washingtonpost--2020-03-04--Analysis | Shopping Malls Face Their Coronavirus Reckoning

While fashion chains and do-it-yourself merchandisers rely less on China today than they did a decade ago , it ’ s inevitable there will be some supply problems .
The country is still the world ’ s biggest clothing exporter , and it makes everything from paddling pools to power tools .
Associated British Foods Plc , owner of cheap chic fashion chain Primark , and U.S. athletic apparel maker Under Armour Inc. have recently warned of the risks .
A full understanding of the impact will only come later .
Many spring fashions and home furnishings were shipped before @ @ @ @ @ @ @ that factories are returning to work .
But the closures in February will mean that some orders for the summer and potentially even the back-to-school shopping seasons may not reach stores in time .
For apparel retailers this is a particular risk .
If say , pastel hued coats designed to be worn in the spring arrive when the weather is warmer , those coats will need to be discounted to sell .
The worry now is not that shoppers won ’ t find what they are looking for , it ’ s @ @ @ @ @ @ @ mall and spend time browsing for it in the first place .
Almost half of U.K. retailers surveyed by consultancy Retail Economics and law firm Squire Patton Boggs had already seen a negative impact on their sales , with three quarters expecting revenue to be hit if the virus continues , according to a report published on Wednesday .
This adds to anecdotal evidence , from some retailers finding trading tougher than expected to others seeing footfall weaken .
In the U.K. , traffic to stores held up until Thursday , but as @ @ @ @ @ @ @ shopper numbers dropped , particularly in malls .
Even for a Tuesday evening in March , London ’ s Oxford Street seemed unusually quiet yesterday .
Expect the same pattern in the U.S. as new cases pop up in new cities .
It would be understandable if people hesitate to head to the mall and avoid lingering at the supermarket after filling their cart with hand sanitizer , toilet paper and food staples for a month .
After all , employers such as Amazon.com Inc. are telling workers to limit non-essential travel and @ @ @ @ @ @ @ events for more than 5,000 , leaving worried citizens to wonder how many people is too many people in one place .
And with Covid-19 ’ s symptoms silent for a long incubation period it can be tempting to avoid public spaces altogether .
Reasons for splurging at the shops are also evaporating as major events get canceled or delayed , and by extension people contemplate skipping parties , weddings or graduations .
For example , tech giants including Facebook Inc. and Twitter Inc. have pulled out of the South by Southwest tech @ @ @ @ @ @ @ means purchases that would have been made — from trendy sneakers to wear at SXSW to the suit to impress at any number of industry conferences — may be lost .
Travel is another boon to spending that risks being sapped .
Tour operator TUI AG said holiday bookings have weakened over the past week .
Unless they come back later on , that means fewer bikinis and tubes of suntan lotion filling shopping carts .
If the problem is consumers hibernating , then online retailers such as Amazon and Britain ’ s @ @ @ @ @ @ @ But if the issue is a lack of stimulants to spending , no one will be spared .
There ’ s also the knock on effect on restaurants and bars if consumers stay home .
There may be some offsetting factors .
For example , Brits and Americans have been bulk buying essentials in retailers such as Costco Wholesale Corp. Long-life milk , nappies and bottled water are all in demand at supermarkets .
At the other end of the spectrum , shares in Peloton Interactive Inc. defied the market rout last week @ @ @ @ @ @ @ work out at home , rather than go to the gym .
Any short-term silver linings will be lost if consumers simply hunker down .
The risk of a pandemic , as well as market uncertainty or worse , are hardly conducive to splashing out .
Britons had started spending again after pulling in their purse strings during the impasse over their departure from the European Union .
In contrast , U.S. consumer confidence has remained remarkably robust .
But cracks are emerging .
U.K. consumer confidence dropped for the first time in @ @ @ @ @ @ @ the Centre for Economics and Business Research .
Meanwhile , in the U.S. , the Bloomberg Weekly Consumer Comfort Index suffered its largest one-week drop since late October in the week ending Feb. 23 .
As with trading , it ’ s hard to separate out what ’ s due to the virus and what ’ s down to other factors .
But either way , it ’ s a timely reminder that faced with an epidemic , consumer demand also isn ’ t immune .


washingtonpost--2020-03-04--Analysis | GE’s Big Worry Is a Virus, and That Counts as a Win

But the company also flagged a notable turning point : GE expects the long-beleaguered power unit to actually generate positive free cash flow starting in 2021 after years of negative numbers .
The company said the renewable-energy unit – expected to burn more than $ 1 billion of cash in 2020 – is GE ’ s “ key focus ” this year , echoing CEO Larry Culp ’ s comments on a late January earnings call .
To make that a priority would have been unthinkable a year ago when the larger , troubled power division had just announced a @ @ @ @ @ @ @ deepening losses .
It ’ s an encouraging sign that the business is seeing decent enough progress that Culp can divert his attention elsewhere .
Part of what made GE ’ s recent financial distress so incredible was that it first came to light at a time when most industrial peers were enjoying the benefits of the U.S. tax overhaul and a recovery from the oil-price-driven downturn of 2015 and 2016 .
While other manufacturers were later dogged by questions about the trade war , that was mostly just a footnote at GE @ @ @ @ @ @ @ turnaround in its power unit and its bloated and unpredictable insurance liabilities .
I don ’ t want to belittle the risks from the coronavirus here because they are meaningful , but in general , the tone of this outlook meeting feels … dare I say , normal for an industrial manufacturer right now ?
Or at least as close to normal as a company that clings to financial complexity like a security blanket is going to get .
This being GE , there is always a risk of some kind of nasty @ @ @ @ @ @ @ brought none of those .
In fact , we haven ’ t had one in a while now and it feels like Culp is hitting his stride on a turnaround .
GE had previously cited Boeing Co. ’ s grounded 737 Max as the biggest risk to its cash-flow guidance , but the companies have since reached an agreement on payment terms for both 2019 engines attached to parked planes that can ’ t be delivered yet and those it produces in 2020 while Boeing works through a logjam of grounded jets .
@ @ @ @ @ @ @ a dampening effect the coronavirus will have on its progress .
Before Wednesday ’ s meeting , GE shares had fallen about 13 % since the beginning of February amid a broader market sell-off on coronavirus fears .
For GE , the impact includes supply-chain disruptions , the sudden upheaval of a steady trend of aerospace traffic growth and the drop in interest rates .
It ’ s entirely possible that these issues extend beyond the first quarter and that the cash impact over the course of the year is more significant .
@ @ @ @ @ @ @ unit right now , but they risk ensnaring the rest of the company over time , while GE is seeing weaker China demand for certain products .
It ’ s fair to ask if GE , like its engine joint-venture partner Safran SA , is being too optimistic about the possible hit to lucrative spare parts and maintenance work in the aerospace division from the marked drop in demand .
Planes bearing GE engines have seen 60 % fewer departures out of China .
GE is still calling for overall aviation free cash @ @ @ @ @ @ @ up relative to the $ 4.4 billion generated last year .
Meanwhile , GE ’ s pension obligations increase by about $ 2.3 billion with every 25 basis-point drop in the discount rate .
The company assumed a 3.36 % discount rate at the end of 2019 for its principal pension plan ; yields on 10-year Treasuries dropped below 1 % on Tuesday after the Federal Reserve announced a surprise 50 basi-point cut to interest rates .
The company ’ s long-term care insurance liability also varies with interest rates , which puts @ @ @ @ @ @ @ GAAP charge announced last year and the $ 100 million expected increase to statutory reserves announced in February in more concerning context .
GE said it ’ s monitoring testing of its insurance reserves , which isn ’ t included in its 2020 outlook .
While that liability appears to have stabilized and is less of a un-analyzable bogeyman than it was , it hasn ’ t gone away .
To say GE has overcome all of its challenges would be a step too far .
But when the CEO is devoting a @ @ @ @ @ @ @ every other industrial company is talking about , too , that ’ s as good a benchmark as any of progress .

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washingtonpost--2020-05-15--Even Disney Reopening Is No Magic Bullet to Orlando’s Recovery

Motels , vacation home rentals and other lodgings on the U.S. Route 192 corridor south of Orlando can come back to life only when tourists are once again willing to board crowded planes and line up to enter crowded attractions , which could be years away .
That ’ s beyond the control of Florida ’ s governor .
It ’ s beyond even the mighty Walt Disney Co .
Although hotels were allowed to remain open under Florida ’ s lockdown that began in early April , many are all but vacant .
East of Schnaars ’ hotel on @ @ @ @ @ @ @ the empty parking lot of Pradeep Sharma ’ s motel , Seasons Florida Resort .
With no guest bookings , Sharma faces about $ 15,000 in monthly costs despite laying off 24 workers .
The picture is grim for America ’ s theme-park capital .
Orlando is expected to be one of the hardest-hit economies in the U.S .
Almost 350,000 positions in the Orlando-Kissimmee-Sanford area are in industries at high economic risk from the pandemic crisis , according to the Brookings Institution , a Washington , D.C. , research group .
Disney @ @ @ @ @ @ @ .
The major Orlando parks – Disney World , Universal Studios and SeaWorld – usually draw tens of millions of tourists annually .
Disney ’ s park attendance throughout the U.S. , which was an estimated 83 million visitors last year , may end up halved for 2020 .
Its Orlando park closed in mid-March , a couple of weeks before Florida ordered all non-essential businesses to shutter .
That pain trickles down quickly .
As part of his plan to gradually reopen Florida , Governor Ron DeSantis said Friday he invited amusement @ @ @ @ @ @ @ plans , though he wouldn ’ t predict when he would approve such a step .
Schnaars , who co-owns Destiny Palms Hotel along Highway 192 , had been looking forward to a banner year .
February bookings were at a record .
But then European visitors started canceling as the coronavirus spread across Italy and Spain .
On March 11 , President Donald Trump announced a ban on most travel from Europe into the U.S .
The next morning , Schnaars lost $ 75,000 in bookings .
These days he ’ s @ @ @ @ @ @ @ a sense of how potential tourists might approach future travel .
It ’ s not just that fewer people will be able to afford trips .
New York ’ s governor recently warned all states of a potentially fatal illness in children that might be related to the novel coronavirus , confirmed by a new study from Italy .
Sharma , of Seasons Florida Resort , has been ambivalent about seeking aid from the government stimulus programs aimed at small businesses .
For loans under the Paycheck Protection Program to be forgiven , @ @ @ @ @ @ @ payroll now and must rehire the same number of employees that they had before the shutdowns .
With no certainty of when Disney will reopen , both criteria are a challenge for Sharma and other motel owners .
According to a study by the American Hotel & Lodging Association , most hotel owners could be worse off financially if they accept loans under the Paycheck Protection Program and meet its criteria than if they simply close .
In a typical year , the Orlando area would be wrapping up one of its busy @ @ @ @ @ @ @ .
This spring , however , Sharma said he is anxiously awaiting one piece of news : “ Every day there are rumors about when Disney is going to open.
” Disney is beginning to test visitor demand .
It aims to open Disney Springs , its mall outside the Orlando park , on May 20 .
Because China is ahead of the U.S. in recovering from its first Covid-19 outbreak , the company reopened its Shanghai theme park this week , after a hiatus of more than three months .
Bloomberg Intelligence @ @ @ @ @ @ @ note that Disney will use its Shanghai experience as a blueprint to reopen other parks worldwide , perhaps reaching full capacity gradually over years .
The company didn ’ t respond to requests for comment .
Some of the Orlando-area businesses in Disney ’ s orbit see stirrings of hope .
Although Florida vacation rentals are not yet allowed to host vacationers , Lance and Karin Boyer ’ s business , Florida Dream Homes , started offering discounts earlier this month for bookings later in the year and received some interest .
Although @ @ @ @ @ @ @ bookings can ’ t come soon enough for them .


washingtonpost--2020-05-15--Analysis | Trump’s China Bark Is Worse Than His Bite

For all the intemperate language , there ’ s less to this latest clash than meets the eye .
Trump and Beijing are both adept at filling their diplomatic language with sound and fury , signifying nothing .
A look at China ’ s other strained ties shows there ’ s usually far more realpolitik than ego at play .
Take Australia .
The testy relationship with Canberra is going through another bad patch , with China threatening tariffs on barley and banning beef imports from some slaughterhouses after Australia called for an inquiry into whether its wet markets were @ @ @ @ @ @ @ Australia exports more to China than to its next four biggest trade partners put together .
From China ’ s perspective , only the U.S. , Japan and South Korea buy more mainland goods .
Yet Canberra has been in the doghouse with Beijing for several years .
The last meeting between their leaders was in 2016 .
Chinese President Xi Jinping hasn ’ t managed to fit the country into his busy travel schedule since 2014 .
Recent years have been dotted with spats over foreign-influence laws , China ’ s human @ @ @ @ @ @ @ writer Yang Hengjun , and even a doping scandal around now-banned Olympic swimmer Sun Yang .
In spite of all that , economic and social relations are as good as they ’ ve ever been .
Chinese imports from Australia have never been higher than in the 12 months through December ; the number of Chinese students enrolling at the country ’ s universities was also at a record , running nearly double the level when warmer ties prevailed back in 2014 .
Last year ’ s trade diplomacy stand-off centered around claims @ @ @ @ @ @ @ impose a soft ban on Australian coal exports , but in the end trade volumes for that commodity rose about 21 % from a year earlier in the 12 months through March .
The best explanation for this is that while Beijing ’ s leadership might try to bully smaller nations like Norway , self-preservation instincts make it entirely pragmatic in how it deals with key exports from major trading partners .
That ’ s even been the case with the likes of South Korea : Its shipments to China increased by 11 @ @ @ @ @ @ @ by a highly public dispute over a U.S.-supplied missile shield system .
Brazil ’ s President Jair Bolsonaro came to office seemingly hell-bent on antagonizing Beijing at every opportunity .
China ’ s leaders have steadfastly refused to take offense , and have even worked hard to woo a nation they see as a rich source of iron ore , soybeans and meat .
The U.S. seems to behave in a similar manner , in spite of all the heated words from the Oval Office .
Three years into a simmering trade war @ @ @ @ @ @ @ businesses in 2019 was running at the $ 14 billion a year level it ’ s followed in almost every year since 2005 , according to Rhodium Group , a research consultancy .
While flows in the opposite direction plummeted , that was as much to do with a general reversal in China ’ s attitude to outbound investment and tougher regulatory scrutiny in Washington , as with a decision to punish the U.S. for its trade stances .
The slow deterioration of the U.S.-China relationship is still worrying , especially as the @ @ @ @ @ @ @ in Washington and almost every echelon of the Chinese leadership .
Countries that start to see themselves as rivals can end up behaving that way .
Unless efforts are made to restore comity , the vicious spiral of mistrust can be impossible to escape .
Still , whenever leaders bicker it ’ s worth remembering that the real ties between nations are among people and businesses , rather than diplomats and presidents .
At that level , the relationship still remains hearteningly warm .
David Fickling is a Bloomberg Opinion columnist covering commodities @ @ @ @ @ @ @ companies .
He has been a reporter for Bloomberg News , Dow Jones , the Wall Street Journal , the Financial Times and the Guardian .


washingtonpost--2020-05-14--Analysis | China Inc. Is Unloved Abroad, Unwanted at Home

Unlike most other nations , China doesn ’ t allow the Public Company Accounting Oversight Board — an auditor of auditors , set up after the Enron scandal — to inspect the work papers of its U.S.-listed companies .
The Securities and Exchange Commission has issued warnings about the quality of these reviews , even when the industry ’ s biggest names are signing the annual reports ( as was the case with Luckin ) .
SEC Chairman Jay Clayton singled China out in a public statement late last month .
The SEC has good reason to be annoyed , @ @ @ @ @ @ @ only hardened with a new law that took effect in March .
Item 177 states that overseas regulators can ’ t directly inspect or collect evidence on Chinese soil .
In addition , domestic companies aren ’ t allowed to provide any relevant supporting documents without permission .
As a result , the cloud of suspicion over these businesses will only grow darker .
Even the most well-meaning among them won ’ t be able to prove otherwise .
Going home was always the grand slogan whenever China Inc. felt mistreated or undervalued @ @ @ @ @ @ @ frenzy in the first half of 2015 saw a wave of take-private deals , to the tune of $ 24 billion , as companies trading in New York rushed to go public in Shanghai or Shenzhen .
The timing seems ripe again , especially now that mainland exchanges and Hong Kong both allow secondary listings .
But there ’ s a new problem : China doesn ’ t want these companies back .
Its bourses ’ secondary listing requirements rule out most small caps .
Hong Kong , for instance , demands that @ @ @ @ @ @ @ cap over $ 5.2 billion , or barring that , $ 129 million in annual sales and a market cap of at least $ 1.3 billion .
As for China , secondary listing rules released last month are intriguing .
Beijing relented on its obsession with blue chips — the required market cap was lowered to $ 2.8 billion from $ 28 billion .
There ’ s a catch , though .
Smaller companies must have “ independent research , ” “ world-leading technology ” and an “ edge ” in their field @ @ @ @ @ @ @ t bother if you ’ re sub-scale .
The likes of e-commerce retailer Vipshop Holdings Ltd. , online dating app Momo Inc. or after-school education provider New Oriental Education & Technology Group Inc. can stay put .
What China wants is hard tech that spends millions on research and specializes in semiconductors and artificial intelligence .
Alibaba Group Holding Ltd. has become the face of China for retail investors in New York , while e-commerce operator Pinduoduo Inc. and social video site Bilibili Inc. have become hedge fund playthings .
Yet hundreds of @ @ @ @ @ @ @ Of the 335 stocks , only 27 have a market cap of more than $ 2.8 billion , data compiled by Bloomberg show , and most would still need to pass Beijing ’ s “ edge ” test .
As for Hong Kong , less than 40 stocks are eligible for a dual listing .
Will Beijing allow hundreds of its companies stranded overseas to languish ?
You bet .
If you can ’ t make it in New York , Shanghai isn ’ t for you either , the thinking goes .
@ @ @ @ @ @ @ equivalent — the big names that give the U.S. tech supremacy — more obscure mainland rivals will be forgotten .
Except , of course , by short sellers .


washingtonpost--2020-05-15--Analysis | Nobody’s Splurging on a $10,000 Watch Just Yet

Chairman Johann Rupert warned of up to three years of “ grave economic consequences , ” as the owner of the Cartier brand reported a 22 % fall in operating profit in the year to March 31 .
He described the current crisis not as a pause , but a reset .
That assessment is a lot more downbeat than those provided by the likes of rivals LVMH Moet Hennessy Louis Vuitton SE and Gucci-owner Kering SA .
Some of the difference may be because about 70 % of Richemont ’ s sales come from watches and jewelry , often @ @ @ @ @ @ @ luxury wish list .
When shopping for revenge with the coronavirus ’ s economic costs still pilling up , a $ 2,000 handbag may be higher up the list of priorities than a $ 10,000 watch .
It ’ s only when true discretionary spending returns that Richemont will benefit from its efforts to clean up its watch business after an excess of Cartier , Panerai and IWC models risked hurting its brand appeal .
The company has a strict rule that it doesn ’ t supply more watches to boutiques than are @ @ @ @ @ @ @ of Swiss timepieces already feeling the pain , plus the high fixed costs in watchmaking , Richemont ’ s caution here is justified .
Richemont has been building a powerful digital business , positioning it to benefit from a surge in online shopping as consumers shy away from returning to malls and department stores .
In 2018 , the company paid $ 3.3 billion to take full control of the high-end luxury platform Yoox Net-a-Porter ; purchased the Watchfinder website ; and formed a joint venture with Alibaba Group Holding Ltd. , the @ @ @ @ @ @ @ accounted for about 12 % of global luxury sales in 2019 , according to Bain & Co. estimates .
But that could rise to about 30 % by 2025 .
It ’ s true that during the lockdowns Yoox Net-a-Porter , known as YNAP , was hurt by warehouse closures and the division still needs to make a profit .
But as competitors seek to prosper in this market , Richemont ’ s digital proposition could become an interesting acquisition target too .
Meanwhile , Richemont halved its divided , to 1 Swiss @ @ @ @ @ @ @ of 2.4 billion euros , it decided to prioritize prudence .
However , it is also considering giving shareholders the option to buy shares at a future date , at the price when the dividend was declared .
While the company has yet to work out the details , that implies that management believes conditions will eventually get better .
There would be little upside for loyal investors otherwise .
Still , shareholders seem to be taking Rupert ’ s downbeat assessment to heart .
The stock fell about 3 % on Friday @ @ @ @ @ @ @ it trades at a significant discount to the Bloomberg Intelligence top luxury peer group .
Richemont typically takes a long-term view .
Its perspective on the Covid-19 pandemic looks no different .
The upside is that it may transform the YNAP deal , which was a rare strategic flip-flop for the group , into a prescient purchase .


washingtonpost--2020-04-22--Analysis | China’s Factories Are Slowly Waking Up

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washingtonpost--2020-04-22--Saving Small Businesses One Mail-Order Cheesesteak at a Time

“ We ’ re making 8,500 cheesesteaks a week for Goldbelly , ” says Pat ’ s owner , Frank Olivieri .
The Philly stalwart has already shipped about 55,000 of its melty cheese-meat behemoths , flash-frozen and requiring only reheating , since mid-March ; orders are sold out through the end of May .
Ess-a-Bagel Chief Operating Officer Melanie Frost says her landmark stores are shipping about 500 orders , or 6,000 bagels , a day because of the company .
“ And we could do more .
Thank goodness for Goldbelly , ” she says .
Goldbelly has @ @ @ @ @ @ @ lovers procure authentic New Orleans king cakes and Texas pecan pie .
Chief Executive Officer Joe Ariel started the company with about $ 3 million in funding from sources such as Intel Capital Corp. and the Silicon Valley incubator Y Combinator Inc .
It has grown steadily through word of mouth—and relentless online advertising .
But the site has seen accelerated growth since shelter-in-place rules took effect .
It ’ s currently one of the few success stories in the food world during the pandemic .
Ariel says business is up 200 % @ @ @ @ @ @ @ period last year , but he declines to disclose specific figures .
“ We ’ re seeing more demand than at Christmas , which is our biggest time , ” he says , adding that the order size has gone up about 30 % .
The service currently works with some 500 vendors including Walter ’ s Hot Dog Stand in Westchester , N.Y. , and Snow ’ s BBQ in Lexington , Texas .
Since the pandemic began , Ariel says , he ’ s been fielding hundreds of requests a day @ @ @ @ @ @ @ .
Newly activated is New York ’ s most famous pepperoni slice , from Prince Street Pizza , which is shipped frozen , ready to crisp in the oven .
“ For local restaurants , we can help open up the rest of the country .
People understand the value proposition of food e-commerce much more than they did a couple of months ago , ” Ariel says .
Apps such as Seamless and Caviar can transport many of the foods Goldbelly offers across town , but they can ’ t get a @ @ @ @ @ @ @ Los Angeles to Boston .
Potential competitors including Mouth and IGourmet specialize in curated packages such as cookies and cheeses , as opposed to the decadent dishes that might have starred in Man v. Food .
For small businesses that depend on expanding their scope beyond the now evaporated local traffic , the service has become a vital source of revenue .
Cooped-up , bored people are willing to pay a premium for indulgent foods that make them feel better , and Goldbelly is accommodating them—especially those who might crave dishes from a @ @ @ @ @ @ @ .
A canceled vacation to New York can be evoked with mile-high deli sandwiches and black-and-white cookies .
To capitalize on the emotional connection people have to local specialties , the company has released a new subscription box that benefits first responders .
Customers can order three- or six-month packages from Chicago , Los Angeles , Miami , New Orleans , New York , and San Francisco , filled with signature foods ; 100 % of the proceeds go to care packages that are sent to first responders and health-care workers based on @ @ @ @ @ @ @ nominate people to receive them .
( Chrissy Tiegen was the first to place an order , and she went further , sending an additional donation of Little Italy cannolis to paramedics in Indianapolis . )
“ We ’ re thrilled to offer our guests the ability to re-create the Shack experience in their own homes , ” said culinary director Mark Rosati via email .
“ Now more than ever , we need to find new ways to connect with our guests.
” ( Ariel says that the backlash over the company @ @ @ @ @ @ @ loan—subsequently returned—hasn ’ t hurt sales so far , though he received comments . )
One reason a major company such as Shake Shack forms a partnership with Goldbelly is because the company is very good at packaging invariably delicate products .
It spends months figuring out optimal conditions for shipping , whether its refrigerated and ready to reheat , like a cheesesteak or pizza ; or a kit , like Pittsburgh ’ s famed Primanti Brothers sandwich , a mess of griddled meats topped with fries and coleslaw , to be assembled @ @ @ @ @ @ @ takes time to onboard potential vendors , leading to that bottleneck in requests .
Ariel likes to check the quality of each item and how it can survive shipping in good shape .
The cost of a Goldbelly order varies .
The eight-pack ShackBurger costs about as much— $ 49—as it would to pick up the cooked burgers at the Madison Park flagship , but shipping starts at $ 15 .
An eight-pack of Pat ’ s Philly cheesesteaks is $ 99 , not including shipping ; those sandwiches are about $ 6 @ @ @ @ @ @ @ And though food production is better for restaurants than , say , T-shirt sales because it entails hiring workers to cook food , it doesn ’ t replicate pre-Covid-19 sales .
Olivieri at Pat ’ s says he had to lay off 11 people and is working with a skeleton crew .
On the Philadelphia Philly ’ s opening day , “ we might do 5,000 sandwiches , ” Olivieri says .
“ It ’ s nothing like that now.
” They get some business from Seamless deliveries and relentless fans who show @ @ @ @ @ @ @ , he says , “ if it wasn ’ t for Goldbelly , our doors would be closed .
”


washingtonpost--2020-04-22--Analysis | Oil’s Dividends May Not Withstand Covid and Climate

Aggregate indebtedness at the big five Western oil majors — BP Plc , Chevron Corp. , Exxon Mobil Corp. , Royal Dutch Shell Plc and Total SA — has also jumped since 2014 .
And as a group , they only just covered capital expenditure and dividends from operating cash flow in 2019 , when Brent crude oil averaged $ 64 a barrel .
So while they aren ’ t quite in the same boat as the services firms , they ’ re getting uncomfortable .
There is a strong case to be made that having a progressive dividend in @ @ @ @ @ @ @ is asking for trouble .
Big Mining acknowledged as much back in 2016 , when BHP Billiton Plc , for example , switched away from progressive dividends to tying its payouts to a percentage of ( fluctuating ) profits .
A dividend that erodes the balance sheet , thereby raising the risk premium , stops being a down-payment on value and ultimately becomes a drag on it .
Put another way , above a certain level , dividend yields indicate the market isn ’ t paying up for promises of more — so @ @ @ @ @ @ @ have ridden out prior downturns , usually leaving dividends untouched , through a mixture of borrowing , selling assets and cutting costs .
But the seams have split at various points .
BP temporarily suspended dividends after the Deepwater Horizon disaster ( a decade ago this month ) , and both Royal Dutch Shell and Total instituted scrip dividend programs — whereby investors take new stock rather than cash — in the previous oil crash .
Shell ’ s annual dividend per share , meanwhile , has been flat since 2014 , the @ @ @ @ @ @ @ Psychology is a big factor .
The dividend is a fixed point to cling to in a changing world .
It ’ a also the last bond of trust between the sector and investors .
Big Oil ’ s capex boom saw capital employed for the big five jumping by half even as earnings dropped by almost half over the past decade , trashing returns .
Viewed in that light , the dividend is an insurance policy against doing stupid stuff .
“ Dividends and debt prevent undisciplined companies from being more undisciplined @ @ @ @ @ @ @ analyst at Evercore ISI .
If management doesn ’ t have a loose billion or so lying around , they ’ re less likely to blow it on an ill-timed acquisition or mega-project .
“ The bottom line is that it ’ s not that dividends are too high for Big Oil , it ’ s capital discipline that is too low , ” Terreson adds .
As it is , consensus forecasts for 2020 have the five majors generating almost $ 29 billion of free cash flow .
That factors in big @ @ @ @ @ @ @ would cover barely half of last year ’ s dividend payments .
Sure , this is a plague year .
But the damage done to the global economy and the glut of barrels building up in storage mean recovery could take a while , and structural changes to demand may have accelerated .
Even if oil prices were to rise strongly in 2021 for whatever reason , the already-delicate math would demand budgets remain on a tight leash .
Remember , regardless of Covid-19 , Exxon was having a hard time convincing investors @ @ @ @ @ @ @ counter-cyclical spending boom .
On that front , it ’ s worth noting the stock with the lowest yield of the group , Chevron Corp. , enjoys that position in large part because it has shifted messaging and cash-flow priorities toward payouts ( plus it has a good balance sheet ) .
The company even walked away from a takeover battle last year , and looks far better for it compared to the nominal winner , Occidental Petroleum Corp .
The same goes for another large oil and gas producer outside the group @ @ @ @ @ @ @ payout policy as a way of dealing with a future of lower but more volatile oil prices .
If investors aren ’ t willing to put a big multiple on oil earnings 10 years out , then Conoco ’ s approach is to offer them something tangible they might value in the interim .
It also weights those payouts more toward buybacks , giving itself wiggle room in a tight spot such as now .
This isn ’ t Big Mining ’ s payout ratio approach , but closer to it in spirit @ @ @ @ @ @ @ mergers and acquisitions .
Two decades ago , the majors led consolidation amid another crisis .
Those deals were about taking out costs but also gaining scale for new mega-projects .
We are now at another natural point for restructuring the industry .
This time , though , empire building will be met with disinterest , if not outright shareholder activism .
Any deal will have to not only enhance return on capital but also dividend coverage .
The biggest advantage the majors hold is their lower cost of capital at a time @ @ @ @ @ @ @ rising .
So any deals should be mostly paid in stock — which then adds to the payout obligation .
Alongside earnings accretion , synergies-to-dividends could become a useful multiple .
We aren ’ t likely to see any shift in dividend policy in the immediate future ; like everyone else , the majors will want to see how things shake out in the months ahead .
If the Covid-19 crisis lingers and yields remain elevated , though , the pressure on more indebted companies to reset could mount quickly , especially as @ @ @ @ @ @ @ ’ t going away .
Muddling through the cycle doesn ’ t work quite so well if the overall arc is beginning to bend downward .


washingtonpost--2020-04-22--Analysis | Facebook and Ambani Can Be Happy Together

But as we ’ ve said before , Ambani ’ s strategy has three connected elements : carriage , content and commerce .
Jio charges practically nothing for voice calls , and little for data .
Prices will rise now that Jio ’ s aggressive entry is effectively turning the fragmented telecom market into a duopoly .
Still , it ’ s unlikely that Indians who came online only because Ambani made it affordable would be able or inclined to pay much for JioTV or JioCinema .
That ’ s where “ phygital ” commerce — the combination of physical @ @ @ @ @ @ @ — might have the biggest appeal for Zuckerberg .
As Facebook says , the deal would bring together JioMart and WhatsApp to enable people to connect with businesses .
A validation of this thesis is under way , as the 30 million neighborhood stores Ambani wants to link up with JioMart prove their value to society during one of the world ’ s harshest coronavirus lockdowns .
The mom-and-pop stores that rule Indian retail are keeping people fed .
Online commerce , which has only a sliver of the market , is practically @ @ @ @ @ @ @ Inc. was keen to dish out free internet service to India ’ s 1.3 billion people .
Zuckerberg thought he was being charitable by offering a low-bandwidth entry to those on the wrong side of the digital divide to join the 21st century .
Critics and the Indian government saw it differently .
The so-called Free Basics service looked like a walled garden , with Facebook the tallest tree .
Zuckerberg ’ s naive view was that India wouldn ’ t be able to compete with the internet-centered economy of China if it @ @ @ @ @ @ @ If people couldn ’ t afford to get online , especially in rural regions , how would they transact digitally ?
Beyond this grand altruistic gesture stood a need : expansion .
While the U.S. and Canada account for around 10 % of Facebook users , they contribute almost half of revenue .
The social media empire needs new markets to keep growing .
Despite learning Mandarin and making multiple trips to China , the world ’ s biggest market remains out of Zuckerberg ’ s grasp .
India is the next best @ @ @ @ @ @ @ made it accessible by forcing down data charges and offering cheap handsets and services in Indian languages .
A recent article in news website Morning Context names Michael Grimes , the global co-head of Morgan Stanley ’ s technology investment banking , as the prime mover behind the Jio-Facebook deal .
Grimes has the ability to “ create something out of nothing , ” the article quotes an unidentified telecom analyst as saying .
( Morgan Stanley was the financial adviser on the transaction , Jio ’ s parent , Reliance Industries Ltd. @ @ @ @ @ @ @ But while the investment is expensive , Jio isn ’ t all fluff .
Customers in China and Indonesia have shown a preference for superapps , which allow people to interact with an umbrella brand for everything from chatting with friends to booking cabs and managing money .
Ambani could be best-suited to try the model in India , especially if he gets to build it around the popular WhatsApp .
The pandemic may also be forcing Ambani to reassess his options .
The deleveraging he promised investors last August after a seven-year @ @ @ @ @ @ @ more easily achieved with Facebook ’ s cash than the planned sale of a stake in his refining and petrochemical operations to Saudi Aramco .
With the oil glut unlikely to reverse soon , the mirror image of OIL appears more like the real thing .
Andy Mukherjee is a Bloomberg Opinion columnist covering industrial companies and financial services .
He previously was a columnist for Reuters Breakingviews .
He has also worked for the Straits Times , ET NOW and Bloomberg News .


washingtonpost--2020-04-21--Analysis | Subscribing to Netflix Is No Longer a Choice

Walt Disney Co. launched Disney+ in November , and by the time the pandemic arrived , users may have already exhausted its best new content , such as its “ Star Wars ” series , “ The Mandalorian.
” Meanwhile , Netflix had a trifecta of hits in February and March alone that showcase the refreshing breadth of its library : Its wild docuseries “ Tiger King : Murder , Mayhem and Madness ” averaged a whopping 19 million viewers at any given minute over the first 10 days of its release , according to Nielsen .
A week later @ @ @ @ @ @ @ ” an intensely dark series full of clever twists that dare I say echos the quality of HBO .
There was also the highly binge-able “ Love Is Blind , ” which put a new spin on dating-themed reality shows and just so happened to foreshadow what has since become a reality for many people — dating remotely before meeting the other person .
At a time when Netflix has never had more competition , it ’ s proving its value .
“ So far , the new bundles have been complements , @ @ @ @ @ @ @ an analyst for MoffettNathanson LLC , noted in an April 17 report .
He found that about 80 % of people using Amazon Prime Video , Hulu , Disney+ and Apple TV+ still also use Netflix : Of course , with Hollywood shut down , Netflix and its rivals will all struggle to keep their apps stocked with enough content so that subscribers stay loyal .
The good news for Netflix is that it will still be able to release all its originally planned programming for the second quarter ( it says the @ @ @ @ @ @ @ to create dubbed versions in other languages for the time being ) .
It ’ s hard to predict anything beyond this quarter for any industry .
With new productions on hold , Netflix ’ s free cash flow was actually — gasp — positive .
But if anything , this insatiable demand for content is a reminder that streaming companies will have to keep spending to keep subscribers happy and get creative about how to turn this new industry into a consistently profitable one .
Even so , it ’ s now @ @ @ @ @ @ @ would cause the credit market to turn on Netflix and break its business model was short-sighted .
Likewise , other extreme points of view will gradually be proven wrong : It ’ s year two of the streaming wars and there is still no “ Netflix killer , ” nor is Netflix the killer that will destroy all its new copycats .
These are all positives for consumers .
It ’ s certainly fair to continue to quibble about Netflix ’ s absurd valuation : Its $ 200 billion enterprise value is more @ @ @ @ @ @ @ are “ treating this company like it ’ s Amazon , ” as if it will put all its rivals out of business , which is unlikely , said Michael Pachter , an analyst at Wedbush Securities , during a Bloomberg TV interview Tuesday .
He said the stock price is “ exceedingly optimistic ” — and he ’ s right .
It ’ s just that Netflix hasn ’ t given anyone a reason not to be , or at least not yet .
And a little optimism is refreshing right about @ @


washingtonpost--2020-04-12--Analysis | A 100-Year Chance to Shake Up Debt and Taxes

Industrial losses may need to be socialized en masse to get displaced workers back on the job and prevent the global economy from spiraling into depression .
To manage the backlash against using public money for private gains , more countries are likely to follow the U.S. Congress and the U.K. banking regulator , which have pushed for a halt to buybacks and dividends .
But corporate rescue this time may also involve a rewriting of accounting rules to encourage deleveraging , so that bailouts are needed less often and are less costly .
It was in 1918 , when @ @ @ @ @ @ @ an excess profit tax on wartime corporate income to the deadly outbreak of the Spanish flu , that the U.S. relented and allowed all interest paid to be deducted from taxable profit .
It was a temporary measure to give firms relief , but although the extra tax burden went away in 1921 , the favorable treatment of interest income stayed and was copied around the world .
The debt bias is very real .
In the late 1950s , academics Franco Modigliani and Merton Miller controversially asserted that corporations should be indifferent @ @ @ @ @ @ @ in their capital structure .
Five years later , the professors issued a correction , acknowledging that a dollar of debt would raise the value of a firm by 50 cents , the then-prevailing corporate tax rate .
( 1 ) The idea of a withholding tax on interest payments has done the rounds since at least 1982 , but how does a foreign investor or a tax-exempt local investor get credit ?
No country would want foreigners to shun its corporate debt and go where there ’ s no withholding .
Developing @ @ @ @ @ @ @ tax authorities hate it when multinationals give loans to their profitable subsidiaries , thus reducing their taxable income in poor nations.On the other hand , it didn ’ t take long for local firms in Asia , Latin America or Eastern Europe to figure out that they , too , could attract large pools of Western savings by souping up shareholder returns with higher leverage .
It helped that the cost of the debt was tax deductible .
To the extent the borrowings came from state-owned local banks , the lenders ’ interest @ @ @ @ @ @ @ and dividends .
After the 2008 crisis , policymakers looked aghast at the debt-financed expansion in banking over the previous three decades .
But beyond specifying higher regulatory capital , they couldn ’ t do much to shake the inertia .
As McKinsey & Co. noted in 2010 , replacing the stock of financial sector debt with equity in just 14 countries would have required more than 60 % of the then-existing global equity capital .
No wonder , then , that the world economy has kept accumulating debt .
China stepped up @ @ @ @ @ @ @ in a slow-speed world ; India wrecked its finance industry to achieve China-like expansion .
On the supply side , as banks retreated under regulatory pressure for more capital , private credit from insurers , pension funds and other non-banks took their place , growing to a $ 300 billion industry by 2018 from $ 100 billion in 2010 .
The additional corporate value garnered with cheap debt isn ’ t a free lunch .
An International Monetary Fund staff discussion note warned in 2011 that “ costs to public welfare are larger @ @ @ @ @ @ @ thought.
” The 2017 overhaul of the U.S. tax code restricted interest deduction to 30 % of earnings before interest , tax , depreciation and amortization as an offset for slashing the corporate rate to 21 % from 35 % .
The U.K. , too , put a limit .
But then came the coronavirus .
The sheer scale of economic disruption and job losses means that governments and central banks will join hands .
Japan ’ s near- $ 1 trillion fiscal spending has set the tone for outsize government borrowing .
@ @ @ @ @ @ @ role , governments will also want to show that they aren ’ t running a Ponzi scheme .
Disallowing interest deduction will generate resources as well as play into the zeitgeist for more public welfare .
As independent strategist Gerard Minack noted recently , our world is primed to maximize financial returns on the assumption that nothing will go wrong .
When things do , not just once but twice in 12 years , politicians must ask whether a smaller , more resilient firm , valued a little less than before , is @ @ @ @ @ @ @ .
Minack also believes that temporary restrictions on stock buybacks could be accompanied by changes to the tax treatment of debt .
With industries of all hues begging governments for survival capital , rebates and even employee wages , bargaining power of firms is at rock bottom .
The unfinished tax reform agenda has a chance .
Given that suppliers of debt financing are spread all over the world , a withholding tax on interest payments could cause dislocations .
“ A less disruptive option , ” as law professors Michael Graetz and @ @ @ @ @ @ @ 2016 essay , “ might be to deny deductions for all or part of interest payments at the corporate level .
”


washingtonpost--2020-04-12--Analysis | The Historic Oil Price Truce Won’t Last

The drama was provided by Mexico refusing to accept its allotted cut .
The farce followed when the country ’ s oil minister left the virtual OPEC+ meeting to hold separate talks with her U.S. and Canadian counterparts , while the other energy ministers agonized for hours , and then for days , over how to respond .
The tedium ?
Well , that was just the bits in between .
Mexico was asked to cut 400,000 barrels a day of production in the first phase of an OPEC+ deal that would run for an unprecedented two years .
It @ @ @ @ @ @ @ a slightly higher baseline than what was asked for .
An unlikely white knight appeared to ride to the group ’ s rescue on Friday in the form of U.S. President Donald Trump .
He proposed an arrangement with Mexico ’ s President Andres Manuel Lopez Obrador ( known as AMLO ) in which 250,000 barrels a day of the “ market-driven ” decline in U.S. output would be rebranded as “ Mexican.
” But don ’ t be fooled : That wouldn ’ t have taken a single additional barrel of oil @ @ @ @ @ @ @ disappear anyway because of the Covid-19-prompted collapse in demand .
Eventually , after nearly four days of trying to persuade the Mexican government to budge , the Saudis and the Russians finally decided to cut their losses and swallow Mexico ’ s lack of genuine commitment .
The alternative would have been to allow the commodity markets to open on Monday morning with the group still in disarray and to risk another big price slump .
In fairness , the OPEC+ deal is historically grand in its scope , given the size of @ @ @ @ @ @ @ it ’ s questionable how much value there is in setting targets two years hence , when so much remains uncertain .
The 20 producers taking part will initially cut output by 9.7 million barrels a day , with all but Mexico reducing production by 23 % for two months — May and June .
As it stands now , Mexico ’ s cuts will end with the first phase of the deal , when it will presumably have to leave the OPEC+ group .
The reduction for the remaining 19 countries will @ @ @ @ @ @ @ until the end of the year , and then to 5.8 million barrels for another 16 months , until April 2022 .
Don ’ t be surprised if the headline numbers published by OPEC+ are even bigger than these .
There has been some suggestion that the official figure could be closer to 12.5 million barrels a day , but that would be achieved by raising the starting production numbers for Saudi Arabia , the United Arab Emirates and Kuwait , who have all boosted production this month , leaving their real targets @ @ @ @ @ @ @ to try to make the cuts look even more substantial .
The deal raises some even bigger questions than Mexico .
Russia , for example , is to cut its output by 2.5 million barrels a day over the next three weeks .
Really ?
Igor Sechin , head of state-controlled oil company Rosneft , was a fierce critic of Russia ’ s modest contribution to previous reductions .
I can imagine how he ’ ll react when he ’ s told his company has to cut output by almost 1 million barrels @ @ @ @ @ @ @ contribution from Friday ’ s meeting of G-20 energy ministers — which followed Thursday ’ s marathon OPEC+ call — was , to put it mildly , underwhelming .
India ’ s minister mentioned filling the country ’ s strategic oil reserve , but there were no concrete new offers from the group .
With oil prices on the floor , building up reserves makes sense anyway , and China and India have already started .
But storage space is limited .
The U.S. has room for another 77 million barrels in its @ @ @ @ @ @ @ last month to approve the budget for an initial 30-million-barrel purchase .
Oil traders and analysts estimate that China could buy an extra 80 million to 100 million barrels this year .
Meanwhile , the Indian government is asking state-run refiners to buy 15 million barrels of crude from Saudi Arabia , the United Arab Emirates and Iraq to fill its tanks .
Beyond those three countries , there ’ s little storage capacity elsewhere .
U.S. Energy Secretary Dan Brouillette told the G-20 meeting that the oil market collapse will impose some @ @ @ @ @ @ @ output cuts by the end of the year without any government intervention .
Some predictive models , he added , see the drop as big as 3 million barrels .
Russia previously rejected such “ free market ” cuts , arguing that production falling in response to a lack of demand is not an output reduction .
But in the end it capitulated , along with the other OPEC+ countries .
There was no mention in the OPEC+ communique of the deal being dependent on the actions of anyone else outside the group @ @ @ @ @ @ @ , Brazil and Norway have also contributed “ market-driven ” output cuts .
This is the second time in less than five years that Saudi Arabia ’ s attempt to pursue a pump-at-will policy has collapsed .
After just one month , this one has lasted an even shorter time than the previous effort , brought to an end by the OPEC+ deal with Russia and other countries toward the end of 2016 .
But these are quite clearly extraordinary times , with an unprecedented demand collapse .
Don ’ t be surprised @ @ @ @ @ @ @ the Saudis , the Russians and the Americans resumes once the lockdowns ease and people want oil again .
This is a temporary truce rather than lasting peace between the three biggest producers .


washingtonpost--2020-04-12--The Coronavirus Comes for My Hometown

The Coronavirus Comes for My Hometown

Here in Nyack , an old Hudson River village about 20 miles above the northern tip of New York City , the vacant storefronts are growing ominous .
When the coast is clear , Times Square , with its global brands and distracting neon , will bustle back to life .
Will the barber shop ?
“ I can tell you that our downtown is devastated , ” says Roger Cohen , president of the Nyack Chamber of Commerce .
Most small businesses , he says , especially restaurants , have only enough cash to keep going for about 25 @ @ @ @ @ @ @ runs about eight-tenths of a mile downhill .
Before it meets the river , Main crosses Broadway .
These two commercial arteries host more than 100 small businesses , including a yoga studio and , improbably , a jazz club , as well as restaurants and retail stores .
Despite its proximity to the city , the commute from Nyack is inconvenient , which has fostered a community keyed to New York ’ s off hours .
There are surely more actors and musicians in town than investment bankers .
Including South Nyack @ @ @ @ @ @ @ live here , which means the ample downtown requires visitors from other towns to keep it thriving .
Crisis mode is not unfamiliar .
In 1998 , one of the largest malls in the country opened a couple miles to the west .
Local merchants panicked .
Then came the sprawling tentacles of Amazon .
Then the financial crisis of 2008 , leaving empty storefronts and a long , painful recession in its wake .
Now Covid-19 .
Maria Luisa Whittingham has been retailing clothes and small household items here for three decades @ @ @ @ @ @ @ : Her two stores have to appeal to affluent shoppers who know their way around Manhattan .
She has succeeded in building a local institution on Broadway with a distinct identity .
“ In my 33 years as a retailer in downtown Nyack , I ’ ve experienced several financial crises and as serious as they have been ( most of us small businesses never fully recovered from the 2007-2008 market crash ) , they now seem minor compared to this Covid-19 pandemic , ” she says by email .
Whittingham has applied @ @ @ @ @ @ @ a component of the coronavirus relief package passed by Congress .
It provides up to $ 10,000 to a small business and , despite its name , doesn ’ t have to be repaid .
It takes commitment and coordination to keep small businesses thriving , Whittingham says .
“ Maria Luisa Boutique will make it through this , in a new way , ” she says .
“ Exactly what that new way will be — I ’ m not completely clear on that yet.
” Tom Lynch , who owns a @ @ @ @ @ @ @ for both the EIDL and the Paycheck Protection Program , which the Small Business Administration provides to cover expenses , including keeping employees on payroll .
The loan is forgiven if employees remain on the payroll for eight weeks .
“ I ’ m trying to remain positive , ” Lynch emails .
“ But losing what could be 3 months of our prime season can truly be devastating .
I think landlords will have to be willing to renegotiate leases with their tenants in order for businesses to remain open.
” Nyack @ @ @ @ @ @ @ who keep community ties strong .
The local hospital is strained by Covid-19 patients and the same lack of protective gear that afflicts larger hospitals .
People have started a temporary venture called Nyack Nourishes to purchase takeout meals from Nyack restaurants and provide them to hospital staff and responders — a two-fer .
A network of volunteers has been sewing masks for hospital personnel .
In addition , a former mayor has helped to organize the village ’ s musical talent , both amateur and professional , to play across the street @ @ @ @ @ @ @ It ’ s the sort of action that reinforces bonds and local pride .
It ’ s also indicative of the kind of emotional and civic investments necessary to keep a village core alive .
With Amazon forever at your doorstep , shopping locally is more an expression of community solidarity than a blandly rational consumer choice .
To survive the pandemic , small-town commercial districts will need both savvy merchants attuned to local tastes and committed residents attuned to civic obligations .
Without that , the tragedy of the commons beckons .
@ @ @ @ @ @ @ providing ample openings for demagogy and division .
To keep small commercial centers afloat will require the opposite : Local investments that transcend politics and occasionally defy narrow self-interest .
Here on the banks of the Hudson , we ’ ll sink or swim together .


washingtonpost--2020-04-12--Analysis | Virus Sell-Off Turns Bonds Into ‘Fallen Angels.’ Here’s Why Downgrades Matter

Companies are facing a near unprecedented rate of downgrades as the coronavirus pandemic , paired with the worst oil rout in decades , threatens their supply chains , consumer demand or both .
More than $ 92 billion of debt fell to high yield from investment grade in March between 11 different companies , according to research firm CreditSights .
Most credit strategists see twice as much damage ahead , or more .
Here are their forecasts that include the remainder of the year : Generally speaking , a fallen angel is a bond that is downgraded to BB+ or @ @ @ @ @ @ @ , more politely , high yield ) by at least two of the three major rating firms -- Moody ’ s Investors Service , S & P Global Ratings and Fitch Ratings -- after being formerly rated BBB- or higher ( categories that are investment grade ) .
Downgrades can happen when a company isn ’ t creating enough revenue or generating enough cash to service its debt , or when it takes on so much debt that its financial leverage -- usually calculated by debt as a measure of earnings -- becomes @ @ @ @ @ @ @ affects both borrowers and investors .
Downgrades make borrowing more expensive , and could mean that lenders will tack on protections in the form of debt covenants .
Junk status can force a wave of selling by investors whose mandates prevent them from holding credits below investment grade .
The prices of downgraded bonds may also need to fall to compensate investors for holding what ’ s become a less liquid , or actively-traded security .
On the other hand , traders often start selling off troubled bonds well before the rating agencies @ @ @ @ @ @ @ amount of forced selling once a downgrade actually occurs .
That ’ s why investors often say credit ratings are retroactive and backward-looking .
As part of a massive response to the sharp drop in economic activity , the Fed announced that it will buy corporate bonds -- including , for the first time ever , some that are below investment grade .
That only applies , however , to debt of companies that were investment-grade rated as of March 22 , and subsequently downgraded to no lower than BB- , or three @ @ @ @ @ @ @ fallen angels who only recently lost their wings and haven ’ t fallen very far .
Ford Motor Co. and Macy ’ s Inc. both stand to benefit given the timing of their downgrades .
The automaker ’ s bonds rallied more than 10 cents after the Fed action was announced , according to Trace pricing data .
Occidental Petroleum Corp. looks set to miss out under current provisions .
The company , which has $ 35 billion of index-eligible debt outstanding , fell into junk territory on March 20 with a cut @ @ @ @ @ @ @ earlier action by Moody ’ s Investors Service .
It depends on who you ask .
Credit Roundtable , an industry group for corporate bond investors , says that credit raters have mostly acted rationally and sensibly through the current crisis , according to the group ’ s vice chairman David Knutson .
There had been concern that raters may not have been sticking to their motto in “ rating through the cycle , ” which acknowledges near-term shocks but tries to maintain a longer-term view of the borrower ’ s underlying health @ @ @ @ @ @ @ .
Critics of the agencies point to the way companies in recent years had loaded up on cheap debt to fuel acquisitions , often sacrificing credit metrics in the process .
Many investors have argued that raters weren ’ t hard enough on those firms , cutting them too much slack when companies promised to reduce their debt load sometime in the future .
Market access is a big one -- investment-grade companies tend to be the largest employers in the world , and it ’ s important for them to be able @ @ @ @ @ @ @ credit ratings tend to translate into lower borrowing costs .
The average U.S. investment-grade company pays a rate of about 3.5 % , while high-yield is nearly 10 % .
A 1984 story in American Banker newspaper attributed it to David Solomon , head of Solomon Asset Management , which at the time was a leading investor in the emerging field of junk bonds .
( He ’ s not to be confused with the current head of Goldman Sachs Group Inc . )


washingtonpost--2020-04-12--Billionaire Cuban Sees Fanless NBA Games Before Normalcy Resumes

“ That ’ s a great thing , because I think we need things to cheer for .
We need things to get excited about , ” he said .
As the league restarts , “ we won ’ t do anything to jeopardize the safety of our players or employees.
” The billionaire said he wishes President Donald Trump was right about the U.S. economy launching into a rapid , V-shaped rebound after the Covid-19 pandemic fades , but isn ’ t optimistic .
Trump said on April 7 that , “ we ’ re going to go like @ @ @ @ @ @ @ to business .
There ’ s a lot of pent-up energy and demand.
” That optimism was undiminished on Saturday , when Trump again predicted a “ rocket ship ” rebound .
“ We ’ re going to have just a tremendous surge , ” the president said on Fox News ’ s “ Justice With Judge Jeanine.
” “ I wish he was right , but he ’ s not , ” Cuban said on Fox .
“ There ’ s going to be a lot of trepidation , and that concern @ @ @ @ @ @ @ back.
” Cuban has invested in dozens of small businesses across the U.S. through his work on the ABC entrepreneur pitch show “ Shark Tank ” since 2009 .
Those include companies making everything from cupcakes to bed-bug detection systems .
He questioned the value of the $ 349 billion small business relief effort the Trump administration launched to help mom-and-pop firms stay afloat during the coronavirus pandemic , and suggested a form of overdraft protection instead .
“ You would work with the banks to designate , here ’ s my rent @ @ @ @ @ @ @ I write checks to , here ’ s my utilities that I write checks to , here ’ s what I do for payroll , ” Cuban said .
“ And for those checks , they won ’ t bounce.
” Regarding large corporations , including airlines , which are in line for millions or billions of dollars in federal help , Cuban called for a hard line , and strings attached .
“ This is taxpayer money .
So I ’ m not saying don ’ t give them money , but @ @ @ @ @ @ @ that really put the taxpayer first , ” he said .
“ Let ’ s ask for equity .
Let ’ s ask for equity kickers .
”


washingtonpost--2020-04-05--Investors Need to Be Selective in Following the Fed

The strongest argument for an investment approach that focuses overwhelmingly on a single issue — how committed , in words and actions , is the Fed to financial market stability — is that this worked extremely well for many years .
Again and again , the world ’ s most powerful central banks jumped to repress higher market volatility .
Again and again , they succeeded .
And again and again , this contributed to continual across-the-board gains .
With that , investors were conditioned to “ buy the dip , ” resulting in periods of exceptional gains , low @ @ @ @ @ @ @ prices of both risk and risk-free assets rose together .
Have no doubt , this is a remarkable policy engagement that in just two weeks expanded the Fed ’ s balance sheet by an astounding $ 1.3 trillion .
And it won ’ t end there .
The Fed is said to be working on other facilities as it seeks to ensure that financial market dislocations do not spill over into an economy already experiencing a historic and alarming rise in joblessness .
With such Fed involvement , it should come as no @ @ @ @ @ @ @ have followed it back into markets , or are tempted to do so .
After all , what ’ s more assuring than buying when another buyer with unlimited purchasing power is behind you ?
At first glance , this market opportunity seems even more compelling than what investors successfully bet on for years after the global financial crisis .
But , I suspect , it is also a lot more selective one for at least two reasons .
First , the economic context is much different .
Despite Fed liquidity injections and @ @ @ @ @ @ @ through by the Trump administration and Congress , the U.S. economy is already in a recession that will get worse in the weeks to come .
Indeed , the risk of a depression is uncomfortably high .
Unfortunately , the result is certain to include more unemployment , more income losses for those with jobs , and record corporate credit downgrades and bankruptcies .
Second , some investors ’ risk appetite has been sapped by the sudden and large losses they have incurred already and the more challenging need to manage liquidity carefully @ @ @ @ @ @ @ such , even if the willingness to buy the dip exists , it is no longer matched by the same ability that prevailed in the recent past .
Together , these two factors suggest that rather than following the previous playbook of expecting a deep and wide Fed trickle-down effect , investors should pursue a strategy that focuses overwhelmingly on the areas touched directly by Fed liquidity .
They should be a lot more careful in assuming that the Fed ’ s success in calming liquidity risk will also expand to credit and @ @ @ @ @ @ @ its emergency facilities .
If I am correct in my analysis , this results in caution for those expecting the Fed to effectively bail out the weaker segments of the credit market , like high-yield bonds , and of equities , like emerging markets .
Moreover , the risk of triple-B rated companies becoming speculative grade is high , and the Fed will be hesitant to increase its own credit exposure to them .
These so-called fallen angels have , and in some cases still are , taking on more debt at a @ @ @ @ @ @ @ .
That becomes a balance-sheet and income issue that the Fed can do little about .
Thus , the only way investors would be protected in these circumstances would be through the government rather than the central bank .
In other words , this is a bet on government bailouts on terms that are favorable to financial investors .
It ’ s not a wager that I would be comfortable in making or advocating .
Rather than view the Fed ’ s unquestioned commitment as a signal to buy across the financial markets @ @ @ @ @ @ @ sectors and high-quality securities .
It is another reason to trade up in quality by sharply reducing credit and equity exposures to those companies at high risk of default or downgrade below investment grade .
Remember , in making the policy bet in this environment , it is particularly important for investors to distinguish between liquidity risk on the one hand and credit and equity risks on the other .
And in following the Fed , investors need to keep in mind that the central bank is committed to ensuring smooth functioning for @ @ @ @ @ @ @ It does not seem willing , and may even not be able , to support income and balance sheets for the more junior ones .
Mohamed A. El-Erian is a Bloomberg Opinion columnist .
He is the chief economic adviser at Allianz SE , the parent company of Pimco , where he served as CEO and co-CIO .
He is president-elect of Queens ’ College , Cambridge , senior adviser at Gramercy and professor of practice at Wharton .
His books include “ The Only Game in Town ” and “ When Markets @ @ @


washingtonpost--2020-04-03--Analysis | Oil Market Is Desperate for Saudi Arabia to Flatten the Curve

Saudi Arabia ’ s call for an emergency Zoom session on Monday , along with reports that Russia may be coming around to the idea of supply cuts , lend credence to the idea that , even if Trump wildly jumped the gun , cuts are coming .
Cue mass celebration in the oil market .
To which , one can only say this : Supply .
Cuts .
Were .
Coming .
Anyway .
As I wrote here , the collapse in demand means we will quickly run out of places to stash surplus oil .
Which means refiners @ @ @ @ @ @ @ ) and production gets shut in ( some is already ) .
Saudi Arabia and Russia would love to get the U.S. to sign up as a willing partner in making this look like market management rather than managed retreat — and Trump may be of a similar mind .
Getting cuts of anywhere near the 10 million barrels ( a day , we think ) cut that Trump touted looks very unlikely given the time pressure .
On Thursday , I quoted Kevin Book of ClearView Energy Partners as saying , “ @ @ @ @ @ @ @ ; barrels move at 10 knots.
” To which we can add that the novel coronavirus moves at an exponential pace .
Distancing measures mean demand in April could be down by 20 million or 30 million barrels a day .
Hence , a cut of 10 million barrels a day would only extend the timeline for storage filling up and , in order to work , would have to happen very quickly .
The country best able to take production down quickly is , as ever , Saudi Arabia .
And as @ @ @ @ @ @ @ country ’ s pride , reversing its stance of maximizing output , adopted less than a month ago , would make sense .
Right now , the world has perhaps 700 million barrels of spare storage capacity for crude oil which , assuming 20 million barrels a day of excess supply , would fill in five weeks .
As the tanks top out , oil prices would begin collapsing toward single digits well before that deadline .
An immediate cut of , say , 7 million barrels a day , with more than @ @ @ @ @ @ @ would push that deadline to more like eight weeks .
Think of this as the oil world ’ s equivalent of flattening the curve , but with the idea being that you try to stave off storage tanks being overwhelmed rather than ICU beds .
Damage would still be unavoidable .
But Saudi Arabia makes more revenue by exporting 6.5 million barrels a day at $ 20 apiece than it would 10.5 million at $ 10 .
The resulting drop in tanker rates might also support the front end of the Brent crude @ @ @ @ @ @ @ OPEC producers make their money .
Nice theory .
But there ’ s no guarantee of such immediate cuts being agreed at all — remember that OPEC meeting all of four weeks ago ?
Best case is that oil producers somehow extend the deadline for storage capacity maxing out , hopefully getting to a point in late May where demand has bottomed out and the inventory glut is merely historic rather than apocalyptic .
And even at $ 20- $ 30 Brent , many U.S. frackers are still underwater , especially as they @ @ @ @ @ @ @ for ( unwanted ) gasoline and suffer discounts to benchmark pricing the further inland they are .
Set against the current reality of cratered oil demand , a lot of things need to go right — and quickly — to justify a hopeful outcome for producers .
Four cents actually sounds about right for this rally .
Liam Denning is a Bloomberg Opinion columnist covering energy , mining and commodities .
He previously was editor of the Wall Street Journal ’ s Heard on the Street column and wrote for the Financial Times @ @ @ @ @ @ @ an investment banker .


washingtonpost--2020-04-03--Analysis | In Pay Gap Between Women and Men, Britain Keeps Score

In the first two years , the pay gap narrowed at about half of U.K. private employers , while at the rest the difference had gotten worse or there ’ d been no change , according to data filed to the Government Equalities Office .
Analysis of 10,826 filings by Bloomberg showed the overall figure was little changed , with a mean pay gap of 14.23 % on the snapshot date of April 5 , 2018 , compared with 14.21 % a year earlier .
The median difference was 13.1 % , compared with 13.3 % .
The disparity in @ @ @ @ @ @ @ from 8.4 % .
Men in aggregate were paid more at 88 % of companies and public-sector bodies .
The next set of reports was due by April 5 , but authorities dropped the requirement due to the “ unprecedented uncertainty and pressure ” facing companies during the U.K. ’ s virus lockdown .
About 4,500 firms -- less than half the usual number -- had already published their results or opted to submit them anyway .
Any comparison with earlier years ’ data would be flawed though as businesses with improving figures @ @ @ @ @ @ @ publish .
Some critics of the system have called for it to be scrapped altogether , claiming the methodology is too crude and onerous on smaller firms .
Employers submit a blunt , uniform assessment of what men and women earn on average across their workforce .
The numbers don ’ t measure the pay of men and women in the same job or attempt to adjust for any other characteristics .
Specifically , companies must report the salary and bonus of all male employees and all female employees on a mean and @ @ @ @ @ @ @ each gender receiving a bonus and the proportion of men and women in each pay quartile .
Publication of an “ action plan ” showing how employers will try to close any gap is encouraged , but not mandatory .
Not necessarily .
The figures reported in 2019 were based on a snapshot on April 5 , 2018 .
Any changes made in the previous 12 months wouldn ’ t show up until the following year ’ s report .
Many of the plans in place will take time -- building a pipeline @ @ @ @ @ @ @ more women at all levels -- and the relationship with pay is not always straightforward .
HSBC Bank Plc ’ s gender pay gap , for instance , actually got worse after the first year of reporting , widening to a mean 61 % , in part because just one-third of its highest-paid employees were female .
It ’ s most recent data however , shows the disparity narrowed to 55 % , despite the proportion of women in the top pay bracket shrinking to less than one in 10 .
That ’ @ @ @ @ @ @ @ refers to the idea that men and women doing the same job at the same company should receive the same salary .
The disclosures by U.K. companies don ’ t provide such comparisons .
Reporting on a so-called adjusted basis -- taking into account job title , seniority , geography and other factors that can affect compensation -- is more popular among U.S. companies , some of which have chosen to disclose their pay gaps under pressure from activist shareholders .
Still , in early 2020 , Mastercard Inc. reported a gap of @ @ @ @ @ @ @ its pay practices , and Citigroup Inc. said female employees earn 27 % less than men on average , an improvement from 29 % a year earlier .
Results from the U.K. ’ s debut survey in 2018 produced widespread criticism and came amid an uproar about how women were paid at the BBC , Britain ’ s publicly funded broadcaster .
The annual reporting is building greater awareness and understanding of the issue , and the information could help women negotiate higher wages , researchers say .
In particular , there ’ @ @ @ @ @ @ @ women in more senior -- and thus well-compensated -- positions .
The disparity in financial services was described as “ astonishing ” and “ shocking ” by Nicky Morgan when she was a member of the U.K. House of Commons and chair of its powerful Treasury Committee .
She was also among politicians demanding that some law and accounting firms revise their figures after they classed their top-earning partners as owners , who are excluded from the calculations , and thus potentially understated the gender wage difference .
That remains to be seen @ @ @ @ @ @ @ for existing or future lawsuits under the U.K. ’ s 2010 Equality Act .
The law gives women and men the right to equal pay for equal work , and there ’ s a framework for comparing jobs by effort , skill or decision making .
In early 2019 , thousands of women working for Glasgow City Council in Scotland reached a financial agreement over pay discrimination after fighting for more than a decade and staging what was believed to be the U.K. ’ s biggest-ever strike over equal wages .
David Cameron @ @ @ @ @ @ @ 2010 to 2016 , made addressing the gender-pay “ scandal ” part of the Conservative Party ’ s agenda .
Eliminating the difference could add 150 billion pounds ( $ 195 billion ) to annual gross domestic product by 2025 by boosting female participation in the workforce , encouraging women to work longer hours and moving them into more productive jobs such as those in science and engineering , according to a 2016 study by McKinsey & Co.
It ’ s also a question of fairness .
The U.K. ’ s Office of @ @ @ @ @ @ @ analysis , says the gap is caused , in part , by more women working part-time , clustering in occupations with lower pay and taking time out to have children .
The discrepancy widens with age , and women ’ s pay stops climbing at a younger age than that of male colleagues .
Yes .
Australia requires firms with more than 100 employees to report annually , collecting data on 40 % of the workforce ( it reports a gap of 13.9 % ) .
Germany , which has one of the @ @ @ @ @ @ @ also implemented new rules .
The European Union is working on rules to be unveiled by the end of 2020 ; statistics show the bloc has a gap of 16 % .
Member states Austria , Sweden , Denmark and Finland already gather data .
After President Donald Trump took office in 2017 , the U.S. moved away from requiring more uniform or transparent disclosures to the federal government .
While the suspension of reporting in 2020 is intended to be a one-off , it will make it harder for analysts to draw @ @ @ @ @ @ @ first round of reporting , a group of U.K. lawmakers suggested ways to make the figures less blunt , in order to bolster enforcement and to require remedial action .
However the government rejected the recommendations to maintain consistency .
It also declined to increase the number of organizations required to file reports .
The U.K. is considering the possibility of mandatory pay reporting by ethnicity to expose the pay gap for citizens of “ black , Asian and minority ethnic , ” or “ BAME , ” origins .
A public consultation @ @ @ @ @ @ @ firms , such as Deloitte , KPMG and broadcaster ITN , have voluntarily released their numbers .


washingtonpost--2020-04-05--Analysis | How Saudi Arabia Can Save the Global Oil Industry

The oil market got quite in a flap over President Donald Trump ’ s Thursday tweet that Saudi Arabia and Russia had agreed to cut production .
But it ’ s quite clear from subsequent comments out of Riyadh and Moscow that nobody had pledged any such cuts ; not of 15 million barrels , nor 10 million , nor even anything at all .
In fact , the leaders of Russia and Saudi Arabia hadn ’ t even spoken with each other .
Perhaps Trump was just getting his ducks in a row — setting up a fictional promise @ @ @ @ @ @ @ , which would give him an excuse to resurrect his Tariff Man persona and slap duties on imports of their oil into the U.S .
But it ’ s clear that something has shifted , even if it ’ s only in tone .
Saudi Arabia is now audaciously seeking a global deal to cut oil production , not just by the Organization for Petroleum Exporting Countries , nor only with the extended OPEC+ coalition that includes Russia .
It did so by calling for “ an urgent meeting ” aimed “ at @ @ @ @ @ @ @ desired balance of oil markets , ” among the OPEC+ group “ and other countries.
” That last bit is crucial .
The kingdom led by Crown Prince Mohammed bin Salman is making painfully clear that the sacrifice must be shared or Saudi Arabia will take no part in it at all .
There can be no free-riders .
It ’ s a tactic the country has used before , and the current nosedive in oil prices shows it stood by its word .
The kingdom was the driving force behind cuts proposed @ @ @ @ @ @ @ ministers .
But it said then , as it ’ s saying now , that it would only make them if others joined in too .
The only thing that has changed in the last month is that the “ others ” has now become an even bigger group that needs to include all of the world ’ s big oil producers .
At the virtual meeting of oil producers , now tentatively pushed back to Thursday from Monday , it should give its counterparts — including those who don ’ t show @ @ @ @ @ @ @ an unequivocal ultimatum .
Either they agree to strict , enforced , observable output curbs for everybody and Saudi Arabia will join in by reducing its own output to , say , 8.5 million barrels a day ( I picked that number out of the air ) .
Or Saudi Arabia should make clear it will continue to pump 12.3 million barrels a day , which would result in prices collapsing to single digits to force oil off the market .
The kingdom could even go so far as to include a list @ @ @ @ @ @ @ to take part .
The chart above suggests who some of those required participants might be .
Alongside the U.S. and the OPEC+ countries , it includes Canada , China , Brazil , Qatar , Norway and the U.K. , each of whom pumps more than 1 million barrels a day .
Sure , there are obstacles to be overcome .
Some on that list may be more willing to participate than others .
But the alternative will hurt the oil industries of the countries on that list much more than they will @ @ @ @ @ @ @ in prices may happen anyway if the cut isn ’ t big enough , or is delayed .
I know lots of people argue that Saudi Arabia needs higher oil prices than shale producers to fund its budget .
But I ’ ve never been a big fan of using budgetary break-even prices for determining the relative pain that would be experienced by oil-producers .
Budgets , to some extent , reflect price expectations .
If you expect oil to be $ 60 a barrel , say , you prepare a budget based @ @ @ @ @ @ @ .
If that price is not achieved , you can cut expenditure , draw on reserves , or borrow — all options that remain open to Saudi Arabia .
The kingdom will , though , face the same storage problem as everybody else .
It shouldn ’ t go unnoticed that Saudi Arabia said it would boost exports in May to 10.6 million barrels a day because its own refineries didn ’ t want as much crude because of the drop in demand .
Refiners elsewhere may not want it either .
Saudi @ @ @ @ @ @ @ own stockpiles , which it has drawn down during the past four years , but it has more than twice as much room to do so than is available in the U.S. Strategic Petroleum Reserve .
Finally , Saudi Arabia should make clear that this is a short-term solution crafted for an extraordinary situation .
It must avoid the temptation of tying any deal into a long-term supply management initiative .
Anything that whiffs of an OPEC+ extension won ’ t fly with the U.S. or others .
This is not OPEC++ .
@ @ @ @ @ @ @ one-off solution to the extreme situation the global oil industry is facing as a result of the world locking down to fight the Covid-19 virus .
Once things pick up again — as they will — it will be back to business as usual , and a return to the dash for market share .


washingtonpost--2020-04-04--Analysis | China Is Reopening Its Wet Markets. That’s Good

Animals in wet markets are penned and slaughtered or sold live right next to stalls selling fruit and vegetables .
Conditions , as my colleague Adam Minter has written , are often less than hygienic .
Places where a range of common and exotic animals mix together while bodily fluids flow freely may seem a fertile breeding ground for the virulent novel diseases that cross the species barrier to humans and occasionally become pandemics .
At the same time , let ’ s put the outrage on pause .
Wet markets are increasingly losing ground to supermarkets in China .
@ @ @ @ @ @ @ suppliers of fresh goods , it ’ s precisely because consumers regard them as a healthier and more sustainable alternative .
That perception isn ’ t inaccurate .
The prevalence of food-borne microbial illness in developing East Asia suggests that far from being cesspits of disease , wet markets do a good job of providing households with clean , fresh produce .
And while the origins of coronavirus remain obscure , they may have at least as much to do with more worldwide activities such as intensive farming as practices specific to Asia @ @ @ @ @ @ @ ’ t so different from that of farmers ’ markets in Western countries .
In contrast to a supermarket model where multiple layers of retailers , wholesalers and logistics companies stand in between the consumer and the grower , wet markets offer a personal and direct connection between shopper , stallholder and farmer .
Consumers know the food is fresh because there ’ s generally little refrigeration , so everything must be sold on the day .
If in doubt , they can ask the stallholder what ’ s in season and which @ @ @ @ @ @ @ If they think one market looks unsanitary , they can choose to shop at another .
That helps explain how wet markets have managed to hold their own in spite of the growth of store-based retail in recent years .
Supermarkets now account for about half of all grocery spending in China , up from about 36 % in 1995 , according to Euromonitor International .
Add in convenience stores and the like and so-called modern grocery has about 68 % of China ’ s retail wallet , giving wet markets less than @ @ @ @ @ @ @ spending is overwhelmingly concentrated in packaged , rather than fresh produce .
Foreign retailers that once hoped to dominate China ’ s staple goods sector such as Carrefour SA and Metro AG have struggled and sold out of local ventures — but wet markets are still going strong .
The evidence suggests this consumer loyalty isn ’ t misplaced .
One 2015 study for the World Health Organization compared the number of years of life lost per 100,000 people due to food-borne sickness , disability and death .
The region encompassing the wet @ @ @ @ @ @ @ down through most of Southeast Asia has the best record for microbial infections outside the Americas , Europe and the rich countries of the Pacific Rim .
( 1 ) What about Covid-19 itself , though ?
There ’ s good evidence that the virus has genetic characteristics from another pathogen found in pangolins , an exotic mammal sometimes sold in Chinese markets .
And it circulated extensively around one of Wuhan ’ s seafood and meat markets last December , although the earliest infections don ’ t seem to have been connected @ @ @ @ @ @ @ minority of wet markets sell such exotica , though , so you can close down the wild animal trade without shutting the places where most Chinese people get their daily sustenance .
And don ’ t overlook the possibility that a key ingredient in Covid-19 ’ s genetic cocktail isn ’ t wild game , but domesticated livestock .
The high-density conditions on farms are far more conducive to cooking up novel diseases , as we ’ ve written — and even pangolins are farmed in China these days .
To the extent @ @ @ @ @ @ @ the cooked in Asia ’ s wet markets is a health problem , it can easily be mitigated by better building design ( such as separating meat , vegetable and livestock areas and keeping markets fully enclosed ) , plus the sort of mandated cleaning regulations found in places like Singapore , Hong Kong and South Korea.There ’ s plenty to complain about in the way that China downplayed and hushed up the initial outbreak until it was all but inevitable it would become a worldwide pandemic .
Closing all wet markets , @ @ @ @ @ @ @ .
( 1 ) Indeed , the data suggest the problem with Asia ’ s appetite for “ warm meat ” isn ’ t that fresh-slaughtered produce is less healthy than the chilled meat from an abattoir , but that local preferences for undercooked meat and fish lead to unusually high burdens of tapeworms , flukes and other parasitic worms .
That ’ s not something different retail formats can solve .


washingtonpost--2020-05-01--Wall Street Misses Chance to Star After Chaos Snags Rescue Loans

Those firms are getting assailed on Capitol Hill , beaten up on social media and sued by angry borrowers .
The Small Business Administration even temporarily shut Wall Street out of the loan effort on Wednesday , allowing applications only from small community banks to give them a larger share of the final chunk of the $ 670 billion in funding .
“ What we did in 2008 is not lost on us , ” said Richard Hunt , president of the Consumer Bankers Association , a lobbying group for large and mid-sized lenders , including those that have come @ @ @ @ @ @ @ time in 2020 to show America that we wanted to lead in this crisis , and the process at times has been so utterly frustrating.
” The Trump administration has deemed the Paycheck Protection Program a success and crowed about getting much needed money into the hands of tens of millions of small business workers .
But the largest banks are concerned that the legacy for them will include a flurry of litigation and state and congressional investigations .
For that , lenders blame lawmakers , the Treasury Department and SBA for how @ @ @ @ @ @ @ All banks have been doing , they say , is handing out the money .
Under the $ 2 trillion Cares Act passed by Congress in March , the loans are guaranteed by the SBA and meant to be forgiven as long as they are used to pay workers , mortgage interest , rent and utilities .
In addition , the 5,000 or so banks working on the SBA effort are being paid for their work , though there is dispute about whether it will end up being a profitable venture .
Wells @ @ @ @ @ @ @ its fees to nonprofits that serve small businesses , and JPMorgan said Friday that it doesn ’ t intend to make any money off of PPP .
Still , the industry ’ s collective fees could run into the billions of dollars , said Marcus Stanley , policy director at Americans for Financial Reform , a Washington-based group often critical of Wall Street banks .
That should have motivated banks to be more thoughtful in distributing funds , rather than prioritizing their profitable existing clients , he said.Many of the program ’ s @ @ @ @ @ @ @ an understaffed agency that has never faced such a massive job .
In fiscal 2019 , for example , it approved just $ 28 billion of loans .
The flood of applicants wreaked havoc on the agency ’ s software , often causing loan processing to grind to a halt .
During the second round of funding , the SBA also restricted banks to sending in 350 applications an hour , a requirement that ’ s not ideal for large lenders whose systems can push through applications much faster in greater volumes .
@ @ @ @ @ @ @ banks could submit batches of thousands of loans , which the largest firms did take advantage of .
It turns out the 350-application limit was an ambitious goal at times .
Wells Fargo ’ s head of small business , Steve Troutner , said in an internal memo Tuesday that his bank had been able to submit just 80 applications per hour .
“ While that pace is more than a little frustrating for us all to see , we ’ ve heard from peers across the industry and they are seeing similar @ @ @ @ @ @ @ wrote .
The industry also noted that SBA and the Treasury issued more than a dozen revisions to the program –- many while loans were going out the door .
And the agencies refused to take some industry suggestions -- like relaxing required anti-money laundering checks -- that slowed lending and made it challenging for banks to service anything but existing customers .
Privately , much banker scorn has been directed at Treasury Secretary Steven Mnuchin .
They say he spurred a massive rush for loans by deeming them first-come , first-served and @ @ @ @ @ @ @ repeatedly saying there was enough money in the program after Congress passed a second round of funding .
Lenders in contrast suspected that the money would run dry .
By Friday afternoon , however , banks were more optimistic that they could serve all applicants .
A Treasury spokesman pointed out that any revisions or lack of guidance didn ’ t stop the PPP program from providing some $ 350 billion in loans in the first two weeks it was operational .
The SBA is continuing to quickly process requests and has enough @ @ @ @ @ @ @ sent in by the big banks , the spokesman added , noting that overall the program is expected to aid 60 million workers .
As the rules kept changing , banks and their lawyers began fielding anxious requests from large public companies that wanted to give money back because they were being shamed on social media .
The public fury contributed to the SBA ’ s decision to kick all but the smallest banks out of the program on Wednesday for several hours .
“ With the SBA blocking nearly 800 banks , @ @ @ @ @ @ @ owners and their employees will be delayed , ” Financial Services Forum President Kevin Fromer , whose group represents the chief executive officers of Wall Street lenders , warned in a statement .
“ A better solution would be a fully operational system that allows banks of all sizes to provide support to Main Street.
” To be sure , the largest lenders do point to some successes from the program .
JPMorgan announced Friday that it has secured $ 29 billion in funding for over 239,000 small businesses .
Bank of America @ @ @ @ @ @ @ that it sent 184,000 applications at the start of the second round , while Wells Fargo said it sent over 100,000 .
JPMorgan , Bank of America and Wells Fargo have all been sued by small businesses who say they were shut out because the lenders cherry-picked clients seeking large loans in processing applications .
The Department of Justice has also launched a preliminary investigation into borrower fraud .
While banks aren ’ t the targets , the development will likely add to their headaches .
Facing so much heat , some bankers @ @ @ @ @ @ @ clear of the Paycheck Protection Program .
They also say the Trump administration probably should have used a more direct approach , providing money to deserving businesses through the Internal Revenue Service , much like the relief checks that went out to tens of millions of Americans .


washingtonpost--2020-04-30--Colleges Roiled by Pandemic Costs Find Federal Loan Aid Elusive

At issue is whether students who work on campus in part-time jobs should be counted .
With no direction from Washington , officials at Knox College in central Illinois abandoned plans to apply .
“ This is an existential threat for the college and many colleges , ” said Karrie Heartlein , director of government and community relations at Knox , which has about 1,200 students .
Higher education is being hit by an unprecedented financial crisis as the virus forced schools to clear students from campus and make refunds for room and board .
Universities have had to cut @ @ @ @ @ @ @ plans .
Under the federal Paycheck Protection Program created to help small businesses contend with economic losses from the outbreak , enterprises with fewer than 500 employees can qualify for loans of as much as $ 10 million .
The loans become grants if used for payroll and other approved expenses for two months to keep workers employed .
The program has proved popular .
The initial $ 349 billion in funding ran out in 13 days and was relaunched Monday with another $ 320 billion approved by Congress .
Colleges , however @ @ @ @ @ @ @ money because it ’ s unclear whether part-time students who work on campus should be counted as employees .
Even some 40 members of Congress who wrote to the Treasury Department and the Small Business Administration couldn ’ t get an answer .
“ Many of our smaller colleges were already struggling with enrollment challenges before this crisis , and are now experiencing major revenue losses as a result of COVID-19 , ” Republican Senator Joni Ernst of Iowa said in a statement .
She was among those who contacted the agencies .
@ @ @ @ @ @ @ , officials said the school calculated it could receive a $ 5.7 million loan if it had qualified , but it held back applying because it lacked clarity on how to count some employees .
The school has an average of 472 non-student employees and that number doubles when counting student workers .
Knox could use the cash .
Even before the pandemic hit , the school ’ s $ 45 million budget had a $ 3 million deficit .
Its finances worsened this year when it returned $ 3 million to students @ @ @ @ @ @ @ had a $ 170 million endowment as of June 2019 .
Its situation also has consequences for Galesburg as Knox is one of the city ’ s largest employers and the school has already had to furlough 50 workers .
Despite being unclear about how to count employees , Covenant College , in northern Georgia , applied and got about $ 3.2 million .
President Derek Halvorson said he will hold off using the money for now because of the ambiguity about student workers .
The school , which is waiting for clarification @ @ @ @ @ @ @ and part-time employees and about 250 students who work on campus .
“ People ’ s jobs and livelihoods hang in the balance , ” said Halvorson .
“ We will have to furlough employees and we may also have to lay employees off if we can ’ t use the money .
”