washingtonpost--2020-03-03--Analysis | Why Malaysia’s Politics Are Messy and What’s at Stake

Two veteran politicians , Mahathir Mohamad and Anwar Ibrahim , pulled off a shocking election victory in 2018 that ousted then-Prime Minister Najib Razak , who was enmeshed in a massive money-laundering scandal linked to the state investment firm 1MDB .
Mahathir , now 94 , became prime minister again ( he held the post from 1981 to 2003 ) , with the understanding that he would hand over to Anwar at some point .
Delays in setting a date -- as well as policy disputes within the unwieldy coalition -- led to tension that boiled over in late February @ @ @ @ @ @ @ interim prime minister .
He then sought to strengthen his hand by forming a unity government outside party politics .
But the king pre-empted his efforts on March 1 by naming Mahathir ’ s erstwhile right-hand man , Muhyiddin Yassin , as Malaysia ’ s eighth prime minister since independence from the U.K. in 1957 .
Malaysia is a parliamentary democracy along the lines of the U.K. , except instead of one constitutional monarch the title rotates every five years among the rulers of nine Malay states .
The king , known as @ @ @ @ @ @ @ on the sidelines performing ceremonial duties , but is involved in major appointments like that of prime minister .
A 72-year-old career politician who rose through ranks of the once-ruling United Malays National Organisation party .
He was Najib ’ s deputy for six years before he was sacked in July 2015 after calling for greater clarity in the 1MDB investigations .
He later joined forces with Mahathir to set up a new party , Bersatu , and became home affairs minister in the new government .
A cancer survivor who ’ s @ @ @ @ @ @ @ best known for quipping in 2010 that he considers himself “ Malay first ” and Malaysian second .
Some 56 % of the country ’ s 31 million people are ethnic Malay ( defined in the constitution as Muslim ) , and another 13 % belong to other indigenous groups , according to 2019 estimates from the Department of Statistics Malaysia .
Collectively they are known as bumiputera , or “ sons of the soil.
” There are also large ethnic Chinese and Indian minorities who are Christian , Buddhist and Hindu .
@ @ @ @ @ @ @ , traditionally seen as disenfranchised , in such areas as public-sector jobs , housing and higher education .
Critics say the preferences have fostered cronyism and a dependence on state handouts and have prompted many educated minorities to look for work overseas , draining the economy of talent .
But they are something of a “ third rail ” in Malaysia ’ s polarized politics .
Mahathir ’ s appointment of Lim Guan Eng as finance minister , the first ethnic Chinese to hold the post in over four decades , sowed suspicion @ @ @ @ @ @ @ be eroded , costing the coalition support .
Mahathir and Anwar , who are also Malay , had campaigned on a “ New Malaysia ” agenda aimed at boosting good governance -- including prosecuting Najib and his wife for corruption .
Mahathir had appointed the country ’ s first female chief justice and lifted bans on previously blacklisted journalists .
The parties in the new government , including Najib ’ s UMNO , are supporting a more conservative agenda favoring Malays , including measures to promote a stricter version of Islam .
In @ @ @ @ @ @ @ however , Muhyiddin pledged to be prime minister for all races and to strengthen government integrity .
He also said he would pursue shared prosperity goals , referring to a pledge by the coalition he just abandoned to promote equitable development and raise living standards .
It ’ s already growing at the slowest pace in a decade amid the rapid spread of a virus that ’ s wreaking havoc on travel and supply chains across Asia .
( Projections are for a 3.2 % to 4.2 % expansion of the commodity-reliant economy @ @ @ @ @ @ @ forecast of 4.8 % . )
Mahathir had unveiled a 20 billion ringgit ( $ 4.8 billion ) stimulus package to support affected businesses , particularly in the tourism industry .
Oil-related earnings also are in decline amid weak crude prices , adding headwinds for exports and potentially undermining the Muhyiddin-led government ’ s capacity to boost infrastructure , lift income and rein in government debt .
Even before the virus , recent surveys found rising living costs and a lack of jobs had replaced corruption and abuse of power as voters ’ @ @ @ @ @ @ @ clear yet what Muhyiddin ’ s policy will be .
Malaysia has long been seen as one of Southeast Asia ’ s most stable countries and enjoys relatively warm relations with China , its biggest trading partner .
It is participating in China ’ s ambitious infrastructure program known as Belt and Road , although Mahathir canceled one deal and renegotiated another last year to cut costs .
While Mahathir has regularly denounced the Trump administration over its trade policies and its Middle East peace plan , the U.S. is Malaysia ’ s @ @ @ @ @ @ @ to the U.S. State Department , the two countries cooperate closely on security matters , including counterterrorism and regional stability .
With some from the old government back in power , Mahathir has expressed concerns of possible political meddling in the legal process , which could undermine investor confidence .
Snap elections could be called if the new government proves unstable .
The key stock index , which has been one of the world ’ s worst-performers since the 2018 election , slumped to its lowest since 2011 a day after Muhyiddin ’ @ @ @ @ @ @ @ trading around its lowest level in two years .


washingtonpost--2020-03-03--Analysis | StanChart’s Investors Should Be Careful What They Wish For

Investors have plenty of reasons to want a new boss .
Winters picked a churlish fight with some of them last year over his pay , calling them “ immature , ” even when his steering of the bank didn ’ t exactly justify the compensation .
StanChart recently delayed its target of a 10 % return on tangible equity to beyond 2021 after delivering just 6.4 % last year , 2 percentage points lower than larger rival HSBC Holdings Plc .
Still , viewed from coronavirus-hit Hong Kong — StanChart ’ s biggest market — you ’ d have @ @ @ @ @ @ @ right year for making big changes at the top .
This isn ’ t 2015 , when Winters was brought in to deal with a big bad loan problem .
Now banks are grappling with low interest rates and the impact of the virus .
A steady ship is critical .
StanChart ’ s main task this year will be to lift profitability through stricter cost controls .
Maybe a new CEO could cut thousands of jobs , as HSBC ’ s interim boss Noel Quinn is doing .
But a similar axing @ @ @ @ @ @ @ the outbreak doesn ’ t last much longer .
The bank is midway through the launch of an internet bank to attract millennial and Generation Z savers in Hong Kong , where its customers are getting old .
Why jeopardize that ?
True , StanChart ’ s $ 500 million buyback was less than investors expected last week , but the sale of Indonesia ’ s PT Bank Permata should release the capital needed to return some more to investors .
Besides , where exactly is Vinals going to find this new CEO @ @ @ @ @ @ @ already struggling to fill their own posts , and there ’ s hardly a surfeit of talent out there .
Neither are decent executives falling over themselves to work for bigger lenders ; look at Jean Pierre Mustier ’ s snub of HSBC in favor of staying with Italy ’ s UniCredit SpA .
If Vinals could land someone like Piyush Gupta , CEO of Singapore ’ s DBS Group Holdings Ltd. , then investors would have cause to celebrate .
The head of Singapore ’ s largest bank has won accolades for @ @ @ @ @ @ @ for the finance industry .
But would Gupta really consider the job unless Singapore ’ s state investment firm Temasek Holdings Pte .
— the largest shareholder of both StanChart and DBS — saw value in combining the two banks ?
Such a merger , as far as we know , isn ’ t on the cards .
Andy Mukherjee is a Bloomberg Opinion columnist covering industrial companies and financial services .
He previously was a columnist for Reuters Breakingviews .
He has also worked for the Straits Times , ET NOW and @ @ @

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washingtonpost--2020-03-03--Analysis | Hong Kong’s Property Insiders Are in Buy Mode

That might seem surprising .
A widely followed index of residential prices compiled by Centaline Property Agency has dropped only 6.5 % from its record high in June last year .
The Hong Kong government forecasts the economy may contract as much as 1.5 % this year , as the virus disrupts business , scares off tourists and damps spending .
In the fourth quarter , gross domestic product shrank 2.9 % from a year earlier , the worst performance since the depth of the global financial crisis in 2009 .
The explanation lies in the divergence between publicly traded @ @ @ @ @ @ @ real estate .
Hong Kong property companies trade at deep discounts to their book value , meaning that taking a company private can be a value-enhancing proposition even if property prices continue to fall .
Wheelock is a holding company whose principal assets are its controlling stakes in publicly traded Wharf Real Estate Investment Co. and Wharf Holdings Ltd .
The Woo family , which owns 67 % of Wheelock , is offering one share each of Wharf REIC and Wharf Holdings , plus HK $ 12 ( $ 1.54 ) cash for @ @ @ @ @ @ @ The deal values Wheelock shares at HK $ 71.90 each , or 52 % more than the last trading price before the stock was halted on Feb. 24 .
That ’ s not as generous as it might appear .
Wheelock was trading at a 64 % discount to its its estimated end-2020 book value before the offer , according to Bloomberg Intelligence .
The median forward price-to-book ratio of companies in the Bloomberg Intelligence Hong Kong real estate group is 0.47 times .
The discount has widened from 0.51 times as the @ @ @ @ @ @ @ prompted investors to discount the risk of a future tumble .
Woo isn ’ t the only business owner to take such a step .
Hopewell Holdings Ltd. was delisted by its then-83 year-old founder Gordon Wu last year .
And in 2016 , New World China Land Ltd. was taken private by the controlling Cheng family .
The discount on Hong Kong property shares also reflects the dominance of controlling family shareholders , which fuels concern among investors that minority interests may come second .
By contrast , shares in Singapore ’ @ @ @ @ @ @ @ held .
Even some of China ’ s debt-laden real estate developers command higher valuations because investors see them as more aggressive in pursuing growth .
China Evergrande Group , for example , trades at 1.3 times book value .
At some point , though , prices can become too cheap , calling into question the value of maintaining a listing — and offering majority owners the chance to pick up assets from minority investors for less than they might fetch in the market .
In 2010 , Wheelock was trading at 0.85 @ @ @ @ @ @ @ may be better than those of its subsidiaries .
Wharf REIC and Wharf Holdings are largely focused on shopping malls and offices , with assets such as the Times Square development in Hong Kong ’ s prime Causeway Bay shopping district , which have been badly affected by the slump in tourism and drop in Chinese business activity .
For its own account , Wheelock is also a developer of mass residential housing , where prices have stayed resilient .
Hong Kong home supply remains tight and interest rates and leverage are low @ @ @ @ @ @ @ its Lohas Park project in the eastern district of Tseung Kwan O even at the height of the protests last year .
It ’ s telling that bidding for land sold by the government has remained heated amid the coronavirus outbreak .
Last month , Wheelock outbid eight other developers for a site in Lohas Park that could provide 2,000 homes .
Wheelock isn ’ t the only unloved Hong Kong developer .
The Jardines group-controlled Hongkong Land Holdings Ltd. , the biggest office landlord in the central business district , trades at @ @ @ @ @ @ @ s a similar valuation for Kerry Properties Ltd. , a builder of luxury housing owned by Malaysian billionaire Robert Kuok .
Both were trading at about 0.5 times at the end of 2017 .
Keep an eye on developer share prices .
As malls remain half-empty , some tycoons may be doing some home shopping of their own .


washingtonpost--2020-03-03--Analysis | Coronavirus Tester Gets $10 Billion of Good News

Qiagen extracts DNA and proteins from biological samples and makes them ready for analysis .
The coronavirus , and bid speculation , has made it a favored stock lately .
Last year was different .
The shares plunged after an October profit warning and news that the chief executive officer was stepping down .
An initial approach from Thermo Fisher sent them higher in November , but those talks failed and the stock crashed just before the end of the year .
Now the pair have agreed an all-cash deal at 39 euros a share .
Given the recent market @ @ @ @ @ @ @ .
The 23 % premium to Monday ’ s close rises to a more reasonable and fair 32 % when compared to the price before the first set of talks last year .
It starts to look expensive if you consider that the offer is 70 % above Qiagen ’ s recent low .
But the price is similar to where the Qiagen shares were trading after last year ’ s talks emerged — it ’ s clearly in the ballpark of what investors were seeking .
Qiagen brings growth .
Revenue is @ @ @ @ @ @ @ rate of 6 % over the next four years .
What ’ s more , Thermo Fisher has identified cost savings and revenue synergies worth $ 200 million after the deal closes , implying total acquired operating profit would be worth about $ 780 million based on 2023 forecasts .
In absolute terms , however , Thermo is paying up for this boost .
Adjust for tax and the stream of profits from Qiagen still represents only a 5 % return on the full $ 11.5 billion acquisition cost ( which includes assumed @ @ @ @ @ @ @ s cost of capital estimated at 7 % , Thermo Fisher needs to achieve something better .
Capitalized at $ 122 billion , it may be able afford to pay such a full price for a deal this size .
Even so , it has its work cut out to generate good returns .
Thermo Fisher could well accelerate Qiagen ’ s business much faster than its initial projections suggest .
Even leaving aside the increased demand for diagnostic testing kits as a result of the coronavirus this year , the pairing offers @ @ @ @ @ @ @ eliminating duplicate research and development and using each other ’ s distribution networks .
Qiagen has got a buyer on the hook after a difficult period with no permanent CEO and lingering investor doubts over its strategy .
The deal shows that even with that backdrop , bargains in health-care M & A are hard to find .
Chris Hughes is a Bloomberg Opinion columnist covering deals .
He previously worked for Reuters Breakingviews , as well as the Financial Times and the Independent newspaper .


washingtonpost--2020-04-03--Analysis | Why India’s Booming Power Market Is Bad for Business

That booming market hasn ’ t translated into good times for the industry .
Out of 45 Indian electricity companies for which Bloomberg has data , just two are covering their cost of capital — KKV Agro Powers Ltd. , a tiny renewables developer , and PTC India Ltd. , a power-trading business set up by the government .
The problem isn ’ t entirely unconnected with the success of mass-electrification campaigns like Modi ’ s .
The distribution networks that get electrons into households and businesses are owned by state and territory governments , and are run more for @ @ @ @ @ @ @ and plentiful electricity is a clear vote-winner , but it doesn ’ t necessarily translate into profits .
Thanks to regulated prices and the general mismanagement of the network , India ’ s distribution companies ( known as discoms ) lose around 360 rupees ( $ 4.63 ) on every megawatt-hour of electricity they deliver — equivalent to roughly 10 % of the retail price .
Spread that across a market generating more than 1.5 billion megawatt hours a year , and the losses quickly mount up .
Total debt in the sector @ @ @ @ @ @ @ $ 56.4 billion ) , according to a recent report by the Asian Development Bank Institute .
The precipitous slump in power demand as a result of the coronavirus — coming on the back of sluggish conditions ever since last year ’ s monsoon slowed economic activity — has led New Delhi to have another crack at solving this festering problem .
Discoms will be able to put off paying their debts to generators and transmission companies for three months to see them through a period when customers will be struggling to pay @ @ @ @ @ @ @ week .
These overdue payments alone amounted to $ 11 billion as of January , according to Fitch Solutions .
That will be a relief for the state-owned discoms , but it ’ s terrible news for the businesses that will pay the price for their delinquency — the generation sector , about half of which is in private hands .
These companies have their own debt problems as it is , with Fitch Solutions estimating they have $ 40 billion to $ 60 billion of non-performing coal and gas generators on their @ @ @ @ @ @ @ of time that a plant is online ) have been falling for years thanks to an overzealous build-out of coal plants in the early 2010s .
These generators struggle to make money when load factors fall much below 70 % ; India ’ s were running at just 56 % in the 11 months through February .
With reports that power demand is down by as much as a quarter due to the Covid-19 shutdown , they ’ ll do well to be much above 40 % at the moment .
Making matters @ @ @ @ @ @ @ to perform national service in the midst of a public emergency by providing uninterrupted power supply , despite their own dwindling cashflows .
The rupee ’ s 9 % decline against the dollar over the past 12 months will be raising the cost of imported coal for private generators , not to mention the cost of finance for rolling over all those debts .
Solving this won ’ t be easy .
Programs like the rollout of prepaid smart meters to ensure that people actually pay for the electricity they consume and solar-powered @ @ @ @ @ @ @ sector ’ s drain on grid revenues might help .
But India ’ s ultimate problem is that its power industry is simultaneously too generous and not generous enough to the country ’ s households .
Retail customers benefit from cross-subsidies that put a lot of the cost of delivering power onto commercial users , raising costs for industry and hurting Modi ’ s ambitions to turn the country into a manufacturing powerhouse .
At the same time , ample generation capacity is throttled by weak transmission and distribution networks that mean even @ @ @ @ @ @ @ t always count on getting 24-hour power .
Electrifying India involves more than just connecting a wire to a home .
Another major shakeout of the power sector is overdue .
The falling cost of renewables represents an opportunity for the country to deliver cheaper electricity while reducing some of the particulate pollution from coal-fired generators that ’ s become such a damaging fact of life in recent years .
The government needs to relieve the private sector from its coal-related debts to free it up for the immense investments in solar , @ @ @ @ @ @ @ needs .


washingtonpost--2020-04-02--Analysis | Now Private Equity Wants In on the Bailout? Spare Me

But before asking Uncle Sam for money , private equity firms should consider their role in this mess .
Should they be liable if this virus morphs into a full-blown credit crisis ?
In the past decade , the sector started urging portfolio companies to tap the loan market rather than issue high-yield bonds , which were largely closed off to businesses their size .
Today , roughly half of leveraged loans , or about $ 1.5 trillion , are issued by sponsors for their holdings .
There ’ s certainly a good case for private equity firms to back @ @ @ @ @ @ @ loans can be called immediately — that is , borrowers can redeem them at any time — which allows portfolio companies to refinance more easily .
What ’ s more , these businesses tend to be closely held ; the loan market ’ s opaque reporting standards spare firms from quarterly financial disclosures to the Securities and Exchange Commission .
But private equity ’ s large presence in the market has caused a fast deterioration of loan quality .
Roughly half of borrowers are rated B or worse , up from 30 % @ @ @ @ @ @ @ Inc. show .
After all , levering up to juice returns is the sector ’ s forte .
Last year , more than 75 % of deals included debt multiples greater than six times Ebitda , compared with 25 % after the collapse of Lehman Brothers Holdings Inc. , as I ’ ve noted .
Everyone suffers in times of distress , private equity firms and corporate issuers alike .
In March , the average yield of the S & P/LSTA U.S .
Leveraged Loan 100 Index shot as high as 13 % @ @ @ @ @ @ @ , as the Big Three ratings agencies were busy downgrading high-yield issuers at the fastest pace in at least a decade .
If the Federal Reserve hadn ’ t stepped in with new financing facilities , how would Middle America roll over its loans ?
According to the parameters of the rescue bill , companies with more than 500 employees aren ’ t eligible for small-business relief .
That number includes affiliates , meaning staff at portfolio companies are being added together .
To get around this , the industry wants the Trump @ @ @ @ @ @ @ entities .
In reality , these holdings don ’ t operate separately , at least not in terms of financing decisions .
Private equity firms have teams of lawyers and advisers dedicated to crafting credit agreements that give them as much financial flexibility as possible , such as removing caps on leverage ratios .
As a result , the leveraged loan market is now filled with covenant-lite loans , as my colleague Brian Chappatta has written .
The wheel of fortune is turning .
Banks that agreed to help private equity firms may @ @ @ @ @ @ @ now .
With blue-chip companies drawing at least $ 124 billion from their credit lines in the first three weeks of March alone , and dollar funding tight , do lenders have the bandwidth ?
There are $ 66 billion leveraged loans mandated , or in the works , and about $ 10 billion under syndication — that is , marketed but not priced , data compiled by Bloomberg show .
There ’ s good reason to believe the current jitters go beyond a few canceled deals , and could threaten to trigger @ @ @ @ @ @ @ ’ t mark-to-market , but the financing facilities that banks provide to asset managers ( which allow the latter to buy such loans before packaging and selling them as bonds ) tell a lot about the quality of these assets .
Goldman Sachs Group Inc. and JPMorgan Chase & Co. already demanded their clients to put up extra collateral , or face the risk of liquidation , Bloomberg News reported last month .
It ’ s unclear if industry titans can convince President Donald Trump to bail out their investments .
For its @ @ @ @ @ @ @ to make loans to distressed companies .
Since the passage of the Dodd-Frank Act in 2010 , the Fed isn ’ t allowed to take big credit risks and can only lend with a high degree of protection .
Private equity may be in the eye of the storm , but it certainly doesn ’ t need a bailout .
Last year , capital committed to this sector grew 20 % to a record $ 1.3 trillion , according to data provided by PitchBook , a Morningstar company .
So instead of trying @ @ @ @ @ @ @ small businesses , firms can use that dry powder to shore up the balance sheets of their investments .
These firms came out of the collapse of Lehman Brothers fairly unscathed .
Perhaps the coronavirus could finally teach them a lesson : Using cheap debt to pay themselves dividends isn ’ t such a savvy investment model after all .


washingtonpost--2020-04-03--Analysis | HSBC Refugees May Find a Stable Home in China

It ’ s difficult to overstate the importance of HSBC to individual investors in the city where it was founded more than 150 years ago .
The stock is unusually widely held .
Institutions own just 61.5 % of the shares , compared with 94 % for Standard Chartered Plc , HSBC ’ s London-based and Hong Kong-listed rival .
Standard Chartered also cancelled its dividend along with other British banks after the BOE called on them to conserve cash amid the coronavirus pandemic .
HSBC ’ s dependable payouts have also been a lure for institutional investors .
Shenzhen-based @ @ @ @ @ @ @ bank ’ s second-largest shareholder , cited the dividend as an attraction for taking its 7 % stake .
Mainland Chinese investors will also be feeling the pain : As much as 8.2 % of HSBC ’ s Hong Kong-listed stock sits with investors who bought via trading pipes that connect the city ’ s exchange with counterparts in Shanghai and Shenzhen .
That ’ s risen from about 2 % three years ago .
HSBC said it would cancel an interim dividend slated to be paid this month and make no payouts @ @ @ @ @ @ @ of the year .
That raises the question of where investors will turn in search of the stable income that they used to take for granted from HSBC .
The answer may lie in the bank ’ s giant , state-controlled rivals across the border in mainland China .
That might seem surprising .
Shares of Industrial & Commercial Bank of China Ltd. , and three fellow Chinese lenders that are members of Hong Kong ’ s benchmark Hang Seng Index , have languished over the past decade .
Their poor performance reflects @ @ @ @ @ @ @ buildup of debt will eventually lead to a surge in bad loans .
ICBC ’ s Hong Kong-traded shares are 13 % lower than they were a decade ago , and Bank of China Ltd. has slumped 27 % .
While China Construction Bank Corp. has lost only 1 % , Bank of Communications Co. has fallen 44 % .
Yet all have been steady dividend payers .
Including dividends , ICBC has returned 46 % in the past decade , Construction Bank 65 % and Bank of China 28 % .
Only @ @ @ @ @ @ @ .
The four banks have typically traded at high dividend yields over that period .
Yields for ICBC , Construction Bank and Bank of China have all averaged more than 5 % , with peaks higher than 8 % .
Elevated yields often indicate that investors expect payouts to be cut or omitted altogether , but dividends have actually been rising at the Chinese banks in recent years .
China ’ s opaque financial system and the state-owned banks ’ status as policy tools of the government have helped to deter some investors @ @ @ @ @ @ @ economies from the U.S. to Europe and pressuring financial systems , it ’ s debatable whether Chinese institutions should be seen as any more risky than their overseas counterparts .
For one thing , having been first into the coronavirus outbreak , China ’ s economy is also the first to start getting back to normal .
For another , the government has an incentive to ensure that the banks keep paying dividends because it relies on that income to fund social security spending .
An unofficial rule has mandated the big state @ @ @ @ @ @ @ of their profits out as dividends , another reason to be sanguine that payouts will be sustained .
In 2016 , HSBC chose to keep its headquarters in London rather than move back to Hong Kong , a call that it may now be tempted to revisit .
It would be ironic if a decision by its adopted jurisdiction helped send shareholders in the bank ’ s home city — and biggest market — scurrying into the hands of Chinese rivals .


washingtonpost--2020-04-03--Analysis | Retailers Wish You’d Be Back Shopping By Easter

The extended closures will now affect crucial pre-Easter shopping period , worth about $ 25 billion to U.S. retailers , according to GlobalData .
While people may still indulge in filling their children ’ s baskets with chocolate eggs to create some holiday cheer in this difficult time , crackdowns on even the smallest of gatherings mean they won ’ t be planning big fancy meals , nor refreshing their bunny-and-chick-themed decorations .
What ’ s more , consumers can ’ t take advantage of the long holiday weekend in much of Europe to start shopping for the latest trends @ @ @ @ @ @ @ blow because it typically kicks off the period when consumers refresh their wardrobes , home decorations and gardens for the warmer months .
If temperatures soar , that can normally set non-food retailers fair for the coming quarter .
From there , people ’ s diaries would typically be chock full with weddings , graduations and parties , plenty of reasons to update one ’ s wardrobe .
But the novel coronavirus has radically changed all of that , eliminating pretty much any reason to dress for success .
It ’ s estimated @ @ @ @ @ @ @ the U.S. this year are looking to postpone them , according to data from the Wedding Report .
The graduation season has been thrown into question .
More than 80 U.S. colleges and universities have either canceled , postponed or been turned their 2020 commencement ceremonies into virtual gatherings .
That means everything from floral dresses to pastel hued shoes may have to be offloaded .
Discounting to clear unwanted stock means the crisis is likely to last well into the second quarter , and possibly beyond .
There ’ s another reason @ @ @ @ @ @ @ than initially feared : Some online demand has evaporated .
Retailers have to ensure workers processing internet orders observe strict social distancing rules .
So far British online fashion group Asos Plc , which generated 13 % of its sales from the U.S. , has kept its warehouses in Atlanta , Berlin and the U.K. open , albeit with longer delivery times .
But rival fashion chain Next Plc has stopped taking online orders while it reconfigures its distribution centers .
This would be in line with its worst case scenario of the @ @ @ @ @ @ @ cutting full-year sales by 1 billion pounds ( $ 1.2 billion ) .
No wonder store chains have shifted to cash preservation mode .
H & M said it was taking a number of initiatives , from cutting working hours to seeking rent reductions , to try to cope .
In the U.S. , hundreds of thousands of staff are being temporarily laid off , with chains such as Macy ’ s Inc. , J.C. Penney Co. , Kohl ’ s Corp. and Gap Inc. halting pay for much of their workforce while @ @ @ @ @ @ @ hiatus in consumer spending , the more likely that some retailers and restaurants just won ’ t open their doors again .
Others may decide to radically cut down on their brick-and-mortar locations .
U.S. department stores , already grappling with the shift to online and mostly lackluster product selections , look particularly challenged .
But even companies that do emerge relatively unscathed could find recovery just as demanding .
Consumers who have kept their jobs will likely be eager to splash out on holiday and work attire when they ’ re finally @ @ @ @ @ @ @ back to the office , purchases they can fund with money saved during lockdown on everything from gym memberships and dining out .
The question is whether any pent up demand will be enough to alleviate lost sales from those who have been temporarily laid off , or worse , made redundant .
Individuals in fear of losing their jobs , or being forced to take pay cuts , are likely to save more .
So consumer-facing companies need to brace themselves for a long haul .
It ’ s going to be @ @ @ @ @ @ @ even longer before they get back to any semblance of normality .


washingtonpost--2020-04-03--Analysis | Why the OPEC-Russia Blowup Sparked All-Out Oil Price War

Russia had joined forces with OPEC in 2016 , along with nine other non-member countries , and the group controlled almost half of the world ’ s oil production .
The “ OPEC+ ” pact led to a resurgence of the cartel , which wields immense power over the world ’ s most critical commodity .
The blowup came after Russia refused to go along with production cuts pushed by Saudi Arabia at a March 6 meeting in Vienna .
The kingdom -- OPEC ’ s biggest producer and its driving force -- wanted to trim output further to prop @ @ @ @ @ @ @ .
Saudi Arabia ’ s state-owned oil behemoth responded aggressively just hours later , reversing course and opening the taps .
As the pandemic stretched on , there were estimates that it could knock out as much as a third of global oil demand .
The slump in prices threatened millions of jobs and the political stability of oil-dependent nations .
On April 2 , U.S. President Donald Trump called for a coordinated production cut , and the first meeting of the OPEC+ members since the breakdown was hastily scheduled for April 6 @ @ @ @ @ @ @ held by video conference , to include producers from outside that group and to reach a “ fair agreement ” to reduce oil supplies .
To be sure , there are still many obstacles to a truce .
Talks between Russia and the 13-member Organization of Petroleum Exporting Countries broke down because the country didn ’ t want to be strong-armed into further cuts to its lucrative oil production .
It complained that the deal with OPEC , which has been managing global oil supply since 1960 , had aided America ’ s @ @ @ @ @ @ @ angry with the willingness of Trump to employ energy as a political tool .
It was irked by the use of U.S. sanctions to prevent the completion of a pipeline linking Siberia ’ s gas fields with Germany , known as Nord Stream 2 .
The Kremlin was reluctant to cede further market share to U.S. shale drillers -- known as frackers -- that have been adding millions of barrels of oil to the global markets .
An attack on shale has been tried before : When the new technique was expanding in @ @ @ @ @ @ @ was to flood the market , expecting that a collapse in prices would thwart the new competition .
As shale producers found cheaper ways to operate and a global supply glut dragged on , OPEC then returned to its traditional tool of constraining output , sending oil to a four-year high of more than $ 85 a barrel by mid-2018 .
The victory proved self-defeating .
Higher prices re-invigorated U.S. fracking , propelling the U.S. to overtake Saudi Arabia and Russia as the world ’ s No .
1 crude producer .
Many @ @ @ @ @ @ @ look vulnerable , as they ’ re overly indebted and already battered by rock-bottom natural gas prices .
The price of oil tumbled to less than $ 25 a barrel in the days following the OPEC+ bustup .
That prompted the main oil regulator in Texas to consider whether the state should curb crude production for the first time in nearly half a century in a coordinated effort with Saudi Arabia and Russia to calm the market and stave off a total industry meltdown .
That remains to be seen .
In the @ @ @ @ @ @ @ good position to withstand a price slump .
Its government budget breaks even at a price of $ 42 a barrel and it has squirreled away billions of dollars in a rainy-day fund .
Saudi Arabia , which is almost entirely dependent on oil to fund lavish government spending , holds about $ 500 billion in foreign currency reserves to cushion the blow .
One source of potential stress : The kingdom ’ s currency , the riyal , has been pegged to the U.S. dollar for more than three decades , providing @ @ @ @ @ @ @ a built-in competitive advantage , since its Middle Eastern members can produce crude at about a third of the cost of U.S. shale .
Such a dramatic crash in the price of oil , if it were sustained , would savage national budgets of petro-states from Venezuela to Nigeria to Iran , threatening to upend politics around the world .
To policy makers , volatile oil prices are an added complication as they try to shield economies from the impact of the coronavirus epidemic .
There are winners from rock-bottom oil prices -- @ @ @ @ @ @ @ s largest oil importer , whose recovery from the virus will be key for the global economy .
The U.S. -- once a beneficiary of low oil prices -- is now an exporter rather than a buyer .
Sudden surges in oil prices are feared because of the way they could jack up costs across the global economy and slow economic growth .
Now a world reeling from an economic slump triggered by the virus is enduring another sort of oil shock .


washingtonpost--2020-04-03--Analysis | Airborne or Not? The Evidence on Virus Transmission

In its first major report on the Covid-19 outbreak , the WHO said the virus spreads in respiratory droplets -- spatters of liquid that are sometimes visible to the naked eye and are forcefully expelled from an infected person ’ s cough or sneeze .
These are usually heavy enough to fall immediately to the ground or surrounding surfaces .
Infection could occur if the droplets reach the mouth , nose or possibly the eye of someone nearby .
Transmission can also occur indirectly , via a hand that has touched a so-called fomite -- a contaminated surface or object @ @ @ @ @ @ @ A study concluded that the coronavirus can survive as long as 24 hours on cardboard , 48 hours on stainless steel and 72 hours on plastic .
The WHO recommends people wash their hands frequently and keep a distance of least 1 meter ( 3 feet ) from anyone who has a fever , cough or other respiratory symptoms .
It advises against shaking hands , hugging and kissing for now .
For households with a suspected or confirmed case of infection , the U.S. Centers for Disease Control and Prevention suggests keeping @ @ @ @ @ @ @ as possible and cleaning and disinfecting “ high-touch surfaces ” in common areas -- such as switches , tables and remotes -- daily .
People also emit particles from their noses and mouths that are so small , instead of falling right to the ground , they can float for a time through the air .
When a virus is carried by these so-called aerosols , its odds of infecting people are higher because of the potential for them to be inhaled .
Since February , the WHO has said this method of @ @ @ @ @ @ @ health-care facilities conducting procedures such as a tracheotomy on people with Covid-19 .
Researchers who aerosolized it intentionally found active virus can float in the air for up to three hours .
The WHO , in a statement , said the experiment reflected neither normal human coughing nor aerosol-generating medical procedures .
In another study , not yet peer-reviewed , researchers found particles of the virus in the air of rooms where patients were receiving care and adjacent hallways .
The particles they identified , however , were not capable of causing infection @ @ @ @ @ @ @ yet peer-reviewed , researchers who examined air samples in two hospitals in China raised the theoretical concern that aerosols could arise from surfaces contaminated by droplets , for instance when hospital workers shed their masks and gowns , or when floors were cleaned .
These risks are one reason medical workers who deal with suspected or confirmed Covid-19 patients are directed to wear face masks , specifically the more sophisticated type known as respirators , and dispose of them carefully .
Increasingly , health authorities across the world are recommending members of the @ @ @ @ @ @ @ public .
With medical masks in short supply , many suggest that ordinary people use home-made versions .
Another possible route of transmission arises when infected people improperly wash their hands after using the toilet , and then touch surfaces that others come in contact with .
Some patients have been found to have live virus particles in their stool .
The WHO has said that the fecal-to-oral route does not appear to be a significant pathway for the novel coronavirus .
To the extent it is a means of transmission , sanitizing @ @ @ @ @ @ @ help slow the virus , in addition to regular hand-washing .
They may be a source of infection if contaminated by a carrier ’ s respiratory secretions or feces .
The virus was found to have spread readily among food service workers on the Diamond Princess cruise ship , where about one in five people became infected while it was quarantined off Yokohama , Japan .
Chinese health officials recommended strengthened sanitation and hygiene measures in epidemic areas .
These include drinking boiled water , avoiding eating raw food , washing hands frequently @ @ @ @ @ @ @ food from being contaminated by patients .
According to U.S. officials , the coronavirus has not been detected in municipal drinking water supplies .
Conventional treatment methods that use filtration and disinfection should remove or inactivate the virus .
After the infection appeared in babies born to mothers with the disease in China , the possibility was raised that the virus could be passed in utero .
Subsequent studies reached different conclusions .
One looked at nine infected women who gave birth to uninfected babies .
No virus was detected in amniotic fluid @ @ @ @ @ @ @ throats or in breast milk , suggesting that transmission from mother to child occurs through respiratory droplets .
However , doctors in China reported on the case of a mother with Covid-19 whose baby had elevated antibody levels two hours after birth .
That suggests the baby was infected in utero , since the antibodies aren ’ t transferred to the fetus via the placenta and usually don ’ t appear until three to seven days after infection .


washingtonpost--2020-04-03--Analysis | Bankers Are Sitting on a Vast Mountain of Risky Trades

Some of Europe ’ s biggest banks have gone into the worst economic contraction since the Second World War sitting on huge piles of complex , risky trades whose fair value is hard to determine .
These are the so-called Level 2 and Level 3 assets , the types of instruments that blew up in 2008 .
Valuations of Level 2 assets — mainly over-the-counter derivatives and illiquid stocks — are derived from using observable external measures , such as the price of similar instruments traded in the market .
Level 3 assets are the most illiquid instruments , whose @ @ @ @ @ @ @ t observable to outsiders .
Unlike Level 1 assets , which have easily viewed market prices , investors have to rely on banks ’ internal models , and own judgments , to get a handle on the Level 2 and Level 3 exposure .
Fair values for the same instrument might easily differ from firm to firm .
The absolute size of these risky asset pots — totaling several hundred billions of dollars at many of the largest banks — is eye-watering .
They dwarf the lenders ’ capital by many multiples .
@ @ @ @ @ @ @ of Level 2 and Level 3 assets is more than 11 times its common equity Tier 1 capital .
At Britain ’ s Barclays Plc , it is just shy of 11 times , at France ’ s Societe Generale SA it ’ s seven times and at Switzerland ’ s Credit Suisse Group AG it ’ s almost eight times .
While plenty has been written about the inevitable build-up of bad loans in the Covid-19 downturn , these piles of interest-rate swaps and collateralized debt obligations need to be considered too @ @ @ @ @ @ @ every major asset class was upended .
U.S. stocks fell into a bear market at record speed , the dollar soared and safe-haven assets such as government bonds were rocked .
How banks ’ risky assets fared during the unprecedented turmoil is guesswork from the outside .
All the banks listed in the table above declined to comment for this piece .
One bank executive , who asked to remain anonymous , said the balances of banks ’ Level 2 and Level 3 assets and liabilities may both have increased in the quarter @ @ @ @ @ @ @ that hedges have been working in the turmoil .
For example , the decline in long-term interest rates would have increased the present value of years-old derivatives that swapped fixed rates for floating rates .
Interest-rate derivatives tend to make up the bulk of the portfolios , and they may have offset declines in the prices of equities and loans .
( That said , some hedges would have been for interest rates and inflation to rise , so they could be heavily in the red . )
Less welcome is that banks @ @ @ @ @ @ @ from Level 2 to Level 3 as price discovery becomes more difficult .
Some may decide that observable measures through mid-to-late February are sufficient to keep assets in the Level 2 pot for the first quarter .
Each bank has its own model .
Lehman Brothers allegedly shifted mortgage-backed securities and other assets from Level 2 to Level 3 in 2008 in an effort to prop up their values .
The market became hugely skeptical about these instruments during the financial crisis .
A 2015 study published by the Journal of Accounting and @ @ @ @ @ @ @ 2 assets at 85 cents on the dollar and Level 3 assets at 79 cents during 2008 .
More troubling for the banks sitting on large stocks of Level 2 instruments is that an analysis by Wharton Research Scholars shows they were discounted even more significantly during the crisis than the more opaque Level 3 stuff .
Investors should look at how frequently banks turn over their Level 3 assets , according to analysts at Berenberg , who published a report this week saying that France ’ s BNP Paribas SA , Credit @ @ @ @ @ @ @ turnover of Level 3 instruments among 12 banks they studied , which means the assets are probably “ stickier and harder to sell.
” Credit Suisse has the highest turnover among the group .
The French banks , Credit Suisse , Barclays and Deutsche each hold Level 3 assets that are as large as , if not larger than , those of Citigroup Inc. and Bank of America Corp. , even though the latter have much bigger trading businesses .
The European Systemic Risk Board , the European Union body that monitors the @ @ @ @ @ @ @ also noted the Level 2 and Level 3 threat — particularly the prospect for “ opportunistic behavior ” by managers and the overvaluation of assets .
“ If several banks were to be affected simultaneously at a time of acute fragility in the financial system , concerns could spread to the macroprudential domain and affect financial stability , ” a February report from the board warned .
What ’ s more , banks no longer have to use the crisis-era filters that protected their capital positions from movements in the fair value of @ @ @ @ @ @ @ these filters , fair-value gains and losses are directly recognized in banks ’ income statements even if they ’ re unrealized .
And as my colleague Ferdinando Giugliano noted , significant risks may lie in smaller banks that may not have been as transparent in their Level 2 and Level 3 disclosures .
Equally concerning is the faith being placed in banks ’ risk management practices , especially since regulators started loosening the rules because of the Covid-19 crisis .
In its 2019 review , the European Central Bank ’ s Single Supervisory @ @ @ @ @ @ @ observed a worsening of internal governance , especially among the larger lenders .
Regulator ’ s plans to tackle this area of weakness with a new set of capital rules for trading desks — known as the Fundamental Review of the Trading Book — was pushed back a year to January 2023 as part of the response to the coronavirus lockdowns .
By then , it could be glaringly obvious how clever banks have been at managing risk .


washingtonpost--2020-04-03--Virus-Bailout Watchdogs Face Immense Task With Echoes of TARP

The $ 2.2 trillion stimulus bill that Congress adopted last month will give Ware ’ s office $ 25 million – more than double its annual budget – to beef up its auditing and investigative capacities over the next four years .
Overall , the legislation also establishes a $ 500 billion bailout fund for large businesses and expands unemployment benefits .
To police that spending , it creates layers of oversight that would be paid for with more than $ 155 million in new funding .
In racing to craft the legislation while building in ways to protect taxpayers @ @ @ @ @ @ @ were put in place for federal bailouts in 2008 and 2009 .
Already , though , some question whether the bill ’ s oversight provisions will work in harmony - and whether the watchdogs ’ funding will be robust enough .
“ Hopefully , they ’ ll get more , ” said Neil Barofsky , a former federal prosecutor who served as the first special inspector general for the Troubled Asset Relief Program .
Barofsky ’ s office , called SIGTARP , received $ 50 million in seed money in 2008 to examine @ @ @ @ @ @ @ of it loans to banks and financial institutions that were concentrated in New York City .
This time around , the big-business bailout provisions will provide as much as $ 500 billion in loans from the U.S. Treasury and Federal Reserve – and create a new inspector general to oversee them , with start-up funds of just $ 25 million .
Barofsky noted that this new office , called the Special Inspector General for Pandemic Recovery , will have a nationwide purview .
That will require a large travel budget and expertise in @ @ @ @ @ @ @ the financial knowledge that SIGTARP ’ s employees had to have.
“ The organization can not succeed with $ 25 million , ” he said .
To be sure , there are additional sources of scrutiny – and more money – tucked into the bill .
The Department of Labor ’ s inspector general received $ 25 million in new funds to oversee the roughly $ 250 billion in expanded unemployment benefits that will offset unprecedented job losses .
And , to sit atop the oversight efforts , the bill appoints a “ @ @ @ @ @ @ @ inspectors general from 11 different agencies .
That panel will receive $ 80 million in funding to coordinate , support and oversee the other IGs .
The committee ’ s first meeting took place Thursday .
Tensions have already begun to flare between the executive and legislative branches , after President Trump issued a statement last Friday in conjunction with signing the bailout bill , known as the Coronavirus Aid , Relief and Economic Security , or CARES Act .
Trump ’ s signing statement insists the new inspector general must get approval @ @ @ @ @ @ @ when it ’ s been denied information by government agencies .
That controversy centers on the inspector general that the law will set up for the big-business loans from the Treasury and the Fed – an office whose role will be almost identical to the 2009-vintage SIGTARP .
The 11-year-old forerunner still exists .
In February , one of its investigations led to a conviction and a five-year prison sentence .
“ Any time you have a lot of money going out the door that fast in an emergency crisis , there is @ @ @ @ @ @ @ Christy Goldsmith Romero , the office ’ s current chief .
“ That ’ s why there has to be a long-term commitment to finding criminal activity and civil fraud.
” SIGTARP and its oversight have had their critics .
Some point out that most of its cases involved small community and regional bankers , not high-profile Wall Street figures .
Others say it slowed the distribution of funds to failing banks by focusing too much on investigations , fueling a backlash against the 2008-09 bailouts that ’ s widely believed to have @ @ @ @ @ @ @ Wall Street movements .
For the general public , the CARES act creates a website to track the anticipated $ 2.2 trillion in spending , another provision borrowed from the 2009 bailout legislation .
The Obama-era website , recovery.gov , was slow to start offering detailed information about spending , but later won an appraisal from the Government Accountability Office as a “ good practice.
” The new version will be better , according to Alan Boehm , the executive director of the Council of the Inspectors General on Integrity and Efficiency , @ @ @ @ @ @ @ , an independent agency founded in 2008 to coordinate oversight across government agencies , already has a site , oversight.gov , which is likely to become the CARES transparency tool .
“ For the oversight of the coronavirus bailouts to work , a lot of things have to go right , ” said Carter Dougherty , a spokesman for Americans for Financial Reform , a policy group made up of 200 civil rights , consumer , labor and other civic groups .
“ It will demand cooperation with Congress and the various inspectors @ @ @ @ @ @ @ mildly , not been a strong suit of this administration .
Every Trump administration official needs to be accountable to the inspectors general , and those officials need to be accountable to Congress .
”


washingtonpost--2020-04-03--Analysis | How Germany Pays Workers When Their Work Dries Up

Businesses facing a temporary and unavoidable shortfall of orders due to a crisis -- as is the case for many due to the coronavirus -- can apply for the government to subsidize workers ’ salaries while activity is reduced or put on hold .
Kurzarbeit -- pronounced KUHRTS-ahr-bite , and loosely translated as “ short-time working ” -- typically covers 60 % of lost net wages , which rises to 67 % for people with children .
That ’ s far more generous than what ’ s on offer to furloughed workers in the U.S. and elsewhere .
Companies are @ @ @ @ @ @ @ apply to get reimbursed by the state .
The German government recently expanded the program to include contract workers and cover social insurance contributions , among other tweaks to make it easier to access .
Though smaller companies say it isn ’ t perfect -- as it assumes they have the liquidity to cover personnel costs upfront -- Germany ’ s program has received frequent praise .
It kept about half a million people employed during the global financial crisis , the Organisation for Economic Co-operation and Development reported in 2009 .
Germany @ @ @ @ @ @ @ will save millions this time around .
German companies , particularly manufacturers , make routine use of Kurzarbeit even when there ’ s not a global economic crisis going on .
Companies can use it to offset seasonal production swings , such as bad weather affecting construction .
Under special circumstances , it can even be used by companies undergoing restructuring to prevent sudden layoffs .
A record 470,000 companies applied for Kurzarbeit in March , suggesting that around 9 million employees , or 20 % of the German workforce , are affected @ @ @ @ @ @ @ that to 2019 , when an average of 1,300 companies applied for support each month .
Big names including Volkswagen , BMW , Daimler , sports-apparel maker Puma and airline Lufthansa have said they plan to make use of the program .
France , Italy , Belgium , and the Netherlands are among other European countries that allow distressed companies to tap government funds to pay salaries in periods when they have little or no income .
Many have recently pledged to bolster those programs with additional funds , and the European Commission @ @ @ @ @ @ @ pay for such policies .
Canada also provides income support to people on a reduced work week , with a well-established program that has helped during previous economic hardships .
With the pandemic causing extraordinary economic pain , other countries are moving to join the club .
Sweden and Denmark introduced support measures specifically in response to the coronavirus .
Denmark ’ s three-month aid program , for instance , is expected to pay partial wages to an estimated 70,000 people by June .
( Nordic populations , those in Denmark , Finland @ @ @ @ @ @ @ rely on generous welfare states that ensure those dropping off payrolls still get monthly support . )
In the U.K. the government has made an unprecedented move to cover as much as 80 % of salaries of workers whose jobs are at risk .
Not really .
Furloughed employees in the U.S. typically go without pay but retain access to benefits like health insurance .
Under the stimulus package signed into law by President Donald Trump , people receiving unemployment benefits through their state get an additional $ 600 per week from the @ @ @ @ @ @ @ .
The stimulus law also makes more workers eligible for unemployment benefits , including those furloughed rather than laid off .
Nobody has proposed it on any official level .
But one of Trump ’ s favorite Fox News hosts , Tucker Carlson , on March 16 endorsed Kurzarbeit as “ a model in progress for how we can save work.
” One of Trump ’ s top economic advisers , Kevin Hassett , wrote approvingly of Kurzarbeit in 2009 during the global financial crisis .
And a March 25 policy paper by @ @ @ @ @ @ @ program , noting that it helped limit job losses after 2008 , has been widely emulated since , and is likely to prove effective in the current slump too .


washingtonpost--2020-02-28--Analysis | What It Means If the Coronavirus Is Called a Pandemic

The word itself invokes alarm , and it could have repercussions depending on how it ’ s used and who uses it .
The current outbreak comes close to the technical criteria for a pandemic , when a new infection , against which most people do not have immunity , mushrooms across continents .
That ’ s a bigger threat than an “ epidemic , ” which refers to a more constrained spread to a specific country or area .
The WHO ’ s Director-General Tedros Adhanom Ghebreyesus stopped short of labeling the situation a pandemic at a Feb. 24 @ @ @ @ @ @ @ an “ uncontained global spread ” or “ large-scale severe disease or death.
” Even so , on Feb. 28 the WHO raised its global risk assessment for the novel coronavirus to “ very high ” from “ high.
” It ’ s not always black and white , but in general , the WHO will look at the geographical reach of cases , along with the deadliness of the disease and the effectiveness of containment efforts .
In this case , the virus , which causes the pneumonia-like Covid-19 illness , has @ @ @ @ @ @ @ the Chinese city of Wuhan .
There are aspects of the virus ’ s spread and transmission that are still not clear .
These factors make it difficult to come up with a trigger point for pandemic conditions to be met , especially while there are early indicators of slowed or stopped transmission in some places , including China , Singapore , Nepal and Vietnam .
If the WHO begins to talk about the coronavirus as a pandemic , it could spur more countries to roll out higher-level , emergency-grade response plans at @ @ @ @ @ @ @ Centers for Disease Control and Prevention , for example , said there are a range of measures health officials can take if the outbreak spreads widely in the U.S. One major tool is what ’ s known as social distancing -- finding ways to limit personal interactions where the virus could transmit , such as closing schools , or rearranging desks so that they are further apart .
Businesses could encourage telecommuting or use video-conferencing to replace in-person meetings .
More public events could be canceled .
Still , the way the WHO @ @ @ @ @ @ @ any sort of legal designation , and precautions are already being deployed in many countries , including a massive quarantine in parts of China and Italy and extended school closings in such places as Hong Kong and Japan .
Australia activated an emergency plan on Feb. 27 , although details were sparse .
The new coronavirus can cause Covid-19 , a severe pneumonia-like illness .
Some people have only mild cases , or can remain healthy even as they transmit the virus .
The novel germ is from the same family as the @ @ @ @ @ @ @ ( SARS ) , but is less consistent in causing serious disease .
Its highly contagious nature has led to thousands of infections , leading to more deaths in two months than all those recorded in the nine-month SARS epidemic .
Another related virus , known as MERS-CoV , that ’ s been spreading since 2012 , has led to death in 34 % of the 2,499 cases recorded .
Still , neither of those outbreaks qualified as pandemics , by WHO standards .
There ’ s no formal numerical definition , but @ @ @ @ @ @ @ the outbreak in specific regions or countries fail .
The goal then switches from containment to mitigation -- trying to ease the pain .
The last virus to make the cut as a pandemic was the 2009 outbreak of a new strain of H1N1 flu , or swine flu .
It infected an estimated 61 million people in the U.S. alone and may have killed as many as 575,000 people worldwide in the first year it circulated , according to the CDC .
Even then , the WHO faced criticism that it had @ @ @ @ @ @ @ the most widely cited pandemics was the 1918 flu outbreak , which killed about 5 % of those infected , an estimated 50 million people worldwide .
The WHO has said that it ’ s working on a new definition of a pandemic as it might relate to Covid-19 , but warned that this could take some time .
That ’ s in large part due to the WHO tightening its criteria for classifying an outbreak as a pandemic after the 2009 swine flu crisis .
In the meantime , the WHO on @ @ @ @ @ @ @ “ public health emergency of international concern , ” its highest level of alarm .
That ’ s a formal declaration of a public health risk that requires a “ coordinated international response .
”


washingtonpost--2020-02-28--Analysis | Why Curbing Travel Is No Cure-All for the Coronavirus

Travel restrictions have been imposed by more than 50 countries or territories in hopes of containing the virus , according to data compiled by the International Air Transport Association .
The first and most dramatic was China sealing off the outbreak ’ s epicenter , Wuhan , a city of 11 million inhabitants , and the surrounding Hubei province .
The U.S. has said it would bar entry of most foreigners who have been in China within the previous two weeks .
Australia , Japan , Singapore , the Philippines and New Zealand also barred entry by non-citizens who had @ @ @ @ @ @ @ airlines have suspended flights .
Hong Kong , the international financial center that functions with some autonomy from China , announced restrictions as well .
Even some mainland Chinese cities have begun to control arrivals from abroad .
Consider Italy , which abruptly canceled flights to and from China when it emerged as an early European Union virus hot spot .
The government ’ s decision was second-guessed , since travelers from China could still fly to other EU countries and enter Italy from there -- without a passport check -- depriving authorities @ @ @ @ @ @ @ do spot medical checks at airports .
And travel curbs can create a false sense of security , distracting countries from other crucual steps to fight an epidemic .
Catherine Worsnop , an assistant professor in the School of Public Policy at the University of Maryland who has studied the effects of restrictions on people ’ s movement in past outbreaks , says such steps can merely delay an epidemic for a few weeks , at considerable economic and societal cost .
Plus , the fear of trade and travel limits can lead @ @ @ @ @ @ @ avoid economic and political harm , ” Worsnop wrote in a 2019 study .
The United Nations agency advises against restrictions on travel and trade to countries hit by the outbreak because costs -- social disruption and lots of resources -- usually outweigh benefits .
Only in areas with few international connections and resources are temporary curbs useful , it says .
Even during an outbreak last year of Ebola -- a far more deadly disease that kills about half of those infected -- the head of the WHO said any restrictions on @ @ @ @ @ @ @ rather than stop the spread , because such limits could lead people to use informal and unmonitored border crossings .
The WHO advised on Jan. 24 that departing travelers at China ’ s international airports and ports be screened for fever or other signs of coronavirus “ while minimizing interference with international traffic.
” As for how other countries deal with incoming passengers , the WHO said , “ The evidence from the past outbreaks shows that effectiveness of entry screening is uncertain.
” A big reason is that temperature monitoring may miss @ @ @ @ @ @ @ and asymptomatic , or those trying to hide a fever .
People suffering from other illnesses could also get caught up in the process .
Instead of restrictions on travel , the WHO advises people stay put if they have a fever or cough and seek out medical attention early on if symptoms develop on the road .
If people are returning from affected areas , they should remain isolated for 14 days .
In the face of the virus ’ s rapid spread , governments are increasingly coming under fire by citizens @ @ @ @ @ @ @ South Korea , public fury is coalescing around the idea that authorities should have blocked Chinese from coming to the country sooner .
Japanese Prime Minister Shinzo Abe has also been criticized for taking a softer approach to travel curbs on China , the country ’ s biggest trading partner .
Flight cancellations have skyrocketed since the virus ’ s outbreak .
Most international carriers have announced plans to halt service to China .
In a bid to reassure travelers , some airlines are turning to the world ’ s hardest-hitting disinfectants to @ @ @ @ @ @ @ cruise ships have found themselves all but trapped at sea over coronavirus concerns , as governments seek to keep cases away from their shores .


washingtonpost--2020-02-28--Analysis | Why Havens Might Not Be Safe When Everybody Rushes In

Merriam-Webster defines a haven as a “ refuge ” or “ a place of safety.
” In the financial markets , “ haven asset ” is applied to a range of assets , primarily those whose values are expected to rise when global market sentiment sours into a so-called “ risk off ” environment .
They usually behave counter-cyclically , or tend to appreciate when the business cycle is in a downdraft .
For debt securities , it ’ s those also deemed to have no -- or little -- credit risk , meaning you ’ re assured of repayment @ @ @ @ @ @ @ are also expected to be very liquid , meaning they can be bought or sold in big sizes with ease nearly anytime .
• U.S. Treasuries are the global safe-haven asset of choice , as nobody expects the U.S. to default on its debt obligations .
America ’ s ballooning deficit over recent years has created an ample supply of about $ 16.7 trillion .
The suddenly insatiable demand by worried investors for the securities has sent long-term Treasury yields to all-time lows .
Germany ’ s government debt also falls into this @ @ @ @ @ @ @ on its bonds of all maturities below 0 % .
• Certain currencies .
Among the more than $ 5 trillion in currencies traded each day , the U.S. dollar , Japanese yen and Swiss franc have tended to be favored havens ( although not always , with the yen going a bit offsides lately ) .
The International Monetary Fund has described currency havens as those from countries with relatively low interest rates and deep and liquid financial markets .
• Gold has long been a haven asset .
When the prospect @ @ @ @ @ @ @ think “ risk off ” -- gold becomes more attractive as a way for investors to get returns as the world sours .
That ’ s why investor Warren Buffett says gold buyers are motivated by their “ belief that the ranks of the fearful will grow.
” Some people even have hidden gold underground , viewing it as the safest way to store their wealth .
• Within the world of stocks , avoided by many in a “ risk off ” period , some investors snap up lower-volatility shares and those @ @ @ @ @ @ @ remain in demand even if Armageddon arrives .
Simple answer : yes !
For starters , behind the rally in Treasuries lurks a potential disaster waiting to happen if any downturn gives way to a rapid rebound -- what ’ s known as a V-shaped recovery .
That could send yields sharply higher and make prices tumble .
That ’ s especially true because of the way so many investors have piled into long-term debt .
The market ’ s growing duration -- a measure of how much prices will fall if yields @ @ @ @ @ @ @ a coiled spring ready to break .
Some bond prices are also at their biggest gap from models of fair value in years , meaning that history suggests that the odds are greater that prices snap lower than that they keep rising .
And quantitative strategists warn that low-volatility stocks have become very richly valued .
There ’ s good news and bad news for them .
Those in the market to buy a house now may be able to set their sights higher as tumbling debt yields have sent mortgage rates lower @ @ @ @ @ @ @ to lock in lower monthly house payments by refinancing .
On the flip side , this might be a good month for ignoring brokerage statements , given that $ 3 trillion has been wiped off the value of U.S. stocks .


washingtonpost--2020-02-28--Germany Boosts Border Checks; Google Scraps Event: Virus Update


washingtonpost--2020-02-28--California Reports Second Case of Unknown Origin: Virus Update

The move comes after California identified the first possible case of the virus in a patient with no apparent link @ @ @ @ @ known cases .
Nancy Messonnier , director of the CDC ’ s National Center for @ @ @ @ @ said in a briefing Friday that surveillance is increasingly important , adding that the CDC @ @ @ @ @ program to all 50 states .
“ Are you going to see some schools shut @ @ @ @ @ see impacts on public transportation ?
Sure , but we do this .
We know @ @ @ @ @ ” Mulvaney said at the Conservative Political Action Conference outside Washington on Friday .


washingtonpost--2020-02-28--Analysis | Occidental Goes Skinny-Dipping in a Tsunami

Buffett didn ’ t get rich by giving stuff away , so the fact Oxy went to him in the first place signaled just how far it was stretching .
Back then , things looked dicey already on the trade-war front .
But in early 2020 , Oxy finds that not only has the tide gone out , it has gone way out , similar to what happens just before a tsunami floods back in .
The tsunami is the coronavirus crisis , swamping an already fragile oil and gas market .
A few numbers tell the story .
Oil @ @ @ @ @ @ @ when Oxy entered the fray for Anadarko ; it has since dropped to about $ 45 .
When Oxy CEO Vicki Hollub made her fateful flight to Omaha , Nebraska , the 10-year Treasury yield was just over 2.5 % , Oxy ’ s stock yielded about 5.5 % , and high-yielding energy bonds paid about 7.75 % .
Now Treasuries yield less than 1.2 % , so the spread Buffett earns from Oxy , about 5.5 % when the deal was struck , is closing in on 7 % .
Oxy ’ @ @ @ @ @ @ @ to be lower than Buffett ’ s preferred , spiked as high as 10.7 % on Friday morning , roughly where the energy high-yield index ended Thursday .
The market is treating the dividend like a distressed credit .
Even using Oxy ’ s adjusted figure for cash from operations before extraordinary charges and working capital , free cash flow in the fourth quarter was less than $ 60 million , not enough to cover the $ 149 million paid out on preferreds , let alone the $ 700 million or so in @ @ @ @ @ @ @ the deal , Oxy ’ s interest and dividend obligations have risen from just under $ 750 million a quarter to more like $ 1.25 billion ( $ 200 million of that is Buffett ’ s ) .
Including guided capex , Oxy needs an Ebitda run-rate of about $ 2.6 billion a quarter to cover all this from cash flow .
Consensus estimates average about $ 2.9 billion a quarter this year , and Oxy has further asset sales to come , as well as more cost savings to realize from the @ @ @ @ @ @ @ the latter should be in consensus forecasts already ) .
This implies Oxy can cover its obligations based on current observations , but with little left over to cut into net debt — now $ 35 billion , versus $ 8.5 billion at the end of June .
That will rely mostly on disposals for now , although Oxy says it can also cut capex further if necessary , albeit at the expense of growth .
This position is all too familiar in the energy sector .
To buy Oxy now is to @ @ @ @ @ @ @ prices on disposals that will offset the headwinds in the oil and gas market — although , as several questions on Friday morning ’ s call addressed , the risk around disposals has increased as oil prices have tanked .
Alternatively , it ’ s a straight bet oil prices will rebound once pandemic fear passes .
The company ’ s well-timed hedging of 2020 production helps .
And unit costs in the upstream business , especially in the U.S. , have declined dramatically already since last summer , providing credibility on the @ @ @ @ @ @ @ that debt may be a grueling process .
This is a bigger issue than just where oil prices will eventually wash out in 2020 .
In the same week Oxy reported these results , energy stocks ’ weighting in the S & P 500 dropped below that of utilities for the first time ever .
Generalist investors were abandoning the sector long before troubling news reports began emanating from China .
They were put off by weak governance and high leverage , plus they ’ re no longer buying the traditional option on @ @ @ @ @ @ @ and how it was done , ticked all these penalty boxes , piling obligations onto Oxy ’ s cash flow just before oil prices slumped .
While some hedge funds may be willing to rent the stock for short-term bets , Oxy needs to rebuild enough trust to tempt value investors back in from the thinned-out generalist crowd .
That ’ s tough in general , and even harder when infection updates keep crossing the wires .
Sure , no one could foresee the coronavirus outbreak .
But Oxy ’ s been through @ @ @ @ @ @ @ stranger to black swans .


washingtonpost--2020-02-28--Analysis | Markets Are Pricing in a Coronavirus Recession

Yes , investors hate uncertainty and the deluge of virus warnings from businesses is alarming , but the markets are starting to price in a global recession and that doesn ’ t seem a true reflection — at least , not yet — of the virus ’ s impact .
Largely , this is down to portfolio protection .
It ’ s also a symptom of the longest-ever bull market for equities ; a catalyst for a long overdue correction that has been delivered all at once .
As my colleague Chris Hughes has noted , many of the biggest @ @ @ @ @ @ @ virus scares .
With an increasing amount of investments in passive index funds there ’ s a shoal effect .
Re-weighting out of equities into the perceived safety of bonds is the knee-jerk reaction , even if yields are non-existent .
It becomes a return of capital game ( that is , putting it back somewhere safe ) rather than return on capital .
Poor corporate results are going to be punished more heavily in a febrile market environment .
The U.S. economy in particular is still in decent shape .
The U.K. @ @ @ @ @ @ @ in history and there are even signs Germany has got the message .
Noises out of the European Commission are that budgetary limits can be eased .
China has managed the crisis steadily and Japan can not be far away from pulling the stimulus lever again .
Are you listening G20 ?
That is where the concerted political and economic response needs to come from .
This is not a deadly killer like Ebola .
Markets will eventually rationalize what ’ s going on , and accept that the world can get back @ @ @ @ @ @ @ There will be a first-quarter hit to global growth , but it will hopefully be contained — so long as the virus is contained .
Countries heavily dependent on tourism will suffer longer .
Fixed-income markets in particular have got ahead of themselves in driving toward all-time lows .
This effectively signals recession , with a further three U.S. Federal Reserve interest rate cuts now being priced in for this year .
So far the reaction from the Fed , the European Central Bank and the Bank of Japan is that none will @ @ @ @ @ @ @ of course , given the deep selloffs on Friday .
But it ’ s right for central bankers to keep a calmer head than market traders .
A token Fed cut — or at least a promise of ongoing liquidity provision — wouldn ’ t hurt in the short term .
Christine Lagarde has said the ECB doesn ’ t need to take action yet , but again some restricted measure might help confidence .
This is both a demand and supply shock , given the strain it puts on global supply chains @ @ @ @ @ @ @ reality is that there ’ s very little central banks can do to arrest it — bar some symbolic nod to improve sentiment .
The Hong Kong government even tried helicopter money this week , without any discernible effect .
Monetary policy is practically useless in this context .
It ’ s down to governments to fire up the fiscal engines .


washingtonpost--2020-02-28--Analysis | Clorox Bleach Beats 99% of Germs — and Stocks?

Clorox generates a third of its revenue from cleaning products for household and professional use , and 85 % of its sales occur in the U.S.
It ’ s hardly a fast-growing business , nor is it typical to see large fluctuations in demand , except for in the September quarter at the start of the regular flu season .
Sales of Clorox ’ s cleaning products have held steady at $ 460 million to $ 570 million every quarter for the last four years , averaging $ 508 million over that span .
Wet wipes aside , it ’ @ @ @ @ @ @ @ the Centers for Disease Control and Prevention is warning that the same flu-like Covid-19 virus that crippled China ’ s Hubei province and is spreading globally could now threaten the U.S .
If that ’ s the case , Clorox may be about to experience a surge in demand .
“ So far we ’ re not seeing an uptick , ” Clorox CEO Benno Dorer said during the company ’ s earnings call Feb. 4 , which was before the outbreak grew so severe that there was talk of a pandemic .
@ @ @ @ @ @ @ to be able to supply our customers and also our health-care institutional customers , ” he said .
It ’ s a part of the business Dorer knows intimately , having worked in the cleaning division for years before being named CEO in 2014 .
The market clearly sees Clorox as a hot commodity .
The only problem is that Clorox ’ s stock is already quite expensive , and it ’ s not like the sales boost from the coronavirus will be permanent .
Clorox trades at 26 times forward earnings , @ @ @ @ @ @ @ average valuation over the past five years , according to data compiled by Bloomberg .
Price-to-earnings ratios for all the consumer-products giants are elevated , but Colgate-Palmolive Inc. , Kimberly-Clark Corp. and Procter & Gamble Co. are sill cheaper than Clorox on that metric .
Six analysts kept their “ sell ” ratings on the stock after Clorox ’ s latest earnings report earlier this month , which showed that two of the company ’ s other product lines — bags and charcoal — continued to prove troublesome .
( Nine have a @ @ @ @ @ @ @ investors buy the shares . )
Clorox had mistakenly raised the prices of its Glad trash bags last year to offset resin costs , but its competitors didn ’ t follow suit and so it lost market share and had to turn to promotions .
The company also said that retailers have been devoting more space to alternative grilling fuels , an area that it ’ s beginning to move into as sales of its Kingsford charcoal decline ; Clorox even renamed that division “ grilling ” to reflect the shift .
In @ @ @ @ @ @ @ isn ’ t raiding supermarket shelves for bleach disinfectant , Clorox ’ s growth has to come from demand that it creates by developing new versions of its products .
When your main products are things like liquid pipe de-cloggers and grease removers , it ’ s hard to do much in the way of innovation .
( Clorox also owns , somewhat randomly , Hidden Valley salad dressings and Burt ’ s Bees lip care . )
With this week ’ s coronavirus-induced market sell-off , investors are desperate to grab on @ @ @ @ @ @ @ could stand to benefit from the outbreak .
Clorox may play its own crucial role in combating the disease , but its stock is already overheated .


washingtonpost--2020-02-28--Analysis | A Global Rout Is a Great Time for a Command Economy

When things get tough , stock prices become a tug of war between liquidity and fundamentals .
The outlook for profits is bad , but if the central bank cuts interest rates and puts listed companies on life support , stocks may well brush off this black swan event .
This is where China is right now .
There will be a bloodbath for corporate earnings , given that much of China remains at a standstill .
Only one-third of small and medium-size businesses have had their workers return , according to a government briefing Wednesday .
China ’ s @ @ @ @ @ @ @ the virus being contained until the end of April .
Enter the command economy .
Whatever reforms Beijing has vowed to enact to give markets a bigger role , China ’ s financial system remains highly centralized and command-driven .
Authorities are now forcing banks to lend and buy corporate bonds at yields that make no sense to private investors .
For equity holders , this translates into lower risk premiums .
Take corporate bonds .
While the U.S. market practically froze up this week , Beijing is encouraging companies to issue so-called @ @ @ @ @ @ @ issuance criteria are low : Companies need only devote 10 % of the proceeds to virus control ; the rest could be all for refinancing .
The interest rate is also low , with the average coupon only 3 % , even lower than the People ’ s Bank of China ’ s benchmark one-year medium-term lending rate .
It ’ s no surprise that these virus control bonds have been mopped up by banks , which are often called upon to perform national service .
Already , more than 120 companies have @ @ @ @ @ @ @ than 100 billion yuan ( $ 14.3 billion ) since the beginning of February .
These are essentially large financial subsidies from the state .
Or consider bank loans .
In China , the loan prime rate , or what banks offer their best corporate clients , is in theory a consensus figure derived from the central bank ’ s policy rate and the risk premium determined by lenders .
Yet miraculously , the loan prime rate has been moving in lockstep with the policy rate since the coronavirus outbreak .
In other @ @ @ @ @ @ @ a spike in credit risk at all .
That shouts window guidance to outsiders .
Meanwhile , investors are looking to President Xi Jinping to reopen the sluice gates as promised in his vaguely worded speeches .
This month , Xi repeatedly vowed to meet China ’ s economic growth targets , despite the virus .
The only way for that to happen is to shower the economy with helicopter money .
Inadvertently , Xi is now on the hook for a stock rally .
What Beijing is trying to do is to @ @ @ @ @ @ @ which are often publicly traded , afloat until it can contain the virus .
The reasoning is that the ultimate demand is there : Chinese consumers will still want to buy cars , apartments and 5G phones , once they can roam about freely on the streets again .
The government just needs to ensure that until then , China Inc. doesn ’ t get any margin calls .
In China , earnings never mattered that much anyhow .
Look at the historical performance of the ChiNext .
The two recent rallies , @ @ @ @ @ @ @ sharp slump in the 10-year government bond yield .
The benchmark yield is now back at its 2016 low .
Liquidity has always been what matters .


washingtonpost--2020-05-29--Powell Says Fed Policies ‘Absolutely’ Don’t Add to Inequality

“ The pandemic is falling on those least able to bear its burdens , it is a great increaser of inequality , ” Powell said Friday during an online discussion when asked whether the Fed ’ s policies contribute to U.S. inequality .
“ Everything we do is focused on creating an environment in which those people will have their best chance to keep their job or maybe get a new job.
” He used as an example the Fed ’ s plans to purchase bonds from companies whose debt has been downgraded since the start of the crisis to @ @ @ @ @ @ @ facility and including those companies , the ones who actually needed the credit in March , those companies have been able to go out and finance themselves , ” he said .
“ They ’ ve been able to avoid big layoffs .
That is the point of all this.
” “ We crossed a lot of red lines that had not been crossed before , ” Powell said .
“ I ’ m very confident that this is the situation where you do that and then you figure it out.
” Powell @ @ @ @ @ @ @ last from a Fed policy maker before officials enter a blackout period at midnight Friday leading up to the June 9-10 meeting of the Federal Open Market Committee .
Officials are widely expected to leave interest rates just above zero at that gathering and re-commit to using their full range of tools to support the U.S. economy during the coronavirus pandemic .
The Fed chair responded to questions about one of its most complex and riskiest programs intended to support the economy -- the Main Street facility -- which has been slow to @ @ @ @ @ @ @ is “ days away ” from getting it up and running .
The loan program is designed to help small and medium-sized businesses that don ’ t have access to public markets , he said .
Main Street is one of nine Fed emergency lending programs opened or under construction that are aimed at mitigating the economic impact of the virus .
Powell and his colleagues have warned the pandemic may leave deep and lasting scars on the economy even as the U.S. and other countries begin to emerge from lock-downs designed to @ @ @ @ @ @ @ million U.S. workers have filed for unemployment benefits in the past 2-1/2 months as businesses shuttered and Americans stayed home .
Data released earlier on Friday showed U.S. consumer spending , which accounts for about two-thirds of the world ’ s largest economy , plunged in April by the most on record .
Powell said a full economic recovery “ will really depend on people being confident that it ’ s safe to go out.
” But he reiterated his skepticism around following other central banks in forcing rates into negative territory .
@ @ @ @ @ @ @ to my colleagues and to me on the Federal Open Market Committee that this is a tool that would be appropriate to deploy here in the U.S. , ” he said .
“ There are clearly some negative side effects .
”


washingtonpost--2020-05-27--Analysis | Bill Ackman Gives Up on Warren Buffett

When Ackman first bought Berkshire shares last summer , he said he was expecting Buffett to spend some of the company ’ s $ 100 billion of “ excess cash ” on large acquisitions and stock repurchases .
( Weren ’ t we all . )
That hasn ’ t happened , even before Covid-19 struck .
Still , on March 23 as the virus took hold , Ackman told Bloomberg TV that he added to his Berkshire stake as part of a “ recovery bet ” on the U.S. economy that involved exiting short positions and using the proceeds @ @ @ @ @ @ @ We are all long , ” Ackman said on air .
“ No shorts , you know , betting on the country.
” Yes , betting on the country the way Buffett was expected to .
What ’ s changed since then is Buffett ’ s outlook .
Even as Berkshire sits on $ 137 billion of cash , and as the pandemic would seem to have created cheap buying opportunities , Buffett is selling stocks and avoiding acquisitions .
“ The cash position isn ’ t that huge when I look at @ @ @ @ @ @ @ during Berkshire ’ s virtual shareholder meeting earlier this month , leaving his listeners ’ mouths agape — maybe Ackman included .
If Buffett isn ’ t spending , Ackman will .
Pershing Square ’ s managers suggested during a conference call with their own investors Wednesday that they can put money to work faster than Buffett at this stage , which is why it doesn ’ t make sense to have funds tied up in the stock even though they still see Berkshire as a strong company .
It ’ s hard @ @ @ @ @ @ @ ’ s ability to continuously convert the company ’ s insurance float and cash into high-return deals and fruitful stock picks has long underpinned Berkshire as an investment .
Otherwise , it ’ s just a collection of sturdy but slow-growing businesses that represent a cross-section of the U.S. economy at a time when the economy isn ’ t looking so good , as Buffett himself says .
Shares of Berkshire are down 18 % this year , compared with a 7 % loss for the S & P 500 Index .
That @ @ @ @ @ @ @ The stock has trailed behind the benchmark index for the last decade , as the market recovered vigorously from one crisis , then recently plunged back into another .
While Buffett says that he still thinks “ nothing can stop America , ” his actions are making it harder to believe him .
And at almost 90 years old , he ’ s coming dangerously close to leaving his successor stuck with so much cash that it ’ s less a blessing than a curse .
Berkshire still has a very devoted shareholder @ @ @ @ @ @ @ group that looks a lot like Buffett himself : graying , male , not long from retirement .
At last year ’ s shareholder meeting — the real-life one in Omaha — what was evident from looking out at the some 40,000 enthusiastic attendees was that Berkshire needs to work on courting younger investors .
Given his deal-making hiatus and Berkshire ’ s under-performance , they may not have the same fascination with Buffett and his company as his loyal followers do .
If even Ackman is saying , in so many words @ @ @ @ @ @ @ , we can do better , ” certainly others are starting to feel that way , too .
Then again , it would take just one big , splashy purchase for people to say that Buffett ’ s got his groove back .
That ’ s probably how he ’ d prefer to hand off the company , too .


washingtonpost--2020-05-29--Relief Aid Stalls With Small Businesses Returning Loans Unused

“ We were essentially just going to rehire people , ask them to go off of unemployment , take lower wages , and then not really work or only work in a very limited capacity , ” Menzies said .
Menzies ’ s conundrum helps explain why , after a mad dash for funding last month , the $ 669 billion centerpiece program to keep the 30 million U.S. small businesses afloat during the crippling pandemic has abruptly slowed .
Created at the end of March as a stopgap to keep workers employed for eight weeks during a self-induced coma @ @ @ @ @ @ @ as PPP is about to outlive its own purpose .
Efforts are underway in Congress to loosen the rules and accommodate the needs of businesses today .
It ’ s a critical time for the rescue effort , as large swaths of the country are reopening and many stores won ’ t get more leniency from their landlords .
While almost 4.5 million firms have been approved for loans , the pace of new approvals has sharply dropped this month .
And Friday starts the period when firms that got funding when the @ @ @ @ @ @ @ applying to have their loans forgiven in a complicated process that lenders and small-business advocates want to see simplified .
“ We ’ re stalled because it needs a refresh and it needs to reflect what ’ s needed for small businesses on the ground in order to survive to the other side of this crisis , ” said Karen Kerrigan , president and chief executive officer of the Small Business & Entrepreneurship Council .
At least $ 20 billion in PPP loans have been canceled , according to calculations by Bloomberg News @ @ @ @ @ @ @ Administration .
The net amount of approvals was $ 510.5 billion on Thursday , about $ 2.7 billion less than through May 16 -- even as the net number of loans increased by more than 119,000 during that time , according to SBA reports .
The SBA and Treasury Department , which are in charge of the program , haven ’ t provided a comprehensive accounting of cancellations , which include duplicate loans .
Some of the returns are from larger publicly traded companies that sent back hundreds of millions of dollars following @ @ @ @ @ @ @ expense of mom-and-pop stores and the prospect of an audit of all loans of more than $ 2 million .
But small-business advocates estimate the bulk of the cancellations are from companies returning their loans because they ’ re not sure they can spend the funds in the eight-week forgiveness period , are unsure about the rules , or are concerned about an audit .
Even as the economic damage from the pandemic continues to hit hard across the U.S. , executives at the largest U.S. banks , speaking on the condition of @ @ @ @ @ @ @ t foresee demand for loans picking up again without major changes to the program .
Businesses that were worried about getting capital to survive in April are now also anxious about reopening and loan forgiveness , said Tom Sullivan , vice president of small business policy for the U.S. Chamber of Commerce .
Supporters of PPP say that , despite glitches , the unprecedented program has helped keep millions of workers on payrolls .
They include seven full-time employees at Menzies ’ s other business , the Little Joe ’ s bookstore .
@ @ @ @ @ @ @ good , he was able to slowly reopen the book and coffee shop after using his second loan , for $ 42,500 .
There ’ s about $ 130 billion left in the program .
Some independent contractors , the self-employed , and other small firms still need help , but the PPP rules are too restrictive and ambiguous , said Amanda Ballantyne , national director of the Main Street Alliance , a network of small businesses .
“ It ’ s not creating the level of certainty that business owners need to @ @ @ @ @ @ @ money and use it and not end up in more debt than they ’ re already in , ” Ballantyne said .
Business owners , in particular restaurateurs , want to extend the loan-forgiveness period to as many as 24 weeks because they aren ’ t ready to reopen or fully operational .
They also need the freedom to use more funds for non-payroll such as rent and reopening costs .
( Right now 75 % must be spent on payroll ) .
The House approved a bill 417-1 on Thursday to make @ @ @ @ @ @ @ measure to the Senate , where there ’ s also bipartisan legislation for program fixes .
It ’ s not clear yet what might become law and when .
The Independent Community Bankers of America anticipates a flood of loan-forgiveness applications .
Paul Merski , an ICBA executive , said the organization wants borrowers with loans of $ 1 million and less to be able to certify that they followed loan-forgiveness rules without having to complete an overly complex and burdensome process .


washingtonpost--2020-05-28--Analysis | Little-Known Data Show Signs of a Tech Bounce

Except in Taiwan .
A decades-old regulation requires companies there to report sales every month .
This information isn ’ t useful only to investors in locally traded stocks .
What ’ s listed is a broad range of companies that make chips , components , half-assembled modules and final products used in almost every electronics device in the world .
The numbers can also provide a snapshot of output in China , where most Taiwanese technology manufacturers have the bulk of production .
As early as January , it became obvious that the coronavirus would be a nightmare for @ @ @ @ @ @ @ Apple Inc. posted a 7.2 % drop in March-quarter sales of iPhones and iPads , while its major supplier , Foxconn Technology Group , suffered its biggest dive in revenue for seven years .
More interesting is to see what ’ s been going on since .
A look at April sales data from Taiwan enabled me to crunch numbers .
What we find is a bounce in revenue that gives some hope for the global sector .
Taiwan Semiconductor Manufacturing Co. and Foxconn ’ s Hon Hai Precision Industry Co. are the @ @ @ @ @ @ @ , because they ’ re the biggest in their category and have a VIP client list that includes Apple , Qualcomm Inc. , Huawei Technologies Co. and Sony Corp .
Yet hundreds of others , such as Pegatron Corp. , Quanta Computer Inc. and Largan Precision Co. , collectively supply most of the industry .
By aggregating the data month by month , comparing to a year earlier to smooth out seasonality , and looking at the sub-sectors within tech — defined by the Taiwan Stock Exchange — such as components suppliers , @ @ @ @ @ @ @ can get an understanding of what was happening just a few weeks ago .
• Computers and peripherals , which include major PC and server makers Quanta and Compal Electronics Inc. , showed the largest rebound , from an 11.9 % drop in the January to March period to a 7.9 % rise in April .
One of the key takeaways is the relative strength in corporate-focused hardware , and possible continued weakness in gadgets .
Foxconn pointed to this earlier in May , when it told investors that its consumer-devices division , @ @ @ @ @ @ @ least 15 % , while enterprise products would climb 10 % .
The first is that they track just Taipei-listed companies , and not some big names like Huawei and Samsung Electronics Co. , which also manufacture their own hardware .
However , it ’ s a like-for-like comparison — those companies aren ’ t included in last year ’ s data , either — and the broad reach of Taiwan ’ s tech sector means that even Huawei and Samsung are likely part of its supply chain .
A more important note @ @ @ @ @ @ @ month .
Some of that April uptick is simply catch-up production for time lost at the height of the pandemic .
Yet clients wouldn ’ t place orders if they didn ’ t feel that there ’ s end-demand somewhere .
Autos and textiles are cutting production and shuttering factories in the knowledge that such a pickup in sales isn ’ t likely .
With global turmoil making companies reticent to give predictions , investors wait in the dark for an update or a quarterly conference call .
Even if we don ’ @ @ @ @ @ @ @ rebound , or merely a dead-cat bounce , at least there ’ s more timely data available to examine .