washingtonpost--2020-05-28--House Votes to Extend Popular Small Business Loan Program

The House measure would give companies much more time to spend the money -- within 24 weeks or until the end of the year , whichever comes first -- and still qualify to have their PPP loans forgiven .
Businesses would also have up to five years , instead of two years , to repay any money owed on a loan and could use a greater percentage of proceeds on rent and other approved non-payroll expenses .
“ The true emergency period has evolved over time and this bill addresses that , ” said Steve Chabot of Ohio , the @ @ @ @ @ @ @ .
“ The flexibility that this allows America ’ s small businesses is going to go a long way to address the concerns we have heard time and time again.
” Bill co-sponsor Dean Phillips , a Minnesota Democrat , said restaurants and hospitality businesses are especially in need of the new flexibility because many employees haven ’ t been able allowed to return to work .
“ This bill will help people in ways they need , and we have not a moment to lose , ” Phillips said , urging colleagues @ @ @ @ @ @ @ restaurant employees.
” The Senate is expected to take up the bill next week .
While House Majority Leader Steny Hoyer said his chamber isn ’ t scheduled to be formally in session next week , it could pass a Senate-amended bill by voice vote .
But Senate Small Business Chairman Marco Rubio , a Florida Republican , said in a statement that some provisions in the House bill “ could create an unintended disincentive to rehiring and create new and serious burdens for PPP borrowers in terms of forgiveness.
” He said @ @ @ @ @ @ @ necessary changes to increase flexibility do not inadvertently harm business owners and employees in the process.
” The House bill , H.R .
7010 , would lower to 60 % the current requirement that 75 % of a loan be used on payroll .
Restaurants and other small businesses have said they want flexibility to spend more on overhead expenses , especially in high-rent areas .
The measure would change documentation requirements for employers who say they ’ ve been unable to rehire laid-off employees .
Under the program , the amount of @ @ @ @ @ @ @ ’ t maintain head count and salaries .
The bill also clarifies that a borrower doesn ’ t have to start repaying a loan until the SBA determines whether it can be forgiven .
Rubio contends the House language creates a problem for companies that use less than 60 % of a loan on payroll .
The current PPP program allows partial loan forgiveness if a company uses less than 75 % of a loan for payroll , but the House bill appears to state that none of the loan would be forgiven @ @ @ @ @ @ @ t met .
The PPP , the centerpiece of the $ 2.2 trillion relief package Congress enacted in March , allows loans of as much as $ 10 million that can be forgiven if a business spends it within eight weeks on payroll and no more than 25 % for rent and other approved expenses .
The idea was to help businesses keep workers on the payroll while they were closed during stay-at-home orders , so they could be ready to reopen when the bans lifted .
But restaurants and other small businesses @ @ @ @ @ @ @ spend the funds because they won ’ t be ready to reopen or be fully functional at the end of eight weeks .
The second round of $ 320 billion in PPP funding began April 27 after an initial allocation of $ 349 billion was exhausted in just 13 days .
The SBA reported on its website that more than 4.4 million loans worth $ 510.5 billion had been approved as of Wednesday night , meaning about $ 130 billion remains .


washingtonpost--2020-03-18--Analysis | Aston Martin Rescue Is More Lucky Than Deserved

Aston Martin Lagonda Global Holdings Plc saw its share price halve in the weeks after announcing a 500 million pounds ( $ 548 million ) capital increase at the end of January .
The deal envisaged Canadian fashion billionaire Stroll injecting funds for a 17 % stake , then putting in more cash with existing shareholders in a rights offer .
The new plan sees Stroll put in less , but for a 25 % holding .
Current shareholders will have to dig even deeper on the subsequent stock sale .
The price of that cash call has been slashed @ @ @ @ @ @ @ requiring Aston to issue an eye-watering 1.2 billion new shares at a humiliating 86 % discount to the closing price last week .
It ’ s awkward that attempts to reset the business stalled before they even got started .
But in reality Aston has been incredibly lucky : it began lining up the rescue before coronavirus became a global pandemic .
The revised fundraising is underwritten .
Other companies that now face a virus-induced liquidity crisis might not be as fortunate .
Unless investors vote in favor of the plan , Aston @ @ @ @ @ @ @ matter of weeks , the prospectus warns .
The stock is down over 90 % since its market debut .
Shareholders ’ choice is grim : put in more cash , or sell their entitlement to the new cheap stock but suffer enormous dilution .
Will the rescue be enough to put Aston on a sustainable footing ?
The economic freeze caused by measures to contain the coronavirus makes it hard to know .
Aston depends on loyal customers putting down fat deposits for so-called special vehicles that aren ’ t delivered for @ @ @ @ @ @ @ repeat buyers became more circumspect about new purchases , cash could flow out of the business .
As for the core range , demand in China has already taken a hit .
Production could be interrupted either at Aston ’ s own factories or because suppliers face difficulties .
There were high hopes for its new sports utility model , the DBX .
Sales now can only be guesswork .
The difficulty is that even if it overcomes this treacherous period , Aston ’ s medium-term prospects don ’ t look rosy .
@ @ @ @ @ @ @ s .
Suspending development of electric vehicles due to the cash shortage could cause Aston to fall behind in crucial low-emission technology .
Cash burn will remain negative for at least the next couple of years , according to the Bloomberg-compiled analyst consensus .
Stroll says that while Aston ’ s global market environment has changed , his consortium ’ s commitment to help fund the business through this time has not .
That may be so .
But the commitment will keep being tested .

Why did this happen?
Please make sure your browser supports JavaScript and cookies and that you are not blocking them from loading. For more information you can review our Terms of Service and Cookie Policy.


washingtonpost--2020-03-18--Analysis | How Currency Derivatives Show Dollar Funding Stress

They ’ re contracts where two sides agree to exchange interest payments in two different currencies .
During the life of the contract , floating interest-rate payments are exchanged , typically on a quarterly basis .
On March 17 , the premium paid to swap funding exposure from euros into the dollar surged to the widest since 2011 .
That suggests investors are struggling to get their hands on dollars despite injections of cash into financial markets by the U.S. Federal Reserve and other central banks .
Dollar funding stress is particularly pronounced for yen- and euro-based investors , based @ @ @ @ @ @ @ demand to swap funding exposure from the yen into the dollar was evident from the start of February -- coinciding with the rally in Treasuries -- the euro-denominated market was more resilient until mid-March .
The moves have also come at a time when financial companies become increasingly cautious about lending to each other and demand higher premiums on interest over risk-free rates , known as the FRA/OIS spread .
Major central banks , including those in the eurozone and Japan , said on March 15 that they would lower dollar borrowing costs @ @ @ @ @ @ @ in their respective jurisdictions .
These central banks borrow dollars from the Federal Reserve in exchange for an equivalent amount of their local currencies .
While the measures can ease pressures for banks , the effect is felt in a broader economy only if these lenders extend more dollar loans to companies and other institutions .
Banks also may shun a central bank swap line because of a stigma attached to tapping it .
Banks are the biggest users , while hedge funds and proprietary trading firms rank second .
The favored currencies @ @ @ @ @ @ @ .
Most contracts involve the dollar .
They typically range from 1 to 30 years , reflecting the length of the transactions they fund , such as loans .
What makes them unique in the world of swaps is that the parties agree to exchange notional principals , or the face amount used to calculate the payments .
Let ’ s say a European company needs a dollar loan .
While the firm may be well-established on the continent , banks in the U.S. may demand a stiffer rate to lend to a @ @ @ @ @ @ @ of the Atlantic .
Enter the cross-currency basis swap .
The European firm borrows in euros and swaps the payment into dollars with another entity that needs funds in Europe ’ s common currency .
That ’ s the million-dollar question .
If investors continue to seek the safety of Treasuries and stocks keep tumbling , the preference to swap out funding exposure into the dollar may persist .
The pressure may be more pronounced in the yen market because it ’ s historically been a good proxy for institutional funding stress .
@ @ @ @ @ @ @ the exchange rates ( forward and spot ) reflect the difference in interest rates .
According to a theory known as covered interest parity , a forward exchange rate is priced to take account of the interest received on the currencies over the term of the forward rate , so that an investor will receive at the end the same amount he or she started with ; hence the “ parity.
” Not so often .
And when it doesn ’ t that ’ s where the “ basis “ comes in .
@ @ @ @ @ @ @ exchange rate is 1.59 % below the spot rate , and the gap between U.S. and Japanese interest rates is 1.23 percentage points , the difference is minus 36 basis points .
So , the basis is negative 36 .
More formally , the basis is the difference between the forward exchange rate and the spot rate minus the difference between the two interest rates .
The basis is used to calculate interest paid during the swap .
Say investor A borrows dollars from investor B and simultaneously lends yen , at the @ @ @ @ @ @ @ At the end of the swap , the currencies will be returned using the same exchange rate .
During the term of the swap , investor A will pay the going interest rate on the dollar and will receive interest on the yen adjusted for the basis .
A higher negative basis value means local investors have to bear higher costs to hedge currency risks when buying foreign assets .
Companies borrowing locally and converting the proceeds into dollars using basis swaps suffer .
A higher negative basis also means dollar holders can @ @ @ @ @ @ @ greenback to enhance returns .
It ’ s a ploy that the Reserve Bank of Australia used when it swapped the bulk of its foreign-currency holdings into yen .
Take this example .
A Japanese investor bought $ 1 million at a spot rate of 110.40 on June 2 and agreed to sell three months later with a forward rate of 109.96 .
The effective borrowing rate works out as 1.59 % per annum .
Using basis swaps instead to lend 110.40 million yen and borrow $ 1 million , the borrowing rate @ @ @ @ @ @ @ includes 1.22250 % interest on the dollar loan , based on the London interbank offered rate .
The three-month dollar-yen basis swap was quoted at minus 32.25 , while the three-month yen Libor was minus 0.01250 % .
Add them together and the interest is minus 0.3350 % .
So this investor has to pay , instead of receive , 0.3350 % on the yen that was lent , as well as the 1.22250 % on the dollar loan : a combined 1.5575 % . )


washingtonpost--2020-03-18--Analysis | Virus Crisis Makes Big Deal of M&A Small Print

AMS , which makes laser components for the iPhone ’ s facial recognition system , is midway through an effort to sell 1.7 billion euros of new shares in a rights offer to pay for Osram .
It will be tough to fund the whole deal ultimately with debt .
When the terms of the share sale were announced a week ago , the price of the new stock was set at 9.20 Swiss francs .
That was a 64 % discount to the then share price , which had long been anticipating the fundraising .
Coronavirus was no secret @ @ @ @ @ @ @ falling , and these wide terms seemed to acknowledge as much .
Since then , however , AMS shares have continued their downward trajectory , and were trading below 9 francs on Wednesday .
Investors are now being asked to buy AMS shares above the market price to clinch a risky takeover in challenging times .
It ’ s hard to see them being keen .
No wonder Osram shareholders are getting worried AMS will not fulfill its bid – the German firm ’ s shares have also fallen sharply .
Normally , @ @ @ @ @ @ @ the banks underwriting the share offer – HSBC Holdings Plc .
and UBS Group AG – to buy any stock not taken by investors .
The snag is that the underwriting agreement includes a so-called material adverse change clause , which allows the banks to walk away in the case of any “ calamity or crisis or development involving a prospective change in national or international financial , political or economic conditions in any country ” .
The markets see that as a get-out .
The virus could detrimentally affect demand for the @ @ @ @ @ @ @ and the automotive industry – Munich-based Osram ’ s key end market .
It ’ s a highly uncertain situation .
In a worst-case scenario the banks could be left holding roughly 70 % of AMS , although they are likely to have passed on some of their commitment to hedge funds .
Getting a controlling stake might even necessitate a mandatory takeover bid .
The incentives for the banks to try wriggling off the hook are high .
AMS can still fund the deal in the short term because it has bridge @ @ @ @ @ @ @ repay those loans before long .
It ’ s not clear if AMS shareholders wouldn ’ t mind letting the deal fall apart .
What ’ s not in doubt is that Osram and its shareholders would be furious if that happened , and would almost certainly chase AMS in the courts – there doesn ’ t seem to be a material adverse change clause in the actual takeover offer .
Still , the bidder might prefer a legal battle to turning to the debt markets to pay for the transaction at considerably @ @ @


washingtonpost--2020-03-18--Analysis | HSBC Falls Into a Safe Pair of Hands at Last

HSBC approached at least three outsiders for the CEO role after ousting John Flint in August , leaving Quinn in charge on an interim basis .
Citigroup Inc. veterans Stephen Bird and James Forese , and Unicredit SpA ’ s Jean Pierre Mustier all ruled themselves out of contention .
Flint was axed after only 18 months in the role , having failed to satisfy Chairman Mark Tucker that he was doing enough to revive growth at the London-based and Asia-focused bank .
The frustrated CEO search led to the bizarre situation of having an interim chief present the bank @ @ @ @ @ @ @ , a plan that includes as many as 35,000 job cuts and a $ 100 billion reduction in gross assets .
No outsider would be scrambling to lead the bank after such big decisions had already been taken , leaving Quinn the likely pick , as I wrote at the time .
Exactly one month later , HSBC has come to the same conclusion .
As a 33-year veteran of HSBC , Quinn represents continuity and stability .
Both are welcome .
The landscape looks vastly different than when Tucker became the first @ @ @ @ @ @ @ Oct 1 , 2018 .
Former CEO Stuart Gulliver , Flint ’ s predecessor , had already started the tough work of trimming of one of the world ’ s most bloated banks .
HSBC had cut tens of thousands of jobs , exited at least 80 businesses , and was back in analysts ’ good books .
Interest rates were rising in Hong Kong , its single largest market , as the U.S. Federal Reserve moved to normalize policy .
Two-and-a-half years later , the coronavirus pandemic is making a mockery of @ @ @ @ @ @ @ .
Interest rates are back at zero , credit markets are tightening and dollar funding is freezing up in an uncomfortable echo of the 2008 credit crisis .
The Fed already began cutting borrowing cuts late last year as the U.S. economy weakened , hitting net interest margins of banks across the world .
If the financial turmoil unleashed by the virus proves as severe as the crisis of 12 years ago , then experience will be at a premium .
Quinn has the advantage of having been with HSBC through that period @ @ @ @ @ @ @ by contrast , is limited to a couple of years at HBOS Plc in the early 2000s , a non-executive role at the Bank of England and a period on the board of Goldman Sachs Group Inc. With the global economy heading into recession , no bank will be left unscathed .
HSBC said last month it could see an additional $ 600 million losses if the virus outbreak extends to the second half of the year .
It is at least in a stronger position to ride out the crunch than many @ @ @ @ @ @ @ plenty of deposits , especially in its Hong Kong .
Its mortgage loan book in Hong Kong looks secure , with the city ’ s real estate market having proved resilient so far .
And its size and geographic spread ensure access to dollar funding .
Amid these challenging conditions , Quinn ’ s appointment has come in less than ideal fashion , with his extended probation making clear that the board harbored doubts about his suitability .
The next few months will be a test of his safe hands .
He won @ @ @ @ @ @ @ to be tested .
After such a clumsy search for its next CEO , investors may feel that Tucker deserves scrutiny , too .


washingtonpost--2020-03-18--Analysis | No, Stocks Are Not a Bargain Yet

The short answer is no , even after all the recent turbulence , although it ’ s easy to conclude otherwise .
Wall Street loves to parade its favorite stock market barometer , the price-to-earnings ratio based on analysts ’ forward earnings estimates .
Ever the optimists , analysts have slashed their earnings expectations for this year by just 3 % since Feb. 19 , a laughably modest haircut against the backdrop of a U.S. economy widely expected to contract because of coronavirus-related complications and a Federal Reserve desperate to temper the damage with its historic intervention on Sunday .
@ @ @ @ @ @ @ Analysts expect earnings of $ 169 a share for the S & P 500 this year , down from $ 174 .
That translates into a forward P/E ratio of 14 , which is not terribly far from the 2008 financial crisis-era low of 11 .
But how realistic is that earnings estimate ?
It ’ s reasonable to suspect that the economic contraction from the coronavirus might rival the one that followed the dot-com bust in 2001 , or even the one around the financial crisis .
Earnings declined by 54 % @ @ @ @ @ @ @ peak to trough during those two episodes .
But let ’ s assume analysts ultimately write down earnings by 30 % , which is an average of the two write-downs they were eventually forced to make during the previous two downturns .
That would yield earnings of just $ 122 a share and a forward P/E ratio of 20 , which leaves a lot more room for the market to tumble further .
One need not argue about earnings to see that the market is not yet a bargain .
Based on its @ @ @ @ @ @ @ 500 is still roughly 50 % more expensive than its dot-com low and 160 % pricier than its financial crisis low .
It ’ s also more expensive based on other measures , such as price-to-book and price-to-cash flow .
The fact that many investors are surprised the market is not cheaper , by historical standards at least , shows how accustomed they ’ ve become to lofty stock prices .
By some measures , the bull market that just ended was the second longest on record .
There was also a lot @ @ @ @ @ @ @ growing availability of low-cost index funds meant that investors are willing to pay more for stocks than they once were .
It ’ s true that average valuations for U.S. stocks have risen in recent decades , but that may be false comfort .
For one , over the same time , average valuations have declined in many other developed countries where index funds are as popular and widely available , which may mean that the recent trend in the U.S. is a fluke .
More important , there ’ s no evidence @ @ @ @ @ @ @ during periods of stress , which is ultimately what investors care about when attempting to gauge how much further stocks might fall .
In fact , the bottom is uniquely too far for comfort in the U.S. Broad U.S. stock market gauges are stuffed with large-cap growth stocks , many of which were extravagantly expensive before this sell-off began , such as Amazon.com Inc. , Tesla Inc. , NVIDIA Corp. , Netflix Inc. and many others .
When those stocks are excluded , U.S. stock valuations appear much closer to previous bottoms .
@ @ @ @ @ @ @ U.S. where stock markets have been beaten up for years .
Overseas value stocks , for example , are already at or near their financial crisis lows .
None of this means U.S. stocks are necessarily heading lower , of course .
And even if they do , attempting to time the exit and re-entry is famously difficult .
But for those wondering how much more room the U.S. stock market has to fall , the answer is a lot more than investors probably realize .


washingtonpost--2020-03-18--Despite Global Crisis, Trump Resists Calls for Tariff Relief

“ There ’ s no reason to do that .
China is paying us billions and billions of dollars in tariffs , ” Trump said in a news conference .
“ I can ’ t imagine Americans asking for that.
” Over the course of his presidency , Trump has imposed tariffs on a total of more than $ 400 billion in goods , ranging from Chinese apparel imports and French cheeses to European aircraft .
Economists say those duties are either absorbed by companies or added to the price tag for U.S. consumers , meaning they ’ re not @ @ @ @ @ @ @ often claims .
Trump didn ’ t rule out , however , that China might request relief .
“ It could be that China asks for a suspension or something .
We ’ ll see what happens , ” he added .
Complicating the matter , is that many of the same small- and medium-size enterprises such as retailers or manufacturers that were hurt by the president ’ s tariff battles are also now suffering from the economic fallout of the coronavirus .
Business representatives admit it ’ s not clear that targeted @ @ @ @ @ @ @ on the broader economic outlook but eliminating their levies certainly wouldn ’ t hurt , they said .
Behind the scenes , the discussion about tariff relief has for weeks caused heated debates among Trump administration officials as well as outside allies , including lawmakers .
Larry Kudlow , the White House economic adviser , has been among the most vocal aides to make the case for relief , people familiar with the internal deliberations said .
Other aides have argued that cutting tariffs would only lead to a bigger trade deficit – @ @ @ @ @ @ @ reelection campaign .
Dan DiMicco , former CEO of Nucor Corp. , who helped craft many of the White House initiatives on trade , said talk about cutting tariffs isn ’ t founded in real need and he ’ s expressed that to the administration .
“ This is just another cheap shot to try and undo what is absolutely necessary for dealing with trade cheats , ” DiMicco said .
“ Steel and aluminum tariffs is hardly a serious issue for the economy , but it is for national security.
” “ @ @ @ @ @ @ @ glut in steel production and threatens to unleash a new surge in imports into the United States , which would be devastating to the American steel industry and our national security , ” the group wrote to lawmakers .
Despite their reluctance to cut tariffs across the board , the administration has moved quickly to exempt a range of products that are essential to the coronavirus response in the U.S .
The Office of the U.S. Trade Representative in recent weeks has granted exclusions for face masks , gloves and other medical supplies @ @ @ @ @ @ @ Trump has shifted from praising Chinese President Xi Jinping for his prompt containment of the virus , to blaming the world ’ s second-largest economy for spreading the disease , which he now calls the “ Chinese virus .
”


washingtonpost--2020-03-18--Analysis | Cheap Sterling Has Reasons to Be Cheaper

Of course , the drop is partly the flipside of dollars being in demand .
The pound does not benefit from safe-haven status like the Swiss franc or Japanese yen .
The U.K. economy is heavily weighted towards the service sector and the coronavirus pandemic could lead to a 10 % fall in gross domestic product in the second quarter , according to economists at Jefferies .
The Bank of England is also expected to cut interest rates down to 0.1 % and restart quantitative easing via a potential 100 billion pounds ( $ 118 billion ) bond-buying program , @ @ @ @ @ @ @ Canada .
This likely extra stimulus relative to what other central banks are doing further weighs on the British currency by reducing its attractiveness .
With the additional 350 billion pounds of measures announced by the government on Tuesday , and a promise of more , there is clearly sizeable economic support on the way for British business .
The U.K. policy response has been large and well coordinated .
But until there is hard evidence the virus is abating there will be no concomitant consumer growth rebound which would help reverse sterling @ @ @ @ @ @ @ , Brexit uncertainty still looms .
An extension to the transition period which ends this year would surely help the pound .
For now Prime Minister Boris Johnson ’ s government appears resistant to its core agenda getting blown off course .
There are signs that the cost of securing dollar funding is easing , as currency swap lines provided by the six major central banks , alongside separate action by the U.S. Federal Reserve , floods the market with in-demand greenbacks .
If so , some of the impact on sterling could @ @ @ @ @ @ @ 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--2020-03-18--Analysis | What You Need to Know About the Coronavirus Pandemic

It has been described as “ insidious ” because many infected people are well enough to go about their daily business , unwittingly spreading it to others .
A study of 191 patients in China found that the median duration of infectiousness was 20 days with a maximum of 37 days .
As of March 3 , the fatality rate was about 3.4 % based on globally reported cases , the World Health Organization said .
Such numbers are unreliable in the early stages of an outbreak , however , because there may be many people with mild cases who @ @ @ @ @ @ @ of the U.S. National Institute of Allergy and Infectious Diseases , told American lawmakers March 11 that the new coronavirus is 10 times more deadly than the seasonal flu , which has a mortality rate of about 0.1 % .
That jibes with a study published Feb. 10 that estimated a mortality rate of 1 % once all cases , including those with no or only mild symptoms , are counted .
A related coronavirus killed 9.5 % of patients in the 2002-2003 epidemic of severe acute respiratory syndrome , or SARS , @ @ @ @ @ @ @ to death in 34 % of the 2,499 cases recorded since 2012 .
In those outbreaks , however , the viruses didn ’ t transmit from one person to another as efficiently as this new one appears to do .
Certainly , they didn ’ t spread as widely as fast .
In the worst pandemic in recent history , an estimated 50 million people died from the 1918 influenza that had a case-fatality ratio of about 2 % and infected as much as a third of the world ’ s population .
@ @ @ @ @ @ @ a new strain of H1N1 flu ( swine flu ) in 2009 , infected an estimated 61 million people in the U.S. alone and killed an estimated 12,469 of them in the first year it circulated .
Symptoms begin to appear on average five to six days after infection .
The virus appear to cause a mild illness lasting about two weeks in children , adolescents and younger adults in most cases , and potentially more severe disease lasting three to six weeks in older people .
Frequently reported early signs are fever @ @ @ @ @ @ @ production if it stays in the nose and throat , which it does for the majority of people infected .
Danger starts when it reaches the lungs .
One in seven patients develops difficulty breathing and other severe complications , while 6 % become critically ill .
These patients typically suffer failure of the respiratory and other vital systems , and sometimes develop septic shock , according to a WHO report .
In severe cases , studies suggest the virus invades cells in the lower respiratory tract , causing difficulty breathing and the @ @ @ @ @ @ @ In an early study , more than a quarter of hospitalized patients developed a complication known as acute respiratory distress syndrome .
It appears to be the elderly and those with underlying health issues .
Many of the fatalities have been in patients with other illnesses such as high blood pressure , diabetes or cardiovascular disease .
A Chinese study of 72,000 cases found most deaths occurred in patients over 60 years old .
Of all confirmed cases , 81 % were mild , 14 % were severe and 4.7 % critical .
@ @ @ @ @ @ @ % of those who died were younger than 65 , according to the U.S. Centers for Disease Control and Prevention .
By coming into contact with virus-containing droplets that are emitted when an infected person coughs or sneezes , according to the WHO ’ s first comprehensive report on Covid-19 .
These droplets can be transferred directly to someone else in close proximity or via hands and surfaces .
How long it survives on surfaces is unknown , but preliminary studies suggest coronaviruses may remain viable from a few hours to 2 or @ @ @ @ @ @ @ .
Simple disinfectants kill it .
There ’ s a theoretical risk the virus can spread through feces or in tiny particles known as aerosols .
In a preliminary study , researchers who aerosolized it found active virus can float in the air for as many as 3 hours .
People who are still incubating the virus and show no symptoms may spread it .
Health authorities are concerned about what ’ s known as community spread , where the virus begins circulating freely among people outside of known contacts with other patients @ @ @ @ @ @ @ estimating the number of additional people likely to be infected by an individual with the virus .
That measurement , called a basic reproduction number or r0 ( pronounced “ r naught ” ) , is one indicator of how difficult an epidemic is to control .
A study of an outbreak aboard a cruise ship estimated that the r0 for Covid-19 was 2.28 during the early stages .
That would make it more infectious than seasonal flu , which has an r0 of about 1.3 and killed an estimated 61,000 people in @ @ @ @ @ @ @ There ’ s no evidence of that .
But “ false negative ” test results could give that impression .
A study published March 12 showed that a small proportion of recovered patients may test positive again days after discharge .
The authors theorized that it may take a few days for the immune system to completely eliminate residual viruses , which can be hard to detect .
During that period , the virus may briefly rebound and , depending on the patient ’ s general health , there is a risk of @ @ @ @ @ @ @ necessarily mean that the patient who retests positive is contagious , but the researchers suggested further investigation and post-discharge surveillance .
Just because outbreaks of influenza wilt with seasonal changes doesn ’ t mean a different respiratory virus will behave in the same way , though there is some indication it may .
The easing of flu outbreaks in the summer doesn ’ t mean the virus dies out .
Some evidence suggests it migrates to the opposite hemisphere , before returning again with cooler weather .
So , even if the coronavirus @ @ @ @ @ @ @ could return in the fall .
The virus emerged in early December in Wuhan , an industrial city of 11 million and capital of Hubei province .
Early attention focused on a seafood market where live animals were also sold , but about a third of the first 41 cases were found to have no link to it .
The viral genome is closely related to several coronaviruses found in bats .
Diseases transmissible from animals to humans , sometimes referred to as zoonoses , comprise a large percentage of all newly identified @ @ @ @ @ @ @ when a new human pathogen emerges because people typically lack immunity to it and there usually aren ’ t specific treatments or vaccines available .
Novel coronaviruses -- those unseen in humans before -- represent a particular concern because they have been known to spark complicated outbreaks that have sickened thousands of people , as SARS did as it swept across the globe from southern China .
As long as people can ’ t get it twice , yes .
If a sufficient percentage of people in a community develops immunity to an @ @ @ @ @ @ @ , so-called herd immunity can become established .
That reduces the number of susceptible people to a level at which transmission slows and eventually stops .
The necessary percentage depends on the basic reproductive number .
Patrick Vallance , the U.K. government ’ s chief scientific adviser , said March 13 that 60 % of the country ’ s population could become infected with the new coronavirus , which would help build up a degree of herd immunity .
However , researchers at Imperial College London have warned that , in the absence @ @ @ @ @ @ @ wave ” of infections is possible once quarantines and other intervention measures are lifted .
China imposed a quarantine on Wuhan and more than a dozen other cities in late January , sealing off some 60 million people .
New hospitals were built from the ground up in days , and the production of medical equipment was ramped up .
( Some makeshift centers in stadiums , hotels and office buildings have started to fold up as patients have recovered . )
With Covid-19 showing up in more places , officials began to @ @ @ @ @ @ @ to preparing for it amid shortages of testing kits , face masks and other equipment .
Italy , the worst hit country in Europe , was the first to attempt a nationwide lockdown to curb the spread .
Schools have been closed in many countries .
In mid-March U.S. President Donald Trump declared a national emergency and has significantly restricted international travel , as have European leaders .
Globally , governments are looking at a mix of cash handouts , tax breaks and transfers to counter the virus ’ s impact .
The @ @ @ @ @ @ @ could amount to as much as $ 1.2 trillion in spending .
The WHO declared a pandemic , which can help mobilize international responses .
The World Bank has allocated $ 12 billion in virus aid for developing economies .
Numbers of new cases in China have dropped dramatically .
A spokesperson for China ’ s National Health Commission said March 12 that the peak of the current outbreak in the country is “ generally over.
” China is now restricting flights into the country to combat imported cases .
Reactions to China @ @ @ @ @ @ @ The country did not immediately release genetic information about the virus and has struggled to explain changes in the way it counts new cases .
But China ’ s strict quarantine likely bought the rest of the world two to three weeks to prepare for the virus and averted many infections , according to the WHO .
The initial U.S. response failed to stop the virus ’ s spread despite Trump ’ s tweet in late February that it was “ very much under control.
” Italy ’ s hospitals are being overwhelmed @ @ @ @ @ @ @ a faster rate than any other country , betting on early detection , isolation and treatment to help defeat the virus .


washingtonpost--2020-03-18--Analysis | Will Warm Weather Curb Coronavirus? What the Experts Say

It ’ s too early to know .
The new coronavirus has infected more than 120,000 people worldwide , but it only appeared in central China at the end of last year .
Officials of the World Health Organization said March 5 there ’ s no reason to believe temperature will play a role in the outbreak but that the subject was worth investigating .
A handful of researchers have prepared analyses on the subject , but none have yet been published in scholarly journals , which require papers to be vetted by experts working in the same field .
@ @ @ @ @ @ @ the places where coronavirus infection has mostly taken hold so far -- such as Wuhan in central China , Milan and Seattle -- share similarly mild humidity and temperatures ; one paper put the range from about 5 to 11 degrees Celsius ( 41 to 52 degrees Fahrenheit ) in winter .
Other researchers who examined outbreaks in 100 Chinese cities found that high temperature and high relative humidity significantly reduce the transmission of theCOVID-19 virus .
Still other scientists in the U.S. concluded that weather changes alone won ’ t necessarily reduce @ @ @ @ @ @ @ flu is largely a winter phenomenon , whereas in tropical and subtropical areas it tends to occur during the rainy season , if there is one , or year-round if not .
There are various theories why .
There ’ s evidence that both cold , dry air and especially humid conditions are favorable for flu ’ s transmission .
Just as people tend to crowd indoors in cold and rainy weather , boosting contagion , they spend more time outside in fine weather , reducing contamination .
There ’ s the possibility @ @ @ @ @ @ @ and vitamin D levels , which can boost their immune systems , and that viruses lose their punch in warmer weather because their fatty coating degrades .
The 2002-2003 epidemic of severe acute respiratory syndrome did indeed ease over the summer .
But that may have had little to do with the weather .
“ SARS did not die of natural causes , ” Harvard epidemiologist Marc Lipsitch writes .
“ It was killed by extremely intense public health interventions in mainland Chinese cities , Hong Kong , Vietnam , Thailand , Canada @ @ @ @ @ @ @ authorities isolated cases and quarantined their contacts .
The strategy worked , Lipsitch says , because the most infectious SARS patients showed obvious symptoms .
While China has taken similar steps with the new coronavirus , its long incubation period and many mild cases have complicated containment efforts .
The easing of flu outbreaks in the summer doesn ’ t mean the virus dies out .
Some evidence suggests it migrates to the opposite hemisphere , before returning again with cooler weather .
So , even if the coronavirus does subside in the @ @ @ @ @ @ @ fall .


washingtonpost--2020-03-18--Analysis | SoftBank’s Nuclear Option Puts the ‘You’ Back In to WeWork

SoftBank is unlikely to give up on the troubled office-rental company , because it can ’ t .
Which puts the ball in Neumann ’ s court .
The $ 3 billion deal that the Japanese company says it could walk away from , because of the regulatory investigations , is just one part of a package totaling close to $ 8 billion put together to bail out the startup after its offering plans were scrapped and value massively written down .
Among the items in its Oct. 23 funding announcement is the acceleration of an existing $ 1.5 billion @ @ @ @ @ @ @ debt financing .
( 1 ) The tender offer for shares was a big deal because that ’ s what helped SoftBank boost its stake from 29 % to 80 % .
It also allowed SoftBank chairman Masayoshi Son to install his own executive team at WeWork — Chairman Marcelo Claure is SoftBank ’ s chief operating officer —and start calling the shots on everything from employee layoffs to unwinding earlier acquisitions .
If the purchase of those existing shares doesn ’ t go through , then Neumann gets to hold on to @ @ @ @ @ @ @ to the dollar of where it was a year ago .
SoftBank may not even have control , limiting its ability to steer WeWork to profitability .
But SoftBank has to do something .
Last week it announced plans to buy back $ 4.8 billion shares , an opportunistic move aimed at propping up the stock and alleviating some of the pressure put on by activist investor Elliott Management Corp. That move spurred S & P Global Ratings to put SoftBank on negative outlook , the first step before actually cutting its credit @ @ @ @ @ @ @ as 12 % , taking the decline over the past month to more than 40 % .
At the same time , the global economic meltdown caused by the Covid-19 pandemic has made the Vision Fund ’ s portfolio of unprofitable startups look shaky .
These companies survive on continuous streams of cash until they can eventually turn a profit , and that lifeline may get cut in a credit crunch .
Walking away from the tender offer is entirely possible .
This would be the nuclear option in the sense that doing @ @ @ @ @ @ @ Without purchasing that stake , SoftBank would be left sharing control with the same executive team and investors who oversaw WeWork ’ s early blunders — making it tough to effect the wholesale changes needed for a turnaround .
Yet SoftBank has already plowed so much cash into the business that WeWork ’ s final demise would cause further pain not just to investors , but Son ’ s own reputation as a savvy and trustworthy investor .
Neumann could hold his ground and insist on the originally agreed price .
But these @ @ @ @ @ @ @ and actions that took place under his watch , including concerns over self-dealings , disclosures and conflicts of interest .
That gives SoftBank the opportunity to point the finger not only at Neumann but at existing shareholders who share the responsibility of not exercising enough oversight .
That means that if the tender offer does fail , SoftBank can put the blame on the counterparty with a reminder that there won ’ t be a better offer elsewhere .
In the current meltdown , Son is in a position to show what it @ @ @ @ @ @ @ are not in this together .


washingtonpost--2020-03-17--Respond to the Coronavirus With Everything, All at Once

The first phase is the intentional economic shutdown , produced by social distancing and other practices , that is designed to stem the spread of the virus .
This policy causes immediate and direct economic harm in the hope of preventing greater loss of life .
It is a necessary and justifiable tradeoff .
The economy will have to absorb this loss and the government should provide direct assistance to families and businesses in need .
The second phase is the liquidity crunch , the early effects of which are already being seen in the financial markets .
They will @ @ @ @ @ @ @ The essential problem is that , as Larry Summers puts it , time has essentially been stopped economically but has not been stopped financially .
Households and businesses are still responsible for paying rent and making payroll .
The third phase is the recovery .
Once the pandemic has passed , the economy will need to surge back to prevent a prolonged recession .
In his press conference on Monday , President Donald Trump said that he expected pent-up demand to produce such a boom , and Treasury Secretary Steven Mnuchin has echoed @ @ @ @ @ @ @ Three depends almost entirely on what the government does about Phase Two .
The Federal Reserve has already lowered rates to zero and begun quantitative easing .
That will help by making it easier for banks to negotiate favorable terms with distressed borrowers , and there is already some anecdotal evidence that banks are offering unsolicited credit lines to small business .
The White House is also planning to expand Small Business Administration loans .
This makes sense , but these types of federally administered programs can be kludgy and difficult to scale @ @ @ @ @ @ @ payments of $ 1,000 to all American adults .
That will help , but it ’ s not nearly enough — for either consumers or the economy .
For households that are truly distressed , $ 1,000 is not sufficient .
Meanwhile the total amount of stimulus , roughly $ 200 billion , is too small to change the overall dynamics of the economy .
First , it should temporarily increase unemployment benefits and remove any caps for the duration of the pandemic .
( In fact , the White House is already @ @ @ @ @ @ @ , such generous benefits would discourage workers from aggressively seeking new work .
In the current climate , however , policy makers should be cautious about pushing those out of work to seek new work .
Second , Congress should not only adopt Trump ’ s proposal to eliminate the payroll tax for the rest of the year , but it should also refund any payroll tax already paid in 2020 .
This will be an enormous stimulus to the economy , roughly $ 1.2 trillion , and it will provide an infusion @ @ @ @ @ @ @ allow them to expand employment under pandemic conditions if they are able to do so .
Amazon , for example , is preparing to hire 100,000 new delivery workers , and some bars and restaurants may need to hire more people as they convert to delivery-only .
It may seem that these two goals — expanding pandemic-appropriate employment and raising unemployment benefits — are odds .
They aren ’ t .
The idea should be to encourage expansions in safe employment while giving job seekers bargaining power to turn down dangerous work .
@ @ @ @ @ @ @ not be concerned about the price tag .
The president has said that this is the equivalent of a war , and Congress should treat it as such when considering appropriations .
It ’ s far better to do too much than too little .


washingtonpost--2020-03-18--Analysis | Dollar Funding Is Freezing Up, and the Fed Knows It

To ease the strain in dollar borrowing , the Fed took action Tuesday , restarting a commercial paper funding facility for U.S. corporates .
It also allowed banks and broker-dealers that trade directly with the Fed to borrow cash secured against some stocks and higher-rated bonds .
But that doesn ’ t do much to ease funding tightness overseas .
For evidence , look no further than currency swaps , which measure how expensive it is to borrow in dollars .
If a Japanese bank wants to offer a dollar loan to a client , the bank , pocketful of @ @ @ @ @ @ @ yen in exchange for an American bank ’ s dollars using currency swaps .
This practice is common across Asian markets — and the costs are soaring .
Since the global financial crisis , foreign banks ’ dollar lending has ballooned to $ 12 trillion from $ 10 trillion , the International Monetary Fund estimates .
Lenders abroad like this business because dollar assets tend to offer higher returns and companies prefer to borrow in the currency .
Now , this key corner of the funding market is in trouble .
The three-month @ @ @ @ @ @ @ as negative 122 basis points Tuesday , the widest since December 2011 .
That ’ s despite the Fed promising to boost liquidity via its swap line with the European Central Bank just two days earlier .
Stocks fell during European trading hours as investors feared a squeeze .
If the euro swap ’ s explosion was just a blip , how about markets without a direct line to the Fed ?
Dollar liquidity conditions in Asia have been tightening recently , too .
In South Korea , the one-year won basis swap @ @ @ @ @ @ @ , from negative 55 basis points only two weeks earlier .
Meanwhile , in Hong Kong , dollar funding is as tight as the 2011 European financial crisis , going by data from cross-currency swaps .
In the asset management world , the dollar is still the king .
If it ’ s hard to get a hold of them , that doesn ’ t bode well for risk assets .
Just look at the Korean won , which sank to a 10-year low Tuesday , even though Seoul has been doing a @ @ @ @ @ @ @ its foreign currency reserves and reducing its reliance on short-term external debt .
Meanwhile , some Korean stocks have become dirt cheap .
The country ’ s banks , for instance , are trading at only 0.2 times book , data compiled by Bloomberg Intelligence show , making them almost as unloved as the industry ’ s basket case , Deutsche Bank AG .
Then consider Hong Kong .
In February , even with China in the throes of the virus outbreak , the dollar bond market stayed afloat , with mainland developers @ @ @ @ @ @ @ But the funding squeeze has changed the calculation entirely : The total value of Chinese dollar bonds yielding above 15 % more than doubled from a week ago .
That means China Inc. ’ s borrowers will have to pay a lot more — and , unfortunately , the offshore market is about the only place big enough to place the half-a-billion-dollar issues they rely on .
While the Fed has taken action on American soil , it could expand its swap lines with more central banks .
It ’ s understandable that @ @ @ @ @ @ @ be the world ’ s lender of last resort , but it ’ s a little too late for that : The dollar greases the pipes of global finance .
Funds can ’ t flow freely if things are clogged on the other side of the Pacific .
In its latest financial stability report from October , the IMF worried about the role foreign banks serve in dollar funding .
Currency swaps tend to be short-term , volatile and costly , it warned .
The coronavirus is only drawing out that instability .


washingtonpost--2020-03-18--Mnuchin Warns Virus Could Yield 20% Jobless Rate Without Action

He told the senators that he believes the economic fallout from the coronavirus is potentially worse than the 2008 financial crisis .
Extraordinarily high unemployment , he said , is a possibility if lawmakers don ’ t swiftly provide financial assistance to wage workers and small- and medium-sized businesses .
“ During the meeting with Senate Republicans today , Secretary Mnuchin used several mathematical examples for illustrative purposes , but he never implied this would be the case , ” Treasury Department spokeswoman Monica Crowley said .
For many lawmakers , plunging stock prices and an abrupt drop-off of consumer @ @ @ @ @ @ @ has crystallized the need for Congress to act quickly and boldly .
The U.S. Federal Reserve has already used much of its toolbox to shore up the economy -- bringing rates close to zero and announcing crisis-era lending programs -- leaving policy makers to ease the extent of the damage with fiscal stimulus .
The unemployment scenario raised by Mnuchin would be a dramatic turn from February , when the U.S. jobless rate fell back to a half-century low of 3.5 % as average hourly earnings climbed a steady 3 % from a @ @ @ @ @ @ @ the coronavirus has continued to spread in the U.S. On Tuesday , there had been more than 6,200 cases in the country and 105 deaths , according to a tally by Johns Hopkins University .
A surge in unemployment of the scope Mnuchin described is greater than what has so far been forecast by bank economists -- though economists continue to stress the uncertainty of any prediction at this time .
On Tuesday , Wells Fargo & Co. updated its forecast to show the unemployment rate would reach 5.3 % in the fourth @ @ @ @ @ @ @ a stimulus plan that could include direct payments of $ 1,000 or more to Americans .
Mnuchin pitched $ 250 billion in checks to be sent at the end of April with a second set of checks totaling $ 500 billion four weeks later if there ’ s still a national emergency , according to a person familiar with the matter .
For more articles like this , please visit us at bloomberg.com


washingtonpost--2020-03-21--Analysis | Closing School May Cause Some Kids a Lifetime of Harm

I ’ m talking of course about the school closures in many countries , from Europe and Asia to North America .
And I ’ m not interested in relitigating whether those shut-downs are necessary ; let ’ s assume they are .
But depending on how long schools stay closed , these ruptures will derail some youngsters , while spurring others to excel .
Let ’ s start with the teachers .
There are huge differences in how schools intend to keep teaching remotely during the crisis with the digital tools now available .
And it ’ s not @ @ @ @ @ @ @ to be in poor or rich areas .
Looking at my own children ’ s school after a couple of days of remote learning , for example , I ’ m cautiously optimistic .
It had already set up Google Classroom , SeeSaw and a few other online tools , and the teachers appear joyfully flexible in trying out ways to keep the kids engaged .
But many other schools in Berlin , the worst of Germany ’ s 16 school systems , either aren ’ t set up yet or don ’ @ @ @ @ @ @ @ keep teaching during the closure .
Now for the parents .
Here the differences are at least as big .
In some families , mom and dad have white-collar jobs that let them work from home , keeping an eye on the kids .
They probably also have good WiFi , at least one laptop or iPad per kid and shelves of books in the background .
They may also have a sense of discipline and balance , setting strict time tables but making room for playtime and exercise .
And they ’ @ @ @ @ @ @ @ waiting before the next lesson .
In other families , the parents — or the single mom or dad — may have none of this .
If the school doesn ’ t structure the children ’ s learning , the parents don ’ t know where to find teaching tools , and wouldn ’ t be confident in this role anyway .
Maybe they need to hold down a job in the gig economy and will therefore will be absent much of the time .
Their kids will end up spending “ school @ @ @ @ @ @ @ .
Last but not least , the kids .
Even within one family , the individual differences can be huge .
Some children thrive in the social and structured setting of a school , but fall apart without that discipline and stimulation .
For others , it may be the reverse .
Without the usual distractions , they may benefit from a time of deep and immersive study .
Whatever a student ’ s purely academic skills may have been so far , “ non-cognitive ” factors such as self-discipline , organization and @ @ @ @ @ @ @ during a prolonged school closure .
That ’ s what some educators fashionably call “ grit.
” As a result , some children will fall behind or stop learning altogether , while others will keep learning at the same rate or even build the organizational and motivational skills for lasting success .
At some point , whenever the pandemic recedes , these cohorts will rejoin in a classroom .
But one group may never catch up again , whereas the other will pull ahead — and keep pulling ahead in school , university @ @ @ @ @ @ @ relative weight of teachers , parents and children in determining the outcome ?
Perhaps the individual traits of each child are most important .
That was the conclusion of the famous marshmallow test , a study that began in the 1960s and was published in 1990 .
The researchers offered 4-year-olds a marshmallow but promised them even more candy if they waited before chomping .
Then they left and came back after 15 minutes .
The kids who were able to delay gratification later went on to do better in life in almost @ @ @ @ @ @ @ body mass indices .
But a more recent study published in 2018 came to a different conclusion .
Trying to replicate the original marshmallow test , it looked at ten times as many children and controlled for social class .
And it found that family background , not the willpower implied by delayed gratification , was the biggest factor in subsequent life success .
In fact , it even found that family background pretty well predicted whether a given child will eat a marshmallow or wait .
A poor child , for example @ @ @ @ @ @ @ of a second marshmallow .
I ’ m not ready to dismiss the importance of anyone — teachers , parents or individual children — in coping with the disruption we ’ re all facing in school and life .
They all matter .
But everything tells me that the virus-induced school closures of 2020 ( and going into 2021 ? )
will bifurcate today ’ s population of school children into winners and losers with lasting effects .
This is bad news .
It suggests that inequality , already a huge problem before @ @ @ @ @ @ @ now , we must of course defeat our immediate enemy , which is the virus .
But it ’ s not too early to start thinking about the day after we declare victory , whenever that may be .


washingtonpost--2020-03-21--Analysis | How the ‘Brussels Effect’ Helps the EU Rule the World

It ’ s a term for the influence the EU exerts by shaping rules and technical standards adopted by companies and countries around the world .
When YouTube pulls a video rant off its website , it ’ s using the EU ’ s definition of hate speech .
Timber chopped down in Indonesia , honey harvested in Brazil and the amount of chemicals in Japanese toys all abide by rules set by Brussels .
EU antitrust probes into Google ’ s business are mimicked by India , South Korea and even the U.S .
The list goes on .
@ @ @ @ @ @ @ ignore the terms set by one of their most important markets , says Columbia Law School Professor Anu Bradford who coined the term “ Brussels Effect ” in an article and a book .
If businesses want to avoid producing different versions of the same product for different markets , many will take the EU line for a number of reasons .
Legislation from the bloc of 27 nations can prove more flexible than that from other regions as the EU picks up what ’ s been trialed in its member states , @ @ @ @ @ @ @ or emissions trading programs in the U.K. European rules also need to be agreed by consensus , allowing a say for companies and consumer or environmental activists .
What comes out sets a high standard that firms with global supply chains tend to accept .
Pretty much everything .
Companies wanting to prove their products use safe chemicals will follow the EU ’ s REACH rules .
African farmers growing food that might be sold to Europe will shun genetically modified crops to comply with EU standards .
Trees felled illegally can ’ @ @ @ @ @ @ @ Europe .
Any business that collects and uses data ( that ’ s most of them ) knows of the EU ’ s General Data Protection Regulation , or GDPR , rules that limit what personal information can be gathered and stored .
Looking ahead , energy efficiency and environmental rules to meet EU climate goals may also be adopted by companies and copied by countries across the globe .
That ’ s another matter .
Its support of human rights is often ignored and few countries seek to emulate its expensive and @ @ @ @ @ @ @ high-wage labor market .
The euro , overseen by the European Central Bank in Frankfurt , has never seriously challenged the dollar as the world ’ s benchmark currency and the EU ’ s struggle to contain its own financial and debt crises have eroded its role as a global economic power .
Former Bank of England Governor Mervyn King argued in a Bloomberg Opinion column that for U.K. banks the partnership with the U.S. may offer a better hope for regulation than tying London to an EU model .
The Brussels Effect @ @ @ @ @ @ @ Effect ’ phenomenon also described in academic research , didn ’ t come about by design but the EU ’ s executive , the European Commission , is happy to show it off .
It invites overseas officials to see how it works and explain its policies , for example telling China how Europe tries to keep state subsidies in check .
Lobbyists from companies and governments around the world maintain offices in the Belgian capital .
The U.K. ’ s move to quit the EU was partly predicated on the desire to @ @ @ @ @ @ @ according to Bradford , the country is likely to remain hooked into EU regulations as its businesses push for alignment to allow them to sell into the European market of 450 million people .
When it comes to internal EU debate , Britain ’ s disappearance will eliminate a pro-market voice that often countered French and German pushes for greater regulation and intervention .
The EU isn ’ t leading the rule-making in every area , particularly emerging technologies such as artificial intelligence that are dominated by Chinese and American companies .
Weary @ @ @ @ @ @ @ , EU tech czar Margrethe Vestager aims to ensure technology deployed in Europe is transparent and has human oversight , likely meaning more stringent guidelines than in many other regions .


washingtonpost--2020-03-21--Virus Stimulus Plan Grows With Senate Talks Going Into Weekend

Senate Democratic leader Chuck Schumer wants an expanded package that would spend far more on workers and on responding to the health care crisis , while Mnuchin wants more to bolster the economy , including direct payments to more Americans , according to people familiar with his thinking .
The legislation will be the third measure from the U.S. Congress to soften the economic blow from the coronavirus that has swept the globe , sent markets plunging and constricted much of the world ’ s economy .
Even as Democrats rejected the Republican draft bill released Thursday , lawmakers of @ @ @ @ @ @ @ quickly with a massive infusion of federal money into a U.S. economy that has ground to a halt .
“ We ’ re talking about a bill that at minimum is a trillion dollars , ” Ueland said earlier Friday .
“ I understand the potential for the deficit impact .
But the deficit impact is not a barrier to the need to act on behalf of the American people .
The impact of the virus is roiling markets worldwide .
The S & P 500 Index tumbled to its lowest in three @ @ @ @ @ @ @ % .
The European Union said the recession this year may be as bad as 2009 , and Goldman Sachs warned the U.S. economy may shrink 24 % on an annualized basis in the second quarter .
McConnell and Schumer have each proposed their own sweeping plans that four groups of senators spent much of Friday trying to reconcile .
Schumer spoke with Trump Friday , and both Schumer and House Speaker Nancy Pelosi spoke several times with Mnuchin .
Lawmakers on Friday were nearing an agreement to give low-income individuals the full @ @ @ @ @ @ @ amount in the GOP version , according to multiple people familiar with the talks .
They also were close on an increased unemployment insurance , a central Democratic ask .
The two issues appear to be intertwined , and final numbers for the emergency benefits will in part depend on what feedback negotiators receive from other senators , as well as the administration and potentially House leadership .
A major sticking point is a Democratic demand for additional emergency funding to states .
Ueland told reporters that he estimates states have an aggregate @ @ @ @ @ @ @ funds .
But certain states , like Illinois , have precarious debt or budget situations like to be exacerbated by the sudden drop in economic activity .
In Schumer ’ s earlier phone conversations with Trump , he urged the president to immediately use the Defense Production Act to get ventilators and other important equipment .
Trump said at the White House briefing that he was doing that .
Ueland on Friday said the negotiations between Republicans , Democrats and the White House can ’ t go on forever because staff members will @ @ @ @ @ @ @ that it can be voted on Monday .


washingtonpost--2020-03-21--Analysis | Our Phones Are Watching Us. That’s a Virus Tool

Thanks to the location and personal data that we share with the likes of Facebook Inc. and Alphabet Inc. via our mobile phones , the world ’ s population is currently under routine surveillance in a manner that would have made George Orwell blench .
That ’ s a source of justified disquiet at the best of times .
As the Covid-19 coronavirus was quietly beginning its spread through the population of Wuhan in December and January , a series of New York Times articles outlined the staggering amount of data that we ’ ve given up to technology companies @ @ @ @ @ @ @ being rendered anonymous , it ’ s trivially easy to crack someone ’ s identity by simple tricks like checking where they sleep each night and work during the day .
In the current crisis , it ’ s worth contemplating whether that ’ s more of an opportunity than a danger .
We ’ re rightly concerned about surveillance when it ’ s done by a business or a government with nefarious intent — but the word “ surveillance ” also describes a medical practice that ’ s crucial in suppressing epidemics @ @ @ @ @ @ @ infected , tracing their contacts , and restricting or checking on the movements of whoever may have been exposed has been a vital step in reducing the spread of diseases for more than a century .
The discipline of epidemiology dates back to John Snow , a London doctor who managed to tame an 1854 cholera outbreak by tracking who ’ d had direct and indirect access to a tainted water pump .
Alongside more broad-based and disruptive restrictions such as closures of borders , schools and businesses , disease surveillance is still @ @ @ @ @ @ @ to combat Covid-19 until workable vaccines become available — and that may be 18 months away .
It ’ s extraordinary in this context that we ’ re not yet seeing wider use of the world-class surveillance technology at the fingertips of every phone company in the world .
Instead , the very thought of such measures makes many queasy .
China has introduced scanning of QR codes so that only residents and employees can gain entry to apartment complexes and offices , as well as assigning citizens “ traffic light ” levels @ @ @ @ @ @ @ history .
In a country where surveillance has already been used to restrict civil liberties , there are reasonable fears that those technologies could end up becoming permanent features of life .
But in nations governed by democracy and the rule of law , we shouldn ’ t let knee-jerk discomfort cause us to reject measures that could save lives in a crisis .
At present , much of the discussion is happening behind closed doors .
Companies whose tracking of personal data has alarmed civil liberties activists , including Palantir Technologies Inc. @ @ @ @ @ @ @ talks with U.S. federal and state agencies about using their tools to track the pandemic , the Wall Street Journal reported this week , citing sources it didn ’ t identify .
Government representatives didn ’ t respond to the newspaper ’ s requests for comment about the talks .
That ’ s the wrong approach .
As was seen in the wake of the quarantines that were imposed in Canada during the 2003 severe acute respiratory syndrome epidemic , people are generally quite accepting of temporary restrictions on civil liberties in a @ @ @ @ @ @ @ s crucial in winning that trust , though , that governments are open about what they ’ re doing .
A sensible application of these tools might allow health agencies to remind people to stay indoors at times when the risk of infection is high , or simply wash their hands as soon as their location data line up with home again .
Rather than using up emergency services resources on physically restricting the movements of infected people — as in the case of a man in Kentucky who ’ s had police @ @ @ @ @ @ @ to self-isolate after testing positive for the virus — the same tools might allow doctors to telephone people as soon as they break quarantine and warn them of the risks , or alert others when a quarantine-breaker is in the broad vicinity .
No one wants to turn our mobile phones into a digital version of the medieval leper bell .
Still , it should be possible to craft technologies and policies that can provide limited data access to health authorities when a pandemic has been declared , before reverting to normal once @ @ @ @ @ @ @ opposition to all government use of our personal data will leave us fighting the spread of pandemic with one hand tied behind our backs .
Adding to the toolkit that health services have to tackle coronavirus may literally now be a matter of life and death .


washingtonpost--2020-03-27--Google Offers $800 Million to Virus Relief, Including Ad Credits

The most important news stories of the day , curated by Post editors and delivered every morning .
By signing @ @ @ @ @ Terms of Use and Privacy Policy


washingtonpost--2020-03-27--Bank of America Pledges to Retain and Pay Staff Throughout 2020


washingtonpost--2020-03-27--Analysis | So You’re Working Remotely. What’s the Best Way?

Offices in Asia , Europe and North America were shut down as part of efforts to reduce contact between people and mitigate the spread of the coronavirus .
Millions of people are now working from home .
Governments in many areas have restricted people ’ s movements .
Workers are scrambling to adapt ; companies are buying and dispatching equipment such as computer monitors , keyboards and webcams to make it easier .
About 56 % of companies globally said they allowed remote work and 16 % were fully remote , with no office option available , in a 2018 @ @ @ @ @ @ @ video conferencing equipment .
Managers were permitted to work from home in 40 % to 50 % of medium manufacturing companies researchers surveyed in 2012 and 2013 in the U.K. , Germany and the U.S. A quarter of all employees in the U.S. worked at home at least occasionally in 2017 and 2018 , according to the Bureau of Labor Statistics .
Fifteen percent of them had days they worked only at home , and among those , 1 in 7 did so five or more days a week .
According to an @ @ @ @ @ @ @ , which promotes flexible working arrangements , 56 % of workers in the U.S. have a job where at least some portion of what they do can be done remotely .
They ’ re disproportionately found among those who work in information , finance , science , the professions , administration and services .
The pandemic has exposed the divide between those who can work from home and those who can ’ t , such as waiters , factory workers and truck drivers .
The latter skew toward lower-paid workers who may lack @ @ @ @ @ @ @ dries up .
Still , some well-paid employees face challenges , particularly those in highly regulated workplaces , such as people who work in financial services .
People who trade securities , such as stocks , bonds and currencies , face myriad issues .
Some home computers and residential internet services can ’ t handle the huge amounts of data and advanced software needed to manage and execute millions of transactions daily .
And working remotely raises compliance concerns , as it ’ s difficult to replicate the close monitoring of phone calls @ @ @ @ @ @ @ as a precaution against misconduct .
Banks such as JPMorgan Chase & Co. are splitting up teams with some at home and some on backup trading floors .
Employers are expected to take advantage of what they learn during the lockdown .
Those with a good experience may decide that offices can shrink , reducing overhead at a time of economic uncertainty .
Even before the pandemic , Global Workplace Analytics estimated that as many as half of desks in many offices were unoccupied on a given day as workers have adopted more @ @ @ @ @ @ @ , permanently reducing workstations means employees have to share them when they do come into the office , a practice that can spread germs .
Reductions in office space would depress the commercial real estate market , which is already under pressure given that numerous businesses are expected to fail in the economic slowdown precipitated by the pandemic .
It was first proposed as an alternative to commuting that would cut down on pollution , traffic and oil consumption .
In a 1973 book , former NASA engineer Jack Nilles imagined a world @ @ @ @ @ @ @ to their homes than downtown headquarters .
His scheme envisioned a “ sufficiently sophisticated telecommunications and information-storage system.
” The arrival of that system—the internet—accelerated the trend through the 1990s and the dot-com boom .
The mass migration to the home office provoked by the pandemic occurred as more data was moving into the “ cloud ” and new tools such as Slack , Trello and Dropbox made it easier to collaborate .
The spread of fiber-optic cable has delivered internet to many homes at speeds of 1 gigabit per second , helping @ @ @ @ @ @ @ video conferencing from home a chore .
Studies have found that they ’ re just as productive as—if not more productive than—people in offices .
But that might be true only for certain types of workers .
One widely cited study looked at call-center employees , whose jobs don ’ t require much teamwork .
A review of studies suggested that the employees best suited to telework are those whose work relies less on others and who have the autonomy to make decisions and choose how and when to complete tasks .
Best @ @ @ @ @ @ @ companies that have eliminated or limited remote work in recent years out of concern it staunches collaboration and innovation .
The argument is that members of teams work more productively in the same place than scattered across different locations .
Some company leaders also dislike remote work because they suspect that staffers abuse the privilege to take it easy .
Most experts agree that it requires a dedicated space , good equipment and sufficient home bandwidth .
A rule of thumb is that about 20 megabits per second of bandwidth is needed for @ @ @ @ @ @ @ internet .
It helps to shut off everything that ’ s online and not being used , such as an unattended movie on a streaming service ; it ’ ll eat up bandwidth that could be used for a video conference .
Workers should set a start and finish time and avoid the lure of household chores during the workday .


washingtonpost--2020-03-27--Bank of America’s Race to Avoid Public Shaming Underscores the Perils of the Crisis

Across the nation , bankers are on edge .
Publicly , they ’ re emphasizing that unlike the last downturn in 2008 they aren ’ t the cause of this collapse and they intend to help America get through it .
Privately , they worry they ’ re destined to get cast as villains .
Once the government enacts its $ 2 trillion rescue package , banks are going to be the last resort for millions of consumers and businesses needing additional support to weather months of hardship .
The nation ’ s eight banking titans have enough excess capital @ @ @ @ @ @ @ trillion , but even that probably isn ’ t enough to meet everyone ’ s needs .
One of the industry ’ s most senior leaders put it this way : The country ’ s banks are strong and ready to support the economy -- but they can ’ t afford to lend irresponsibly to clients who can ’ t repay .
That limits the ability of banks to lend to others .
“ The best credits are made in the worst of times , ” said Julie Solar , a senior analyst @ @ @ @ @ @ @ Fitch Ratings .
As the virus ’ s toll on the economy worsens , lenders will eventually be forced to pick winners and losers , she said .
“ Those borrowers who are higher investment grade are going to fare better.
” There are also ethical questions : Banks must walk a “ fine line ” to prevent desperate clients from overburdening themselves with debts they can ’ t repay , Citigroup Inc. Chief Executive Officer Michael Corbat told the Financial Times this week .
That ’ s “ the last thing that @ @ @ @ @ @ @ of America ’ s quick move to head off a Twitter backlash shows how worried banks are about keeping public criticism at bay .
The lender followed up with a statement saying Newsom was mistaken and that it plans to defer payments on a monthly basis until the end of the crisis .
Banks have many other lending decisions ahead .
It ’ s not hard to imagine people and employers facing rejection will feel they could ’ ve made it through if their bankers just gave them a chance .
Such accusations @ @ @ @ @ @ @ notably the Great Depression .
Companies hit first by the sudden halt to global travel -- such as airlines , hotels , cruise-ship operators , casinos and oil producers -- have been drawing down billions of dollars from existing credit lines for weeks .
Their pain soon spread to restaurants , retailers and legions of small businesses as a growing number mayors and governors told residents to stay home .
Behind the scenes , senior bankers said they are rapidly reevaluating their loan portfolios to gauge how the virus and social distancing measures @ @ @ @ @ @ @ trying to figure out which are most or least resilient .
Banks have been honoring credit lines they offered corporate clients in the halcyon years before the pandemic .
One looming question is whether lenders might invoke the so-called MAC , or “ materially adverse change ” clauses , to stop drawdowns .
One concern is that some businesses with little to no chance of making it through will siphon off billions in loans that could go toward supporting others .
Banks are trying to maintain goodwill in Washington , working in close @ @ @ @ @ @ @ up the financial system .
Earlier this month , a delegation of CEOs from firms including Goldman Sachs Group Inc. , Wells Fargo , Citigroup and Bank of America visited the White House to offer reassurances that they can weather the turmoil and help others .
Lawmakers are ratcheting up pressure on lenders to help constituents in other ways .
Last week , Senators Elizabeth Warren and Ed Markey pushed banks and credit unions in their home state of Massachusetts to suspend a variety of fees -- such as charges for late payments @ @ @ @ @ @ @ generate billions of dollars in annual revenue nationally .
To conserve funds for lending , the country ’ s largest banks vowed to stop buying back their own shares through at least the middle of the year .
The move comes at a cost for investors , some of whom would have preferred firms snap up shares at depressed prices , blunting this year ’ s 40 % plunge in the KBW Bank Index .
“ The biggest difference between now and 2008 is that the banks are a source of strength rather @ @ @ @ @ @ @ ” said Tom Naratil , co-head of UBS Group AG ’ s wealth management unit .
“ This is the time for banks , obviously prudently , to make sure that we are extending credit to our clients .
”


washingtonpost--2020-03-26--Analysis | Who Will Pay the Car Industry’s Bills This Time?

Now , from the U.S. to India , Vietnam and Thailand and elsewhere , auto giants are shutting down production .
It means more than turning the lights off .
Sales are expected to fall almost 15 % this year to fewer than 80 million vehicles , according S & P Global Ratings .
In the U.S. , the drop may be the biggest since 2009 .
Even as China tries to get back to work , auto and parts factories will likely run at low capacity .
The pandemic is showing up vulnerabilities on balance sheets .
Over the @ @ @ @ @ @ @ Investors Services downgraded auto manufacturers including Toyota Motor Corp. and BMW AG , and put several others on review , including General Motors Co. , citing “ weaknesses in their credit profiles including their exposure to final consumer demand for light vehicles.
” S & P downgraded Ford to junk status and put Toyota on review.The billions of dollars of cash that car companies are sitting on may give investors comfort that contingency plans are in place .
But automakers run cash-intensive businesses , paying suppliers and funding operations .
Having a cushion @ @ @ @ @ @ @ for long .
Unlike other cash-heavy enterprises , most also run so-called negative working capital , meaning their current liabilities are higher than current assets .
A dollar upfront is better than a dollar in a few weeks .
The reason they can do this is because they get paid by their dealers before delivery – especially in the U.S , which is a credit-driven market .
That ’ s all good when the cars are selling .
But when things turn down , these companies start burning through cash quickly , as @ @ @ @ @ @ @ Pre-virus sales outlooks were already poor .
The trouble with Covid-19 is that no one knows how long it will last or when buyers will return .
That makes it harder to say how much cash they ’ ll need , part of the reason some are proactively drawing down their credit lines .
In the current gloom , it ’ s worth looking at how far every dollar of sales goes toward meeting operational expenses and paying down short-term debt , or the ratio of working capital to sales .
Companies still @ @ @ @ @ @ @ inventories aren ’ t being drained .
During the financial crisis a decade ago , Bloomberg Intelligence ’ s Joel Levington notes the ratio started slightly negative and rose to 5 % .
If that occurred again , he estimates , an average automaker would need an additional $ 6.9 billion of capital .
With cash needs cropping up across the economy , it ’ s unclear where that money would come from .
The descent can be quick : At the height of the crisis , Japanese automakers in the U.S. ran @ @ @ @ @ @ @ yen ( $ 7.7 billion ) , according to Goldman Sachs Group Inc. , dropping from close to positive 2 trillion yen .
In China , cash flows are highly correlated to profitability .
If you ’ re running losses , working capital will bite .
The cascading effect of a cash crunch could run far and wide .
Some large Chinese auto parts manufacturers rely on international automakers for 30 % to 50 % of their business to generate positive operating cash flow .
“ This could change quickly , ” says @ @ @ @ @ @ @ there ’ s the debt coming due .
Automakers haven ’ t piled on large amounts except for their financing arms .
But , per Levington , as of last week $ 179 billion of debt had a 30 % -plus chance of default .
The convulsions in markets will make it more expensive to pay .
The likes of Tata Motors Ltd.-owned Jaguar Land Rover Automotive Plc have seen their bonds trade down to as low as 59 cents on the dollar .
Across the sector , more than $ 100 billion @ @ @ @ @ @ @ rated below A , he notes.Financing arms , a big source of problems in 2008 , have again become major drivers of operating profits .
If China is any indication for how quickly things can sour , defaults on auto loan-backed securities rose sharply last month and prepayments fell to a record low.The position of car giants is now reminiscent of the pre-financial crisis years .
When Detroit ’ s automakers were on the verge of collapse , the U.S. government braved public rebuke and stepped in with $ 82 billion in various @ @ @ @ @ @ @ collapse .
The bailout remains debated , but one thing is clear : Carmakers will need help this time , too .
While Washington ’ s new $ 2 trillion stimulus could indirectly benefit the sector , prolonged pain would need more support .
Cars may have gotten better since the last crisis , but automakers haven ’ t readied their balance sheets or operations for one as severe as this is turning out to be .


washingtonpost--2020-04-02--Analysis | Giant Funds Are a Model for the Post-Coronavirus Future

Norway currently has the world ’ s biggest sovereign wealth fund , overseeing about $ 945 billion and funded by the nation ’ s oil revenue .
Singapore has had a wealth fund for more than four decades .
Egypt , Senegal and Turkey have all set up wealth funds in recent years to manage their state-owned companies , with South Africa saying earlier this year that it plans a similar move .
Countries in Europe have toyed with the idea in the past .
In August , a draft proposal for a “ European Future Fund ” suggested an @ @ @ @ @ @ @ ) pot could be set aside to invest in strategic industries in the European Union .
But as my colleague Ferdinando Giugliano argued at the time , the EU is not a sovereign state , and such a fund would just divert existing budget resources rather than tapping a pool of wealth .
In the U.K. , the May 2017 Conservative Party manifesto proposed what it called Future Britain funds , which would “ hold in trust the investments of the British people , backing British infrastructure and the British economy.
” The @ @ @ @ @ @ @ “ shale gas extraction , dormant assets and the receipts of sale of some public assets.
” Almost three years later , there ’ s still no sign of those plans being enacted .
( That ’ s probably just as well given their paltry financial underpinning ; as myself and my colleague Marcus Ashworth wrote at the time , those sources would have provided a minuscule capital base , even before fracking was banned in Britain . )
But the current crisis provides an opportunity for individual countries to make good on @ @ @ @ @ @ @ funds that are big enough to count as full-blown assets to society , given the scale of financial assistance that ’ s likely to be required to get through these dark days .
They could start by assigning existing state investments to wealth funds .
The U.K. government , for example , still owns about 60 % of Royal Bank of Scotland Group Plc , more than a decade after bailing out the ailing lender to the tune of more than 45 billion pounds ( $ 56 billion ) as part of a @ @ @ @ @ @ @ .
The German government has a stake of almost 16 % in Commerzbank AG , while Belgium and France have control of Dexia SA , split 53 % to 47 % .
The global financial crisis made many banks wards of their states .
Formalizing those stakes in wealth funds would be a way to start building state-owned asset portfolios .
During normal times , governments could be sleeping equity partners .
But in times of crisis — like now — governments would have a more direct pathway to influence lenders to help @ @ @ @ @ @ @ the U.K. , creating a wealth fund would solve the issue of preserving vital domestic infrastructure without handing free money to foreign conglomerates .
The owners of Heathrow Airport , for example , include Qatar Holding , the government of Singapore ’ s GIC Pte Ltd. , and the China Investment Corp. By making aid conditional on receipt of equity , Britain would be getting a stake at current distressed values in return for bailout funds .
Today ’ s situation demands aid packages for a swathe of industries feeling the pain , @ @ @ @ @ @ @ having such a broad range of stakes feels too interventionist , wealth-fund holdings could be restricted to infrastructure that ’ s vital to the economic functioning of a country .
Though that could prove to be a tough distinction ; given initial lockdown experiences , an argument could be made that suppliers of internet broadband and food delivery should qualify .
For those who still insist the state should stay out of private enterprises , note that governments are already effectively telling companies how to run their affairs in return for aid .
@ @ @ @ @ @ @ seeking help to suspend their dividends , with France also asking the same from firms that defer tax liabilities .
German Economy Minister Peter Altmaier also wants senior executives to “ contribute in emergencies , especially with respect to bonus payments , ” according to an interview with the Frankfurter Allgemeine Zeitung at the weekend .
One of the new realities of the post-virus economy will be increased state involvement in business .
Companies are likely to come under pressure to shorten their supply chains and bring more manufacturing back home , wherever @ @ @ @ @ @ @ production will become shorter , as regional ties replace at least some of the worldwide outsourcing that has been a keystone of the globalized economy .
That will be easier to enforce if governments ’ holdings give them seats on corporate boards .
Shareholdings would give governments additional clout to influence better corporate behavior as more nations embrace their responsibilities to the future of the planet .
Until now , asset managers have long been leading the drive to force firms to give greater emphasis to environmental , social and governance issues .
@ @ @ @ @ @ @ about the rescue of the global financial system was that public money was used to compensate for private risk taking gone awry .
While this crisis is undoubtedly different , there ’ s still a danger that as governments pledge billions of dollars , euros and pounds to businesses , public support will wane as the scale of the financial challenge becomes apparent .
Building equity stakes that belong to the nation will help offset voter mistrust about the wisdom of such largess , allowing everyone to participate in the economic recovery that @ @ @ @ @ @ @


washingtonpost--2020-04-02--Analysis | Trillions in Rescue Aren’t Coming From China

Though China has been first-in and somewhat first-out on the virus , the measures laid out so far still amount to only 1.6 % of gross domestic product on-budget and 1.7 % off-budget .
Compare that to Australia and South Korea , where off-budget measures already amount to 5.2 % of GDP in addition to budgetary help , according to Credit Suisse Group AG analysts .
Beijing is relying more on monetary policy to flush the system with liquidity and boost credit , unlike some countries where fiscal measures are playing a larger role .
This reflects the reality that @ @ @ @ @ @ @ .
The special treasury bonds are therefore notable .
They have only been deployed previously when things just had to get done .
In 1998 , Beijing used them out to recapitalize banks as the financial crisis pummeled Asia .
In 2007 , they were marshaled to set up sovereign wealth fund China Investment Corp. and strengthen foreign-exchange reserve management .
They don ’ t end up on the government ’ s balance sheet and are earmarked for specific , targeted policy goals .
This time , the bonds could directly fund China @ @ @ @ @ @ @ ll have more room to lend .
Nomura Holdings Inc. analysts estimate that almost 2 trillion yuan to 4 trillion yuan ( $ 282 billion to $ 563 billion ) of these long-maturity obligations could be issued to fill the gap between the official and actual fiscal deficit targets .
Unlike regular central government bonds , these need to be put to spending that has returns , which could force some discipline .
China doesn ’ t have the fiscal space of a decade ago , when it unleashed a 4 trillion yuan @ @ @ @ @ @ @ a much smaller economy and the rest of the world with it .
Revenues plunged almost 10 % in January and February from last year ; those from land sales fell 16.4 % .
That ’ s only an early blow .
At the local government level , revenue last year grew at the slowest pace in a decade .
Property prices are dropping across several cities .
With the need for expenditure and leverage rising , the ability to service borrowings has become difficult.There aren ’ t many places left to add @ @ @ @ @ @ @ burden as a portion of its GDP is among the world ’ s highest .
Local government debt has dominated in recent years as almost all of the 2.15 trillion yuan quota of municipal off-books bonds for specific projects was issued .
Meanwhile , years of using state-backed enterprises ’ balance sheets to boost economic growth has leveraged them to the hilt .
Households are also strained .
The special treasury bonds represent something of a last stand .
They ’ re going to indirectly lean on China ’ s banks , which @ @ @ @ @ @ @ risk .
Banks are currently staring into a credit down-cycle made worse by the virus shock , which will amount to billions in yuan of non-performing assets , rising credit costs and slower profit growth .
Jitters in the sector last year have hit confidence .
Rounds of monetary-policy easing have pushed them to lend to the weakest borrowers .
As Goldman Sachs Group Inc. analysts put it , issuing these bonds signals “ a new round of loosening , monetizing fiscal stimulus via the central banking system , leveraging on banks to @ @ @ @ @ @ @ will mean that prudent policies to unwind the leverage buried in China ’ s labyrinthine financial system will be thrown aside .
More debt , on or off the books or contingent liabilities , will pile up .
The type of stimulus China really needs — for consumers — won ’ t arrive.This time , China has limits that it has rarely faced in the past .
As Beijing is constrained to turn inward , it ’ s no wonder that other countries are coming out with far more aggressive measures .


washingtonpost--2020-04-02--Fed’s Mester Says Unemployment Rate in U.S. Could Reach 15%

“ I was anticipating that in the first half of the year we were going to have some really bad numbers , and seeing that number today just confirms how bad it is , ” Mester said in a telephone interview with Bloomberg News .
“ You don ’ t like to see those numbers because it means people really are impacted by this , ” she said .
“ It will take some time to get it back down , and we ’ ll see a big hit to output growth in the second quarter because we ’ ve @ @ @ @ @ @ @ central bank is racing to prepare additional emergency programs , on top of the six it has already announced .
One , the Main Street Lending Program , will aim to deliver loans to small-and-mid-sized businesses .
“ People and businesses need aid now , ” she said .
“ I can tell you we understand the sense of urgency and the Fed is working as quickly as possible.
” Mester was even more careful when asked when the Fed might introduce a facility to purchase debt issued by cities and states .
@ @ @ @ @ @ @ the U.S. Treasury Department to implement a program aiding states and municipalities .
Many expect the Treasury will do so by backstopping a Fed lending facility .
“ This is another one of those things we ’ re working on to see what it makes sense to do , ” she said .
“ We can do some things , perhaps , at the Fed to make sure the markets are working , but I think the direct transfers to state and local governments will come probably from the Treasury , ” she @ @ @ @ @ @ @ particularly in the Treasury market , prompted Mester to dissent on March 15 when the FOMC voted to slash its benchmark interest rate by 1 percentage point close to zero .
“ The illiquidity was really affecting any kind of hope for transmission of a monetary policy cut ” at that point , Mester said .
“ Also there was social distancing going on , which meant any kind of rate cut wasn ’ t going to spur activity.
” She said there ’ s been progress in restoring market liquidity , “ @ @ @ @ @ @ @ where our focus really has to be continuing.
” Mester , who was director of research at the Philadelphia Fed during the financial crisis of 2008-09 , said she hasn ’ t found herself shocked by anything that ’ s unfolded over the past month .
“ I find it very depressing that we are in this situation , but I guess I ’ ve been buoyed by the fact that this is really an all-hands-on-deck situation , ” she said .
“ There really is a sense of everyone working together to @ @ @ @ @ @ @ anticipated .
”


washingtonpost--2020-04-02--Analysis | Scrambling for Cash? Cut Out the Middle Man

Normally a big corporate share sale is about cutting debt or paying for a big takeover .
There ’ s plenty of time to do this properly via a so-called rights offer : the lengthy process whereby investors get priority allocation on any new stock being sold ( hence the “ rights ” ) .
Today ’ s need for equity is different .
Many companies suddenly have zero cash coming in due to measures aimed at combating the coronavirus .
Their lenders may not help unless shareholders dig deep too .
There ’ s no time to lose .
@ @ @ @ @ @ @ to flout British custom and follow U.S. practice instead : Just sell a big slab of shares , ideally to existing shareholders , but ultimately to whomever will take them .
After all , anti-dilution protection is not enshrined in U.K. law but in guidance stating that share sales of more than 10 % of the company should essentially be via rights offers .
That guidance was sensibly revised on Wednesday , with the threshold lifted to 20 % over the next six months .
Bosses will need to explain why they ’ @ @ @ @ @ @ @ try hard to raise the equity from existing owners .
Airport caterer SSP Group Plc blazed the trail last week and sold a 20 % stake in the market for 216 million pounds ( $ 268 million ) .
HSBC Holdings Plc , Lloyds Banking Group Plc and Royal Bank of Scotland Group Plc simultaneously agreed to lend it 113 million pounds .
Each slab of cash appeared to rely on the other being committed .
Sticking with the old guidance was not a realistic option .
Investment banks could have agreed to @ @ @ @ @ @ @ at a price so low it would have wiped out existing shareholders , for a tidy fee .
With that backstop secured , an orderly fundraising might have been possible , for another fee .
But SSP ’ s share price would have subsequently tumbled , and the proceeds would have taken weeks to land .
Lenders could have then charged the earth for bridging the financing gap .
Why ever bother with a rights offer if you can just do what SSP did ?
Should nimble share placings become the norm ?
@ @ @ @ @ @ @ shareholders still get diluted .
However in this case , they actually did OK : SSP shares rallied .
The institutional shareholders who bought the deal paid a premium to SSP ’ s prior-day share price ; there was no VIP bargain .
Moreover , speedy share placings could also be made subject to clawback by smaller holders , with some tweaks to the current documentation requirements .
The real problem is many firms will need to raise even more than 20 % of their share capital this year .
Share offerings that @ @ @ @ @ @ @ European regulations .
And at that size , the case for ignoring anti-dilution rights is weaker .
Shareholders know multiple demands for cash are looming .
Companies should form an orderly queue , ask for no more and no less than they need , and choose their methods accordingly .
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 .