Austria have done more , according to estimates compiled by Our World @ @ @ @ @ @ @ that , if the outbreak gets worse , trust in the individual may end up being a fragile and finite resource .
One poll by newspaper Svenska Dagbladet this week suggested just over half of Swedes think the response has been “ well balanced ” — but that doesn ’ t seem so high considering that policy approval ratings soared to 93 % in the U.K. and France after lockdowns were imposed .
Far from the positivity of Thunberg ’ s post , a lot of social-media vitriol has been directed against the @ @ @ @ @ @ @ s coronavirus response .
There ’ s a real chance that Sweden ends up shifting course with harder measures , only far too late , exposing it to all the costs it sought to avoid .
On a year-to-date basis , in U.S. dollar terms , the Stockholm OMX benchmark equity index is down 24 % , not far off the Euro Stoxx 50 ’ s 27 % fall .
Sweden is right to have resisted some of the other excessive and counterproductive measures seen elsewhere in Europe , such as arbitrary border @ @ @ @ @ @ @ and people in a region that would benefit from more collective action .
But there comes a time when even free societies need clear , strong direction from their leaders .
Sweden would be well advised to avoid having its best-known teenager putting it to shame .


washingtonpost--2020-03-27--Virus Bill Set for House Vote Today, and Then Harder Work Begins

Investors reacted positively to the action in the Senate , even with Thursday ’ s report that 3.28 million Americans filed for unemployment last week .
The S & P 500 closed near session highs Thursday , posting its first three-day rally since February .
The Dow Jones Industrial Average saw its biggest three-day gain since 1931 -- and is now 21 % above its March 23 trough .
By contrast , this plan is intended to deliver a larger and more compressed jolt to the economy until the crisis abates .
New programs , like the $ 377 billion @ @ @ @ @ @ @ are intended to get out the door in weeks , not months or years , though it will be a challenge for the banking system and the government to quickly process the millions of transactions expected .
The biggest single portion of the stimulus is the billions earmarked for large companies and state and local governments .
But the rules for deciding who will get that and how it will be distributed are a work in progress .
The legislation specifies that 10 days after it becomes law , Treasury will publish guidelines @ @ @ @ @ @ @ loans .
Holtz-Eakin said Mnuchin should let the Federal Reserve handle the entire corporate bailout .
That would be the best way to distribute the aid according to need rather than based on political influence or popularity , said Holtz-Eakin , now president of the American Action Forum , a conservative issue advocacy group .
The Fed is less likely to favor , for example , a coal mining company over a solar energy business .
“ They have stood up everything they need , they are experienced at it , having done @ @ @ @ @ @ @ to the Fed out of need , who will then provide it to the people who need it the most , ” he said .
“ The Treasury , in contrast , doesn ’ t lend to people .
They borrow.
” There was concern about whether the SBA could handle the strain of the demand and move quickly enough to deal with the urgency of the financial pressure facing many small businesses , so the legislation was designed to put private lenders on the front line .
“ Those community bankers will @ @ @ @ @ @ @ to structure their loans to get them through this cash crunch for the next month to three months that they are experiencing , ” McHenry said on Bloomberg Television .
Mnuchin said he has authority to create regulations to allow FDIC-backed banks to give quick loan approvals.
“ We ’ re going to have a new program up by next Friday where banks can lend , ” Mnuchin said .
“ This is a brand new program -- the Treasury working with the SBA.
” The money available is significant .
The stimulus @ @ @ @ @ @ @ boost weekly unemployment benefits by $ 600 through July 31 .
Maximum state benefits range from $ 235 in Mississippi to $ 823 in Massachusetts depending on income .
The added boost would be four months for those laid off now , but less time for those losing their jobs closer to July 31 .
” We want people to take advantage of all of this quickly , ” Pelosi said Thursday .
Some of that will “ depend on how the states do it , and they are not all uniform.
” @ @ @ @ @ @ @ systems in many cases do not have the latest technology or data systems , ” he said .
“ Now they ’ re being hit by the largest tsunami of unemployment claims in the history of those data being collected .
Now Congress is asking them to change the way they do things .
”


washingtonpost--2020-03-27--Analysis | It’s Time to Start Testing Coronavirus Immunity

But unlike the president , most people are aware of how dangerous it would be to try to return to normal too soon .
In a country of 330 million people , fewer than 1 million will have been tested by the end of this month .
( As of Thursday , 519,000 people had been tested , including 122,000 in New York State , according to the Covid-19 Testing Project . )
We ’ ve also learned that while older people are especially vulnerable to the virus , the young are hardly immune ; letting people return to work @ @ @ @ @ @ @ insanely risky .
Data compiled by New York City , for instance , shows that 18 % of those hospitalized in the city are younger than 44 ; nationwide , 12 % of those admitted to intensive care as of March 16 were between 20 and 44 .
The truth is , we simply don ’ t know how widespread the virus is in the population , which means we ’ re flying blind .
Given the inherent difficulties of the so-called PCR tests ( reverse transcription polymerase chain reaction ) — which @ @ @ @ @ @ @ wearing protective gear , require equipment that is in short supply and can take days to get results — it will be months before scientists are comfortable giving the all-clear sign .
The fact that government incompetence delayed significant testing for several months hasn ’ t helped either .
Although the Food and Drug Administration is now allowing people to self-swab , that only reduces the risk for health-care workers ; it doesn ’ t eliminate it .
But there appears to be another way , a side-door approach that might make it @ @ @ @ @ @ @ a lot of them — to emerge from self-isolation and get back to their lives .
Antibody tests — simple blood tests that can detect whether a person has developed antibodies , and thus immunity , from the coronavirus — could well be the answer .
They are easy to administer and easy to scale .
They don ’ t require health-care workers to wear special equipment .
Results come back in hours instead of days .
And they could be ready for deployment sooner than you might think .
Like anything else @ @ @ @ @ @ @ which we ’ ll get to shortly .
Let ’ s focus first on their potential benefits .
A serology test that can detect antibodies for the coronavirus means it can tell whether someone has developed immunity to the disease .
Humans develop antibodies after a virus has made them ill ; they are proteins that fight back against a foreign element in the body , eventually repelling it .
Can you see how useful an antibody test could be ?
Imagine that health-care workers could test everyone in an entire community .
@ @ @ @ @ @ @ developed immunity and could be freed from self-isolation .
The test could also tell whether someone has never been infected by the virus and thus can ’ t spread it to others .
Lower-risk , uninfected people who don ’ t work in high-contact environments might be able to join the immune population as long as they took proper precautions .
In such a scenario , a potentially large percentage of the population could return to normal life , and only those still at risk would continue to self-quarantine .
Crucially , we @ @ @ @ @ @ @ infected patients without putting themselves at as much risk .
Such testing is already available in China , South Korea and Europe , according to David Ho , the well-known scientist at Columbia University .
“ It is extremely useful for surveying a population , ” he told Walter Isaacson last week on the PBS program “ Amanpour & Company.
” ( He added that the fact we didn ’ t have tests yet was “ inexcusable.
” ) According to a county press release posted on Tuesday , tests were administered to @ @ @ @ @ @ @ back negative , though two had results that could mean “ early seroconversion.
” Those two people have since self-quarantined , while the others will be tested again in 14 days to make sure there weren ’ t any early infections that hadn ’ t been detected .
On Thursday , the county issued a testing schedule that will start with seniors and then move on to the general population .
If enough people are tested — and the tests are as accurate as United Biomedical ’ s data suggests — San Miguel @ @ @ @ @ @ @ the U.S. to no longer be flying blind .
United Biomedical is hardly the only one working on an antibody test .
At the Icahn School of Medicine at Mount Sinai , a group of scientists led by Florian Krammer posted the protocols of an antibody test it has developed with directions on how it can be replicated , according to Science magazine .
Others labs are working on antibody tests .
Hu says that her company , using its one U.S. facility , could quickly generate 1 million tests a day .
@ @ @ @ @ @ @ the test could scale if other companies got involved , which they surely will .
As for the potential drawbacks , there are several .
It takes the body some time to develop detectable antibodies — sometimes as much as a week or more after infection — so serology tests are not especially useful as a diagnostic tool .
PCR testing will have to continue to catch individuals when they ’ re at their most infectious so they can be isolated .
It ’ s also critically important that any widely used test @ @ @ @ @ @ @ coronaviruses , otherwise people may be falsely labeled as immune .
At this point , no one is sure exactly how long resistance to Covid-19 might last .
There ’ s limited data available from monkeys , but no one should rely on that to make public health decisions .
Acquired immunity to viruses can vary from person to person based on the severity of infection and the strength of their immune response .
Antibodies to SARS last a long time in infected people , but since that outbreak fizzled out quickly it @ @ @ @ @ @ @ .
Immunity to mild coronaviruses that cause common colds can last less than a year .
Health systems can be fairly confident that someone who tests positive for Covid-19 antibodies will have substantially reduced risk , but scientists will need to keep an eye on them and collect more data over time .
At a press conference Thursday , White House coronavirus response coordinator Deborah Birx was asked for a status update on the rollout of antibody tests .
She noted that tests run through a blood-testing method called ELISA are already available @ @ @ @ @ @ @ a quicker test that can be done at the point of care with just a drop of blood .
She did not , however , explain why the absence of an ideal test is preventing widespread use of the ones we have .


washingtonpost--2020-03-27--Analysis | Boris Johnson Is Ready for His Extreme WFH Close-Up

He won ’ t be the last .
Pandemics don ’ t respect class or wealth , and the virus has thrived in the political world , where age and experience reign , crowds gather to press the flesh and travel is constant .
It ’ s a safe bet this virus will change the course of human history as a result , even if we don ’ t yet fully understand how deadly it will be .
The past offers several examples , from the benign to the dramatic .
The Spanish flu epidemic a century ago struck several @ @ @ @ @ @ @ talks after the First World War , confining British premier David Lloyd George to his sick bed for 10 days .
In the 19th century , yellow fever killed so many of Napoleon ’ s troops in Haiti that he ended up abandoning his imperial ambitions in the U.S. , resulting in the Louisiana Purchase and Haitian independence .
If the coronavirus seems much less politically cataclysmic so far , it ’ s because 21st-century technology and health care are helping western leaders such as Johnson — and Germany ’ s Angela Merkel @ @ @ @ @ @ @ flat because of a suspected Covid-19 case — to project an aura of “ business as usual.
” Whereas a great deal of information about the Spanish flu was kept hidden from the public to avoid creating fear and uncertainty , including Lloyd George ’ s illness , Johnson has announced publicly that he will run the country via video-conference even as he self-isolates .
“ Be in no doubt that I can continue , thanks to the wizardry of modern technology , to communicate with all my top team , ” Johnson @ @ @ @ @ @ @ public can work from home , so can the prime minister ; as can his health secretary , Matt Hancock , who tested positive too .
Nevertheless , running countries via video-conference is new in world affairs .
It would be wrong to assume that the transition will be smooth .
In Brussels , for example , the workings of the European Union have been turned upside down as leaders and officials meet virtually to respect social-distancing measures .
That doesn ’ t just make vital crisis meetings prone to technical glitches and @ @ @ @ @ @ @ EU ’ s case — it also robs them of the huddles , side-meetings and mini-breakthroughs that can lead to more fruitful results .
On Thursday , six hours of video talks between European leaders on the Covid-19 response ended in a dispiriting fudge .
History is full of underwhelming EU summits , of course , but forced distance could make things even worse .
That the virus has also infected ministers and local officials lower down the chain of command in several countries will also have an impact , putting more sand @ @ @ @ @ @ @ minute counts when a country is rolling out vast and unprecedented stimulus packages to save businesses from going under , divert precious resources to overwhelmed health services , and to maintain other public services as normal .
Longer-term plans are also likely to be frustrated , such as Johnson ’ s promise to the British public of a quick post-Brexit trade deal with the EU .
London and Brussels have already had to cancel the second round of face-to-face trade negotiations , and both sides ’ chief negotiators have tested positive for Covid-19 @ @ @ @ @ @ @ Michel Barnier called “ very serious ” differences ?
It ’ s doubtful .
The public craves leadership in a crisis , hence the sky-high polling for many leaders over their handling of the pandemic , including Johnson .
For now politicians believe they can keep delivering it , despite infection .
But politics is a “ cut-and-thrust ” business , where fortunes rise and fall rather quickly .
If squabbling advisers or gossiping factions take advantage of a “ self-isolating ” leader , that might chip away at their authority .
What @ @ @ @ @ @ @ close , and your enemies closer still .


washingtonpost--2020-05-12--Analysis | Saudi Aramco’s Stock Trades on a Different Planet

Shares in Saudi Arabian Oil Co. , to give the company its full name , closed on Tuesday 2 % below where they floated in December .
You remember December , right ?
Possibly it ’ s the last time you had a haircut or felt completely safe getting on a plane .
It just so happens that on the same day Aramco released its first-quarter results , BP Plc ’ s new CEO Bernard Looney was quoted in a Financial Times interview saying he couldn ’ t rule out the possibility Covid-19 had ushered in peak oil demand .
@ @ @ @ @ @ @ might say , which is a fraction the size of Aramco and has just announced a big peak-oil-demand-ish long-term strategy .
Certainly , the numbers just released by Aramco adhere to the usual Ozymandian scale .
Free cash flow of $ 15 billion for the quarter is roughly the same as BP ’ s for the past three years .
Return on capital of 26 % , down significantly from a year ago , is what the oil majors used to earn at the height of the supercycle .
While balance-sheet pressure has @ @ @ @ @ @ @ of 10 % and pushed rival Royal Dutch Shell Plc to cut its dividend , Aramco is sitting on net cash .
That other Big Oil stalwart , Exxon Mobil Corp. , has tried to stick to its guns on investing heavily for long-term oil and gas growth .
But its stock has suffered enormously as a result .
Aramco ’ s status as Bigger Oil , low costs and state backing make it much easier to maintain a similar strategy and outlook — but then so does having a stock that exists @ @ @ @ @ @ @ s first-quarter results are robust , it ’ s worth remembering the worst of Covid-19 from an oil-market perspective hit in April , at the beginning of the current quarter .
The Saudi-Russian price war , in which Aramco is a front-line combatant , also only got underway toward the end of the first quarter and then got subsumed in the pandemic .
Aramco ’ s crude oil production averaged 9.8 million barrels a day in the first quarter .
Guidance suggests it could drop to an average of 9.1 million this quarter @ @ @ @ @ @ @ .
Brent crude , meanwhile , has averaged $ 27 so far this quarter versus $ 51 in the last .
More than usual , the latest numbers are a sepia-tinted snapshot of the past .
Things have moved on in a few short months .
Why else has Saudi Arabia imposed austerity measures and decided to cut production even further than promised in June ?
As I wrote here last month , the government ’ s take from Aramco might fall by half this year — and that ’ s only one @ @ @ @ @ @ @ world is changing .
Why else are reports emerging of the acquisition of Saudi Basic Industries Corp. being restructured ( again ) ?
The latter , by the way , would surely have come up on the earnings call , if only there had been one ( there were no details in the report ) .
Since the end of February , average daily volume in Aramco ’ s shares has been all of 0.3 % of the float — 0.3 % of 1.5 % of shares outstanding .
Lock-ups entitling retail investors @ @ @ @ @ @ @ weeks ; it will be interesting to see if that has any impact .
But Aramco ’ s IPO was stage-managed precisely to shield the stock from the outside world .
Given what ’ s happened in the outside world , a call might just spoil that .
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 @ @


washingtonpost--2020-06-23--Fink Cautions Virus Impact on Small Businesses Still Unknown

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washingtonpost--2020-05-02--Covid Aid Scams and Dodgy Deals Could Have Been Avoided

New York officials told BuzzFeed that Oren-Pines seemed credible because he came recommended by a crack team of experts : the White House ’ s coronavirus task force .
The team is led by Vice President Mike Pence and includes Treasury Secretary Steven Mnuchin , Surgeon General Jerome Adams , Health and Human Services Secretary Alex Azar , National Economic Council Director Larry Kudlow and others .
( After BuzzFeed published its report , Pence ’ s office said the task force wasn ’ t involved in the ventilator contract ; New York said it canceled the contract and got @ @ @ @ @ @ @ Oren-Pines doesn ’ t appear to have a background in medical supplies or government contracting , but he was loaded with good old-fashioned ambition .
“ He ’ s always a go-getter , ” a friend told BuzzFeed .
“ Anytime there ’ s opportunity , he ’ s always been out there trying to help and make a buck.
” That ’ s not to say that L ’ Affaire Oren-Pines also isn ’ t obscene and disturbing .
It ’ s got it all .
And it ’ s proof that @ @ @ @ @ @ @ and a dearth of supplies have forced governors across the country to procure medical equipment in a Wild West environment .
Confronted with a global pandemic and routine second-guessing from the left and right , they ’ ve had to scramble for solutions and have sometimes rushed into ill-considered contracts .
It ’ s also a reminder that the public response to the coronavirus is gilded — $ 2.6 trillion in spending from the federal government alone — and yet it already has far too many Keystone Kops moments , and far too @ @ @ @ @ @ @ be comfortable with .
The Treasury Department and Small Business Administration ’ s multiple fiascos surrounding the $ 669 billion Paycheck Protection Program offered some of the first examples of this .
Federal and state contracting whodunits , such as the one featuring Oren-Pines , are an example of another fresh stream of problems that is likely to run much deeper given what we ’ ve already seen .
Representative Katie Porter , a California Democrat , flagged this in a recent op-ed published in the Washington Post .
Contracts procured under the @ @ @ @ @ @ @ like most federal contracts , public documents .
This winds up “ leaving Americans in the dark about one of the administration ’ s key tools in its Covid-19 response , ” Porter wrote .
She recommends that future relief legislation tries to cure this by ensuring that all DPA orders are made public .
Transparency is a crucial and important first step in all of this , but effective federal and state oversight deployed before contracts even go out the door is , perhaps , even more important .
Porter also cited @ @ @ @ @ @ @ gone haywire : • A no-bid , $ 96 million deal for respirators issued to a Canadian chemical and rubber company , AirBoss of America Corp. ProPublica , which first reported the contract , said that the White House took the unusual step of ordering the Federal Emergency Management Agency to give the contract to AirBoss .
ProPublica also found that as of early April , more than 25 % of the Covid-19 response contracts were awarded with no competitive bidding .
• A $ 55 million deal for N95 masks awarded to @ @ @ @ @ @ @ company based in Virginia that also has no history of producing medical supplies .
The Washington Post , which reported on that deal , said that Panthera ’ s parent company is bankrupt and hasn ’ t had any employees since May 2018 .
• A much more modest $ 75,000 contract for masks awarded to MyPillow Inc .
The company ’ s chief executive officer , Michael Lindell , is a generous donor to the Republican Party and Trump famously invited him to speak at a press briefing in the Rose Garden @ @ @ @ @ @ @ make masks and had to look for a subcontractor to fulfill the contract , according to Politico .
Christopher Parris , a 39-year-old Atlanta resident , was arrested by federal authorities on April 10 and charged with fraud for trying “ to secure orders from the Department of Veterans Affairs for 125 million face masks and other personal protective equipment ( PPE ) that would have totaled over $ 750 million , ” according to the Justice Department , which has also uncovered possible fraud by businesses that received PPP loans .
Even @ @ @ @ @ @ @ of this funny , disgusting or outrageous , you should , at the very least , find it worrisome .
The trillions of dollars that have flooded from state and federal coffers into the business community isn ’ t your governor ’ s or your senator ’ s or your president ’ s money .
Its yours .
And there doesn ’ t appear to be enough people tracking it very carefully .


washingtonpost--2020-05-02--Analysis | Streaming Services Face an Economic Reckoning After Covid-19

The meteoric rise of Netflix Inc. has warped the U.S. media industry , forcing companies such as Walt Disney Co. and AT & T Inc. that have long enjoyed fat profits to embrace a business model that is fundamentally broken : Spend billions of dollars to create an endless supply of content , then sell monthly access to this deluxe all-you-can-eat buffet for little more than the cost of dinner at McDonald ’ s .
Oh , and subscribers can basically cancel whenever they want : Analysts from Cowen & Co. have estimated that while Netflix ’ s annual rate @ @ @ @ @ @ @ is 10 % to 20 % , it may be as high as 50 % for other streaming services .
Having so many options might sound like a treat for consumers , but it hasn ’ t worked out that way .
The downside of the proliferation of streaming apps is that some of the most sought-after TV content now lives behind a chaotic jumble of paywalls .
You need different accounts for CBS All Access , Disney+ , HBO Max , WWE Network and so on .
Their low prices would be @ @ @ @ @ @ @ having just one service , but most families may require more .
The race to attract and retain subscribers — and turn a profit — was challenging enough before the coronavirus shut down entire swathes of our economy .
Now , the U.S. is in a recession and consumers are rethinking how much content they need and what ’ s a worthwhile household expense .
When all a country can do is sit home and gorge on movies and TV , a free trial to stream Netflix or any other services is worth @ @ @ @ @ @ @ ( Look no further than Netflix ’ s recent spike in subscriptions . )
The question is , will users just ditch once those free trials are up ?
Let ’ s start with the most controversial of these suggestions : ads .
Because of Netflix , viewers have become accustomed to not having to sit through ads , and they like it .
But that approach probably can ’ t work long-term if consumers want an affordable service with a constant flow of fresh content that is written and produced at the @ @ @ @ @ @ @ or “ Narcos.
” At the end of the day , streaming companies need to make money — and not in the debt-fueled , cash-flow-burning manner of Netflix .
The TV business may just work better for everyone when the consumer is the product , able to be sized up by advertisers hoping to activate our shopping reflexes .
Not all consumers hate ads as much as they profess to , or at least not to the extent that they hate overpriced subscriptions .
Surveys by consumer-research firms have repeatedly shown that the @ @ @ @ @ @ @ much they pay .
Already , tens of millions of people have embraced free , ad-supported streaming services , such as Pluto TV and Tubi .
No wonder both have been acquired by media giants — ViacomCBS Inc. and Fox Corp. , respectively — in deals that went for upward of $ 300 million .
So far , Netflix hasn ’ t changed its tune on ads : Co-founder and CEO Reed Hastings has said that the company doesn ’ t want to try to compete with Google and Facebook Inc. in the @ @ @ @ @ @ @ s whereabouts and other highly personal data sought by advertisers .
That may be true , but it may also be that Netflix doesn ’ t want to alienate customers while it ’ s still in growth mode and enjoying such a wide lead over rivals .
Either way , Netflix is starting to look like it ’ s in the minority on this .
In April , Comcast Corp. ’ s NBC Universal held a soft launch for a streaming service called Peacock that gives viewers the option of watching with or @ @ @ @ @ @ @ free version with a condensed library to get viewers interested .
A step up from there is a $ 5-a-month premium subscription that unlocks much more content but keeps the ads .
Then , for $ 10 a month , subscribers can remove the ads entirely .
This is what ’ s known as a “ freemium ” model : The basic plan is enticing , until a user realizes that paying a small price could dramatically improve the experience .
It ’ s a sneaky , delicate tinkering with how the brain @ @ @ @ @ @ @ Comcast is hoping everyone opts for the $ 10 version , think again .
Hulu has shown that the Goldilocks choice is right in the middle : a low subscription price coupled with ad revenue .
Most Hulu subscribers are on its basic $ 6-a-month plan that includes ads , and Hulu is said to make more money off those customers than the ones who pay $ 12 for ad-free streaming .
Regional stay-at-home orders have , of course , changed things .
Some of the biggest advertisers — auto manufacturers and insurers @ @ @ @ @ @ @ paper brands and so on — now have little reason to spend on air time .
And with the Tokyo Olympics being postponed , sports off the air and U.S. presidential campaigning largely on hold , TV ad budgets have evaporated .
Market-research company EMarketer predicts this spending will drop as much as 29 % in just the first half of 2020 — a $ 12 billion cut to its original forecast .
Even so , as the world eventually resumes some semblance of normalcy , plenty of advertisers will still be eyeing @ @ @ @ @ @ @ happily welcome their dollars — even if they weren ’ t planning on it before .
Consider the situation at Disney , which , before the pandemic hit , had been leaning on its more-stable film , theme-park and cruise divisions , as it invested heavily in streaming .
It ’ s possible that Disney+ may now have to weigh price hikes or incorporating ads .
John Stankey , who will become AT & T ’ s CEO on July 1 , has also called ads and high-quality streaming content “ a winning @ @ @ @ @ @ @ premium TV apps will require some creativity , though .
For streamers , gone are the days of sitting through several 30-second commercials in a row .
Comcast has promised to limit Peacock ’ s own ad load to 5 minutes per hour .
But the best solution may be in changing what form a promotional spot takes .
Hulu has notably experimented with new ways to present ads , such as displaying them when a user pauses a video .
The industry should follow Hulu ’ s lead — and improve on @ @ @ @ @ @ @ annoying remnant of the cable-TV era , but if done right they could improve the streaming experience .
Disney is an example of how it can work : Even though Disney+ already has more than 50 million subscribers , the app — which charges $ 7 a month or $ 70 a year — will eventually suffer for not having enough variety beyond children ’ s animated features and Marvel and “ Star Wars ” content .
This is why its $ 13-a-month bundle with Hulu — which is the same rate as @ @ @ @ @ @ @ to be Disney ’ s secret weapon and a more practical Netflix substitute .
AT & T is pursuing its own bundle , too , with plans to use the forthcoming HBO Max as a freebie for some wireless customers to keep them loyal .
Likewise , Peacock premium ( with ads ) doesn ’ t cost anything extra for subscribers to Comcast cable or internet packages .
Oftentimes , when a customer says a service costs too much , what they really mean is that they want more for the price , @ @ @ @ @ @ @ .
That ’ s why offering savings through a bundle or allowing users to pause their subscriptions can go a long way in reducing churn , according to Guy Marion , who advises on customer retention for subscription services as CEO of Brightback in San Francisco .
“ Many companies haven ’ t figured out yet how to accommodate pause revenue , and billing systems were hard-wired without that concept , ” he said .
Structuring bundles , while investing in more dynamic billing and cancellation processes , could be the difference between @ @ @ @ @ @ @ But perhaps the biggest lesson the entertainment industry should take away from this pandemic is that there ’ s value in being able to provide human connection .
TV services are certainly making life on lockdown more bearable , but it ’ s the video conferencing tools like Zoom and social-media apps like Instagram and TikTok that are uniting us and creating a sense of community .
A study published this month in the International Journal of Information Management found that , with free-to-play video games at least , social features not only @ @ @ @ @ @ @ also encouraged more in-app spending .
Netflix , Disney , HBO and others would be smart to introduce their own social features , ones that would allow , say , viewers to see what friends are watching and to make recommendations .
Netflix ’ s “ Tiger King ” docuseries took social media by storm in recent weeks , as memes about the show went next-level viral , and yet there was no way to experience that collective fascination on Netflix itself .
There is clearly demand for it : During quarantine , @ @ @ @ @ @ @ to watch their favorite shows “ together ” via video chat .
There ’ s now a Netflix Party extension for the Google Chrome browser that does this more seamlessly .
Even before the coronavirus hit , the business model of streaming was beckoning for a change .
Soon it will be begging for it .
The industry should use this bizarre moment in history to rethink how to thrive in a new normal — one defined by all of us spending more time with a remote control or device in hand .
@ @ @ @ @ @ @ can still tap its creative wellspring .


washingtonpost--2020-05-15--Analysis | Flat Oil Futures Should Keep Frackers Quiet

The rally in the June contract ( along with swaps for the balance of the year ) owes much to relativism : Once you ’ ve seen negative prices , how much worse can it get ?
But it also reflects real signs of recovery in oil demand as Covid-19 lockdowns begin to ease and cuts to supply accelerate .
As you might expect , exploration and production stocks have hitched a ride .
The frackers haven ’ t matched the best-performing sector in the S & P 1500 Supercomposite over the past month : Home Furnishing Retail ( which @ @ @ @ @ @ @ makes a ton of sense ) .
But they are in the top five .
That ’ s where those long-dated oil prices become relevant .
Some E & P companies , such as Permian player Diamondback Energy Inc. , have talked of pumping again once oil gets back above $ 30 a barrel .
We ’ re nearly there already .
Yet the lack of enthusiasm in the far end of the futures curve reads like a big Stop sign .
Futures prices aren ’ t forecasts of where oil will trade @ @ @ @ @ @ @ ( and some users ) of oil hedge their price exposure while speculators bet on where it ’ s going .
And while optimism on recovery has taken hold in near-dated oil — which is where speculative money has tended to congregate — there are plenty of reasons for caution further out .
These range from the dreaded “ second wave ” of Covid-19 to more mundane considerations .
Two of the latter concern the glut of oil inventory that is still growing and the less-tangible glut of spare capacity that is also @ @ @ @ @ @ @ output .
Consider the latest International Energy Agency forecasts , released earlier this week .
These added to the market ’ s optimism as the IEA revised its forecast for the drop in oil demand this year from an unprecedented 9.3 million barrels a day to a still-unprecedented 8.6 million .
Even so , the IEA ’ s numbers imply almost 1.7 billion excess barrels having flowed into storage by the end of June , of which just over 1 billion will flow back out by year-end .
To give a sense of @ @ @ @ @ @ @ around means , it would be enough to replace OPEC-member Nigeria ’ s output for an entire year .
In other words , a lot has to go right in a year where , thus far , a lot has gone wrong .
And that ’ s just to limit the glut of inventory .
This is what those subdued futures beyond 2020 are telling us .
Even if a second wave of Covid-19 is avoided , the lingering economic damage and build-up in oil inventory will still signal fewer , rather than @ @ @ @ @ @ @ The curve itself enforces this .
Most frackers rely on hedging to finance their drilling programs , but it ’ s hard to ramp up when you can only lock in prices that start with a three .
As it is , the scars of April ’ s plunge may limit the speculative flows that take the other side of hedging trades , making them costlier ( see this ) .
Moreover , for the glut of inventories to drain , the curve must flip from sloping upward — today ’ s “ @ @ @ @ @ @ @ term — to sloping downward .
“ Backwardation , ” whereby future prices slope down from today ’ s , makes it uneconomic to store barrels , and that ’ s when tanks drain .
So if , as the IEA expects , the glut is due to begin shrinking this summer , then near-term futures must rally further relative to long-dated oil .
In the past five years , that has only tended to happen when near-dated oil has been priced around $ 55-60 a barrel , according to a report from @ @ @ @ @ @ @ start dreaming of oil doubling by July , think about the wider environment and those flat 2021 prices .
As BofA ’ s analysts write , it ’ s more likely that any flip to backwardation this year will happen at a lower level .
That still implies oil getting into the $ 40s soon .
But for frackers , it also implies resisting that siren song , weak as it sounds compared to pre-Covid times .
Don ’ t forget this all coincided with a breakdown of cooperation between Saudi Arabia and @ @ @ @ @ @ @ to prop up prices , they aren ’ t likely to tolerate the sight of U.S. producers getting back to work ( they tried that already in recent years ) .
While they await recovery in demand , their spare capacity should suppress long-dated futures , thereby allowing the inventory glut to start draining at a level where many frackers can ’ t justifiably hedge .
Getting back to work in the Permian would kill the rally supposedly encouraging that .
The message from the curve to America ’ s oil producers is @ @ @ @ @ @ @ retrenchment and restructuring remain unavoidable .


washingtonpost--2020-05-15--Charting the Global Economy: Covid-19 Pandemic’s Toll Deepens

Sales at retailers and restaurants fell 16.4 % in April from the prior month , almost double the 8.3 % drop in March which was previously the worst in data back to 1992 .
With most Americans stuck at home and unemployment that the highest since the Great Depression era , people sharply reduced their spending .
An index of output at the nation ’ s factories , mines and utilities decreased 11.2 % in April , the steepest monthly drop in the 101-year history of the Federal Reserve ’ s series .
Manufacturing production plummeted by a record 13.7 @ @ @ @ @ @ @ .
The politicization of Americans ’ views about the Covid-19 outbreak , including whether to wear a mask , extends to small businesses : Firms in the Northeast and in Democratic-leaning states are more anxious about the future than their peers around the country , with many expecting economic pain from the pandemic to last longer than six months .
U.K. government borrowing looks on course to exceed 300 billion pounds ( $ 366 billion ) in the current fiscal year , according to the latest forecasts from the nation ’ s fiscal @ @ @ @ @ @ @ area has soared to record levels in the face of the pandemic and stringent containment measures , with Bloomberg Economics ’ uncertainty gauge surpassing four standard deviations above its long-run average in the last couple of months .
China ’ s industrial output increased in April for the first time since the coronavirus outbreak , adding to early signs of a recovery that economists cautioned would be slow and challenging .
Japan ’ s economy has slipped from sales-tax hangover into deep recession , official data is set to show on Monday , @ @ @ @ @ @ @ restrictions on activity are gradually lifted .
Australia is the most China-reliant economy in the developed world , leaving it vulnerable to blowback from Prime Minister Scott Morrison ’ s calls for an independent probe into the origins of the coronavirus .
The Paris Club is confident China will take part in a global drive to pause debt payments for poor countries that urgently need funds to battle the coronavirus pandemic .
Russians are running out of money after six weeks of lockdown and minimal government support , adding to pressure that pushed @ @ @ @ @ @ @ economy even as the infection total surges to the second-highest in the world .
The OECD ’ s indicator of future turning points for the global economy plunged to unprecedented levels in April as output , consumption and confidence slumped when governments locked down activity to contain the coronavirus outbreak .
Global central bankers are echoing Federal Reserve Chairman Jerome Powell ’ s latest dismissal of negative interest rates , just as investors bet more of them will be dragged into the policy amid the coronavirus crisis .


washingtonpost--2020-02-27--Analysis | Coronavirus Sends VIX Into Backwardation—Here’s What That Means

Names for curve structures that map traders ’ guesses about what a given contract will be worth in the future .
Contango means upward sloping ; backwardation , downward .
In the oil markets , that means that if traders will pay more to lock in a shipment at a given price several months away than they would for delivery next month , the market ’ s in contango .
The Cboe Volatility Index , or VIX , as it ’ s known , is compiled based on the current state of trading in options -- contracts giving the right @ @ @ @ @ @ @ prices in certain conditions .
Traders often use these derivatives to hedge against market fluctuations .
The VIX uses options prices for equities -- the amounts traders are willing to pay to be prepared for different outcomes -- to calculate what ’ s called the implied volatility for the S & P 500 Index .
In contango .
That ’ s because projections about the outlook for the S & P , like for the weather , normally become more uncertain the further into the future one looks .
The VIX futures curve @ @ @ @ @ @ @ options generally have more value than shorter-term ones .
The VIX futures curve is in backwardation .
That ’ s a signal that investors expect more volatility in the near-term , as the world grapples with what the spread of the virus means for the global economy .
Right now , shorter-term contracts are more expensive than longer ones .
What ’ s particularly unusual about the current inversion is how deep it is beyond just the first two contracts , for March and April .
The spread between the second and third-month @ @ @ @ @ @ @ widest levels during this bull market .
Performance during other similar instances , like the markets ’ reaction to China ’ s devaluation of the yuan in August 2015 as well as the debt ceiling drama and European debt crisis in 2011 , suggest that it may take quite some time to digest the risks investors are grappling with at present .
That market participants are preoccupied with the risk that ’ s right in front of their faces .
That ’ s shown no signs of abating , with stocks on track @ @ @ @ @ @ @ the spread between short and longer-term contracts became increasingly negative .
Any narrowing of the gap , let alone a return to contango , would be a sign that conditions are normalizing .
That ’ s hard to say .
But they ’ ve been around for a while .
In Gilbert and Sullivan ’ s penultimate opera , “ Utopia , Limited , ” in 1893 , a corporate shill is introduced with this : “ A Company Promoter this with special education/Which teaches what Contango means and also Backwardation.
” Remember @ @ @ @ @ @ @ upward in contango ?
If the oil traders are right , they can make money by buying oil at today ’ s spot price , selling a futures contract for delivery at the higher price expected in the future and storing the oil in the meantime .
After oil prices crashed with the financial crisis of 2008 , investors put 90 million barrels of crude into floating storage .


washingtonpost--2020-02-27--Analysis | Reckitt Benckiser Cries Over $6.5 Billion of Spilled Milk

Easing back on Reckitt ’ s margin expectations was essential , as it gives it the space to make some much-need investments to boost sales .
Even in 2019 , when its results were hurt by a poor flu season and the continued underperformance of Mead ’ s infant nutrition products , its operating margin was 26.2 % , well ahead of Unilever ’ s 19.1 % and Nestle ’ s 17.6 % .
Reckitt aims to invest about 2 billion pounds over the next three years to try to deliver mid-single digit organic revenue growth .
It rose by @ @ @ @ @ @ @ of this will be funded by 1.3 billion pounds of cost savings .
But there will also be a hit to the margin of 3.5 percentage points this year , much bigger than the market had expected .
Relaxing the margin also leaves room to change Reckitt ’ s hard-driving culture , which has historically obsessed about controlling costs and short-term earnings .
Martin Deboo , an analyst at Jefferies , anticipates an operating margin of 22.7 % in 2020 .
The company wants to return to a margin percentage in the mid-20s @ @ @ @ @ @ @ signaled portfolio change .
He has ditched a plan to split Reckitt into its hygiene and home business — owner of brands such as the Cillit Bang cleaner and Vanish stain remover — and its health arm , which owns Nurofen painkillers and Scholl foot products .
Reckitt will now remain as a single company , but with three divisions : hygiene ; health and nutrition .
This structure , together with the whopper writedown , suggests that the nutrition business — primarily Mead Johnson — might be for sale at the right @ @ @ @ @ @ @ the poor performance of baby milk since Reckitt acquired Mead .
The foray into formula under former CEO Rakesh Kapoor looks like a colossal waste of money .
Reckitt also missed out on buying Pfizer ’ s consumer health unit , a far better fit , because it was busy digesting Mead Johnson and needed to cut debt .
Narasimham says Reckitt ’ s problems are operational .
Still , fixing them won ’ t be straightforward , particularly with any coronavirus related disruption to consumption and supply chains .
Given the economic @ @ @ @ @ @ @ margin targets look a stretch .
Also , an activist investor might be tempted to push for a breakup if his strategy doesn ’ t work , particularly if the shares , which fell about 5 % on Thursday , decline further .
The now abandoned plan to split the hygiene and home division from the health unit might have delivered value .
If Narasimham doesn ’ t clean up at Reckitt , a hedge fund may try to do the job for him .


washingtonpost--2020-02-27--CDC to Test More People; Stocks Continue Slide: Virus Update

“ We can get money and we can increase staff .
We know all the good people .
Some of @ @ @ @ @ cut they haven ’ t been used in many many years , ” Trump said @ @ @ @ @ the White House .
“ I don ’ t like having thousands of people around @ @ @ @ @ need them .
When you need them you can get them back very quickly .
@ @ @ @ @ very quickly .
We already have done that .
”


washingtonpost--2020-02-27--Analysis | Coronavirus Can’t Stop the CoCo Bond Express

Though it was twice covered with an order book of nearly $ 6 billion , that ’ s actually relatively low for this type of bond sale — no doubt a reflection of its unusually vast size for an AT1 .
It has struggled too in the after-market as it will take some time to be digested properly .
Local buyers will have played a big part too in making sure this deal was a success .
Nonetheless , it ’ s reassuring that bond buyers are still eager to take exposure to China ’ s oldest bank for its @ @ @ @ @ @ @ all the fears about the coronavirus and the effect on the country ’ s economy , this shows its biggest banks can raise money fairly easily .
The bank issued a yuan-denominated perpetual bond last year but it has no outstanding dollar AT1 debt so a deal of this magnitude was due — it is the timing that ’ s impressive .
This benchmark deal will probably be followed by other Chinese banks because there ’ s a need for them to boost regulatory capital buffers , as several credit rating agencies have @ @ @ @ @ @ @ than $ 40 billion worth of outstanding AT1 deals with call dates this year that are expected to be redeemed .
Bank of Communications Hong Kong Ltd. also issued a $ 500 million CoCo this week .
The People ’ s Bank of China , the country ’ s central bank , relaxed its rules in January last year to allow perpetual bonds as eligible collateral , thereby increasing their attractiveness for use in liquidity funding .
This shows how the Chinese authorities are trying to be as flexible as possible .
Falling @ @ @ @ @ @ @ to get ahead of their funding needs so long as investor demand holds up .
The experience of Bank of China should offer reassurance in difficult times .
This column does not necessarily reflect the opinion of Bloomberg LP and its owners .
Marcus Ashworth is a Bloomberg Opinion columnist covering European markets .
He spent three decades in the banking industry , most recently as chief markets strategist at Haitong Securities in London .


washingtonpost--2020-02-27--Analysis | Lenovo Has One Number That Deserves Scrutiny

Lenovo , like much of the technology hardware sector , has suffered a slowdown in sales growth over the past few years .
Revenue climbed just 0.5 % in the December quarter , and 1.1 % in the prior three months .
Yet accounts receivables has shot up .
It rose 40 % in the December quarter , the fourth straight period that growth exceeded 30 % .
This might make sense in an era where growth is strong and the company has a longer list of IOUs on the docket waiting for clients to pay .
But when revenue @ @ @ @ @ @ @ s little prospect of a rebound in the near-term , such a metric stands out .
One follow-on effect of this disparity , as Lenovo points out in its Feb. 20 investor presentation , is the negative impact on operating cash flow , which dropped almost two-thirds to $ 538 million , from $ 1.5 billion a year earlier .
Over the past two years I have sounded the alarm over rising inventories , using that measure across companies and slices of the supply chain to warn about a slowdown in the sector @ @ @ @ @ @ @ as a kind of financial inventory — something that has the potential , but not the guarantee , of being turned into cash — then Lenovo ’ s current situation isn ’ t dissimilar .
This disparity between sales and receivables growth pushed the receivables-to-sales ratio to 65 % in the December quarter .
That ’ s the third straight period it ’ s been above 60 % .
Prior to last year , this had topped 50 % just once in the past decade .
Lenovo also accounts for another category of @ @ @ @ @ @ @ due from subcontractors for components sold in the ordinary course of business ” — in a separate line item on its balance sheet .
If you add this figure in , the total comes to 87 % of sales .
While this is also near historic highs , the contrast to a few years ago isn ’ t as stark .
An interesting caveat for these receivables is that long-dated IOUs haven ’ t jumped as a proportion of the total .
Most of the spike has been in those due within 30 @ @ @ @ @ @ @ .
One possible explanation for higher receivables would be a drop in factoring , which is the practice of selling these IOUs to a third party at a discount .
The company gets immediate cash ( albeit less than the nominal value ) and the buyer gets to collect that debt and make a profit .
Chief Financial Officer Wong Wai Ming mentioned this during the Feb. 20 investor call he said “ our accounts receivable factoring volume dropped year-to-year.
” However , according to its financial filing for the December quarter published @ @ @ @ @ @ @ of factoring increased by $ 20 million , which helped drive up total finance costs by 25 % .
So , if factoring amount fell but costs rose , then that might indicate Lenovo needs to accept a larger discount in order to convert those accounts receivable into immediate cash .
It could mean that there ’ s fewer finance companies even willing to take on that work .
In the current macro-economic environment , especially with a pre-existing slowdown in sales and likely impact from the Covid-19 virus to come , companies @ @ @ @ @ @ @ items like receivables and inventory rather than let them balloon .
At Lenovo , these accounts receivable simply can ’ t be allowed to keep growing .
This may require either selling more through factoring with the possibility of taking a bigger discount , or tightening credit for clients , which could hurt the PC maker ’ s own sales in the face of already weakened demand .


washingtonpost--2020-02-27--Analysis | StanChart Keeps Its Head Amid the Virus Storm

On Thursday , StanChart posted full-year underlying pretax profit of $ 4.2 billion , slightly behind the consensus forecast of $ 4.3 billion , and announced a $ 500 million buyback .
That was less than the $ 1 billion analysts had expected .
The bank salved the disappointment by hinting that it will return more capital to shareholders after completing the sale of its stake in Indonesia ’ s PT Bank Permata .
There ’ s no share buyback in the works at HSBC .
Standard Chartered said that the coronavirus outbreak will delay its target of a 10 @ @ @ @ @ @ @ .
The epidemic has led to a shutdown of factories in China and wide-ranging travel disruption that has interrupted global trade .
Its warning mirrors that from HSBC , which said last week that the outbreak could lead to as much as $ 600 million in additional loan losses if it continues into the second half of the year .
Having Winters at the helm gives StanChart an edge — and not just over HSBC .
Several other European banks have new or no heads .
Earlier this month , Credit Suisse Group @ @ @ @ @ @ @ Tidjane Thiam over a spying scandal ; UBS Group AG poached ING Groep NV Chief executive Ralph Hamers ; Barclays Plc , according to the Financial Times , is looking for a replacement for Jes Staley , who ’ s preparing to retire from the bank next year amid allegations of links to sex offender Jeffrey Epstein .
Winters hasn ’ t exactly had a chummy relationship with investors .
He took a pay cut after shareholders complained about his high pension allowance last year , a revolt that he initially criticized as @ @ @ @ @ @ @ that painful episode behind him , the CEO will need to offer a meaningful increase in shareholder returns from last year ’ s 6.4 % , two percentage points lower than HSBC .
Unfortunately , this is unlikely to be the year .
As with HSBC , Hong Kong is StanChart ’ s single biggest market .
Before the impact of last year ’ s anti-government protests could fade , the coronavirus has arrived to threaten the economy again .
The outbreak will also hurt Singapore , another key market .
All the @ @ @ @ @ @ @ Winters will in all likelihood hand over a more solid franchise than he received .
When he joined in June 2015 , StanChart was neck deep in bad corporate loans in India and Indonesia .
That problem is in the rearview mirror now .
Even though the loan loss rate ticked slightly higher last year , it was just over half what it was two years ago .
While asset quality pressures may rebuild because of the supply-chain disruption from the coronavirus , at least the bank ’ s ability to endure as @ @ @ @ @ @ @ doubt .
Having made a mark as a digital lender in underbanked Africa , StanChart is now in the fray to open an online-only bank in Hong Kong .
Given the aging demographics of its existing client base in the former British colony , going after more millennials and Generation Z customers may be a smart move .
Asia is the biggest profit pool for banks worldwide .
But growth is slowing and competition from fintech is on the rise .
With global interest rates once again going limp , there ’ s @ @ @ @ @ @ @ While Winters can perhaps keep a tight leash on costs , he may not be able to pare them any further .
Having pushed back the 10 % return on equity target to beyond next year , even juicy buybacks won ’ t keep investors from souring on the one CEO who — to borrow from a StanChart advertising tagline — seems to be here for good .
Or as close to that as it gets in European banking nowadays .


washingtonpost--2020-02-27--Analysis | The Market Rout Is About More Than Coronavirus

Investors are meanwhile being asked to bail out past mistakes .
German pharma group Bayer AG cautioned that it may need to raise some equity to settle lawsuits relating to the Roundup glyphosate weedkiller inherited with its overpriced $ 66 billion acquisition of Monsanto Co. Aston Martin Lagonda Global Holdings Plc priced an emergency equity offering at 89 % below the price of the luxury carmaker ’ s 2018 initial public offering , having failed to match its capital structure to its business plan .
It ’ s tempting to dismiss each of these situations as company specific .
But @ @ @ @ @ @ @ corporate cycle has peaked , growth expectations are elevated , IPOs were done at undeserved prices and acquisitions made in the recent past may not deliver as promised .
The owner of WeWork may have failed to list in New York last year , but attempting such an ambitious IPO still had a very top-of-the-market feel .
The valuation of the European stock market , at about 14.5 times forward earnings , leaves little margin for error , say analysts at UBS Group AG .
If this year ’ s earnings are 2 @ @ @ @ @ @ @ would be trading at its historical average , they say .
The snag is that this is a small cushion given earnings expectations have been coming down in recent months .
For their part , the UBS analysts caution that consensus earnings estimates are still too high .
The immediate priority for European CEOs right now is to protect their workforces and defend their businesses while marshaling a proportionate and reasoned response to the threat of the coronavirus .
When that challenge abates , they will have to return to addressing weak growth @ @ @ @ @ @ @ in turn sustain the incentive to do M & A as a means of supporting earnings through cost-cutting , with all the risk of overpaying and writing down the acquisition years later .
On the latest evidence , that cycle is hard to break out of .
This column does not necessarily reflect the opinion of Bloomberg LP and its owners .
Chris Hughes is a Bloomberg Opinion columnist covering deals .
He previously worked for Reuters Breakingviews , as well as the Financial Times and the Independent newspaper .


washingtonpost--2020-02-27--Analysis | A Bailout Won’t Help China’s Tesla Wannabe, NIO

Those are lofty ambitions considering the company was sitting on $ 1.5 billion of debt and is expected to post negative free cash flow of $ 1.4 billion for 2019 , according to Bloomberg estimates .
Earlier this month , NIO said it had raised $ 100 million in one-year convertible notes , bringing the aggregate to $ 200 million of private placements this year .
It said it was “ working on several financing projects , the outcome of which is uncertain at this stage.
” Meanwhile , as the coronavirus hobbles China Inc. , NIO can ’ t @ @ @ @ @ @ @ .
The company has done a few similar partnerships .
Last year , it entered into a 10 billion yuan agreement to finance research and development and a new manufacturing facility with a state-owned fund in Beijing , E-Town Capital , in exchange for a minority stake .
NIO counts the likes of Baillie Gifford & Co. ( a big Tesla investor ) , Tencent Holdings Ltd. and Temasek Holdings Pte among its backers .
It has continuously burned cash since before going public in 2018 .
In the third quarter , it @ @ @ @ @ @ @ 2 billion yuan , Goldman Sachs Group Inc. analysts estimate .
They also forecast another cash outflow of 14 billion yuan before the company can break even in 2023 .
As NIO noted in its latest results announcement for the third quarter , its “ cash balance is not adequate to provide the required working capital and liquidity for continuous operation in the next 12 months.
” A helping hand from Beijing can ’ t turn around its operations at this rate of burn .
Part of the fundamental problem is that the @ @ @ @ @ @ @ cars .
They ’ re manufactured by state-backed Anhui Jianghuai Automobile Group Corp. , or JAC , at a plant in Hefei – where it ’ s moving – under a five-year agreement signed in 2016 .
The cost-effectiveness is questionable : For the first three years , NIO paid on a per-car basis and foot the bill for the plant ’ s operating losses .
It isn ’ t clear what the arrangement is now .
Under the new agreement , NIO plans to build a manufacturing facility .
It previously scrapped @ @ @ @ @ @ @ Tesla has been welcomed by the local government .
Even though car sales have inched up , NIO has continued to spend well beyond its means .
The cost of selling vehicles and other products rose faster than revenues in the third quarter .
But its cost of sales rose to 2.1 billion yuan , up 2.3 % from the second quarter , and climbed 30 % from a year earlier .
Research and development expenses came down from the second quarter but were almost flat on-year at 1.02 billion yuan , accounting @ @ @ @ @ @ @ latest earnings call , the company said it was taking cost-reduction measures .
It cut around 2,000 jobs between January and September last year .
What money NIO does bring in may be better spent on making the cars , rather than feeding hype around them .
More than cash , NIO seems to need a new strategy if it wants to survive .