washingtonpost--2020-03-30--Analysis | Banker Job Cuts Will Be Back, Sooner or Later

Unlike the crisis of 2008 , the stresses on markets and the economy are not of banks ’ making but they could be as severe .
Policymakers have rushed through stimulus and eased lenders ’ capital requirements to soften the blow .
As they grapple with the operational challenge of fielding a volume of customer calls running as high as 10 times normal levels , now is not the time for layoffs .
As regulators have said , buybacks and dividends must go first .
Yet the pressure on bank jobs and other costs won ’ t go away in @ @ @ @ @ @ @ lenders , which have prospered from the recent spike in market trading activity , will be affected by the economic carnage of the next few months .
Deutsche Bank AG , which has paused staff cuts in the middle of its biggest restructuring in decades , on March 18 said the positive business momentum in the fourth quarter of 2019 — in which trading was prominent — carried over into start of 2020 .
Two days later , it warned it “ may be materially adversely affected by a protracted downturn.
” From @ @ @ @ @ @ @ from investment products , analysts expect all banks to suffer a drop in revenue and an inevitable build-up of bad loans that will erode profit .
Record low interest rates will keep squeezing loan margins and appetite for new investments will almost certainly remain subdued for some time .
Some analysts are starting to try to asses the financial hit .
A Berenberg study of 38 European and U.S. banks estimates an overall revenue decline of 8.5 % in 2020 and earnings 30 % below what was expected for 2020 .
There ’ @ @ @ @ @ @ @ to shield financial firms .
Europe ’ s banks , which were struggling to generate sustainable profit even before the latest crisis , will feel most acutely the pressure to shore up capital .
This will create the conditions for more mergers .
The cost-to-income ratio at the region ’ s top banks averaged 66.9 % in 2019 , the highest level since the financial crisis .
Return on equity , a measure of profitability , dropped to 8.7 % , the lowest in three years , Bloomberg Intelligence data show .
Moody @ @ @ @ @ @ @ for banks across France , Italy , Spain , Denmark , the Netherlands and Belgium to negative because the operating environment will “ deteriorate significantly.
” The ratings company already had negative outlooks for British and German banks .
As well as the relentless squeeze on profit and costs , there ’ s another key factor that doesn ’ t bode well for bank jobs once the current environment ends : the sudden shift to digital banking during the pandemic .
Banks are operating with only a fraction of their branches open , @ @ @ @ @ @ @ that might well stick after the Covid-19 outbreak abates .
One big U.K. bank saw demand for its online app more than triple to 5,000 daily downloads last week .
In the U.S. , Italy , France and Germany bank branches on average provide services to fewer than 3,500 inhabitants .
In the Netherlands , where the banks are further along in introducing technological changes , the figure is closer to 11,000 .
This may well be a turning point in the desirability of local brick and mortar banks .
The acceleration toward @ @ @ @ @ @ @ probably be very fast , ” UniCredit SpA Chief Executive Officer Jean Pierre Mustier told Bloomberg Television on Monday .
Smaller banks in particular will have to adapt quickly .
As economies implode under lockdowns affecting more than one-third of the world ’ s population , banks are in demand like never before .
That won ’ t last .


washingtonpost--2020-05-07--Analysis | Don’t Let Uber and Lyft Shortchange Their Workers

There ’ s a lot riding on the distinction .
Employees are entitled to minimum wage , overtime pay and other benefits , whereas contractors are not .
Multiply the difference in cost by millions of drivers and the savings add up to a huge competitive advantage .
So it ’ s not surprising that Uber is doing everything possible to bolster the case that it ’ s not responsible for drivers .
Since California enacted the law , Uber has experimented with letting drivers set their own fares to demonstrate their independence .
Its chief lawyer even claimed that @ @ @ @ @ @ @ usual course of Uber ’ s business.
” Those efforts to disown drivers are laughable .
Uber and Lyft are ride-hailing companies .
Without drivers , there are no rides .
Uber and Lyft also exert significant control over drivers , despite Uber ’ s assertion that it merely provides technology to “ independent , third-party transportation providers.
” The companies determine who has access to the technology .
They dictate the kinds of cars drivers can use .
They require vehicles to pass their detailed inspection .
They impose an encyclopedia of @ @ @ @ @ @ @ , tips and general conduct .
Does that sound like technology or a boss ?
Aside from the fact that drivers are clearly employees by any reasonable application of California ’ s law , there are important public policy reasons why Uber and Lyft should be required to look after drivers .
Labor is a big line item on many companies ’ income statement .
Those that neglect workers are able to undercut competitors , much the way Uber and Lyft are squeezing cab companies .
And once they dispose of competition , @ @ @ @ @ @ @ they quickly amass market share and with it the power to dictate wages and discourage new entrants .
What ’ s left is an industry with a small number of powerful firms in a sea of working poor .
The retail industry is well on its way .
Amazon.com Inc. accounts for 55 % of the S & P 500 Retailing Index by market value .
The second-biggest company in the index , Home Depot Inc. , is a distant second at 14 % , and the rest of the field is miles @ @ @ @ @ @ @ of the retail industry wouldn ’ t have been possible without its army of low-wage workers .
The median total compensation for U.S. full-time Amazon employees was $ 36,640 in 2019 , according to the company , which is roughly half the amount realistically needed to raise a family in the most affordable towns in America .
But good luck persuading Amazon to pay workers a living wage now that it has a firm grip on the retail industry .
That ’ s a preview of life with Uber and Lyft if left @ @ @ @ @ @ @ drivers who have a stake in their employment status .
If the question is left open , Uber and Lyft would have an incentive to relax oversight to fortify their position that drivers are independent .
While it would undoubtedly give drivers more autonomy , it would also most likely mean loose standards for drivers ’ qualifications , the reliability of their cars and the number of hours they can safely work in a day , all of which would endanger both riders and drivers .
Some will say this isn ’ t @ @ @ @ @ @ @ .
Uber announced on Wednesday that it would eliminate 3,700 jobs in response to the coronavirus shutdown , with more cost cuts to come .
Forcing ride-hailing companies to absorb additional labor costs could result in further job losses , but there are ways to help workers during this downturn without compromising their future .
Fiscal stimulus can be used to bolster workers ’ incomes in the near term while keeping the pressure on ride-hailing companies .
Otherwise , the longer ride-hailing companies are permitted to shortchange drivers , the harder and more @ @ @ @ @ @ @ a fair deal .
And if giving drivers the protections afforded to employees would sink ride-hailing companies ’ business model , as some contend , then investors would be wise to acknowledge that reality before they absorb further losses .
Uber ’ s stock is down 38 % since its initial public offering last year and Lyft ’ s stock is down 64 % .
I like cheap rides and free two-day delivery as much as anyone .
But if we continue to let companies take over whole industries by abandoning workers , @ @ @ @ @ @ @ .

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washingtonpost--2020-05-06--Analysis | Crazy Trading on China’s Nasdaq Has Its Own Logic

The data show an irrefutable connection between market value and earnings resilience .
Companies with a market cap of more than 100 billion yuan ( $ 14 billion ) increased their sales and operating profit at the median , despite the virus-related lockdowns .
By contrast , the median smaller company recorded a double-digit decline in earnings .
What ’ s surprising , though , is that not all earnings for ChiNext members are bad .
The new-economy market is a story of ice and fire .
While more than half of companies reported a drop in net income , @ @ @ @ @ @ @ at least 30 % .
In other words , performance was either sub-zero or very hot , with little in between .
That makes the ChiNext an attractive market for stock pickers who fancy they can pick the hot prospects from the frozen waste .
This makes sense for investors , since China has no equivalent of the FANGs — the mega-cap technology stocks that have made the U.S. equity market the world ’ s best performer .
In China , the well-loved large caps are in booze and drugs — and these @ @ @ @ @ @ @ A case in point is Kweichow Moutai Co. , maker of the fiery liquor known as baijiu and the world ’ s most valuable distiller .
Moutai ’ s 1.6 trillion yuan market value is now equal to the entire gross domestic product of Guizhou province , where the company is based .
How much upside can there be left for an alcohol producer whose basic product costs just shy of 2,400 yuan , or close to $ 340 a a bottle ?
That ’ s more than the minimum monthly wage in @ @ @ @ @ @ @ Unlike FANG members Amazon.com Inc. and Netflix Inc. , Moutai surely can ’ t be considered a play on middle-class consumption .
Chinese investors also have a different vision of value .
For them , value isn ’ t about cheap metrics such as low price-to-book or price-earnings ratios .
Rather , it ’ s determined by how fast a small cap can morph into a blue chip .
This explains why investors love Contemporary Amperex Technology Co. , which supplies batteries to Tesla Inc .
They hope it can become as indispensable @ @ @ @ @ @ @ as Sunny Optical Technology Group Co. did to Apple Inc. To be sure , this is all risky business .
Beijing recently approved plans to move to a registration-based system for initial public offerings on ChiNext .
That means a flood of new companies with even less vetting will be arriving on the board .
It ’ s also worth noting that the quarterly earnings of these young and inexperienced companies aren ’ t audited .
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its @ @ @ @ @ @ @ Opinion columnist covering Asian markets .
She previously wrote on markets for Barron ’ s , following a career as an investment banker , and is a CFA charterholder .


washingtonpost--2020-05-07--Analysis | A Win-Win Moment Dawns for a New Bond Market

Many other countries already have thriving regional debt markets , including Germany , Italy and Spain .
In the U.S. , the muni market is worth more than $ 4 trillion .
Thus far , efforts to establish a similar borrowing venue in the U.K. have faltered .
That failure stems partly from a 30-year-old legal case .
When the courts ruled that the London Borough of Hammersmith and Fulham had exceeded its statutory authority by dabbling in interest-rate swaps , banks had to unwind billions of pounds worth of derivatives contracts with more than 130 similar counterparties .
The @ @ @ @ @ @ @ councils — and lawyers tend to have very , very long memories .
The U.K. ’ s centralized fiscal powers have also made it difficult for local governments to develop bond-issuing skills , given the paucity of taxes they ’ re allowed to levy .
Devolving fiscal authority away from Westminster has been a slow process , spurred in part by Scotland and Wales demanding more control over tax-and-spend policies as they threatened to become independent nations .
In 2014 , things started to look promising .
A parliamentary committee said it supported @ @ @ @ @ @ @ local authorities , allowing them to borrow to invest in infrastructure projects .
And the Local Government Association set up the U.K. Municipal Bonds Association , or MBA , with 56 local authorities becoming shareholders .
Then politics got in the way , including three general elections , a Scottish independence referendum and then the Brexit vote .
That ’ s why it took until March for the MBA to sell its first bond .
That first issue comprised 350 million pounds ( $ 438 million ) of five-year floating-rate notes on behalf @ @ @ @ @ @ @ ’ s next step is to offer pooled bond issues whereby several local authorities team up to borrow ; Westminster City Council and Barnsley Borough Council have already signed up to the plan .
There ’ s the potential for the U.K. muni market to exceed 100 billion pounds , depending on the yields investors demand for taking on quasi-government credit risk , says Christian Wall of PFM Financial Advisers LLC , a Philadelphia-based public finance consultant that ’ s advising MBA .
It ’ s an enticing proposition , he says , @ @ @ @ @ @ @ on a debt since the establishment of the first one , the Corporation of London , in 1067 .
Even before the pandemic closed down most of the economy , local councils faced a funding pinch , hamstrung by years of austerity in the wake of the global financial crisis .
In the past decade , central government funding of local authorities has declined by almost 60 % , according to a 2019 report by the LGA .
It predicted a funding gap that would climb to 8 billion pounds by the end @ @ @ @ @ @ @ that was before the coronavirus increased the need to expand care for the elderly , the homeless and the disabled .
The renewed enthusiasm among U.K. local authorities to tap the capital markets comes after the government raised the cost of money supplied by their traditional financing source , an agency called the Public Works Loan Board .
In October , the Treasury raised the premium over gilts on those loans by 100 basis points , to 1.8 percentage points , in an effort to deter councils from borrowing cash to invest in @ @ @ @ @ @ @ regional boundaries .
The surprise increase shows how local government remains at “ the whim of Whitehall ” when it comes to borrowing , so the MBA provides a welcome alternative , says Jonathan Carr-West , chief executive of the Local Government Information Unit .
The debut MBA bond ’ s initial quarterly interest rate was 81 basis points below the variable rate charged by the state agency PWLB at the time of issue .
Even at current ultra-low yields , that represents a handy potential cost saving for councils that choose to @ @ @ @ @ @ @ on their behalf .
A U.K. muni market should be a win-win evolution .
On the supply side , there ’ s no question local authorities will need to borrow more .
Their income from amenities such as public sports grounds , swimming pools and car parks is melting just when they need to provide more assistance to the vulnerable .
On the demand side , pension funds and other asset managers would welcome a bond-market alternative to the flood of gilt supply that ’ s coming as the government funds its various @ @ @ @ @ @ @ to like ?


washingtonpost--2020-05-07--Software Company Sues to Avoid Repaying $750,000 PPP Loan

Facing criticism that much of the money intended to help small businesses weather the economic shock of the coronavirus pandemic was going to larger enterprises , the government said on April 23 that companies applying for PPP loans were required to certify that federal assistance was “ necessary , ” taking into account their access to other sources of liquidity .
But San Clemente-based Zumasys says it is entitled to the money under the original terms , and the company wants an order canceling the April 23 guidance and barring the government from enforcing it .
The SBA and Treasury @ @ @ @ @ @ @ requests for comment on the suit .
Several large companies that initially took PPP loans , including Shake Shack Inc. and Ruth ’ s Chris Steak House Inc. , have returned them in response to public criticism .
The company , which provides software programming and data security services , says it “ has access to other credit facilities , but the uncertainty of current economic conditions , and purpose of the PPP , caused Plaintiffs to request PPP loan funds to support ongoing operations.
” Zumasys said enforcing the new guidance would @ @ @ @ @ @ @ program by putting companies deeper in debt .
Mona Hanna , a lawyer for Zumasys with Michelman & Robinson in Irvine , California , said many companies would likely terminate workers or shut down completely rather than take on more debt in the current economic environment .
” And that ’ s why we filed this lawsuit , ” she said .
“ We want the court to tell us whether or not this guidance , given by the SBA and Treasury , is valid , or is it in fact invalid and @ @ @ @ @ @ @ For more articles like this , please visit us at bloomberg.com


washingtonpost--2020-05-07--Analysis | This Is No Time to Play Games With China Savers

The logic in this shuffle : Big banks can currently earn more from making these short-term deposits than by lending in the repo market .
They can then book the returns to boost profits .
Unsurprisingly , such interest-earning assets drove first-quarter earnings .
The tactics worked during the Covid-19 shutdown , despite net margins shrinking and expected savings from lower rates on deposit costs , stuck at 1.5 % , failing to come through .
But it can ’ t last for long , as banks are being pushed to lend cheaply .
Small banks are the industry ’ @ @ @ @ @ @ @ a pullback in lending in the interbank market in the first place .
Why , then , does it make sense to put cash there even if the returns are higher ?
The risk-reward trade-off doesn ’ t quite tally .
Lending is backed by collateral , but deposits could leave billions of dollars of cash sitting at a weaker bank for up to a year .
For the deposit-taking institution , withdrawal could create more pressure .
All this in an environment where liquidity is already tight , though China Construction Bank @ @ @ @ @ @ @ to increase its time deposits .
Troubled Baoshang Bank Co. was doing such transactions with institutions when it was seized last year .
One lost more than $ 850 million on interbank deposits .
Only a part of those were guaranteed by regulators .
Another took a hit that wasn ’ t covered by China ’ s national deposit insurance .
Sure , all small lenders aren ’ t created equal .
But policy makers have already shown concern about these higher-rate time deposits .
China ’ s interbank network of deposits and @ @ @ @ @ @ @ If one pocket sees stress , the entire system feels the ripples to varying degrees .
Regulators can seize and post bail for only so many institutions .
Even if the central bank cuts deposit rates , which has been widely discussed , it won ’ t move the needle much for the smaller lenders that aren ’ t big holders of individual savings .
Meanwhile , the deposit insurance fund isn ’ t large or savvy enough to cover the millions of people who give their cash to banks for safe-keeping .
@ @ @ @ @ @ @ should be worrying .
Even if they park their money at a large , reliable bank , the lender could place that cash at a more humble peer .
Savers have a claim on the institution where they deposited , but what if that bank doesn ’ t end up getting covered ?
Considering that the gap between Chinese income and expenditure on a per capita basis has “ never been this large , ” according to Rhodium Group , any prospect of risk to personal assets is unsettling .
This inequality is @ @ @ @ @ @ @ strata .
Tough times in China ’ s banking system have been buffered before by trillions of yuan of savings .
This isn ’ t the time to be playing around with that money or with the legions of ordinary people struggling to get through the crisis of their lifetimes .


washingtonpost--2020-05-07--U.S. Small Businesses Are Shelving Hiring Plans at a Record Pace

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washingtonpost--2020-05-07--Analysis | First J. Crew, Now Neiman Marcus. Who’s Next?

Neiman Marcus for decades was one of the few places where wealthy Americans could buy clothing , jewelry and the extravagant holiday gifts featured in its seasonal catalog .
As such , it occupied a distinct position in the retail industry , sitting above more mid-market rivals such as Macy ’ s Inc .
But a confluence of industry pressures — compounded by the lengthy Covid-19 shutdown as well as debt from its $ 6 billion buyout 2013 by Ares Management LLC and the Canada Pension Plan Investment Board — undermined the department store that began life in Dallas in @ @ @ @ @ @ @ sister Carrie Marcus Neiman and her husband A.L .
Neiman set out to fashionably dress the community , there weren ’ t a lot of options .
As with London ’ s Selfridges , shoppers flocked to this shrine to the new consumerism .
One of Neiman ’ s strengths was having a range of designer brands under one roof .
To underline its fashion credentials , in 1938 , Stanley Marcus , the oldest of the four Marcus sons , established an award for designers , with Coco Chanel and Yves Saint @ @ @ @ @ @ @ the picture couldn ’ t be more different .
Over the past decade or so , the big fashion houses have become less reliant on department stores such as Neiman .
Wanting to take more control over their image , and concerned about their handbags and shoes being discounted , they moved to establish their own retail networks , with spectacular flagships .
Then there is the rise of selling luxury goods online .
In the early days of the internet it seemed inconceivable that men and women would buy everything from a @ @ @ @ @ @ @ online .
But that ’ s just what the likes of Richemont ’ s Net-a-Porter , have achieved .
The luxury houses , such as Kering SA ’ s Gucci , have also been developing their own online presence , adding even more completion .
Neiman is no laggard here itself , generating about 30 % of its sales from online , and also owning e-commerce platform MyTheresa ( which won ’ t be included in the Chapter 11 process ) .
But this hasn ’ t brought in as many younger customers @ @ @ @ @ @ @ other storied retailers , its customers are ageing .
While many older Americans have plenty of money to spend , they often prioritize other areas , such as dining out or travel — at least they did before Covid-19 — over spending on things .
Meanwhile , the under-35 crowd accounted for all the growth in the luxury industry in 2019 , according to Bain & Co. To tap into this demographic , Neiman needs to be more innovative and inclusive .
Rival Nordstrom Inc. has done a good job here , from @ @ @ @ @ @ @ smaller , neighborhood stores .
These locations may be even more appealing to shoppers in a post-Covid world .
Bringing in edgier designers , or those with cheaper price points , would be another option .
This doesn ’ t mean mass market .
But it could take a leaf out of London ’ s Selfridges .
As well as Chanel bags costing thousands of dollars , and watches costing hundreds of thousands , it also offers more affordable clothing and accessories , such as Kurt Geiger shoes .
All that helps to @ @ @ @ @ @ @ to create exclusive collections and pop-up stores with quirky brands are other possibilities .
All these actions take significant investment .
And that ’ s not easy with a big debt burden .
With that lessened , the group should have more scope to meet the required outlay .
And of course , there may be stores that either need closing , or shrinking .
Nordstrom said recently that it would permanently close 16 of its locations .
Neiman is already closing most of its outlet stores .
The path to recovery won @ @ @ @ @ @ @ does it have the challenge of reopening stores , but the luxury goods market is facing the worst year in its history .
Meanwhile , amid a tougher market , the fashion houses may be even choosier about where they allow their products to be sold .
A rival group of creditors was urging Neiman to put itself up for sale .
So it is still possible a buyer may come forward .
If either can breathe fresh life into the historic department store , there is a viable retail business .


washingtonpost--2020-04-01--Analysis | This Light Bulb Deal Wasn’t Such a Bright Idea

True , majority take-up is impressive in this market .
The underwriters were also able to offload some of the residual holding overnight .
But the fact remains that the banking syndicate was still left with shares worth around 500 million francs at the current market price , and a roughly 25 million-franc paper loss ( ignoring their fees ) .
And that ’ s not all .
Having also lent to AMS to fund the rest of the 4 billion-euro ( $ 4.4 billion ) acquisition , the financing group now has a large debt and equity exposure to @ @ @ @ @ @ @ financial capacity at a time when other customers are drawing down credit lines .
Investors are already testing the lenders ’ tolerance for taking losses on the position .
One tricky question now is the price at which the banks could unload such a large stake .
Maybe there are some insurance arrangements with hedge funds to mop it up , but these could already have been exhausted .
Or maybe a big strategic investor or activist could come to the rescue .
There ’ s a chance to grab a big stake @ @ @ @ @ @ @ supplies the smartphone industry , on the cheap .
Recall that it was a struggle to get this takeover deal over the line .
After some work , AMS got to 60 % of acceptances from Osram holders .
It should now be relieved it secured more financing than it actually needed .
Investors , largely hedge funds , held back some of their Osram shares hoping to hold AMS to ransom if it wanted to raise its position to 75 % ( or close enough to win such support in a shareholder @ @ @ @ @ @ @ level where the Austrian company can get direct access to Osram ’ s cash flows so long as it agrees to pay a chunky dividend to remaining holdouts .
AMS has no incentive to enter such an expensive operation today given Osram ’ s cash flow is going to be pretty weak this year .
Is this just bad luck for all concerned ?
The situation was foreseeable in general , if not the specifics .
The underwriting terms were fixed after the coronavirus had become a clear threat to global health and @ @ @ @ @ @ @ voiced concerns about developments that could derail the fundraising .
One risk was that the rights offer wouldn ’ t go ahead at all and AMS would have to pay for the deal entirely in debt .
As it happens , AMS got the cash , but its business will now be under more pressure due to the impact of the pandemic-provoked global downturn .
Still , its problems are now shared with shareholders in HSBC , UBS and those Osram investors who gambled on a very different outcome .
Chris Hughes is @ @ @ @ @ @ @ He previously worked for Reuters Breakingviews , as well as the Financial Times and the Independent newspaper .


washingtonpost--2020-04-01--Stimulus May Be Too Late for Many After 50,000 U.S. Stores Close

A new Brookings report estimates that at least 48 million Americans will have to wait weeks or months longer than others for their stimulus checks because they didn ’ t provide the government with direct-deposit account numbers .
That prospect “ given the economic tsunami of COVID will be devastating , ” according to the report ’ s author , Aaron Klein .
Meanwhile , small businesses account for almost half of U.S. private employment .
A complete collapse of even some of those enterprises not only would dash the dreams of entrepreneurs and threaten the livelihoods of many , @ @ @ @ @ @ @ eventual economic rebound as the financial distress ripples through to landlords , vendors and lenders .
Greg Jones , 36 , said he and his wife , Angela , who own the Synergy Fitness gym in Amherst , New York , near Buffalo , already have had to dip into their retirement savings .
He isn ’ t holding out much hope for the relief package .
Even after laying off all seven of his employees , Jones figures he has at most a month left before he won ’ t have enough @ @ @ @ @ @ @ meeting his family ’ s personal expenses and the business ’ s rent , utilities and equipment loan payments .
Andrew Metrick , a Yale University finance professor , said quickly distributing the relief in the coronavirus aid package to get money in the hands of small businesses in time to keep them viable will be a challenge for the system .
The White House is dispatching staff to the Small Business Administration as that agency struggles with a flood of requests for financial aid , according to people familiar with the matter @ @ @ @ @ @ @ one SBA loan program last week that the agency ’ s website failed repeatedly .
Treasury Secretary Steven Mnuchin vowed to have the $ 349 billion small business loan program funded by the coronavirus legislation “ up and running ” by the end of the week .
Yet it may take longer for firms across the country to document they meet requirements and get money from authorized lenders .
Expanded unemployment benefits and direct checks to low- and middle-income families may take longer .
Trump indicated the direct checks would go out by @ @ @ @ @ @ @ leader Chuck Schumer .
But during the last recession , it took about two months for those to go out .
Almost half of U.S. small businesses don ’ t have enough liquid reserves to handle two weeks ’ expenses , according to a 2019 JPMorgan Chase & Co. Institute study .
Four in 10 Americans can ’ t cover a $ 400 financial emergency , according to the Federal Reserve .
After the webinar ended , more than 900 emails flooded in , she said , with business owners asking : “ @ @ @ @ @ @ @ ?
Will I be evicted ?
Will I have to file for bankruptcy ?
Will I be able to reopen ?
” “ Like most retailers , we pay the bills we got today with the revenue we got yesterday , ” said Jerry Akers , who co-owns 27 Great Clips hair salons in Iowa and Nebraska .
“ It ’ s a very narrow window for us and we ’ re stronger than most small businesses.
” His revenue fell between 50-70 % in the weeks leading up to the closing of @ @ @ @ @ @ @ , he said : “ We actually ate up much of our cash reserves during that lessening of the revenue cycle a couple of weeks prior to the shutdown .
“ This last week we ’ ve been working diligently with our banker to keep every single cash reserve dollar we ’ ve got to take care of things we absolutely have to pay until some of these loan programs become available and we can get cash out of them , ” he said .
“ I ’ m not a big government-subsidy @ @ @ @ @ @ @ , that ’ s our lifeline .
”


washingtonpost--2020-04-01--Analysis | Trump and Putin Are All Talk on Oil Price Plunge

But there ’ s no evidence that Russia and Saudi Arabia are talking and , even if the three leaders do get together , don ’ t expect a meeting to lead anywhere .
Neither president , nor the crown prince , is renowned for his statesmanship or flexibility .
Putin ’ s most recent diplomatic “ successes ” include the annexation of Crimea and sending troops to support Bashar al-Assad ’ s regime in Syria .
Trump has become the master of the empty photo-op , most notably with North Korea ’ s Kim Jong Un .
MBS , @ @ @ @ @ @ @ known , led his country into a protracted conflict in Yemen and a blockade of Qatar , neither of which shows signs of bringing results .
In the energy sector , points of contention between Trump and Putin include Russia ’ s role in Venezuela ’ s oil export trade ; U.S. sanctions on Russia ’ s oil and gas industries , including those targeting the second Nord Stream gas pipeline from Russia to Germany and others that have prevented foreign investment in Arctic oil and gas projects ; and Russia ’ s @ @ @ @ @ @ @ Secretary Dan Brouillette and Russian Energy Minister Alexander Novak had a “ productive discussion ” by phone on Tuesday and agreed to “ continue dialogue among major energy producers and consumers , including through the G20 , ” the Department of Energy said in a statement .
Putin has no interest in throwing another lifeline to the U.S. shale sector .
Trump still seems to see the problem as being caused by Russia and Saudi Arabia both going “ crazy ” and launching a price war .
Let ’ s get one thing @ @ @ @ @ @ @ as a result of the worldwide response to the Covid-19 virus is a much , much bigger problem than the additional barrels threatened by Saudi Arabia and Russia — none of which has arrived yet .
As airplanes stop flying and drivers stop driving , they are going to struggle to find buyers for their oil , just like everyone else .
Saudi Arabia is already threatening to boost its exports by a further 600,000 barrels a day in May because its own refineries don ’ t want the crude .
This is @ @ @ @ @ @ @ a buyer .
Sadly , the loudest voices in America still seem to be those calling for the use of bully-boy tactics against the world ’ s other heavyweights .
A letter sent to Secretary of State Mike Pompeo last week from six Republican senators , including Lisa Murkowski from Alaska and John Hoeven from North Dakota , characterizes the Saudi and Russian decisions to end output restriction as “ economic warfare against the United States.
” The lawmakers argue that “ Saudi Arabia must change course , ” when what they really @ @ @ @ @ @ @ Crown Prince Mohammed bin Salman must return to its previous course , and they name-check the whole gamut of pressure tactics the U.S. has at its disposal to get it to do so , from the threat of “ tariffs and other trade restrictions to investigations , safeguard actions , sanctions , and much else.
” I get that senators from oil-producing states want someone else to cut back to keep the oil price high enough so that their local fossil-fuel industries can keep functioning .
But the Saudis might well argue that @ @ @ @ @ @ @ deal with had the U.S. not doubled its oil production in less than a decade .
Targeting Saudi Arabia and Russia for behaving as American leaders have always urged them to behave — by removing “ artificial ” restrictions on their oil production — will not solve the crisis faced by oil producers everywhere .
As I wrote Sunday , we are now getting the free-market in oil .
The demand destruction caused by the collapse in oil demand as a result of responses to the Covid-19 virus will not be solved by @ @ @ @ @ @ @ s Big 3 oil producers might have had a chance to get together to organize a global response to the temporary loss of oil buyers , but they squandered it .
As things stand , the companies ( and countries ) that bear the brunt will be those who can ’ t find buyers or storage tanks for their oil .
No amount of bullying , or half-hearted diplomacy , can change that now .


washingtonpost--2020-04-01--Analysis | HBO, Meet Your New Streaming Overlord

Kilar , 48 , is replacing John Stankey , the longtime AT & T executive who has been juggling two titles : head of WarnerMedia and chief operating officer of the Dallas-based wireless parent company .
Killar will report to Stankey , who began his career at one of the Baby Bells and is now considered a top candidate to become AT & T ’ s next CEO when Randall Stephenson retires .
The leadership of the new AT & T is taking shape , though the WarnerMedia gig wasn ’ t necessarily an easy sell for industry veterans watching @ @ @ @ @ @ @ is an interesting choice .
Nine years ago , he infamously wrote a memo that read like an obituary for traditional TV , according to Rich Greenfield , an analyst for LightShed Partners , who found a digital copy .
“ History has shown that incumbents tend to fight trends that challenge established ways and , in the process , lose focus on ” customers , Kilar wrote , needling Hulu ’ s partners at the time ( it ’ s now controlled by Walt Disney Co. ) .
That means HBO , @ @ @ @ @ @ @ a wireless executive who knew little about traditional media , will now be led by someone who cares nothing for it .
After the Jerry Maguire-like manifesto , one news headline asked if Kilar was trying to get fired ; now that kind of thinking has gotten him the top job at a Hollywood giant .
Following his time at Hulu , Kilar went on to create a $ 3-a-month subscription-video service called Vessel .
He sold it in 2016 to Verizon Communications Inc. , which shut doMn the service days later and @ @ @ @ @ @ @ its own go90 mobile-video product .
It was part of Verizon ’ s failed expansion into media , with go90 now also long gone .
Kilar ’ s arrival marks another step on AT & T ’ s stormy path to become an entertainment juggernaut that can compete with Disney and Netflix Inc. That journey began when AT & T acquired Time Warner in June 2018 , after initially facing government resistance and later , skepticism from AT & T ’ s own shareholders that the megamerger would work .
( The company @ @ @ @ @ @ @ the DirecTV satellite service , was already creating enough headaches . )
Since then , Stankey has reshuffled the Warner ranks , occasionally creating controversy among employees who weren ’ t on board with the changes .
He told me in an interview last year that he was working to have Warner ’ s sub-brands work closer together toward a common mission of making HBO Max a success .
With most everyone stuck home because of the coronavirus pandemic and binge-watching TV , some have wondered why Stankey hasn ’ t pushed up @ @ @ @ @ @ @ so might help it capture more subscribers faster .
Although , more time spent watching doesn ’ t necessarily translate into more money for streaming services , since viewers pay a monthly rate to access an all-you-can-stream buffet of content .
The CEO transition may be yet another reason that WarnerMedia is being patient .
There ’ s also tremendous pressure on AT & T to prove it can get this right , not least because it ’ s saddled with about $ 180 billion of debt as the U.S. economy hurtles toward @ @ @


washingtonpost--2020-04-01--Analysis | The Financial Market’s Stress Is All About the Dollar

Fixed-income assets have a tendency to show where equities are headed during crises and yet again U.S. Treasury bond yields are pushing lower , a clear warning of a renewed flight to quality .
While central banks have swiftly enacted the playbook learnt from the financial crisis more than a decade ago , and even parsimonious governments such as Germany ’ s are reaching for the fiscal checkbook , the emergency aid is only reaching higher-quality assets .
Sub-investment grade companies and non-agency mortgage debt are trapped in a downward spiral .
Marks pointed to mounting job losses and business @ @ @ @ @ @ @ outcomes is wider now .
Gundlach said the current economy resembles a depression and that he expects many defaults , although he advocates a hardline approach with “ no government bailouts whatsoever.
” That might not meet with popular approval .
The critical faultline in the coronavirus-induced selloff has been the sudden strength in the dollar , as banks and investors globally liquidate assets and scramble for cash — above all , dollar cash .
Until the Federal Reserve can satisfy onshore and offshore demand for the greenback , the economic effects of @ @ @ @ @ @ @ is desperate for liquidity , from the commercial property market to blue-chip Exxon Mobil Corp. , which had to come to the bond market recently as it couldn ’ t get the size of funding it wanted in commercial paper .
With this lack of access to liquidity rising all over corporate America — especially in junk-rated companies — assets everywhere are being used as ATMs to raise urgent funds .
Some of the Fed ’ s liquidity measures won ’ t become fully operational until April 6 , such as the crucial @ @ @ @ @ @ @ central bank will buy directly from eligible U.S. issuers .
Until that backstop measure to ease borrowing in the corporate market kicks in , there will be little respite .
We have also just passed the end of the Japanese financial year , and there has been super-strong demand from the country ’ s banks for dollar liquidity .
It ’ s been running at a rate of nearly 10 times that of European banks , which is bound to have an impact .
Until the volatility in the dollar money markets subsides @ @ @ @ @ @ @ asset classes and the intense pressure for liquidation will persist .
The Fed is alive to the problem and has extended its dollar swaps lines to all foreign central banks ( if they have an account with the New York Fed ) , allowing them to park U.S. Treasury bonds in return for cash .
The dollar is the world ’ s reserve currency and the Fed is now acting as the central bank to all .
Only by pumping out liquidity globally can it possibly prevent an even more almighty rush into @ @ @ @ @ @ @ lid on the money-market stress , the rest of the financial markets remain in peril .


washingtonpost--2020-03-31--Wall Street Donors Sit Tight Just When Biden Needs Cash Most

The crunch comes at a particularly bad time for Biden , who was looking to capitalize on his wins in the March primaries as a selling point to donors .
Since entering the race almost a year ago , the former vice president has lagged in fundraising , trailing his top Democratic rivals as well as President Donald Trump .
Biden has relied heavily on in-person fundraising events and has yet to build the large base of donors who give smaller amounts of money online .
Biden gets just 38 % of his money from individuals who gave $ 200 @ @ @ @ @ @ @ for Sanders and 53 % for Trump , Federal Election Commission data shows.
“ Between the global economy , between the stock market that is super confused right now , between running a small company and a small business , yes , I ’ m standing back , ” Democratic donor Erika Karp , founder and chief executive officer of Cornerstone Capital Group , said about making political contributions at the moment .
“ There ’ s not a moment that goes by where everyone is not thinking about coronavirus.
” As the @ @ @ @ @ @ @ raking in donations now in preparation for the convention and the general election to follow .
At the end of February 2016 , Hillary Clinton had raised $ 160 million for her campaign , and had $ 31 million in the bank .
Biden said he had raised $ 33 million in the first half of March , already topping his best monthly total .
But that was before social distancing and stay-at-home policies were put in place .
Biden is also spending less than before the virus shut down campaigning .
The @ @ @ @ @ @ @ 22 .
“ Is there going to be a dip because of coronavirus ?
Look , this is something that ’ s going to affect everybody , ” Morgenthau said .
“ But we will have a very strong month and we will have the resources that we need to take us through the next set of primaries and to build the infrastructure we will need in November.
” Some Democratic donors are putting their money toward coronavirus relief rather than political campaigns.
“ I am not sure what other donors are feeling @ @ @ @ @ @ @ not been top of mind the last two weeks , ” said Robert Wolf , a major Wall Street fundraiser for Obama and founder of 32 Advisors , a strategy and investment firm .
“ I have been focusing on the health and well-being of my family , friends and the community , working on my business from home , and giving to some charitable organizations on the front lines of the crisis.
” While donors say that Trump ’ s fundraising will also be hurt by a poor economy , the president @ @ @ @ @ @ @ election and can weather a downturn .
“ Biden needs to build his election airplane and fundraising apparatus in midair , ” said Dan Eberhart , GOP bundler and chief executive officer of Canary Drilling Services LLC .
“ Trump ’ s is already built and operating.
” Michael Bloomberg in January didn ’ t rule out spending as much as $ 1 billion to defeat Trump , even if his own presidential effort failed .
Instead , he said on March 20 he would transfer $ 18 million to the Democratic National @ @ @ @ @ @ @ to groups , including $ 2 million to Swing Left to aid Democrats in competitive races .
Republicans also rely heavily on successful small-business owners , who have been hard-hit by the pandemic ’ s economic fallout .
They ’ re being vocal about sitting on their hands for now , having had to recently cut their own staffs , and have said they hope to re-engage once the economy recovers , according to a Republican pollster , who spoke on condition of anonymity discussing internal data .


washingtonpost--2020-03-31--Democrats Push for Fed to Have Sole Sway Over Municipal Rescue

The coronavirus pandemic has crimped sources of tax revenue for states and localities at a time when resources , including paramedics and hospitals , are being committed to combat the threat to public health .
In the next round of legislation , House Speaker Nancy Pelosi and some congressional Democrats want to push further .
They favor taking decisions about where to use the money out of the political realm and giving them solely to the independent Fed .
The notion has been circulating for months among progressives in Congress .
If the law is changed , it would give @ @ @ @ @ @ @ beyond stable prices and maximum employment -- by designating the Federal Open Market Committee to be the buyer of last resort of the debt of troubled states and municipalities .
“ If you want money to go somewhere quickly , everybody ’ s idea right now is to get the Fed involved , ” said Ian Katz , an analyst at Capital Alpha Partners in Washington .
“ That doesn ’ t take into account that the Fed has to build these facilities and structures to do something they ’ ve never done @ @ @ @ @ @ @ Robert Menendez would create a permanent change to the Federal Reserve Act to allow the central bank to purchase municipal debt “ under unusual and exigent circumstances ” through direct purchases via open market operations .
Currently , the Fed and Treasury are operating under Section 13.3 of the Federal Reserve Act .
It allows the Fed , with Treasury permission , to open a broad-based facility to support troubled areas of the financial markets in an emergency .
Municipal bonds have rallied in anticipation of the intervention .
Last week was the @ @ @ @ @ @ @ 1982 , according to Bloomberg Barclays indexes .
A handful of debt issuers have been able to price deals in the last few days after billions in transactions were scuttled earlier this month , a signal that the market is starting to regain its footing .
Eric Kim , head of state-government ratings at Fitch Ratings Inc. , said the $ 150 billion set aside in the stimulus bill for state and local governments is limited to reimbursement and may not be spent .
“ Outside of pandemic hotspots like New York , @ @ @ @ @ @ @ most states , but rather lost revenue brought on by severely reduced economic activity , ” he said March 27 .
Fed Chairman Jerome Powell recently expanded the central bank ’ s lending authority to include support for corporations and medium-sized businesses .
Democrats have had a long-standing interest , however , in the Fed using its power to operate in open markets to do something directly for troubled localities .
“ Do you not believe that the governments of Detroit and Puerto Rico also play a vital role that should be preserved @ @ @ @ @ @ @ it hard for them to borrow money ?
” Tlaib asked Powell .
“ That ’ s not a job for the Fed , ” Powell said .
“ Lending to state and local governments and supporting them when they ’ re in bankruptcy is not -- that ’ s not part of our mandate.
” “ I hope that in this next bill that we will be able to address the concerns of our state and local governments , ” Pelosi told MSNBC on Tuesday .
“ We need to do more @ @ @ @ @ @ @ way of our tax code and by way of policy and also by way of the Fed .
”


washingtonpost--2020-04-01--Analysis | Britain Is Going on a Massive Debt Spree

It makes sense to front-load the surge in Gilt issuance , as the BOE is already ramping up its Quantitative Easing bond-buying program by 200 billion pounds in an accelerated schedule .
The net effect on investor demand should therefore be fairly muted , as the central bank will be in the market , hoovering up debt .
Thankfully the DMO , which operates as the Treasury ’ s agent in the debt market , has vast experience in this area from the financial crisis a decade ago .
Even after more than doubling the size of April ’ s @ @ @ @ @ @ @ benchmark 10-year note was little changed at 31 basis points , not far from its record low yield of seven basis points seen on March 9 .
Britain ’ s coordinated response to the economic mayhem has been genuinely impressive , and groundbreaking .
The DMO and the central bank are working together to smooth out what — according to analysts from Royal Bank of Canada — could be a doubling of overall debt sales across the whole of the upcoming financial year ( April to April ) to about 300 billion pounds @ @ @ @ @ @ @ in April alone .
This is a full-blown emergency response .
It ’ s especially important to tread carefully with this almost unprecedented surge in supply with the most sensitive and illiquid longer maturity gilts .
The DMO is limiting issuance of the longest-dated stuff to 12 billion pounds in April , which will be outweighed by planned BOE purchases of 21 billion pounds .
The central bank has raised its total purchases of assets to nearly 5 billion pounds on three days per week and will probably buy more than 60 billions @ @ @ @ @ @ @ new supply .
The two entities are having to be careful not to get in each other ’ s ( or investors ’ ) way by making sure the BOE doesn ’ t snap up too many of the most in-demand bonds , and equally not to overload any sector .
The BOE only buys from investment bank primary dealers in the secondary market rather than directly from the Treasury but the rules might be relaxed with so many auctions taking place , to avoid straining the primary dealers ’ balance sheets .
@ @ @ @ @ @ @ as former BOE deputy governor Charlie Bean said this week , meaning the BOE actually buys straight from the Treasury .
With so many traders working from home , the risk of an operational glitch causing a failed auction is disproportionately high .
The authorities need an insurance policy .
Both debt issuance and QE buybacks will probably tail off later in the year and both can be altered together if the economic situation improves — or worsens .
This is a make it up as you go along moment , but as @ @ @ @ @ @ @ remains as clear as it has been , any amendments shouldn ’ t cause problems .
It helps that the average maturity of U.K. debt is significantly longer than all other major bond markets at 15 years , meaning there ’ s less urgency in refinancing debt .
But having such joined-up institutions in the country ’ s hour of need is very fortunate .


washingtonpost--2020-03-31--Analysis | Which Bills Will You Stop Paying First?

When these car-related debts start going bad , the impact on the bonds they back is severe .
The spread of auto ABS over Treasuries widened sharply in recent weeks , more so than on card-backed debt .
The current dislocations in credit markets show that while auto-loan defaults may not be the center of a financial crisis like mortgage-backed securities , they could well set off wider panic as consumer confidence crumbles , household balance sheets deteriorate and big issuers – car companies – struggle .
This market has grown rapidly since the last financial crisis .
Already this @ @ @ @ @ @ @ auto asset-backed bonds have been issued in the U.S. , following $ 118 billion in 2019 .
As of the third quarter last year , $ 250 billion was outstanding .
At year-end , annualized loss rates on subprime auto ABS were around 9 % , close to financial-crisis levels , while average interest rates have been even higher at 19 % , according to Goldman Sachs Group Inc. Two factors will determine how these bonds perform : unemployment and the value of used cars , because cash flows come directly from borrowers @ @ @ @ @ @ @ disaster , used-car prices rise because property has been damaged or destroyed .
In this crisis , they ’ re likely to fall due to strain on consumer wallets .
That reduces the worth of the collateral and lowers the residual value of leases that back some of these securities .
Cars are , after all , a depreciating asset .
What does this mean for the securitized bonds ?
Lenders and originators package pools of loans and leases in a special-purpose vehicle that then issues debt to investors .
The interest and @ @ @ @ @ @ @ Broadly , the more senior tiers have first claim on all cash flows and assets , while the junior take the first hit on losses but have higher yields .
The lowest tranche , also known as the equity or first-loss pieces , is typically held by the issuer : auto companies ’ financing arms and other lenders .
When loans default and the asset pool can ’ t make up for the payments due to investors , the holders of the lower tranches absorb the loss .
It will be yet another @ @ @ @ @ @ @ carmakers that issue ABS to finance leases and sales .
They ’ ll take the first hit through the equity .
Funding costs will surge and in turn squeeze sales , reminiscent of 2008 .
( 3 ) As sales showed signs of reaching a plateau last year , auto giants , dealers and finance companies were pushing excessive financing with looser underwriting standards and conditions , such as longer terms and incentives .
The weighted average credit score for non-prime loan pool borrowers was 590 last year , lower than 597 in @ @ @ @ @ @ @ overall going into this crisis , but varied greatly across income levels .
The bottom 20 % of American households are far more leveraged — more than 25 % — than the higher income brackets on a debt-to-assets basis .
Around a third of auto ABS are typically made up of subprime loans , where the ability to pay drops off sharply and suddenly .
That doesn ’ t bode well .
Companies like Ally Financial Inc. have already offered relief packages for consumers and dealers .
Payments can be deferred for six @ @ @ @ @ @ @ will be allowed to defer for three months .
The Federal Reserve has brought back a financial crisis-era lending facility that ’ s meant to support the asset-backed securities market , where auto loans and leases are among the eligible collateral .
The troubles will go further : There are other auto sector-related ABS , like those backed by rental cars and dealer-floor financing plans that are even more directly dependent on automakers ’ health .
Investors are busy thinking about mortgage-backed securities , given their large size and potentially deeper and more @ @ @ @ @ @ @ But it ’ s important to consider recent consumer trends : Delinquencies as a portion of outstanding loans have been on the way down for mortgages .
They ’ re rising for autos , especially among subprime borrowers , as are past-due loans .
America has always been a nation of drivers and the appeal of cars has a way of pushing consumers to stretch their budgets in a way houses don ’ t .
But the stay-in-place strategies to fight this pandemic may change that calculus in a way investors aren ’ @ @ @ @ @ @ @ change .


washingtonpost--2020-04-01--Analysis | How the Shopping Mall Can Survive Covid-19

It ’ s a scenario that ’ s being repeated on both sides of the Atlantic .
Cheesecake Factory Inc. , which has 294 stores throughout the U.S. and Canada , said in a filing last week that it would not pay its April rent , and that was in discussions with its landlords , a who ’ s who of American mall owners .
While consumer-facing groups such as apparel chains have been the first shoe to drop , landlords look set to be the next .
Retailers are bracing for a prolonged shutdown .
On Monday , Macy @ @ @ @ @ @ @ most of its 130,000 strong workforce after losing the majority of its sales because of store closures .
No wonder some , such as U.S. mall owner Taubman Centers Inc. , are fighting back .
It told tenants in a memo that they still have to pay , although it added that it ’ s working with affected occupiers .
The developing stand-off will do nothing to help the plight of stores , nor in the longer term , shopping center owners .
As I have argued , the fall-out from the catastrophic @ @ @ @ @ @ @ crisis needs to be shared .
Some consequences will have to be borne downstream , by suppliers ; some upstream , by landlords .
But this could be tricky .
With fixed assets like malls , it ’ s not easy to adjust the cost base .
Some also have significant borrowings .
Lenders may have to bear some of the burden , while government relief looks increasingly necessary .
My colleague Brian Chappatta has warned of the potential dangers to the mortgage market .
Intu , which owns 17 U.K. malls including @ @ @ @ @ @ @ Metrocentre in Gateshead , is particularly vulnerable .
Even before the outbreak , it was struggling under a mountain of borrowings .
It said last Thursday that it was in talks with its lenders on waiving covenants , and that it could access the U.K. government ’ s 330 billion-pound ( $ 410 billion ) support mechanism .
Meanwhile , in the U.S. , mall owners CBL & Associates Properties Inc. , Macerich Co. and Taubman stand out for their above average net debt-to-Ebitda ratios and heavy use of secured lending , according @ @ @ @ @ @ @ Bloomberg Intelligence .
Simon Property Group Inc. has one of the strongest balance sheets .
But it agreed in February to buy Taubman for $ 3.6 billion .
This deal , if it goes ahead , together with the Covid-19 impact , could increase Simon ’ s net debt to 7 times Ebitda at the end of 2020 , from 5.6 times a year earlier , according to Moody ’ s .
Taubman has some prize assets , such as the Short Hills Mall in New Jersey and the Gardens Mall in Florida @ @ @ @ @ @ @ will be more challenging in the current environment .
But even when the virus abates , the retail landscape won ’ t be the same .
Some weaker stores and restaurants will not re-open their doors .
For others , it will take considerable time for demand to return to normal .
A frank conversation between retailers and landlords is needed to settle on ways for making it easier for everyone to weather this crisis .
Alterations could include moving to monthly rent payments in cases where retailers are still expected to pay @ @ @ @ @ @ @ so without any additional fees to facilitate the switch .
Making it easier for tenants to break leases would also avoid time consuming and costly processes to exit agreements .
While that may seem to favor retailers more than landlords , mall owners too have something to gain .
The pandemic , and the retail shake-out that will inevitably follow , will exacerbate the divergence between the most muscular stores and restaurants and the laggards .
It will also polarize the vibrant malls and secondary locations even more .
To prosper in this @ @ @ @ @ @ @ to ensure they can attract the most desirable brands .
The retailers that do emerge from the wreckage will remember how they were treated when the chips were down .
On both sides , even-handed negotiations are the best way to help all parties recover , rather than risking bringing about the death of the mall for once and for all .


washingtonpost--2020-04-14--Analysis | After Coronavirus, Entertainment Will Never Be the Same

The seismic changes that began shaking up Hollywood in recent years intensified in the weeks and months leading up to the coronavirus outbreak .
The meteoric rise of Netflix Inc. inspired copycat services that were beginning to spring up from the traditional media stalwarts .
Studios and cable programmers had to shift some of their focus to streaming apps , away from theaters and traditional TV audiences .
The box office was already showing signs of trouble , raising questions about the long-term relevance and viability of movie-theater chains .
( Indeed , Netflix ’ s revenue surpassed annual U.S. @ @ @ @ @ @ @ And while industry giants such as Walt Disney Co. were getting bigger , the weak were getting weaker .
Since the outbreak , these trends have kicked into high gear , revealing pressure points all across the industry .
In some cases , the U.S. shutdown is merely fueling more of what was already happening .
But in other ways , the pandemic presents new threats : Theaters are closed , and when they reopen there may be a reluctance to go to the movies that outlasts this virus .
At a time @ @ @ @ @ @ @ than ever , new content also can ’ t get made .
Industry mergers and succession plans are being thrown into disarray at the media conglomerates , where a financial strain is being put on old reliable business units that were helping to fund their expansion into streaming .
Now those streaming services are being put to a test they hadn ’ t faced before , with more people glued to their smartphones , yearning for an escape from reality that may be just as easily fulfilled by free user-generated content found on @ @ @ @ @ @ @ enter a deep recession , old-school cable-TV packages will look even more dispensable than they already did given the lack of live sports right now ( the costliest part of your cable bill ) and the proliferation of cheaper streaming alternatives .
But it ’ s the debt-laden cinema chains that have the most to fear if they lose leverage over their sacred theatrical windows .
Studios have put some upcoming film releases — such as the latest “ Fast and the Furious ” and the live-action remake of “ Mulan ” — @ @ @ @ @ @ @ for cinemas to reopen , though .
“ Trolls World Tour ” went straight to digital for families willing to pay the steep $ 20 on-demand rental fee .
Even before the mass quarantine , 2020 was set to be the year of streaming : Quibi , a short-form video app , was released last week , while the soft launch of Peacock — a new digital home for Comcast Corp. ’ s NBCUniversal content — is set for Wednesday .
Next month comes AT & T Inc. ’ s refreshed HBO streaming @ @ @ @ @ @ @ , Disney+ has drawn , rather incredibly , more than 50 million paying customers in the five months that it ’ s been on the market .
Quibi , which doesn ’ t have the benefit of being a globally recognized brand like Disney , reported 1.7 million downloads in its first week .
One has to wonder , though , how much the Quibi ads blanketed across social media cost it to get there and how many users are willing to pay $ 5 a month after the generous 90-day free trial @ @ @ @ @ @ @ ’ t necessarily translated into a better , more affordable experience for all consumers .
While Netflix ’ s popularity drove the industry into a content-making frenzy that can finally be enjoyed , the best programs are now scattered across different apps with their own paywalls and limited selections .
None has earned long-term subscriber loyalty yet the way Netflix has .
Investors will be hanging on each CEO ’ s every word during earnings season , which kicks off with Netflix ’ s results on April 21 .
The recent viral hit @ @ @ @ @ @ @ and Madness ” may have helped Netflix attract or retain subscribers , and at the very least they ’ re watching for longer .
But the notion that this is a great time for streaming businesses simply because everyone is stuck home isn ’ t necessarily true .
The fear and hurt from the outbreak and economic shutdown is ubiquitous — and flat-rate subscription services don ’ t make more money from users spending more time with them .
Hollywood has had to halt productions across the board , which means that eventually @ @ @ @ @ @ @ could run out of new content , giving their subscribers more of a wandering eye .
Any wins in streaming also don ’ t make up for losses elsewhere .
Take Disney : The company is dependent on its theme parks , resorts and cruise lines for about $ 5 billion of operating profit , and no film business has more money tied to the box office than Disney .
Building its direct-to-consumer streaming unit — comprising Disney+ , Hulu and ESPN+ — is a worthwhile pursuit , but one that will continue @ @ @ @ @ @ @ of years .
It ’ s no wonder why Bob Iger is reportedly taking back operational control at Disney after having stepped aside as CEO in late February .
Recent megamergers are also facing an unforeseen stress test .
AT & T , a wireless connectivity business that ’ s somewhat insulated from the economic downturn , is now experiencing the downside of owning a media business .
In the case of ViacomCBS Inc. , two already challenged sets of assets were brought under one roof , including the Paramount film studio that @ @ @ @ @ @ @ its feet financially after years of mismanagement .
It ’ s all about streaming now , and entertainment platforms are competing for fans who have more time than money to spend these days .
That might just force a shift in thinking at the media giants and bring about the most rapid change the industry has ever seen .


washingtonpost--2020-04-14--PayPal, Square Start Lending to Small Businesses Hurt by Virus

“ The PPP program has manual checks and processes that require time , and we ’ re doing the best we can despite having tech that can operate at scale and efficiency , ” said Brian Peters , executive director of Financial Innovation Now , an industry group that counts PayPal and Square as members .
Fintechs have had to “ retool their lending programs to make PPP work.
” PayPal Chief Executive Officer Dan Schulman was on calls with the Treasury Department for weeks prior to getting PPP approval Friday , including speaking directly with Treasury Secretary Steven Mnuchin @ @ @ @ @ @ @ They discussed PayPal ’ s capacity and capabilities to get funds in a timely manner to small and midsize businesses , particularly those from disadvantaged areas or demographics .
One reason it took fintechs longer than traditional banks to participate in the PPP was that they had to wait on final authorization from the Small Business Administration , said Karen Mills , a senior fellow at Harvard Business School and former SBA administrator .
The Treasury Department and the SBA didn ’ t release the application form for fintech and other non-bank lenders @ @ @ @ @ @ @ the fintechs were working very hard on the front end , but the back end of the pipe that hooks up to the fire hose of money , they had to wait for the Treasury for that , ” Mills said .
PayPal , Square and Intuit all serve small businesses that are often overlooked by large banks because it ’ s costly for them to underwrite very small loans , according to Jo Ann Barefoot , chief executive officer of the Alliance for Innovative Regulation .
As many as 70 % of @ @ @ @ @ @ @ U.S. counties that have lost 10 or more banks since the financial crisis in 2008 , according to Schulman .
The company ’ s loans are generally less than $ 25,000 each -- something true as well for small businesses seeking help from PayPal under the PPP , Schulman said in an email .
Square also serves borrowers that “ have been locked out of the financial system , ” said Jackie Reses , Square Capital lead .
Women make up 55 % of Square Capital borrowers , and 37 % are under-represented @ @ @ @ @ @ @ .
Under the PPP , financial institutions including Bank of America Corp. have been favoring existing small-business customers because the process is easer if a borrower has been previously approved .
On Monday , a federal judge ruled that preferential treatment under the CARES Act wouldn ’ t be barred after Bank of America was sued by a number of small businesses for being left out .
Fintechs are starting to take part in the PPP when almost three-quarters of the $ 349 billion program has already been allocated .
The funding may @ @ @ @ @ @ @ top White House economic adviser Larry Kudlow said .
An effort to add an additional $ 250 billion has stalled in Congress .
PayPal is offering access to the PPP to its existing 10 million merchants through a relationship with WebBank , a Salt Lake City-based bank that it already partners with for its Working Capital business .
The company ’ s first emergency-loan borrowers include a chiropractic office in Kansas City , Missouri ; a nail salon in Bayonne , New Jersey ; and a shoe store in Winston-Salem , North Carolina @ @ @ @ @ @ @ is using QuickBooks Capital , its existing business-loan platform , to automate and expedite the PPP application process , according to a company statement .
Square ’ s program is first being offered to users of the Square payments platform , but the company said it plans to extend it to other borrowers once processes start moving more efficiently .
The company has yet to approve any PPP applications .
“ We launched when we were confident we could provide a smooth processing experience for all applicants , to give sellers more transparency @ @ @ @ @ @ @ ” Reses said .
“ This is also why we ’ ve staggered our application rollout to Square sellers , as loan reviews are still a manual process.
” Now that fintechs have PPP approval , the next challenge is getting enough funding from the federal government to reach everyone in need , said Mills of Harvard Business School .
“ I ’ m encouraged by the progress , ” she said , “ but we are not quite at the point we need to be where billions of dollars are flowing seamlessly @ @ @ @ @ @ @ ”


washingtonpost--2020-04-14--Small Business Loan Funds Running Out With Congress Stalled

Trump and the GOP want to add another $ 250 billion to the Paycheck Protection Program , but Democrats have been holding out to expand the stimulus to include aid for state and local governments and hospitals .
Despite the looming shortfall , there is no sign of negotiations between the administration and congressional leaders to break a deadlock over how to proceed .
House Republican leader Kevin McCarthy on Tuesday tweeted to his followers , asking them to pressure House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer to support the added funding for small business and drop @ @ @ @ @ @ @ back the small business program funding , but want changes that ensure the pool of lenders extends well beyond big banks .
They also want an additional $ 250 billion in aid for state and local governments as well as for hospitals in whatever Congress does next .
Meanwhile , Senate Majority Leader Mitch McConnell announced that after consulting with Schumer , he is moving the date for the full Senate to resume work to May 4 from April 20 .
That comes a day after House Democratic leaders announced they also were @ @ @ @ @ @ @ to May 4 .
The Senate could clear added funding by unanimous consent with only a few senators present , but only if no lawmaker objects .
The next opportunity to do that would be Thursday .
The House would have to do the same for the measure to get to Trump for his signature , but it would be tough to accomplish without some sort of compromise .
In his statement , McConnell made clear that he won ’ t consider any additional funding beyond the $ 250 billion for the small @ @ @ @ @ @ @ unsuccessfully to move through the chamber last week by unanimous consent .
He reiterated that the Paycheck Protection Program is the only stimulus initiative at immediate risk of running dry .
“ President Trump , Secretary Mnuchin , and Senate and House Republicans simply want to add more funding for this job-saving program that both parties designed together , ” he said , referring to Treasury Secretary Steven Mnuchin .
“ There is no time to insist on sweeping renegotiations or ultimatums about other policies that passed both houses unanimously , ” McConnell @ @ @ @ @ @ @ Speaker Pelosi and her staff were anticipating that the Senate would seek to push through McConnell ’ s version of the interim measure again , but that no breakthrough on a two-chamber version had been reached .
In letter to all House Democrats Tuesday , Pelosi said that “ we continue to fight for an interim emergency response package followed by a CARES 2 package that will deliver more desperately-needed resources to all suffering from the crisis.
” She added that Democrats “ can not accept Leader McConnell ’ s proposals that would @ @ @ @ @ @ @ the survival of the most vulnerable small businesses and would do nothing to aid desperate hospitals and state and local governments .
”


washingtonpost--2020-04-14--Stimulus Oversight Panel Has One Person Trying to Watch $2.2 Trillion Alone

As tens of billions of taxpayer dollars from the $ 2.2 trillion relief bill begin flowing out the door , Ramamurti remains the lone member appointed to the panel .
With no colleagues , no staff , and no office , he ’ s had to rely on one of the few avenues he has to communicate with the public : his unverified Twitter feed .
“ I ’ m eager for the commission members to be named and for us to get up and running , ” he says .
“ In the meantime , I ’ m trying @ @ @ @ @ @ @ tools I have available right now to start asking some basic questions .
Money is moving around in the blink of an eye and it ’ s not at all clear what it all means and who it ’ s helping.
” Days after his appointment by Senate Democratic leader Chuck Schumer , Ramamurti ’ s solo act got even tougher .
On April 9 , the Federal Reserve , in coordination with the Treasury Department , announced the rollout of the “ Main Street Lending Facility , ” one of the key @ @ @ @ @ @ @ effort that will provide loans to companies with up to 10,000 employees or up to $ 2.5 billion in annual revenue .
Treasury Secretary Steven Mnuchin said the new program “ will make a significant difference for the 40,000 medium-sized businesses that employ 35 million Americans.
” The Main Street Lending Program is funded with $ 75 billion from the $ 500 billion that the CARES Act allotted to the Treasury to backstop Fed loans .
Under the new law , the disbursement of Treasury funds triggers a countdown clock that requires the @ @ @ @ @ @ @ report within 30 days .
“ It ’ s a statutory requirement , ” Ramamurti said , “ so I think one way or another there ’ s going to have to be a report by early May.
” Lacking a better option , Ramamurti took to Twitter to react to the new Fed programs and give the public an idea of what sorts of questions the commission — that is , he — would try to address in its initial report .
“ I hate to be that guy pointing you to @ @ @ @ @ @ @ “ but I put out 9 or 10 questions on a bunch of the new actions .
It would be great to start providing answers .
It ’ s important because the money , and the economic crisis , is moving so quickly that you want to be able to exercise proper oversight.
” The issue of stronger oversight was one of the key battles fought as Congress raced to pass the CARES Act in late March .
After a late push by Democrats , lawmakers agreed to split the job between a @ @ @ @ @ @ @ accountability committee -- a setup modeled after the Warren-led committee that oversaw the $ 700 billion bank bailout in the 2008 financial crisis .
The new law gives congressional leaders responsibility for choosing the panel ’ s members : House Speaker Nancy Pelosi , House minority leader Kevin McCarthy , Senate Majority Leader Mitch McConnell , and Schumer each can appoint one member of the oversight commission ; a fifth member , the chairperson , is appointed jointly by Pelosi and McConnell .
So far , however , only Schumer has made an @ @ @ @ @ @ @ leaders couldn ’ t say when others might be named .
On April 10 , Pelosi told Politico that while she and McConnell had discussed a process for selecting a chairperson , they did not yet have a shortlist of candidates .
Meanwhile , the 30-day clock for the commission to produce its first oversight report is ticking .
The job of overseeing the current bailout could be more difficult than it was in 2008 .
On April 7 , President Donald Trump fired the acting inspector general for the Defense Department , @ @ @ @ @ @ @ known for his independence and set to become the head of a team of U.S. auditors overseeing the $ 2.2 trillion bailout .
Ramamurti says th firing makes filling the congressional oversight panel an even more urgent task .
“ It underscores the importance of the commission , ” he says .
“ We ’ re insulated from that kind of action because all five members are selected by Congress , so Trump and his administration don ’ t have any ability to choose or fire the members .
To me , it @ @ @ @ @ @ @ get up and running as quickly as possible .
”


washingtonpost--2020-04-14--Analysis | Bankers Keep Vision Fund Going With Rubber Bands

Approximately $ 40 billion of its money came in the form of preferred equity , requiring managers to pay a 7.5 % annual dividend .
That ’ s $ 3 billion that must be paid out every year , no matter how the underlying portfolio performs .
Ordinarily , we ’ d expect a steady flow of stock listings — like Uber Technologies Inc. , Slack Technologies Inc. and the We Co. — to feed that cash-hungry beast .
But the fund ’ s initial public offerings have so far been lackluster , and the WeWork disaster compounds the lack @ @ @ @ @ @ @ , such as Grab Holdings Inc. and ByteDance Ltd. , may one day bear fruit .
In the current coronavirus market environment , it ’ s unlikely they ’ ll churn enough profits to get IPO investors excited , which means the companies are likely to be left in the oven to cook a little longer .
For now , that ’ s not a problem .
The Vision Fund , not SoftBank , last year took out a $ 4.1 billion , three-year loan led by Mizuho Financial Group Inc. , JPMorgan @ @ @ @ @ @ @ and Saudi Arabia ’ s Samba Financial Group .
Yet with the fund almost fully spent and major exits of holdings unlikely in the coming year , the ability to keep paying the dividend isn ’ t guaranteed .
It ’ s also unclear whether margin calls need to be met on this loan , and whether the plunge in fund value would trigger them .
It ’ s another cloud over SoftBank ’ s cash needs .
A likely scenario is that the Vision Fund will once again find bankers willing enough @ @ @ @ @ @ @ one would expect ( hope ) they ’ d ask for some collateral to back it up and charge a hefty enough interest rate to make it worthwhile in these unstable times .
If any new loan is structured to invoke margin calls , the fund could ill-afford further paper losses .
While I don ’ t think SoftBank Chairman Masayoshi Son would like to , there ’ s also a chance that the Vision Fund may sell or collateralize its assets to shore up cash .
SoftBank has already announced plans to @ @ @ @ @ @ @ move that spurred Moody ’ s Corp. to cut its debt rating — but the fund ’ s own cash needs can ’ t be ignored .
This would look a lot like another firesale .
The final thing to consider is that even if it the fund can manage to borrow enough cash to pay those dividends , and it can continue to service such loans , and it doesn ’ t face margin calls , and the sun again shines on the IPO market , those multiple years of $ 3 @ @ @ @ @ @ @ eventual profits .
The upshot is that for all of Son ’ s crowing about investing in the coolest tech that will change the world , the future of the Vision Fund really hangs on the ability of bankers to cobble together enough cash to keep it running .
( 1 ) Approximately $ 17 billion for the financial year at the Vision Fund , and the rest from startup writedowns outside the Fund .


washingtonpost--2020-04-14--Wells Fargo Sets Aside the Most for Loan Losses in a Decade

Bank earnings are being closely watched as investors assess the extent of the virus ’ s damage to the U.S. economy in the first month of lock-down orders across the nation .
Wells Fargo is a top lender to consumers , small- and medium-size businesses , and commercial-property investors across the country , so its results offer a view into how bad things have gotten , and how much worse they may become .
“ Wells Fargo plays an important role in the financial system and the economic strength of our country , and we take our responsibility seriously , @ @ @ @ @ @ @ Scharf said in a statement Tuesday .
The lender joins JPMorgan Chase & Co. in having its profit hit by major provisions as the banks expect a spike in consumer and businesses falling behind on debt payments .
JPMorgan posted its lowest net income since 2013 as it boosted reserves by more than $ 11 billion .
“ While we generally view loan growth as a positive for banks , in this instance , it is more indicative of businesses facing challenges and uncertainty , ” Kyle Sanders , an analyst at Edward @ @ @ @ @ @ @ clients Tuesday .
“ We attribute most of the loan growth to commercial clients tapping lines of credit in order to build cash reserves to weather the economic downturn.
” Provisions in the wholesale unit jumped 17 times from a year earlier , while the amount Wells Fargo set aside for the community bank more than doubled .
The total amount of provisions reflected “ the expected impact these unprecedented times could have on our customers , ” Chief Financial Officer John Shrewsberry said in the statement .
The company ’ s shares @ @ @ @ @ @ @ 9:47 a.m. in New York , compared with a 2.1 % increase in the 24-member KBW Bank Index .
Wells Fargo is down 40 % this year .
The San Francisco-based lender is constrained by a Federal Reserve order limiting assets to their end-of-2017 level following a series of scandals at the bank , though it was granted a temporary break last week to expand lending to small businesses .
Total assets were just above that level at the end of the first quarter .
Scharf said last week that Wells Fargo extended @ @ @ @ @ @ @ increased commitments and outstanding loans in March alone .
Wells Fargo has joined its peers in making a variety of promises to help keep customers afloat .
The lender will offer grace periods to mortgage borrowers , pledged millions to charities and relief efforts , offered workers extra pay , and said it paused new job cuts .
The bank ’ s loan-loss figure factors in an accounting rule that took effect in January requiring banks to recognize potential losses more quickly .
The rule requires lenders to predict how a deteriorating economy @ @ @ @ @ @ @ paying .
Wells Fargo ’ s longer-term strategy has been in flux since former CEO Tim Sloan stepped down more than a year ago .
Scharf has been conducting a wide-ranging review of the firm , and has warned that there ’ s still much to be done .
Expenses -- a sticking point for investors in recent years -- fell 6 % in the first quarter from a year earlier .
• The bank ’ s efficiency ratio , a measure of profitability , improved to 73.6 % from 78.6 % in @ @ @ @ @ @ @ been beset by heightened costs stemming from its scandals .
It had been targeting 55 % to 59 % in the long term , excluding litigation costs , though Scharf may set a different goal .


washingtonpost--2020-04-14--Hedge Fund Managers Claiming Bailouts as Small Businesses

Ironically , hedge funds are designed to employ as few people as possible so star traders don ’ t have to share millions of dollars in fees .
The industry gets its name from the premise it can generate gains even when markets fall .
The question of whether to partake in the program is dividing members of the money management community .
Some traders have called it morally corrupt , while others insist they are small businesses -- just like hair salons , restaurants and dry cleaners -- that could use a helping hand after global markets tumbled and @ @ @ @ @ @ @ program is first come , first served , some managers were quick to submit their paperwork , according to market participants , even if eligibility remains unclear.Donald Motschwiller , head of First New York , a trading firm that runs $ 2.9 billion in assets , said he was still deciding whether to request money that could be used to pay employees , including a receptionist and office manager , who are still on the payroll even though , with everyone at home , they essentially don ’ t have jobs to do @ @ @ @ @ @ @ in his circle , from small managers to multibillion-dollar firms , “ and no one has said ‘ no ’ ” to the possibility of taking the loan , he said .
The industry ’ s most prominent firms probably have no interest in the program , but it might make sense for money managers to apply if they are just starting their businesses and gathering capital , said Anthony Scaramucci , owner of SkyBridge , a firm that farms money out to hedge funds .
“ Just because the business has a @ @ @ @ @ @ @ manager , doesn ’ t necessarily mean that they ’ re loaded with rich people , ” he told MSNBC in an interview earlier this month .
Some are in their 20s and scared , he said.The chatter among money managers has grown loud enough to prompt a warning last week from Aksia , which advises institutional investors on placing money with hedge funds and other alternative investment firms .
The firm said it would view any opportunistic use of the program “ negatively ” when counseling pension funds and other institutions with @ @ @ @ @ @ @ with a healthy business who takes advantage of a program that isn ’ t “ precisely defined , is not only showing poor moral judgment and potentially hurting the reputation of the alternatives industry , but it ’ s also probably crowding out struggling workers and businesses severely impacted by Covid-19 , ” Aksia said in the memo .
Some lawyers have cautioned their clients that they may yet be disqualified .
While the rules make clear that banks and insurance companies aren ’ t eligible for the small-business loans , the guidelines @ @ @ @ @ @ @ trading shops .
The Treasury and the Small Business Administration could yet come out with clearer policies that prevent those firms from participating .
Representatives for those departments either didn ’ t immediately respond to messages or had no immediate comment .
One manager , who asked not to be named , said he was outraged when he received a note from his accountant analyzing his potential eligibility .
Why , he asked , would a hedge fund that collects management fees , and can make money if it ’ s skilled , @ @ @ @ @ @ @ “ It ’ s a complete abomination , ” agreed Nate Koppikar , a partner at San Francisco-based money manager Orso Partners .
He noted that firms that avail themselves of the money may later be publicly identified under the Freedom of Information Act .
“ Leave it to the Trump administration to execute a program meant for America ’ s small businesses in a way that instead gives relief to hedge fund managers who don ’ t need it -- while mom and pop shops are forced to wait in line , @ @ @ @ @ @ @ statement .
“ The Trump administration has shown its hand : their priority is to take care of the wealthy and well-connected as fast as possible and with as few conditions as possible.
” “ While we recognize that every manager must make their own decision about the viability of their firm , we have provided guidance to our members that we do not believe the money in this program was intended for managers general partnership interests , ” Bryan Corbett , president and chief executive of the organization , said in a @ @


washingtonpost--2020-03-12--Christine Lagarde Has Three Big Options

Christine Lagarde Has Three Big Options

The ECB has been slow off the blocks in combating the fallout from a pandemic that ’ s spreading quickly in Europe .
The U.S. Federal Reserve and the Bank of England have both cut rates by 0.5 percentage points — the BoE also introduced cheap funding measures directed especially at hard-pressed small- and medium-sized companies .
So far , Lagarde has only issued a statement saying that she stands ready “ to take appropriate and targeted measures.
” The ECB president needs to demonstrate some of the fighting spirit of her predecessor , Mario Draghi .
In 2012 , @ @ @ @ @ @ @ whatever it takes ” to preserve the euro — an action that ’ s credited with saving the single currency .
Lagarde , who took the reins in November , may have hoped for an easier start .
Yet she ’ ll need to sound just as convincing as Draghi when she speaks to anxious citizens and investors .
A central bank can not solve a medical emergency .
But the ECB has a central role in limiting the damaging economic side-effects of the outbreak .
A collapse in demand — even if @ @ @ @ @ @ @ of bankruptcies and redundancies if companies can not access enough liquidity to overcome their credit constraints .
Some countries , including Italy , have put in place draconian measures to try to stop the virus ’ s spread and to ease some of the pressure on the country ’ s health care system , including shutting down most shops and asking people to stay at home as much as possible .
The public sector must find ways to help affected workers deal with the financial and logistical implications of that ; this would @ @ @ @ @ @ @ people less reason to go out .
Lagarde says governments have a big role to play by using fiscal policy .
She ’ s right about that .
Italy has launched a significant spending program — of up to 25 billion euros ( $ 28 billion ) — including a boost to the health care system and various income-support schemes .
Other countries , including Germany , are still dragging their feet despite the signs that their own outbreaks could quickly spiral out of control .
The ECB still has an important role @ @ @ @ @ @ @ it can launch a new round of cheap loans targeted explicitly at SMEs .
This scheme , which would mirror the BOE ’ s , can not guarantee that banks keep extending their credit , but it would provide some incentives .
Such steps are essential to ensure that viable businesses don ’ t have to shut down for good simply because of the outbreak .
Second , the ECB should cut its deposit rate from -0.5 % to , say , -0.6 % .
This would help contain the rise of the @ @ @ @ @ @ @ against the dollar after the Fed chose to intervene .
Finally , the ECB should expand its asset purchase program , by removing some of the self-imposed limits that constrain how many bonds it can buy .
An extension of QE will bring little extra benefit to countries such as Germany , that can borrow very cheaply already .
However , it is crucial for weaker states such as Italy , which need the support of the central bank if they ’ re to launch ambitious fiscal programs without fearing that markets will @ @ @ @ @ @ @ , in theory , be combined with efforts to relax the prudential standards for banks , to encourage them to loosen up on extending new credit .
However , the ECB should use this lever carefully .
The euro zone has taken years to reduce a vast pile of bad loans , so it must ensure it doesn ’ t get out of control again .
The euro zone often fails to act in a timely manner to address its crises .
As the human and economic cost of the Covid-19 outbreak rises @ @ @ @ @ @ @ to come together to show what they can do .


washingtonpost--2020-03-12--Trump Says He’s Restricting Travel From Europe for 30 Days

The president in his address laid out a series of fiscal measures to deal with the economic fallout from the rapid spread of a disease he labeled a “ foreign virus.
” But his remarks -- in which he overstated the scope of the travel restrictions and misspoke that he was also curtailing trade -- were met with a swift plunge in markets .
U.S. stock futures declined as Trump spoke and continued lower overnight .
Contracts on the S & P 500 sank as much as 4.9 % .
Futures on the technology-heavy Nasdaq index dropped as much as @ @ @ @ @ @ @ that doesn ’ t allow them to fall too much in a particular session .
Stocks from Europe to Asia posted steep declines , and oil plummeted .
And while Trump said that the prohibition on European travel would “ not only apply to the tremendous amount of trade and cargo but various other things , ” a White house official subsequently said the restrictions would only apply to people and not goods .
As markets tumbled , Trump offered further clarification in a tweet , saying “ please remember , very important @ @ @ @ @ @ @ that trade will in no way be affected by the 30-day restriction on travel from Europe .
The restriction stops people not goods.
” “ We have a public health crisis in this country and the best way to help keep the American people safe and ensure their economic security is for the president to focus on fighting the spread of the coronavirus itself , ” Senate Democratic leader Chuck Schumer and House Speaker Nancy Pelosi said in a joint statement .
“ Alarmingly , the president did not say how the administration @ @ @ @ @ @ @ kits throughout the United States.
” As Trump spoke , companies and public officials across the country were taking actions to deal with the rapid spread of the virus .
The NBA suspended games until further notice , Twitter Inc. directed employees to work from home and governors and mayors restricted large gatherings .
The State Department issued a Level 3 health advisory , urging Americans to reconsider travel abroad due to the virus .
Trump claimed that his early action to restrict travel from China and other affected countries slowed the spread @ @ @ @ @ @ @ He said the administration is “ monitoring the situation in China and South Korea , ” and that “ a possible early opening ” could happen if the situation improves .
“ I ’ m kind of astonished , ” said J. Stephen Morrison , director of the Global Health Policy Center at the Center for Strategic and International Studies .
“ The idea that this is going to be a solution , it moves us back into this whole idea that we have an opportunity still to close off transmission to the @ @ @ @ @ @ @ that it ’ s already inside our borders.
” Allies were also trying to gage the impact and said they were blindsided by Trump ’ s announcement .
Charles Michel and Ursula von der Leyen , the heads of the European Union ’ s main institutions , said in a statement the EU “ disapproves of the fact that the U.S. decision to impose a travel ban was taken unilaterally and without consultation.
” In the U.K. , Rishi Sunak , Chancellor of the Exchequer , told BBC Radio on Thursday that British @ @ @ @ @ @ @ details .
“ But there will be an impact on the demand side of our economy as people are unable to spend as they normally would and travel but it also effects supply chains for businesses and that impacts the supply side of our economy , ” he said .
Sunak also questioned whether flight bans will keep spread of the virus under control .
“ The advice we ’ re getting is that there isn ’ t evidence that things like closing borders or travel bans are going to have a material @ @ @ @ @ @ @ , ” Sunak said .
Business and individual taxpayers can already get automatic six-month extensions to file their tax returns , but they have to pay by the April 15 deadline or face interest and penalties on the late payments .
Extending the due date is akin to the government extending those taxpayers an interest-free loan for that time .
Trump added that he is instructing the Small Business Administration to provide emergency capital to affected firms .
Small businesses in areas covered by a presidential disaster declaration are eligible for federal loans @ @ @ @ @ @ @ provide operating funds until those companies recover .
In addition , the coronavirus funding bill enacted earlier this month made small businesses negatively affected by the outbreak eligible for the loans .


washingtonpost--2020-03-12--Analysis | ECB Throws Italian Bonds to the Bears

At the start of Thursday ’ s press conference , Italy ’ s 10-year borrowing cost was about 1.4 percent .
By the time it wrapped up a bit less than an hour later , the interest rate had surpassed 1.8 percent , a climb of more than 60 basis points for the day .
The proximate cause of that surge was a phrase that may come to haunt Lagarde .
“ We are not here to close spreads , ” she said , in response to a question about the negative market reaction to the measures her central bank @ @ @ @ @ @ @ other tools and other actors to deal with these issues.
” Except there aren ’ t other actors , at least not as far as the bond market vigilantes are concerned .
The rise in Italian yields as the country went into lockdown mode , guaranteeing a recession as commerce grinds to a halt , was modest in recent days precisely because bondholders expected the ECB to stand ready to curtail any increase in borrowing costs .
Its role as lender of last resort was seen as a given ; Lagarde destroyed those @ @ @ @ @ @ @ bond markets also suffered .
Greek yields climbed by half a percentage point to their highest level since August , with Spanish and Portuguese 10-year borrowing costs also climbing .
Even French bonds took a beating .
That three-part package comprises access to more cheap loans for banks , long-term financing targeted at maintaining access to credit for the region ’ s small- and medium-sized enterprises , and boosting the ECB ’ s existing bond-buying program by an additional 120 billion euros ( $ 134 billion ) .
Missing from the action plan @ @ @ @ @ @ @ something the Federal Reserve and the Bank of England both delivered earlier this month at emergency meetings in response to the coronavirus crisis .
Lagarde was keen to stress that the ECB hasn ’ t reached the lower boundary for interest rates ( which would imply that the only future direction would therefore be for higher rates ) and that her institution has plenty of wiggle room on borrowing costs .
No one in the market is buying that message .
The lack of a rate cut shouts loudest , and the fact @ @ @ @ @ @ @ agreed on is not being perceived as a sign of strength .
More likely is that the ECB ’ s more hawkish representatives , led by Germany , put their foot down , and Lagarde is not yet secure enough to challenge dissent .
So the ECB has drifted from the simplicity of Mario Draghi ’ s “ whatever it takes ” message to a complicated package of confusion .
The markets needed something simple to latch on to .
Lagarde has failed to deliver .
The costs , both to the ECB @ @ @ @ @ @ @ s ability to fund the cost of combating the effects of the virus , could prove expensive .
Mark Gilbert is a Bloomberg Opinion columnist covering asset management .
He previously was the London bureau chief for Bloomberg News .
He is also the author of “ Complicit : How Greed and Collusion Made the Credit Crisis Unstoppable .
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