washingtonpost--2020-06-04--Silent No More on Race, America’s CEOs Fumble for Right Words

Yet each social-media post can set off an online skirmish that mimics the battle lines being drawn across the U.S. as people struggle with rapidly changing events and entrenched fears .
Unlike syrupy messages in support of nurses and essential workers fighting the coronavirus pandemic or a call for unity after 9/11 , there is no happy medium for a position on white privilege .
Black Americans , already ravaged by a fatal virus that is two or three times more deadly in their communities , have spread the protests from the streets to social media , contending that corporate @ @ @ @ @ @ @ Their messages have been blasted out under hashtags such as # WeAreDoneDying , urging companies and others to show support for changes .
While Starbucks , JPMorgan Chase and others responded after teenager Michael Brown was shot in 2014 by police in Ferguson , Missouri — sparking protests that spread to other cities — engagement this time has been exponentially bigger .
That ’ s partly because the protests have been more widespread and also because battles over LGBT rights , the polarization of the Trump presidency and Congressional gridlock on social issues @ @ @ @ @ @ @ void .
Goldman Sachs Chief Executive Officer David Solomon released a transcript on LinkedIn of a May 28 voicemail he sent employees .
“ I am horrified by continued attacks against the black community , highlighted most recently in the U.S. with the deaths of Ahmaud Arbery and George Floyd , and with what Christian Cooper experienced in Central Park in New York City this past Monday , ” he said .
On June 3 , the company announced the Goldman Sachs Fund for Racial Equity “ to support the vital work of @ @ @ @ @ @ @ inequity and economic disparity .
The fund will be launched with $ 10 million from Goldman Sachs Gives , a donor-advised fund that allows the firm and its current and retired senior employees to direct grants to support underserved communities around the world.
” Other organizations have directed contributions to Floyd ’ s family : UnitedHealth Group created an education fund for his children , along with donating $ 10 million toward helping the businesses and people of Minneapolis-St. Paul .
Bank of America ’ s $ 1 billion commitment over four years @ @ @ @ @ @ @ with funds going mainly toward communities of color — those hardest hit by the coronavirus pandemic .
Target — which closed a half-dozen of its hometown Minneapolis stores because of damage and looting — said it will distribute food and other supplies and help local small businesses rebuild through grants from its nonprofit foundation .
Employees affected by store closures will be paid for as many as 14 days of scheduled shifts .
“ As much as I have been saddened seeing these acts of racism across our country , I am also @ @ @ @ @ @ @ and our sport are overwhelmingly white , with incredibly low representation from people of color , ” Katz wrote in a memo this week .
The reactions played out in fits and starts at some companies .
L ’ Oreal ’ s Maybelline posted support for “ inclusivity , equality and justice ” and promised donations to the NAACP at 2:01 p.m. EDT on May 30 after a night of unrest that left many U.S. cities smoldering .
Urban Decay , another of the French giant ’ s brands , followed that evening @ @ @ @ @ @ @ Black Lives Matter .
It wasn ’ t until two days later , after nail-care brand Essie put out a morning tweet , that the namesake L ’ Oreal Paris USA brand posted a corporate message.A company memo reviewed by Bloomberg showed that L ’ Oreal USA CEO Stephane Rinderknech let each brand make its own decision about whether to weigh in .
Garnier and Giorgio Armani posted black squares for # BlackOutTuesday on social media .
As of June 3 , Lancome and It Cosmetics — two of L ’ Oreal ’ @ @ @ @ @ @ @ didn ’ t have a visible statement .
“ Some brands may be afraid , but this feels totally different ” from the aftermath of other times when black men and women have been killed by police , said Tiffany McGhee , CEO and co-chief investment officer of institutional investment services at Momentum Advisors , which follows retail and other consumer-facing companies .
Brands that are silent have more at risk than those that weigh in because “ people are at home and watching.
” The reactions haven ’ t all been positive @ @ @ @ @ @ @ past complaints about its own racism when it fired a transgender model in 2017 for saying she was tired of the racial violence of white people — “ Yes , ALL white people.
” — on Facebook .
Ben & Jerry ’ s faced backlash from some who claimed it was sowing racial divide by calling attention to white supremacy .
Some companies that want to show their support may have awkward moments if the racial makeup of their c-suite or progress of their corporate culture doesn ’ t match their aspirations , @ @ @ @ @ @ @ chairman of the NAACP board .
Nike was criticized for its own employee-relations record and mostly male , white leadership .
If they are “ sincere and authentic ” in outrage and willingness to fix what is wrong within their own companies , “ that will be appreciated , that will be rewarded , ” she said .
“ There ’ s no hiding , and I think most CEOs see that.
” Far fewer CEOs are consistently activist than might be supposed , though , with less than 30 % of those @ @ @ @ @ @ @ even fewer at smaller businesses taking controversial positions , according to a 2018 Stanford University survey that tried to quantify the risks and rewards of executive activism .
But pressure is growing for them to take a stand amid the likelihood consumers will notice if they don ’ t , said Kim Wright-Violich , a managing partner at consultant Tideline and adviser on the Stanford report — even though it ’ s guaranteed some will be upset regardless of how they act .


washingtonpost--2020-06-04--Senate Passes Changes to Small Business PPP Loan Program

The coronavirus program provides forgivable loans to help small businesses make their payrolls during the Covid-19 crisis .
The bill would extend an eight-week period -- when proceeds must be spent for loans to be forgiven -- to 24 weeks or until the end of the year , whichever comes first .
Businesses would also have as long as five years , instead of two , to repay any money owed on a loan , and they could use a greater percentage of proceeds on rent and other approved non-payroll expenses .
Timing is urgent because the eight-week spending period @ @ @ @ @ @ @ loan recipients after the Small Business Administration program opened April 3 .
Businesses -- especially in the restaurant and hospitality industry , which are only recently getting the green light to reopen -- say they need more time to distribute pay .
Utah Senator Mike Lee had also objected to language that he and Johnson said would lengthen the application deadline .
Maine Senator Susan Collins didn ’ t oppose the bill but said she was concerned about the way the House drafted a provision reducing the current requirement that 75 % of @ @ @ @ @ @ @ Besides extending the loan-forgiveness period , small businesses have said they want flexibility to spend more on overhead expenses , especially in high-rent areas .
The bill , H.R .
7010 , would instead require that 60 % of a loan be used on payroll .
The House bill creates a “ cliff , ” Collins said in a statement .
The current PPP program allows partial loan forgiveness if a company uses less than 75 % of a loan for payroll , but the House bill appears to state that none of @ @ @ @ @ @ @ 60 % threshold isn ’ t met .
As of Wednesday night , SBA reported that 4.5 million firms had received approvals for loans totaling $ 510.6 billion .
About $ 130 billion remains from the second round of $ 320 billion that Congress approved for PPP .
The initial round of $ 349 billion was tapped in just 13 days .
Small business advocates hailed passage of the bill as providing needed flexibility to firms still struggling to emerge from Covid-related closings , even as lenders and other groups are still seeking @ @ @ @ @ @ @ make in the coming weeks.Sean Kennedy , executive vice president of the National Restaurant Association representing thousands of owners and chains including McDonald ’ s Corp. , said in a statement the passage is “ a win for restaurants and small businesses across the country.
” The U.S. Chamber of Commerce said a new survey it released Wednesday with MetLife showed that while eight of 10 small businesses are in the process of re-opening , 55 % think it will take more than six months to be fully operational – up from 50 @ @ @ @ @ @ @ % in March.
“ Congress deserves credit for removing barriers that could slow recovery further , ” the chamber said in a statement .
“ We urge the president to sign the legislation quickly and for SBA and Treasury to immediately provide guidance to small businesses on how they qualify for loan forgiveness under the new law.
” A National Federation of Independent Business survey of its members last week showed that a majority have their loan-forgiveness period ending in the next couple of weeks .
The group said in a statement it @ @ @ @ @ @ @ flexibility for small business owners ” and “ we look forward to continuing to work with members in the chamber on improving ” the program .
Lenders are seeking to simplify the process of applying to have loans forgiven by allowing borrowers with loans of a certain amount to simply certify they followed the rules , rather than having to make complicated calculations with rules that keep changing .
“ Much more needs to be done on this bill , ” said Paul Merski of the Independent Community Bankers of America .
“ @ @ @ @ @ @ @ fixing the issues with the PPP program.
” There was broad support during a Senate Small Business Committee hearing Wednesday for extending the eight-week loan forgiveness period and changing the rule that 75 % of proceeds must be spent on payroll.Republican Senator Joni Ernst of Iowa highlighted a sportswear business in her state that kept 27 workers employed with a PPP loan despite a 96 % decline in revenue .
But with ballparks and other venues where the apparel is sold still closed -- and the firm ’ s eight-week period expiring this @ @ @ @ @ @ @ , she said .
Michael Strain , director of economic policy studies at the American Enterprise Institute , called the 75 % payroll rule -- set by SBA and Treasury -- “ a mistake ” because it limits the program ’ s ability to help companies such as those in high-rent cities that need to spend more money on expenses .

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washingtonpost--2020-06-04--Analysis | Italy’s Bond Investors Have a New Heroine

This ability to get political leaders on board during a crisis is why Christine Lagarde , a former French finance minister , was chosen as ECB president .
There wasn ’ t full approval from the central bank ’ s governing council on this expanded package — the decision was a “ broad consensus ” — but Lagarde was assured in her delivery .
She ’ s evidently feeling more comfortable in the role after her miscommunication in the early part of the crisis , when she suggested it wasn ’ t her job to protect weaker nations ’ bond @ @ @ @ @ @ @ bonds certainly loved her more aggressive approach on Thursday .
Yields on 10-year Italian debt tightened by 20 basis points when compared with those of Germany .
The euro jumped on the day as well .
Lagarde didn ’ t dwell on the possibility of buying junk bonds , which she said hadn ’ t been discussed .
She emphasized that the ECB had “ massively ” front-loaded its debt purchases under the pandemic plan and overbought Italian bonds in the first weeks of the program to calm markets .
The early investor @ @ @ @ @ @ @ and its ability to act are being laid to rest .
Nevertheless , the ECB ’ s quarterly economic forecasts for the euro area remain highly optimistic , predicting a sharp recovery in the third quarter and a drop of 8.7 % in gross domestic product this year that ’ s almost totally recovered by the end of 2022 .
In these highly uncertain times , this is just guesswork .
The ECB is sticking to a positive message in the hope that it might will a V-shaped recovery into existence .
Lagarde @ @ @ @ @ @ @ to the ECB ’ s central mission of getting the euro zone ’ s inflation close to 2 % ( something it was failing to achieve pre-Covid ) .
Even with the huge wave of stimulus , her 2022 inflation expectation is only 1.3 % .
It was telling that for the first time the increase in bond buying was linked directly to inflation forecasts .
This might have been an attempt to satisfy the demands of the German Constitutional Court , which wants the ECB to justify its existing QE programs .
@ @ @ @ @ @ @ before the virus hit , a poor position from which to enter a crisis .
Nonetheless , Italian yields have largely recovered their equilibrium since the early days of the outbreak , meaning the country ’ s borrowing costs remain manageable .
The ECB is doing a good job in mitigating the pandemic ’ s fallout .
Lagarde needs to ride the current wave of market euphoria for as long as she can to make sure that government bond yields are low enough to allow a recovery .
So far she ’ s @ @ @ @ @ @ @ does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners .
Marcus Ashworth is a Bloomberg Opinion columnist covering European markets .
He spent three decades in the banking industry , most recently as chief markets strategist at Haitong Securities in London .


washingtonpost--2020-06-04--Analysis | Is the Summer of Covid Staycations Canceled?

Maybe you ’ re the weird ones , you might think , as you search for the Transportation Security Administration checkpoint data you ’ ve seen referenced in many news articles .
But you ’ re still in the majority : Sure , traffic is up from the most restrictive lockdown days of April and March , but the number of U.S. fliers on Wednesday was just 13 % of what it was the same time last year .
Going further down the Internet rabbit hole , you might see that American ’ s head of personnel said in a @ @ @ @ @ @ @ carrier would need to dramatically shrink “ for the foreseeable future ” and cut 30 % of its management and support staff .
Welcome to the world of stock trading in the coronavirus era .
These days , the actual numbers matter less to investors than momentum .
Any sign of a recovery from the coronavirus destruction , however modest or nascent , is richly rewarded .
That ’ s especially true for companies such as American , which had seen an elevated level of bearish bets made against it by short-sellers .
@ @ @ @ @ @ @ good news , and they can magnify a rally as they scramble to buy back the stock to cover their wagers .
To be fair , American did report good news on Thursday .
The company said it was adding flights for July after seeing increased demand from leisure travelers for trips to states that have reopened , such as Florida , Georgia and South Carolina , as well as interest in visits to national parks in Utah , Wyoming , Montana and Colorado .
That will boost July capacity to 40 % @ @ @ @ @ @ @ compared with a June schedule that ’ s 30 % of a year earlier and May operations that were a mere 20 % of normal traffic .
This kind of steady improvement is encouraging because it suggests that a recovery in air travel may not be the multi-year battle that many in the industry have indicated .
That ’ s the glass-half-full take .
The half-empty take is that July capacity will still be down 60 % from a year earlier .
However you slice it , that is still terrible and in @ @ @ @ @ @ @ catastrophe .
That first wave of returning passengers is also likely the easiest group to win back .
A recovery in international and longer-haul business travel , where airlines make most of their money , will be much harder , with American restoring service to eight overseas destinations but delaying the return of other flights .
American ’ s load factor , or the average percentage of filled seats , was 55 % in the last week of May , up from 15 % in April but still down significantly from 86.6 % @ @ @ @ @ @ @ .
American hasn ’ t followed rival Delta Air Lines Inc. in guaranteeing an empty middle seat , though the carrier said it would offer an unspecified percentage of passengers the option to rebook on empty planes if their flight is relatively full and deemed “ eligible.
” A lack of social distancing on flights has elicited grumbles on social media from those who have been brave enough to fly during the pandemic , and poor experiences won ’ t encourage those people to get back on a plane again soon .
Perhaps @ @ @ @ @ @ @ in fresh jobless claims this week raises the question of how many people will be financially capable of paying for flights this year , even if they ’ re comfortable with the concept of plane travel .
Despite its positive tone on Thursday , American itself has yet to walk back any of its own comments about the need for severe cuts to its staff .
“ Aviation is still in a fragile state , ” Vertical Research Partners analyst Rob Stallard wrote in a note on Thursday .
“ There is a @ @ @ @ @ @ @ got ahead of the fundamentals here .
”


washingtonpost--2020-06-03--Lenders, Businesses Say Confusing Rules Hampered Virus Rescue

The guidance , which is at times contradictory , also puts banks making those loans at risk , he said .
“ Is it any wonder why borrowers and lenders are questioning whether Treasury has set everyone up to fail ?
” Wilkinson said at the hearing in front of the Pandemic Response Accountability Committee .
“ Is it any wonder why borrowers of all sizes have been returning their loans out of fear of their own government ?
” Some big restaurant chains like Potbelly Corp. and Ruth ’ s Chris Steak House got loans , while many mom-and-pop @ @ @ @ @ @ @ said they would give the loans back after facing criticism from lawmakers and pressure from the Treasury Department .
The forum was the first public event for the independent committee created to oversee spending under the $ 2.2 trillion Cares Act that Congress approved and President Donald Trump signed into law in March .
The panel is comprised of inspectors general from more than a dozen federal agencies .
The effort to help small businesses retain their workers has been the subject of criticism from businesses and lenders who were charged with distributing @ @ @ @ @ @ @ gave priority to larger companies where the bank could generate larger fees , and lenders have said the spotty regulations and “ know your customer ” rules left them exposed to losses as businesses rushed to apply for the stimulus funds .
PRAC is one of several panels in charge of overseeing government spending to combat the economic fallout of the coronavirus pandemic .
The Senate on Tuesday confirmed former White House lawyer Brian Miller to serve as a special inspector general for pandemic recovery .
There ’ s also a bipartisan congressional @ @ @ @ @ @ @ looking into airlines receiving federal support , the validity of tax credits claimed by businesses , the accuracy of economic stimulus payments and the Health and Human Services Department ’ s adherence to safety protocols during the outbreak .
“ There ’ s already growing concern that congressional oversight will in part focus on companies or sectors that various elected officials view as unworthy , ” said Neil Bradley , the Chamber of Commerce ’ s chief policy officer .
“ There will likely be numerous requests for this committee to investigate entities @ @ @ @ @ @ @ because of a belief that an industry or entity shouldn ’ t have been allowed to receive assistance in the first place.
” Even before it was fully operating , Trump had challenged and undercut the power of PRAC , indicating contentious times ahead for the effort to hold agencies accountable for spending and managing a bailout program for small businesses .
On April 7 , Trump removed an experienced inspector general who was appointed to chair the committee .
The career official , Glenn Fine , had been serving as the acting @ @ @ @ @ @ @ But Trump designated a new acting inspector general at the Pentagon , thereby demoting Fine and making him ineligible to chair the committee .
Fine later resigned .
In a signing statement accompanying the law creating PRAC , the president said he doesn ’ t recognize a requirement that congressional leaders help select the leadership of the panel .


washingtonpost--2020-06-04--Analysis | How the Tiananmen Square Protests Shaped Modern China

In 1989 , more than a million Chinese civilians , many of them students , staged the biggest challenge to the Communist Party ’ s legitimacy since it came to power in 1949 .
The pro-democracy demonstrations were sparked by the April 15 death of a former party chief , Hu Yaobang , who had a reputation as a liberalizer .
Mourners poured into Tiananmen Square and stayed .
Initially fueled by anger at the slow place of democratic reforms by a government many viewed as a dictatorship , the protests extended to such issues as rising living costs .
@ @ @ @ @ @ @ including college campuses .
In May , hundreds of students in the square began a hunger strike , embarrassing the party during a visit by Soviet leader Mikhail Gorbachev .
Attempts at compromise failed .
After about two months , martial law was declared in parts of Beijing .
On June 2 , top officials including Deng Xiaoping decided they ’ d had enough of what they deemed “ counter-revolutionary protests , ” and gave the army orders to use force to clear the square .
On June 3-4 , the People ’ @ @ @ @ @ @ @ unarmed civilians around the square .
Hundreds or maybe thousands ; there ’ s never been an independent investigation .
United Press International reported on June 14 , 1989 that the Chinese government first said there were 300 deaths , including 100 soldiers , then lowered the total to 200 .
Others including the Wall Street Journal at the time reported a Chinese Red Cross estimate of 2,600 people killed , a figure that was then retracted .
In a diplomatic cable dated June 5 , 1989 -- and declassified in 2017 -- @ @ @ @ @ @ @ least 10,000 were killed .
The most famous of the images beamed around the world from Tiananmen was that of “ Tank Man , ” an unidentified man who stood alone in front of a column of tanks rolling out of the square early on June 5 , then walked back into their path after they tried to go around him .
The iconic image of the man , who wore a white shirt and black pants , was taken by photographer Jeff Widener and transmitted by the Associated Press .
The troops @ @ @ @ @ @ @ , who was shown on video climbing onto one of the tanks and was eventually removed from the scene by Chinese authorities .
Though his name and fate remain unknown , he has become a global symbol of resistance to oppressive governments .
It spurred the Communist Party to modernize its security state over the years and extend it to cover what people do online and how they behave at home and in public , all aimed at eradicating any chance of another mass movement .
State media promotes the party ’ s @ @ @ @ @ @ @ rhetoric .
China has led the way globally in asserting cybersovereignty over the digital realm within its borders , largely restricting foreign search engines , social media platforms and news sites .
Home-grown chat apps and blogs are monitored and disallowed posts removed .
It ’ s instituted a system of mass surveillance that uses high-tech advancements like facial recognition to keep an eye on civilians .
The government is also experimenting with a “ social credit ” system that assigns scores to civilians based on their behavior and can affect their ability @ @ @ @ @ @ @ money .
Speaking at a security forum in Singapore in June 2019 , Chinese defense minister Wei Fenghe defended the 1989 army crackdown , saying “ decisive measures ” were taken to “ calm the turmoil , ” leading to decades of stability .
Commemorating the anniversary or publicly mourning those who died is forbidden in mainland China .
Security tightens in the square each June and human-rights activists are taken from Beijing .
President Tsai Ing-wen of Taiwan , the democratically run island that China considers a wayward province , has said @ @ @ @ @ @ @ to China ’ s Communist Party .
She has also met with survivors from the 1989 protests .
A Taiwanese artist created an inflatable installation of the “ Tank Man ” scene ahead of last year ’ s 30th anniversary , prominently displaying it in central Taipei .
In semi-autonomous Hong Kong , where China has been exerting growing influence , an annual June 4 vigil to commemorate the massacre was banned for first time in 2020 .
Authorities cited the health risk from the coronavirus .
Last year ’ s 30th-anniversary commemorations @ @ @ @ @ @ @ turnout of more than 180,000 people .
Survivors who live outside the mainland continue to speak out about their experiences -- and criticize President Xi Jinping ’ s government .
The Tiananmen Mothers , a group founded by families of the victims , is outspoken about preserving the memory .
They have written an open letter to Xi urging “ truth , compensation and accountability ” from the government .
Remembrance of the events has also fed tensions with the U.S. China said in 2018 that it was “ dissatisfied ” by Secretary @ @ @ @ @ @ @ that it reveal details about how many were killed , detained or missing in Tiananmen .
Shortly before the 30th anniversary , a PLA lieutenant who witnessed the massacre even called for a public reckoning in a New York Times interview -- leaving China the week it published .


washingtonpost--2020-05-26--Analysis | Meituan Shows What Really Matters in a Pandemic

Even with business activity decimated , suppliers who rely on Meituan ’ s connection with customers kept spending money to chase the few orders that were available .
Ad spending on food delivery climbed 21 % , while that same subcategory in bookings only dropped 8 % .
This latter figure is remarkable because the number of hotel room nights plunged 46 % .
These strong results helped lift the stock almost 10 % in early Tuesday trading .
This comes as revenue in Meituan ’ s only profitable division — the one that handles restaurant and hotel bookings — @ @ @ @ @ @ @ there by 57 % .
Food-delivery sales fell a mere 11 % , with losses narrowing by more than half .
On the upside , demand for grocery shopping and micro loans drove the company ’ s new initiatives business 5 % higher .
Overall , operating loss widened 32 % to 1.7 billion yuan ( $ 238 million ) .
I discussed Meituan ’ s advertising strategy six months ago , likening it to the virtuous cycle deployed by Amazon.com Inc. Having gathered both consumers and suppliers , Meituan can leverage that @ @ @ @ @ @ @ commissions .
To get ahead of the competition , restaurants not only need to be on the platform , but pay to be seen .
In an investor call Monday night , management highlighted that big brands are jumping aboard .
With stores closed and consumers afraid to go out , those that previously survived purely from in-store dining realized that delivery is critical .
Customers , meanwhile , wanted food from the premium establishments because they ’ re perceived to be safer and more hygienic .
It was a win-win .
Except @ @ @ @ @ @ @ eatery that ’ s made its business on stir-fry and two-dollar noodles .
While millions of consumers will again one day appreciate the convenience and camaraderie of a quick , cheap meal at the neighborhood joint , volumes could drop sharply if people continue to embrace delivery .
Now when they vie for ad space , smaller restaurateurs will be competing with a new wave of branded outlets that have larger marketing budgets .
This will still be good for Meituan .
The company ’ s earnings show that when the market is @ @ @ @ @ @ @ advertising isn ’ t a luxury , it ’ s a necessity .
What this portends for the future of small businesses amid an ongoing economic slowdown , however , is less encouraging .
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners .
For more articles like this , please visit us at bloomberg.com/opinion


washingtonpost--2020-05-26--Analysis | Did Europe Just Agree to Joint Borrowing? Not Exactly

Broadly speaking , southern European countries , most notably Italy and Spain , have been the hardest hit by the coronavirus .
These are also the nations that came into the crisis with weaker economies and higher levels of debt and unemployment .
The European Commission -- the EU ’ s executive arm -- has warned that the unevenness of contractions and recoveries will deepen divisions within the bloc and could put at risk stability in the euro area , whose 19 members share the common currency .
Deep-pocketed member states such as Germany have showered their firms with state @ @ @ @ @ @ @ Italy can ’ t match that spending power .
That is distorting the level-playing field between companies in the EU ’ s vast single-market .
Social discontent could destabilize governments and fuel anti-European sentiment in countries that are struggling the most .
In short , the EU ’ s future is at stake .
The EU is not a country .
It doesn ’ t have a common treasury that ’ s expected to support regions in need , the way the U.S. Treasury pours funds to states hit by hurricanes .
Nor @ @ @ @ @ @ @ in its relatively meager common budget to deal with a crisis on this scale .
Even in the euro-using core , the monetary union is not backed by real economic or banking unions .
As the EU ’ s devastating debt crisis of 2010 showed , in tough times money tends to fly to the continent ’ s safe harbors , exacerbating liquidity crunches in the economically weaker countries as their borrowing costs surge .
During the debt crisis , countries in the bloc ’ s south proposed what they called eurobonds , @ @ @ @ @ @ @ borrowing power .
The idea was that by issuing jointly backed debt , the financial solidity of countries like Germany and the Netherlands would allow all countries to borrow more cheaply .
This year , that idea has been revived in proposals for what have been termed coronabonds .
But a group of richer , northern leaders were firmly against that , refusing to put their taxpayers on the hook for the liabilities of their southern neighbors .
The EU ’ s initial response to the crisis came mainly in the form of @ @ @ @ @ @ @ that countries in the south argued would only increase their debt burden and weigh on future economic growth .
In response , German Chancellor Angela Merkel and French President Emmanuel Macron agreed to support a 500 billion-euro ( $ 550 billion ) aid package financed through the issuance of bonds by the European Commission on behalf of the EU as a whole .
If the package is approved by EU states , proceeds from the so-called Recovery Fund would be distributed to countries most affected by the crisis in the form of grants @ @ @ @ @ @ @ budget , where Germany contributes the lion ’ s share .
The proposal marked a dramatic shift for Germany , which initially opposed any form of mutualized borrowing .
Germany says the recovery fund does not represent debt mutualization .
First of all , it ’ s a one-off concession for the duration of the crisis .
Second , if coronabonds were issued , the danger for Merkel could be like that faced by someone who signed a lease when a roommate can ’ t pay their share of the rent -- Germany @ @ @ @ @ @ @ bigger chunk than it expected .
But in the Merkel-Macron plan , Germany wouldn ’ t be liable for the entire 500 billion envelope , only for its share of the budget , an amount that corresponds to its share of EU economic output .
On the other hand , Germany is the main contributor to the EU budget , so it will repay most of the funds , whatever the debt instruments are called .
“ The Franco-German deal is a real step towards creating the first meaningful EU debt , ” @ @ @ @ @ @ @ Brussels-based Bruegel think tank .
“ The debt service of federal debt always depends on contributions from all regions but those contributions are relative to the economic size of the regions.
” Debt mutualization is not .
Article 125 of the Treaty on the Functioning of the European Union says that neither the EU nor individual member states can be liable for the debts of other governments .
A so-called “ Hamilton moment ” -- as happened in the U.S. in 1790 -- whereby obligations across the 27-nation bloc are mutualized would require @ @ @ @ @ @ @ in some cases referendums .
In a nutshell , sharing more risk can only come when countries agree to cede more sovereignty on their finances .
So far , there ’ s no sign of a majority backing for a reform that would give a central authority the power to raise taxes and decide how money is spent throughout the EU or even the euro area .
In practice , the bloc ’ s members are progressively sharing increasing levels of risk and have bailed each other out in times of need .
@ @ @ @ @ @ @ -- the euro area ’ s crisis fund -- has raised hundreds of billions on debt markets , which it then lent to Greece on terms normally reserved for countries with AAA credit rating , allowing the EU ’ s most indebted state to make billions in savings from interest payments .
The same arrangement is also available now for countries wishing to draw up to 240 billion euros from the fund to finance costs related to the pandemic .
Also , the European Central Bank has been buying massive amounts of debt @ @ @ @ @ @ @ of that is held by national central banks , a good chunk is on the ECB ’ s own books , making its shareholders -- euro-area members -- in theory liable for any losses .
In a way .
The EU , through the European Commission , has long been able to borrow , as have other European institutions .
This ability rests on the backing and commitment of member governments to the EU project .
All European institutions have a stellar credit rating , on the assumption of such backing from the @ @ @ @ @ @ @ , these nations lend their fiscal muscle to the EU , allowing its institutions to carry out transactions on concessional terms for the benefit of weaker members .
It may not be debt mutualization , but it ’ s European solidarity in practice .
It ’ s unclear .
A group of rich nations nicknamed the Frugal Four -- Austria , the Netherlands , Sweden and Denmark -- strongly object to joint debt issuance , even if it ’ s a temporary thing .
They argue against disbursing money in the form of @ @ @ @ @ @ @ as happened when the European institutions borrowed to bail out nations in the debt crisis .
They proposed an alternative plan ahead of the commission outlining its own proposal on May 27 .
A compromise might involve a mixture of grants and loans .
Separately , Eastern EU members are worried that the proposed recovery fund will channel cash to the pandemic-hit south and they will be left out , since their healthcare crisis was contained .
Tough negotiations will follow , and unanimity is required for any decisions to be taken .
@ @ @ @ @ @ @ purchases from the ECB to keep borrowing costs low , and on national spending measures to keep its businesses afloat while economies nosedive .


washingtonpost--2020-05-26--Analysis | Why There’s a Looming Debt Crisis in Emerging Markets

Emerging markets owe more than $ 8.4 trillion in foreign-currency debt , or about 30 % of the developing world ’ s gross domestic product .
At least $ 730 billion is coming due through the rest of this year , as many of these nations see the worst of the virus , which will severely tax health systems .
The fear is that weakening local currencies , dwindling foreign reserves and slower global growth , compounded by lower oil prices , will make it harder for some developing countries to keep up on their external debt payments .
While @ @ @ @ @ @ @ Venezuela among them -- were in trouble long before Covid-19 scared investors out of risky assets , the pandemic has helped at least 11 others to linger in distressed territory .
Ecuador has already won temporary relief from its bondholders , but Zambia , Suriname and Sri Lanka are among those with dollar-bond yields in excess of 1,000 basis points over U.S. Treasuries -- a threshold for securities to be considered in distress .
Lower-income countries and those reliant on tourism and remittances are also in need .
Leaders of the Group of @ @ @ @ @ @ @ payments by some of the world ’ s poorest countries , mostly in Africa .
The IIF , which represents the world ’ s biggest banks and financial institutions , is helping spearhead the voluntary initiative .
China said it ’ s interested in helping nations in Africa facing “ the greatest strain.
” More than 20 of the 73 eligible countries have made formal requests so far for debt relief from official bilateral creditors , and more than half have expressed interest .
Meanwhile , the IMF has granted debt waivers to @ @ @ @ @ @ @ option is a so-called standstill -- forbearance on external debt-service payments through at least the end of this year .
This gives countries room to spend on health services and measures to prop up their economies without risk of missing a coupon payment .
A possible step further would be a program to help some governments restructure their debt loads once there ’ s enough information to run sustainability analysis .
One inspiration for that idea is the Brady Plan of the late 1980s .
Announced in 1989 , when countries in Latin @ @ @ @ @ @ @ struggling to pay off loans , the U.S.-led initiative restructured the debt of 18 developing countries into more than $ 160 billion of so-called Brady bonds , many of which were backed by zero-coupon U.S. Treasury bonds or funds from the IMF or World Bank .
The bonds and plan were named for Nicholas Brady , treasury secretary under U.S. Presidents Ronald Reagan and George H. W. Bush .
Not without substantial changes .
The key difference is that the Brady Plan mainly transformed commercial bank loans , many of which were already @ @ @ @ @ @ @ was a way to relieve pressure on Wall Street and encourage growth in the developing world .
Today , emerging markets owe money to a wide range of creditors , and a relief plan would need the backing of hundreds of creditors from New York hedge funds to Middle Eastern sovereign wealth funds and Asian pension funds .
It ’ s no easy task to persuade private investors , especially those with large emerging-market exposure , to take a hit by deferring debt payments .
It ’ s also unclear whether their fiduciary @ @ @ @ @ @ @ grant leniency , even if they wanted to .
Fine print in many deals make it so that terms can not be legally changed without the approval of the majority of bondholders .
Some bondholders say they ’ d rather deal with requests to change bond terms or delay payments on a case-by-case basis .
Many are hesitant on any plan that paints a group of nations with the same brush .
Private creditors representing more than $ 9 trillion of assets under management have already formed a group to negotiate debt relief @ @ @ @ @ @ @ risks of a blanket approach to the process .
They say unilaterally halting payments could lock nations out of debt markets , making matters even worse for borrowers .


washingtonpost--2020-04-15--Analysis | China’s `Aircraft Carrier’ Can’t Sink Wall Street

At first glance , this display of angst might seem puzzling .
Local brokerages dominate the market , and will be hard to dislodge .
They control an industry that is far from robust , though , and that may be ripe for disruption from Wall Street banks that have an edge in structuring complex products and using leverage .
Much brokerage activity in China involves unsophisticated stock trading , where returns have been declining for years .
Trading commissions slid to below 3 basis points , or 0.03 % , in mid-2019 , from 8 basis points in 2013 @ @ @ @ @ @ @ Proprietary trading , or income from investing in securities — largely frowned upon in the U.S. and Europe since the global financial crisis — makes up the bulk of revenue , followed by trading .
Arranging share sales offers limited profit because of an unofficial pricing cap of 23 times earnings on most initial public offerings .
Consolidation is overdue .
China has 130-odd brokerages , which mostly struggle to turn a profit .
The entire industry ’ s combined assets are equal to those of just one U.S. bank , Goldman Sachs @ @ @ @ @ @ @ Citic Securities , one of five local securities firms that account for a third of industry revenue , has a return on equity of 8 % , compared with 11 % for New York-based Goldman .
Authorities have called for the creation of “ aircraft-carrier sized ” brokerages that can compete with the Wall Street titans .
That ’ s more easily said that done .
Many of China ’ s brokerages are owned by provincial and local governments that are loath to give up control , especially at the cheap valuations forced @ @ @ @ @ @ @ .
The Citic-CSC combination could be the first such creation .
Besides being the biggest , Citic Securities is also the most international of China ’ s brokerages , having acquired Credit Agricole SA ’ s CLSA unit in 2012 and flirted with buying Bearn Stearns Cos. during the global financial crisis .
China ’ s securities firms don ’ t have much time .
Starting April 1 , Beijing permitted foreign investment banks to own 100 % of their China operations , allowing them to shake off irksome local partners .
That @ @ @ @ @ @ @ let foreign securities firms take majority control of ventures in April 2018 .
So far , UBS Group AG , JPMorgan Chase & Co. , Nomura Holdings Inc. , Morgan Stanley and Goldman Sachs have been granted such approvals .
Until now foreign banks have mostly contented themselves with marketing their global connections to mainland Chinese customers — advising companies on overseas acquisitions , introducing institutional investors for offshore share offerings in New York or Hong Kong , or servicing rich individuals who have the wherewithal to access offshore investments .
As China @ @ @ @ @ @ @ its domestic stocks and bonds will become more of a focus .
Mainland Chinese equities are now included in the MSCI Emerging Markets Index and the country ’ s bonds have joined global benchmarks such as the Bloomberg Barclays series .
With 100 % ownership , overseas banks will have the flexibility to inject capital and expand into high-value-added areas such as trading over-the-counter derivatives , margin lending and market-making — regulators permitting .
Morgan Stanley plans to build out an onshore brokerage and market-making capability as the securities industry is expected to @ @ @ @ @ @ @ , who leads the firm ’ s China business , told Cathy Chan of Bloomberg News .
It ’ s a long game .
Retail investors still accounted for 70 % -80 % of China ’ s stock market trading volume in 2018 , compared with 60 % in Japan , 40 % in Hong Kong and 30 % in South Korea , according to Goldman Sachs .
China ’ s share has come down only gradually , from 87 % in 2015 .
The local derivative markets remain largely out of reach @ @ @ @ @ @ @ confidence in the legal system a hindrance .
Bond trading , a big moneymaker for banks in developed markets , is underdeveloped in China , where state-owned lenders rather than funds are the biggest holders .
Even so , the trend is clear .
If China ’ s market opening remains on the same trajectory , even a fleet of aircraft carriers may not be enough to repel the invaders .


washingtonpost--2020-04-15--Rescue Fund to Run Dry Today, Leaving Small Firms Shut Out

As of mid-afternoon on Wednesday , the U.S. Small Business Administration reported there had been more than 1.4 million applications approved , totaling about $ 305 billion of the $ 349 billion set aside .
That ’ s the value of loans the agency has approved for lenders to disburse , not money that has reached borrowers .
Republicans sought to approve an additional $ 250 billion for the program last week , but the effort stalled with Democrats also wanting changes to the program and more aid for other groups .
Senate Democratic leader Chuck Schumer and Treasury Secretary @ @ @ @ @ @ @ has been set with staff in the first public sign of a possible break in the stalemate .
House Speaker Nancy Pelosi said Democrats are pushing for changes that will allow small businesses who have been shut out of the program because they don ’ t have access to a lender , as well as more funding for “ desperate ” state and local governments and hospitals .
“ Democrats know that in order for the Paycheck Protection Program to succeed , it must work for everyone , ” Pelosi said in a @ @ @ @ @ @ @ have been asking for the Administration to work with us to help.
” The program , which was enacted last month as part of a $ 2.2 trillion relief package in response to the coronavirus pandemic , offers loans of as much as $ 10 million .
The loans convert to grants if proceeds are used to keep workers on the payroll and cover rent and other approved expenses for about two months , a short-term stopgap designed to help businesses get by until the economy reopens .
Trump administration officials had said @ @ @ @ @ @ @ , even the same day they applied , when the program launched .
But some borrowers couldn ’ t find banks to take their applications if they didn ’ t already have a lending relationship , and lenders couldn ’ t process loans because of vague guidance and a clunky SBA computer system that has been inaccessible for periods of time .
Data on how much money has actually been handed out to borrowers isn ’ t available , and some lenders report that disbursements are only slowly being made .
“ Sadly @ @ @ @ @ @ @ a halt tonight as the limit on $ allocated to guarantee # PPPloans about to be hit .
Now 700000 small business applications are in limbo & no new loans will be made until the game of chicken in Congress ends & additional $ approved , ” he tweeted Wednesday .
Small business advocates are concerned that money also could run out for a separate SBA relief program , the Economic Injury Disaster Loan initiative , which is offering loans and advances of as much as $ 10,000 as grants .
A lag @ @ @ @ @ @ @ especially hard for small businesses struggling to survive the devastating impact of the pandemic , said Paul Merski of the Independent Community Bankers of America .
“ The worst thing you could do is have desperate small businesses that have a loan application pending to tell them that , ‘ Well , we ’ re going wait to decide what we want to do on additional funding , ” ’ Merski said .
Erik Bruun , owner of the SoCo Creamery , an ice cream shop and wholesale supplier in Great Barrington , @ @ @ @ @ @ @ to apply to the paycheck protection program at the end of March .
He was told Monday his application had been approved , but he has yet to receive any funds .
“ The idea that they ’ re going to run out of money is of course on my mind , because that just means another delay , ” Bruun said .
“ It gets to the sense of hopelessness you feel when you don ’ t have certainty .
”


washingtonpost--2020-04-15--Analysis | The End of Cash?

Analysis | The End of Cash?

In the U.S. , debit cards first beat out cash as the top way to pay in 2018 , according to a Federal Reserve survey .
As the coronavirus pandemic spread in early 2020 , some merchants in Seattle and Sydney tried to stop accepting cash altogether , calling it unsanitary .
( Some U.S. cities have made cashless stores illegal to prevent discrimination . )
Still , fear of contagion could accelerate the general trend to more digital payments , according to the Bank of International Settlements .
More than 75 % of adults in Kenya use the mobile-wallet @ @ @ @ @ @ @ getting paid themselves .
China ’ s central bank is already rushing to mint its own digital currency for a country where even street-food sellers in small towns will prefer to scan a QR code on a mobile payment app such as WePay or AliPay than make actual change .
A credit-card consortium is working to extend the system globally .
In most developed countries , however , the value of cash in circulation has risen since the financial crisis of 2008-2009 along with the number of digital payments , suggesting cash ( @ @ @ @ @ @ @ used as a store of value in uncertain times , especially with rock-bottom interest rates on savings accounts .
Despite the growth of digital wallets like Paytm , most Indians still rely on cash , as demonstrated when the government in 2016 suddenly replaced the larger bills that made up 86 % of the cash there with new ones , aiming to curb “ black money.
” The resulting currency shortage was so bad it cut into economic growth .
Since Roman times , people have tried out many alternatives to carrying loads @ @ @ @ @ @ @ of exchange for financing international transactions , a system that spread to Europe in the late Middle Ages .
The earliest known example of a modern check was written by hand and drawn on an account at Clayton and Morris , a goldsmith bank in London , on Feb. 16 , 1659 .
The next revolution started with a forgotten wallet .
In 1949 , U.S. entrepreneur Frank McNamara visited the Majors Cabin Grill restaurant in New York and had an embarrassing moment before his wife paid the tab .
But it gave @ @ @ @ @ @ @ he returned to the same restaurant , this time paying with a small cardboard card .
Thus was born the credit-card industry .
Shortly thereafter , banks began adopting computing systems that made it easier to keep track of money digitally .
The first automated teller machine appeared in London in 1967 , but debit cards only began to be issued in large numbers in the 1980s as ATM networks grew .
Online banking took off in the following decade .
For governments , getting rid of cash would cut minting and distribution @ @ @ @ @ @ @ down on tax evasion and drug trafficking .
Stores could save on cash-handling costs , reduce theft and possibly earn more if faster checkouts led to more transactions per hour , as some salad chains found in a trial .
( There are still card fees to consider ; studies have differed on which mode ends up cheapest . )
Some economists say that without cash , central banks could fight recessions more effectively because they ’ d have an effective way to impose negative interest rates — basically a tax on savings @ @ @ @ @ @ @ that in a digital-only economy , governments and banks could take control of your financial life , leaving you penniless with a flick of a switch .
Phone networks can fail , or be vulnerable to a cyberattack or power outage , as residents of Puerto Rico found after Hurricane Maria .
The Fed has stayed on the sidelines , saying there are “ substantial ” issues around cybersecurity to be resolved .
For the world ’ s poor , going cashless would cut both ways .
Facebook ’ s ambitious plan to @ @ @ @ @ @ @ ran into a wall of political opposition over such issues as data protection , national sovereignty and money laundering , forcing a rethink .
Billions of people in the developing world depend on cash to buy small amounts of goods , often for mere cents .
Not all of them can afford phones or other means of interacting with a digital cash network .
Those without face becoming second-class citizens .
On one hand , services like Paytm in India and Kenya ’ s M-Pesa have let people in remote villages try out @ @ @ @ @ @ @ the other , some people have found themselves ensnared by sky-high interest rates and hounded by e-debt collectors .


washingtonpost--2020-04-15--Bank of America Wants to Be the Good Guy in This Crisis

“ Just as important as our financial results this quarter is what we ’ re doing to take care of our teammates and to help clients and communities impacted by the virus , ” Moynihan said in a conference call with analysts .
“ We do this not only because it ’ s the right thing to do , but also in the end it will benefit you , the shareholder.
” Through these measures , Bank of America is living up to its name .
This is a time of sudden struggle for many Americans , particularly small-business owners @ @ @ @ @ @ @ still find themselves without any source of revenue .
It ’ s precisely the moment that banks should help their clients get to the other side of the crisis .
Moynihan ’ s comments echoed JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon , who said on Tuesday : “ If we can help the country get through this , everybody ’ s better off .
If we lose a little more money in the meantime , then so be it.
” Naturally , it helps that Wall Street isn ’ t @ @ @ @ @ @ @ , Bank of America Chief Financial Officer Paul Donofrio said the bank has more than tripled its liquidity since the 2008 financial crisis , from $ 214 billion to about $ 700 billion .
“ Ten years ago , we set out to transform our business and operate under the principles of responsible growth so we would be a source of strength in the next crisis , ” he said .
That strength is already being put to the test : The bank has received about 1 million requests from borrowers to postpone @ @ @ @ @ @ @ has fallen since peaking a couple weeks ago .
Like JPMorgan and Wells Fargo & Co. before it , Bank of America ramped up the amount it set aside for loan losses , allocating $ 4.76 billion , the most since 2010 and up from $ 1 billion a year ago .
These figures seem large by comparison to recent history , so it ’ s tempting to view them as conservative estimates , but given the lack of precedent for a nationwide voluntary shutdown it ’ s really anyone ’ s guess @ @ @ @ @ @ @ One thing is clear : The price of being the good guy and doing right by your staff and consumers can add up .
Bank of America ’ s profit plunged 45 % in the first quarter even though its trading revenue jumped 22 % year-over-year .
The all-important net interest income dipped 2 % from last year and may drop further in the current quarter with interest rates near record lows .
Bloomberg Intelligence ’ s Alison Williams noted in January that “ one thing we ’ ve seen from Bank of @ @ @ @ @ @ @ how long are Bank of America and its peers willing to let costs climb ?
Bank of America ’ s shares tumbled 6.6 % after the stock market opened on Wednesday , a steeper decline than the rest of its peers and more than the 2 % drop for the S & P 500 Index .
At the same time , the battle for incremental market share across banking divisions doesn ’ t pause during a recession , so slashing costs might not be the best business decision .
It ’ s notable @ @ @ @ @ @ @ grew by 1,000 in the first quarter , in stark contrast to the roughly 174,000 positions it has trimmed since 2007 .
Its net income tumbled 46 % as it set aside $ 7.03 billion to cover potential loan losses , which was too much for a 39 % increase in trading revenue to overcome .
Moynihan repeatedly referred to being “ in a war ” against the coronavirus when discussing the first-quarter earnings .
Certainly , there have been casualties across Bank of America ’ s businesses .
It ’ ll be @ @ @ @ @ @ @ of this crisis looking like a hero .


washingtonpost--2020-04-15--Analysis | Returning to Business Is Going to Take a Pay Raise

Simply put , corporate executives valued fattening their coffers more than looking after workers .
So they hid behind shareholder primacy , the idea that enriching shareholders is their highest priority .
They complained that unilaterally raising wages would put them at a competitive disadvantage , even as they fought efforts to raise the minimum wage .
They even blamed the market : If it decrees that workers should receive inadequate wages , who are they to second-guess it ?
Any competent observer could see that the status quo was unsustainable .
After all , the whole point of work @ @ @ @ @ @ @ employers were unwilling to uphold their end of the bargain , what could they expect from workers in return ?
Some CEOs recently came to that realization , or said they did .
The Business Roundtable , an association of top American CEOs , adopted a new “ Statement on the Purpose of a Corporation ” in August signed by 181 CEOs committing to “ lead their companies for the benefit of all stakeholders , ” including workers .
Days later , Business for Inclusive Growth , a coalition of 34 multinational companies @ @ @ @ @ @ @ at the Group of 7 summit .
Companies were slow to act , however , and now time is short .
The complaints by CEOs are a last-ditch effort to avert two conflicting situations .
The first is a severe earnings recession .
Public companies have begun reporting first-quarter earnings this week , and it won ’ t be pretty .
Wall Street analysts have already slashed their 2020 earnings estimate for the S & P 500 Index to $ 142 a share from $ 175 when the year began .
And that @ @ @ @ @ @ @ short order .
If it takes companies longer to wrangle workers , earnings are likely to take a deeper dive .
The second is a spike in wages .
The coronavirus has laid bare that without workers to produce and consume their products , even the most formidable companies are just empty shells .
The problem is that unless companies sweeten the deal , workers may not be so eager to return .
After years of beaten-down wages and growing pay disparity , workers have far less to lose than their bosses .
@ @ @ @ @ @ @ also conceded that they will have to spend whatever it takes to keep Americans fed and housed , so workers may reasonably decide that government assistance is preferable to flirting with the virus until reliable treatment or a vaccine is available .
That ’ s particularly true for the two sectors in the crosshairs of this crisis .
One is consumer discretionary , which includes travel , entertainment and retail .
Workers in that sector will arguably be most at risk when consumers decide it ’ s safe to leave the house again @ @ @ @ @ @ @ compensated .
My Bloomberg colleague Jenn Zhao compiles the median employee compensation for the biggest U.S. public companies by market value .
The average across 76 consumer discretionary companies was roughly $ 33,000 in 2019 , which is the lowest of the 11 sectors and half the amount realistically needed to raise a family of four in the cheapest places in America .
The other sector is consumer staples , which includes essentials such as food , beverage and personal products .
Workers in that sector are perhaps the most urgently needed , @ @ @ @ @ @ @ .
The average compensation among 41 consumer staples companies was roughly $ 45,000 last year .
If business is to resume any time soon , companies and workers will have to work together to manage the grave risks ahead , as little remains known about the virus .
But collaboration requires trust , which is in short supply thanks to companies ’ long-running neglect of workers .
According to Gallup ’ s most recent survey of the public ’ s perception of honesty and ethical standards among the professions , just 20 percent @ @ @ @ @ @ @ of “ very high ” or “ high.
” CEOs ought to realize that no amount of fear-mongering about the economy is likely to hasten business as usual .
I wrote last year that if companies wouldn ’ t raise pay , the government would make them .
Coronavirus beat legislators to it .
Absent a quick end to the fight against Covid-19 , if CEOs want to avoid a severe earnings slump , they should consider paying workers a living wage .


washingtonpost--2020-04-15--Schumer and Mnuchin Talk in First Sign of Break in Stalemate

Staff from the offices of Schumer and House Speaker Nancy Pelosi will meet with Treasury officials , spokesmen for the Democratic leaders said , amid mounting pressure on Congress to add funds to the Paycheck Protection Program and before state and local governments facing a revenue crunch start slashing their budgets .
“ We see no reason we can ’ t come to agreement , ” Schumer said on a conference call with reporters .
Hospitals , states and cities “ need help immediately or we are going to have millions more out of work.
” The Democratic leaders have @ @ @ @ @ @ @ Mitch McConnell and the Trump administration over putting more money into aid programs designed to stem some of the economic damage from the nationwide shutdown caused by the coronavirus pandemic .
Republicans want to limit action now to adding $ 250 billion to the small business aid plan , a key part of the $ 2.2 trillion stimulus passed late last month .
Democrats want an additional $ 250 billion for state and local governments and hospitals , changes to the small business program , more money for other loan programs that are @ @ @ @ @ @ @ to food stamp benefits .
The grim economic news continues , meanwhile .
U.S. retail sales fell 8.7 % in March , the biggest decline in records dating back to 1992 , according to Commerce Department data released Wednesday .
Federal Reserve figures showed U.S. factory output dropped in March by the most since 1946 , just after World War II ended .
The month also saw millions of layoffs , which have continued into April , and sharply reduced spending power for consumers .
Unlike the process that unfolded when the last @ @ @ @ @ @ @ gave regular updates of each conversation with Mnuchin -- there had been more partisan sniping than talking until Wednesday .
Even if an agreement is reached quickly , it was unclear how soon it could move through Congress with most lawmakers at home .
Doing so this week would require unanimous agreement in both the House and Senate .
The Senate could do that in a pro-forma session Thursday , and House Majority Leader Steny Hoyer didn ’ t rule out the House acting on Friday .
However , that could be thwarted @ @ @ @ @ @ @ ’ t a comprehensive accounting yet of how much money lenders have disbursed so far in loans to small businesses .
Some banks are starting to report totals , including JPMorgan Chase & Co saying on Tuesday it has funded $ 9.3 billion to firms and has more than 300,000 businesses in the application process representing $ 37 billion in loans .
As of noon Wednesday , the SBA reported there had been more than 1.3 million applications approved , totaling about $ 296 billion of the $ 349 billion set aside .
@ @ @ @ @ @ @ given to small businesses , but rather the amount from applications that SBA has guaranteed for banks to lend .
McConnell , speaking Tuesday on the syndicated “ Washington Watch ” radio show , said Democrats want to add money to programs that “ aren ’ t out of money ” while the PPP was near running out .
“ We ’ ll find out if the Democrats will go along with it.
” Florida Republican Senator Marco Rubio said on Bloomberg ’ s “ Odd Lots ” podcast that trying to pair @ @ @ @ @ @ @ with new assistance for states and cities would add complexity .
Congress would have to come up with a formula for distributing funds to local governments.
“ That ’ s more complicated than saying let ’ s just put more money into a program that ’ s up and running , ” he said .
Pelosi , meanwhile , continued a blitz of TV news and late night talk show appearances and other dial-in events -- more than 20 over the past two weeks , according to her office -- and publicly released @ @ @ @ @ @ @ fellow Democrats and other statements .
Tuesday night on MSNBC , Pelosi reiterated the main message she and Schumer have been sending .
She said that after Mnuchin initially proposed a $ 250 billion measure to replenish the PPP , Democrats said that , “ While we ’ re at it , what we desperately need is support for state and local government , as well as for hospitals.
” But as for Republicans , she said , “ They just said ‘ no .
’ ”


washingtonpost--2020-04-15--Marco Rubio on the Effort to Save Jobs And Get People Working Again

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washingtonpost--2020-04-15--Analysis | Trump’s Funding Cut Won’t Fix the WHO’s Problems

There ’ s a certain pot-kettle quality about a president who spent weeks declaring the pandemic was under control and likely to disappear naturally blaming others for a failure of leadership .
On top of that , there ’ s strong empirical backing for the view that travel bans are rarely enough to halt a pandemic — especially not ones that exempt most citizens from quarantine , ( 2 ) as in the U.S .
Analysis of virus genomes indicates that most of the key early cases in the New York area originated in Europe , not Asia .
Still @ @ @ @ @ @ @ Adam Minter have written , criticisms of the WHO ’ s handling of the outbreak are justified .
The trouble is , holding back funds in the middle of a global pandemic will only harm public health , without forcing any change to the organization ’ s behavior .
If it was money that talked in the WHO ’ s Geneva headquarters , no one would be complaining about Chinese influence .
The country is notoriously stingy in its contributions to an organization that gets three-quarters of its funding from voluntary donations .
@ @ @ @ @ @ @ through this route is less than comes from Kuwait , Pakistan or the Democratic Republic of Congo .
Even private donors such as Rotary International , the Wellcome Trust and the Bill & Melinda Gates Foundation give more .
Almost all the money China contributes comes through its membership fees , which are assessed for each state based on its population and income , and make up just 17 % of WHO revenue .
Part of it comes down to the way the WHO operates through regional and country offices .
As defenders @ @ @ @ @ @ @ it ’ s only able to work as a guest in countries where disease breaks out , and has few mechanisms to force compliance .
Governments far short of China ’ s international stature have nonetheless managed to cow the WHO : During the 2014 Ebola outbreak in West Africa , Guinea , Liberia and Sierra Leone caused the organization to delay warnings about the epidemic until it was too late .
More important , though , are the subtle arts of diplomacy — stacking influential United Nations committees and organizations with allied @ @ @ @ @ @ @ ’ re simpatico with your views of the world even if they ’ re not dependent on you for cash .
Beijing ’ s tight-fistedness at the WHO in some ways helps in this regard : Most of its spending to support public health overseas is provided directly to foreign countries instead , giving more opportunities for demanding quid pro quos than if the funds were being consolidated through a multilateral body .
Western countries retained an outsize influence at the top of UN agencies decades after the fall of colonialism .
It @ @ @ @ @ @ @ , but democracies ’ slow-footedness in cultivating friends in the emerging world had until recently left the field wide open for China to establish its hegemony .
There are signs this is finally changing .
Last month , the U.S. threw its weight behind Singaporean Daren Tang to head the World Intellectual Property Organization and won , beating off China ’ s favored candidate .
The same approach now needs to be taken across the board .
Withholding funds isn ’ t the way to achieve that end .
We tend to look @ @ @ @ @ @ @ it ’ s least equipped to deliver : during emergencies .
At those moments , an organization with the budget of an average city hospital ( much of it locked down for long-term programs like polio eradication ) is expected to suddenly mobilize more effectively than entire governments .
A better approach for the U.S. would be to work with other countries to raise the level of member contributions going to the WHO ’ s core budget , giving it the funds and operational flexibility it needs to respond in a crisis .
@ @ @ @ @ @ @ go through Geneva for specified programs could then be brought back into the bilateral arena , making the U.S. not just a distant funder but a partner to nations in the emerging world .
That would be particularly beneficial in sub-Saharan Africa , where the triple plague of tuberculosis , HIV and malaria still accounts for a paltry 5 % or so of WHO spending and where improved health would generate ample goodwill .
Trump isn ’ t wrong in diagnosing the WHO as sick .
His mistake is in spurning a more @ @ @ @ @ @ @ given up bloodletting as a cure for disease .
Diplomats need to take the same approach to funding .
( 1 ) Citizens who had been in Hubei province in the previous 14 days were obliged to enter quarantine under the U.S. ’ s Jan. 31 rules -- but by that point about 40 % of cases in China were in other provinces , and confirmed cases had been identified in around two dozen countries .


washingtonpost--2020-04-15--Analysis | How Herd Immunity Works, a Possible Key to the Covid Pandemic’s End


washingtonpost--2020-04-15--Small Construction Firms Top List of Virus Relief Loan Approvals


washingtonpost--2020-04-15--Analysis | J.C. Penney’s Turnaround Is No Match for Covid-19

U.S. department stores are highly exposed to the unprecedented shutdown brought on by the coronavirus pandemic .
With a quarter of a million shops closed across America , never before has consumerism been so constrained .
But J.C. Penney was struggling even before the outbreak of Covid-19 .
Department stores are becoming increasingly irrelevant in the face of online shopping .
Once they were a one-stop shop for everything from clothing to cosmetics and cushions .
Now Amazon is the go-to destination for everyday needs .
That has left many brick-and-mortar retailers with too much space , and what they @ @ @ @ @ @ @ .
J.C. Penney Chief Executive Officer Jill Soltau has been doing her best to address the chain ’ s lackluster product assortment and messy stores .
There have been some encouraging signs , including a 23 % reduction in stock compared with 2017 , and progress in tackling the chain ’ s incessant markdowns .
But such victories pale into insignificance when compared with the prolonged closure of the company ’ s 850 stores , and a continued struggle to gain traction in online sales .
Add in net debt of about $ @ @ @ @ @ @ @ wonder J.C. Penney is exploring options to shore up its balance sheet .
It had already appointed consultant AlixPartners LLP to help it manage its borrowings , as my Bloomberg News colleagues reported earlier this week .
J.C. Penney drew down $ 1.25 billion of its $ 2.35 billion revolving credit facility in March , and said it was evaluating other financial options .
But it has little income coming in , and $ 105 million of bonds falling due in about six weeks time .
Fitch said at the start of this @ @ @ @ @ @ @ liquidity to fund the buildup of stock for the 2020 holiday season , it could need additional sources of funding for Christmas 2021 .
Consequently , Fitch concluded J.C. Penney could seek a restructuring , possibly a debt-for-equity swap , over the next 12 months .
Other chains look better placed .
Macy ’ s Inc. , Kohl ’ s Corp. and Nordstrom Inc. all have sufficient liquidity to manage their operations through the downturn , Fitch noted .
Nordstrom also generates 33 % of its sales online , according to Bloomberg Intelligence @ @ @ @ @ @ @ even the strongest names .
Hence the reason retailers have furloughed hundreds of thousands of staff and some are even withholding rental payments .
When things do return to some semblance of normality , consumers may be reluctant to shop with the same gusto as before .
There will also be a cost associated with reopening , including restocking stores , which will put extra strain on working capital .
If J.C. Penney does decide to seek bankruptcy protection , it might the first big American household retail name to do so amid @ @ @ @ @ @ @ It won ’ t be the last .
Radical restructurings , and a raft of store closures even among the chains that come through the crisis , will undoubtedly reshape malls and main streets .


washingtonpost--2020-04-15--Fed’s Bostic Says U.S. Businesses Face Survival Crisis in May

The Fed is moving aggressively to try to provide a lending bridge during the crisis , Bostic said .
The central bank pledged as much as $ 2.3 trillion in lending , while cutting interest rates to near zero , including expanding its credit in unprecedented ways such as loans to state and local governments and purchases of so-called junk bonds -- those with lower than investment-grade ratings .
While the goal has been to ensure the economy resembles its pre-crisis state , that wouldn ’ t be possible if businesses are shuttered en masse , Bostic said .
Much @ @ @ @ @ @ @ and how quickly American workers and businesses feel confident they can return to work , he said .
“ What we are seeing and hearing is credit challenges are becoming more widespread and more acute , and as that happens solvency becomes more into play , ” Bostic said .
“ There are wide swaths of the economy seeing significant drops in demand , so the cash flows are so low they are eating through whatever savings they had at a more accelerated pace.
” The Fed and other regulators have made it @ @ @ @ @ @ @ be penalized if they restructure loans to provide help to otherwise successful businesses threatened by virus shutdowns , Bostic said .
Aid such as the Paycheck Protection Program for small business may need to be distributed quickly even if there are fewer immediate controls , and more careful audits can be added later , he added .
“ Time is not our friend , ” Bostic said .
“ The goal is really to get as many key companies as possible to still be around at the end.
” For more articles like @ @ @ @ @ @ @


washingtonpost--2020-04-14--Wells Fargo Vows to Catch Up on Emergency Small-Business Lending

The “ ultimate funded volumes will be as high as anyone ’ s , ” Chief Financial Officer John Shrewsberry predicted on a conference call with journalists on Tuesday after the bank reported first-quarter earnings .
The firm has received 370,000 indications of interest from customers , Chief Executive Officer Charlie Scharf said on an analyst call .
Still unclear is how many small businesses across the country will miss out on the funds intended to help them weather the economic shutdown from the coronavirus pandemic .
Lawmakers have been debating how to expand the popular program that has already @ @ @ @ @ @ @ Customers at banks that were slow to process requests could get hurt .
As a leading lender to small businesses , Wells Fargo is under particular pressure -- especially as it seeks to reassure customers after a series of scandals that prompted the Fed to impose the cap .
No federal data is available to show lending volume by firm .
Wells Fargo didn ’ t say Tuesday how much it ’ s funded .
JPMorgan Chase & Co. said it has already funded $ 9.3 billion , and has more than 300,000 @ @ @ @ @ @ @ in loans .
Other banks are set to report earnings in coming days .
Wells Fargo is still telling some businesses in the queue to apply elsewhere to increase their chances , while Bank of America Corp. prevailed in a lawsuit over prioritizing its existing customers in the program .
The biggest lenders are handling hundreds of thousands of applications for a program that ’ s been beset by bureaucratic hurdles and unclear government guidance .
As JPMorgan and Wells Fargo kicked off bank earnings season Tuesday , the efforts got top billing @ @ @ @ @ @ @ ’ re trying .
But the reality remains that many entrepreneurs are hearing that the money is almost gone , and they ’ re still in line .
For more articles like this , please visit us at bloomberg.com


washingtonpost--2020-04-15--Analysis | One Contagion Is More Than Enough for India

Allowing a credit contagion to take hold is a serious error , especially as India ’ s under-capitalized lenders were swamped by corporate defaults even before Covid-19 struck .
As both retail and institutional loans go sour at a rapid pace , the financial sector will amplify the shock of virus-related shutdowns and hobble the return to anything resembling normalcy .
Leave aside the problem of determining safe zones when the government isn ’ t testing enough for infections , which have crossed the 10,000 mark .
Beyond a token $ 22.6 billion plan announced March 26 , the Modi @ @ @ @ @ @ @ help the working class survive their loss of livelihood .
The lapse is made worse by a monetary authority seemingly oblivious to the crumbling of a shadow-banking industry that ’ s been struggling with high funding costs for nearly two years now .
Lowering the benchmark interest rate or boosting liquidity by $ 50 billion is of little use when those who need the money are simply not getting it .
This approach needs to change .
Let Team Modi figure out a fiscal strategy , and then let the Reserve Bank of @ @ @ @ @ @ @ This will mean copying the U.S. playbook , where programs like Paycheck Protection , targeted at small firms and their employees , and Main Street Lending , aimed at bigger firms , are government backed with the Fed providing funding to banks making the loans .
The template will need to be tweaked to fit the Indian economy ’ s highly informal setup , marked by a near-complete absence of social safety nets — barring a rural job guarantee that pays less than the minimum wage in agriculture .
A quarter of the @ @ @ @ @ @ @ and forth between urban centers and their village homes .
They suddenly have no work and no money to buy food or pay rent .
Even with the government ’ s promise of distributing free food , the 500 rupees ( $ 6.5 ) a month it has started crediting into no-frills bank accounts held by women is paltry .
India ’ s 29 states , which are closer to the unfolding humanitarian disaster , are balking at high costs the market is charging them for long-term money .
For now , they @ @ @ @ @ @ @ enhanced temporary overdraft with the central bank .
However , as their expected $ 100 billion share of federal taxes takes a big hit , they , too , would have no option except to hawk their bonds in a tight market .
If the Fed can cross a political line by doing something it ’ s never done before — offering to lend $ 500 billion to U.S. municipalities and states — there ’ s no reason for the RBI to play coy .
Now that the lockdown has been extended , @ @ @ @ @ @ @ a further two-week delay before the restrictions are relaxed meaningfully .
In such a scenario , where supply chains resume only gradually , the number of people who might lose their ability to subsist would quadruple , and the nonperforming loan ratio could swell by 7 percentage points , according to McKinsey & Co .
The cost of helping households , companies and lenders , could exceed $ 130 billion , or more than 5 % of gross domestic product .
Knowing this , why isn ’ t India committing 1 % of @ @ @ @ @ @ @ Ministry puts down $ 25 billion equity into a special purpose vehicle .
( That ’ s a third of the support the U.S. Treasury is similarly providing the Main Street Lending Program . )
Let this financing vehicle purchase 95 % of lenders ’ interest in loans they make to vulnerable firms , shadow banks , individuals and even states , with the RBI lending seven rupees to it for every rupee contributed by the ministry .
This eightfold amplification of the original firepower will make $ 200 billion of loans available @ @ @ @ @ @ @ by the government , as it should be .
The RBI ’ s present strategy is not working .
The three-month freeze it has recommended on loan repayments has boomeranged on shadow lenders , who have become increasingly important in recent years for meeting the credit needs of individuals and small firms .
The financiers aren ’ t getting a moratorium on what they owe banks , while being forced to offer it to retail customers , many of whom can ’ t pay now , anyway.Debt mutual funds , which also lend @ @ @ @ @ @ @ put options on their bonds , making it even harder for the industry to survive this crisis .
The collapse and botched rescue of Yes Bank Ltd. has bred anxiety among depositors about leaving their money in second-tier , private-sector banks .
The cheap funds the RBI has promised lenders if they invest in corporate bonds are getting parked in the debt of higher-rated firms .
When the moratorium is over , many of the loans held in abeyance will turn bad .
The interest that lenders are booking ( but not receiving @ @ @ @ @ @ @ .
India will have to resort to a sweeping nationalization of its finance industry to restart the economy .
That will cost multiples of $ 25 billion .
Why not lower that future obligation by giving a chance at survival to those who were solvent before the coronavirus and can be made whole once again ?


washingtonpost--2020-04-15--Analysis | Buffett’s Taking More Oxy Stock, So Maybe You Shouldn’t

So don ’ t take Buffett ’ s apparent enthusiasm for bottom-fishing .
Those new shares are just Oxy paying off a coupon on the $ 10 billion of preferred stock it issued to Berkshire last year with payment-in-kind rather than cash .
Let ’ s recap .
It just so happens that exactly a year ago , on an April 15 that may as well have been in a different century at this point , I wrote this about rumors that Oxy was poised to jump into a takeover battle with Chevron Corp. to buy Anadarko Petroleum Corp. : @ @ @ @ @ @ @ , though : Which currency would Anadarko investors prefer to end up with , Chevron ’ s stock or Occidental ’ s ?
Even though Chevron ’ s fell harder on news of an actual deal , Occidental ’ s sell-off on the mere rumor of an alternative looks more telling .
In buying Anadarko , Occidental would be taking a bigger leap , and its new shareholders would be taking it , too .
“ Leap ” turned out to be something of an understatement ; “ bungee-jump with a set of @ @ @ @ @ @ @ the mark .
Yet it wasn ’ t Anadarko ’ s shareholders who took the plunge .
In the end , they mostly got cash from Oxy ’ s winning bid .
The critical slug of that cash came from Buffett , reducing the common stock component and thereby enabling Oxy ’ s management to consummate a “ generational ” deal ( their words ) without putting it to a vote of their own shareholders .
Oxy ’ s dividend cut , announced just over a month ago , meant the quarterly check @ @ @ @ @ @ @ the $ 200 million being wired to Omaha .
But the exigencies of Covid-19 have now forced Oxy to resort to paying Buffett with more stock , and at a bombed-out price : This single payment dilutes existing shareholders by 2 % .
Despite this being mere mechanics in action , possibly Buffett thinks he is getting a bigger stake at bargain prices .
But I think he originally took a preferred position for a reason .
Clearly , Oxy couldn ’ t foresee Covid-19 any better than the rest of us .
@ @ @ @ @ @ @ this looked like a leap for ordinary reasons .
Most notably , Oxy was taking on a lot of debt at a time when oil investors were turning away from the wildcatter mentality and the market was facing a troublesome trade war .
The resort to Buffett ’ s payday loan signaled this in spades and simultaneously shut investors out .
Looking ahead , even after the most acute phase of Covid-19 passes , the existing economic issues relating to trade friction will reassert themselves ; President Donald Trump ’ s shocking withholding @ @ @ @ @ @ @ amid a pandemic doesn ’ t suggest globalization will be making a comeback .
And no patient as sick as the world economy is right now recovers that quickly , which was the main underlying narrative of the IEA ’ s report .
Like the world ’ s storage tanks taking that gusher of excess barrels , or Oxy ’ s own shareholders last year , Buffett ’ s extra oil exposure isn ’ t a choice .
Liam Denning is a Bloomberg Opinion columnist covering energy , mining and commodities .
He @ @ @ @ @ @ @ Journal ’ s Heard on the Street column and wrote for the Financial Times ’ Lex column .
He was also an investment banker .


washingtonpost--2020-04-15--Analysis | China’s Trillion-Dollar Missed Virus Opportunity

In the weeks since Covid-19 halted the economy , China has taken several steps to avoid outright bankruptcies and defaults .
The stress on corporate balance sheets is real .
Non-performing loans as a portion of the total on lenders ’ books , estimated at over 10 % before the epidemic , are expected to rise .
China ’ s banks and bad-debt managers held $ 1.5 trillion of non-performing and stressed assets at the end of 2019 , according to a recent PricewaterhouseCoopers LLP study.If banks start recognizing too much of China Inc. ’ s bad debt , their @ @ @ @ @ @ @ into profitability and capital .
On the other hand , the additional hit because of forborne loans could run to as much as 1.6 trillion yuan ( $ 224 billion ) , according to S & P Global Ratings .
That will crimp their ability to lend .
So far , commercial banks aren ’ t foreclosing on China Inc. and the pressure to roll over is rising .
Since late January , almost a fifth of principal and interest payments on loans to small and medium companies have been deferred .
Chinese @ @ @ @ @ @ @ settle outside the judicial system .
Convinced that recoveries will be poor anyway , investors are walking into so-called exchange offers , effectively extending debt on new terms.All of this , however , doesn ’ t amount to the cleanup that China needs at the risk of deep systemic pain .
It simply puts off difficult decisions on debt resolution .
Clearing out the stock of almost worthless borrowings will create room for more , hopefully productive credit growth .
Meanwhile , there would be some credibility in declaring losses : Everyone knows @ @ @ @ @ @ @ pain will eventually show up somewhere .
For creditors , maintaining the status quo has meant taking bad deals .
Consider the recent cases of debt exchanges .
Water and sewage treatment company Beijing Sound Environmental Engineering Co. said in February that it wasn ’ t sure it could repay its bonds .
In March , the company said it had completed a debt swap for its 500 million yuan three-year medium-term notes at a slightly higher coupon .
Most bondholders took the deal and 100 million yuan wasn ’ t repaid .
@ @ @ @ @ @ @ Similarly , in state-owned commodity trader Tewoo Group Co. ’ s exchange offer , investors will take a significant haircut and the new bonds will be longer tenor for a far lower coupon .
No one is offering — or getting — great outcomes .
At China ’ s banks , the loan-to-deposit ratio is close to 80 % and rising .
As of March , banks had already pushed out 1.8 trillion yuan to deal with the Covid-19 impact .
Their capital buffers aren ’ t placed to protect against a big @ @ @ @ @ @ @ look adequate for now , but that ’ s only until they don ’ t .
Beijing is a big shareholder and dividend income matters .
Yet the government needs them to lend more to ever-weaker borrowers , and has released funds and set up facilities to allow it .
That everyone , including the government , is turning is out to be a loser raises the question of whether Beijing has many options left , or even room for forbearance .
Recent moves signal it doesn ’ t .
Authorities are reforming @ @ @ @ @ @ @ ” or national-level asset management companies , that were established after the Asian financial crisis to help clean up lenders ’ balance sheets .
Special sovereign bonds have also been issued that could be used to recapitalize banks , or to create liquidity with the AMCs to buy up bad assets at market value .
That , though , risks creating a capital hole for banks , and the managers don ’ t have gobs of capital to put to use without hitting leverage limits .
Such a process needs to be done @ @ @ @ @ @ @ have to be recognized , rather than after .
The case of Bank of Jinzhou Co. is an indication of what could go wrong .
The central bank has effectively become a shareholder , while China Cinda Asset Management Co. will provide equity and buy 150 billion yuan of assets .
It ’ s had to issue share capital well below book value , breaking with a long-held line .
The bank had gone bad some time before it went under , and the last-resort restructuring has opened up questions around transparency .
@ @ @ @ @ @ @ the whole system , but it needs to start somewhere .
There isn ’ t much trust in Chinese banks , with their price-to-book ratios trading at historic lows .
A delayed diagnosis will be a missed opportunity .


washingtonpost--2020-03-24--Analysis | What to Know About Recessions, as Virus Threatens One

The dictionary definition is a period when economic output contracts for two straight quarters .
The National Bureau of Economic Research ’ s Business Cycle Dating Committee , which makes the official U.S. determination , uses a different approach , considering factors such as inflation-adjusted GDP , employment , industrial production and income .
The International Monetary Fund , in designating recessions on a global scale , looks at several indicators including a decline in inflation-adjusted per-capita GDP that ’ s backed up by weakness in industrial production , trade , capital flows , oil consumption and unemployment .
Almost @ @ @ @ @ @ @ output is likely shrinking in the current quarter , which ends March 31 , and there ’ s widespread agreement that the contraction in the second quarter could be the most dramatic in quarterly records going back to 1947 .
Morgan Stanley , for one , expects gross domestic product to fall a jaw-dropping 30.1 % in the second quarter .
( It ’ s worth noting that U.S. Treasury Secretary Steven Mnuchin said on March 15 that he expected the coronavirus pandemic would slow growth but not tip the U.S. economy into @ @ @ @ @ @ @ a year to make the official call on when a U.S. expansion ends and a recession begins , though this time it may not wait that long .
Bloomberg Economics is forecasting a global recession in the first half of 2020 , noting that “ for some important parts of the world the contraction has already begun.
” It foresees the global economy shrinking by 1.8 % year-on-year in the first half of 2020 , compared with growth of about 3 % in 2019 .
The International Monetary Fund has counted only four @ @ @ @ @ @ @ compared to the 11 counted in the U.S. since World War II by NBER .
That ’ s becoming the question of the moment .
There ’ s some hope that the downturn won ’ t last beyond the first two quarters of this year , a rosy scenario that assumes fast and effective work in getting the coronavirus under control .
It ’ s a very different picture if the social and economic lockdown lasts for months .
The ultimate fear is a protracted malaise that has some flavor of a depression @ @ @ @ @ @ @ a severe downturn that is measured in years , not quarters .
There ’ s been just one in the last 100 years , the Great Depression of 1929-1933 .
The 2007-2009 recession lasted 18 months , making it the longest since the Great Depression , inspiring the name the Great Recession .
Besides duration , other measures of a recession ’ s severity are how much the economy contracts and how bad unemployment gets .
The worst recessions tend to be those paired with some sort of collapse in the financial system @ @ @ @ @ @ @ 1929 and 2008 .
Another driver of a recession ’ s severity is how broadly the economy suffers a contraction .
The relatively short and mild 2001 recession , for instance , was largely confined to the tech sector , with modest fallout to the rest of the economy .
That ’ s a question of particular interest in the U.S. , where the economic expansion has lasted almost 11 years .
But Federal Reserve Bank of Cleveland researchers found little evidence that duration of an expansion influences how bad the subsequent recession @ @ @ @ @ @ @ reason to think severe recessions ( like the one that ended in 2009 ) spawn strong expansions .
In terms of the depth of the downturn , it might well be worse than the recession of 2007-2009 .
But the speed of the recovery could be swifter , since this recession will reflect a shock ( the virus ) rather than the buildup of underlying economic imbalances .
Also on the positive side , American households are in a good spot .
They ’ re carrying less debt , and an increase in @ @ @ @ @ @ @ consumers ’ pockets .
Central banks around the world are cutting interest rates , intervening in markets , buying corporate assets or helping banks to keep lending to businesses .
The People ’ s Bank of China has injected billions into the economy , and the Bank of Japan boosted asset purchases to stabilize markets .
The U.S. Federal Reserve cut its benchmark interest rate to near zero .
But this time the onus may be on governments in part because central banks have used up a lot of their interest-rate ammunition over @ @ @ @ @ @ @ should be fiscal , first and foremost , ” European Central Bank President Christine Lagarde said .


washingtonpost--2020-03-24--Analysis | The Doctor Isn’t Quite Ready to Skype You Now

Telemedicine has for years promised a great deal , but previously delivered very little .
All of a sudden it looks like it has genuine potential .
French firm Doctolib SAS said last week that it had seen an 18-fold jump in the number of video consultations in the past month .
U.S. health insurers have meanwhile agreed to cover coronavirus-related telemedicine , while the federal government has made it easier for Medicare recipients to use .
Investors are keen on buying into an industry that the market leader , Teladoc Health Inc. , estimates could be worth $ 10 @ @ @ @ @ @ @ in Teladoc , the sector ’ s only publicly traded firm of note , have doubled in value since the start of the year – the S & P 500 is down about 30 % in the same period .
With a $ 12 billion market valuation , Teladoc trades on 16 times predicted 2020 sales , according to Bloomberg data .
That would make it the most highly valued stock in a basket of hot software companies compiled by Jefferies analysts David Windley and Ben Flox .
Even tech darling ServiceNow Inc. @ @ @ @ @ @ @ at 10 times expected sales .
Small wonder analysts have been revising down their recommendations on Teladoc stock .
Superficially , the conditions are ripe for matching investment capital with an industry that needs to grow .
When Tesla Inc. ’ s stock enjoyed a similar jump in January and February , the electric vehicle manufacturer did an opportunistic share sale .
But things aren ’ t quite so simple for the telemedicine industry .
Volatile markets make it hard to see how Teladoc , whose shares have seen 20 % swings , @ @ @ @ @ @ @ rivals could raise money by going public .
Venture capital firms are also targeting resources on the defense of existing investments rather than seeking out new ones .
To meet the surging demand effectively , they likely need that money .
Questions over where telemedicine ’ s profitability will settle may also make investors pause .
As with any new sector , first-mover advantages may be eroded over time by competition .
New entrants have been emerging fast , with venture capital piling into the burgeoning health-tech sector .
In 2018 , $ @ @ @ @ @ @ @ , according to PitchBook data .
While Teladoc ’ s share-price surge is comparable to Tesla ’ s , its business model is more akin to Uber ’ s : it ’ s essentially a two-way marketplace .
The value resides partly in the software that poses questions to patients to ensure they ’ re directed to the most suitable physician .
The main barrier to entry is signing up enough doctors to attract patients , and ( although less so today ) enough patients to use the service .
In tech , @ @ @ @ @ @ @ is to throw money at them — in this case , by providing generous financial incentives to both sides of the market to sign up .
As Uber , whose software connects riders to the nearest driver , has found , fights to outspend rivals may be best avoided .
The ride-hailing company sold regional businesses to well-capitalized competitors in India , China and southeast Asia — cashing out of markets where it lacks scale instead of getting into price wars in the hope of eventually emerging as the dominant player .
The @ @ @ @ @ @ @ operational challenges raised by Covid-19 .
Providers are still struggling to enlist sufficient doctors to meet demand , and are facing tech issues too , CNBC reported last week .
Doctolib has an advantage , since it already has a database of doctors from its original business arranging medical appointments more efficiently .
The industry has an opportunity to lessen the strain on the global health system .
But whether it can overcome financial and operational constraints to make a significant difference to the current crisis remains to be seen .