fortune--2020-11-29--What could happen to the economy if Biden canceled the majority of student loan debt?

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Senate Minority Leader Chuck Schumer caused a stir earlier this month when he stated his hope for President-elect Joe Biden’s administration to forgive $50,000 of federal student loan debt for the majority of Americans. Such an idea endorsed by a major moderate party member like Schumer was practically unthinkable just a few years ago, but the most surprising element was the senator’s assertion that it could be done by executive order within the first 100 days of Biden’s presidency.
The ability to institute such a sweeping stimulus—there is currently more than $1.7 trillion in federal student debt—with the flick of Biden’s pen is huge, because a Republican-controlled Senate would almost certainly not pass it as legislation through Congress. Democrats have a chance to win the majority if they capture both seats in Georgia’s upcoming runoff elections, but that’s far from guaranteed. If they don’t succeed, Biden will have to rely on executive action to carry out most of his governance.
In September, Schumer and Sen. Elizabeth Warren unveiled a resolution arguing that the president has existing executive authority to cancel student loan debt thanks to the Higher Education Act of 1965. A passage in the legislation states that the president-appointed Secretary of Education can “compromise, waive, or release any right, title, claim, lien, or demand,” which, the senators say, includes student loan debt. Some legal scholars say utilizing this provision could survive a challenge in the courts, especially because it’s unclear who would actually bring a case to sue. Whoever did would have to demonstrate harm from not collecting this debt, and few could make that argument.
In an op-ed published in the Washington Post this month, Warren wrote that canceling student loan debt would give tens of millions of Americans an economic boost and help narrow the racial wealth gap, making it “the single most effective executive action available to provide massive consumer-driver stimulus.”
Biden endorsed $10,000 in student loan forgiveness while on the campaign trail earlier this year, but has not offered any public support of Schumer and Warren’s $50,000 plan. When asked about it recently, he declined to comment and instead pointed to the House-passed HEROES Act, the second coronavirus stimulus package that currently lies dead in the water due to Republicans and Democrats in the Senate unable to compromise on a deal.
But the fact that a staunch moderate like Schumer is now in support of such a plan suggests a growing possibility that Biden would consider the executive order. If he did, would the economy really flourish, reducing the racial wealth gap, as Warren insists?
That was the subject of a 2018 paper “The Macroeconomic Effects of Student Debt Cancellation,” authored by a group of economics professors working with Bard College. In a simulation using a one-time total student loan cancellation policy including federal and private loans, the researchers found the macroeconomic effects included:
an average GDP boost of $86 billion to $108 billion per year
a reduction of the average unemployment rate by 0.22 to 0.36 percentage points over a 10-year forecast
roughly 1.2 million to 1.5 million newly-created jobs per year in the first few years following student debt elimination
modest rises in the Federal Reserve’s interest rates
“Research suggests many other positive spillover effects that are not accounted for in these simulations,” the authors added, “including increases in small business formation, degree attainment, and household formation, as well as improved access to credit and reduced household vulnerability to business cycle downturns.”
There are a couple of caveats to these findings, though. This particular simulation forgave all total debt rather than just $50,000 per borrower (though it’s worth noting around three in four Americans have less than $50,000 in student debt), and it assumed that the federal government took over the financing of privately-owned loans on the behalf of borrowers, while Schumer and Warren’s plan is just limited to federal debt. But the researchers noted that “our results provide a conservative estimate of the macro effects of student debt liberation,” so there may be some semblance of balance there.
When it comes to the racial wealth gap, research suggests that eliminating student debt can be beneficial even if not done with a full-scale one-time policy like the Bard simulation. A 2015 study conducted by the left-leaning Demos think tank found that eliminating student debt for all households would actually increase the median racial wealth gap by 9% because white families have a higher likelihood of completing college and graduate degree programs at a higher percent.
Instead, Demos proposed eliminating student debt only among low-wealth households making less than $50,000 a year. Demos found that such a policy would reduce Black-white wealth disparity by nearly 37% among low-wealth households. And taking it a step further by eliminating debt for households making $25,000 or less would reduce the Black-white wealth gap by a staggering 50%.
This income disparity among student-loan borrowers has been one of the main criticisms of a sweeping debt cancellation policy. Essentially, people who have the most debt tend to complete college or graduate programs and go on to earn higher income as a result. Critics argue that those borrowers are in lesser need of debt forgiveness, which could add to the wealth gaps outlined above. Should Biden attempt to push forward with student debt cancellation, he will have a number of choices available to him. Limited forgiveness with a cap on income could present a middle-ground compromise that ensures those who need debt cancellation the most will benefit.


fortune--2020-11-29--Can your boss make you get a COVID vaccine? Probably

It may be a matter of weeks , not months , before Americans can start getting COVID vaccines

The pandemic has taken a devastating toll on millions of U.S. businesses, but now there’s light at the end of tunnel. In the coming weeks, drug makers are poised to distribute highly effective COVID vaccines that could soon end the outbreak.
So long as people agree to get vaccinated.
The advent of the vaccines is great news for the country. But it also creates a quandary for employers who are already navigating tricky legal issues related to COVID, such as whether they can require workers to come into the office. In the case of the vaccines, can companies force employees to get a shot?
The short answer is yes. According to Jonathan Segal, a partner at Duane Morris who specializes in employment law, the legal bar for mandatory vaccinations requires showing a “strong business necessity.” And given the nature of the pandemic, companies should be able to clear that bar.
“There’s a very strong case that preventing a deadly disaster is a business necessity, especially now that we have a quarter million people dead,” Segal says.
In practice, this means that an employer could punish or terminate workers who refuse to get a vaccine since their refusal will endanger customers and coworkers. But of course there are nuances.
Segal notes that the case for mandatory vaccines will vary depending on what type of work someone does. An employee who works in a busy store or crowded office, for instance, would likely have to get a jab, while someone who mostly works by themselves might not.
Then there are the workers who will demand an exemption on medical or religious grounds. In these cases, Segal says, an employer may have to find a way to provide reasonable accommodation—a task that could be easy in some cases, such as having the employee work from home, and near impossible in others.
Employees who refuse to get vaccinated on religious grounds may present a particular challenge since, in some cases, it may be hard to tell if their refusal is based on a sincere religious belief—or is instead a political objection dressed up as religion.
Who will pay for COVID vaccines?
There is also the question of who should pay for am employee to get a COVID vaccine. According to Segal, if the coming vaccine is not free, the law does not obligate employers to pay for the cost of a mandatory shot. Nonetheless, he argues they should do so, both because it is the ethical thing to do and since it will make it easier to ensure compliance. (Meanwhile, some politicians argue the U.S. should pay Americans $1,500 to get one).
For now though, any debate over whether companies should force employees to get the vaccine is premature, says Mark Navin, a professor of bioethics at Oakland University.
Navin points out that the initial phase of the vaccine deployment will prioritize populations like health workers and the elderly, and that it will be months before companies are in position to buy it for their employees—or force them to take it.
Navin also notes a distribution strategy for COVID vaccines will entail making a choice between limiting transmission or curtailing deaths. If the U.S. opts for the first option, then it makes sense to target younger people—including workers—who are more likely to spread COVID. But given the terrible fatality rate, Navin says the initial priority is likely to focus on distributing the vaccine in a way that saves lives.
“While vaccine mandates are an interesting question, it’s very premature to think about imposing any of these policies because we’re going to have a period of great scarcity into the spring and summer,” say Navin.
What about earlier pandemics?
The issue of mandatory vaccines is contentious, but the COVID outbreak is hardly the first time it’s come up. There have been skirmishes in courts across the country in recent years over whether employers can require workers to get a flu shot.
In one high profile case, a Massachusetts hospital terminated a Christian employee who claimed she would go to hell if she got a flu shot. The employee sued with the help of the Equal Employment Opportunity Commission, but a federal judge tossed the case earlier this year.
Meanwhile, the most famous Supreme Court case about vaccines dates from 1905, and involves a man who challenged an edict by city officials in Cambridge, MA to get a vaccine for smallpox or receive a $5 fine. The man claimed he and his son had an adverse reaction to earlier vaccines, but in a 7-2 decision in Jacobson v Massachusetts, the court sided with the city.
While the Jacobson case involved government officials, not private companies, many of the ethical issues—involving the safety of the general population versus the rights of the individual—are the same.
What is different, though, is how public discourse has shifted in favor of a patient’s autonomy. Prior to the 1970s, says Navin, government and medical elites could make sweeping health decisions with little or no consent from the people affected. He points to the mid-20th century when the U.S. faced a dangerous polio epidemic, and school boards and medical officials responded by ordering vaccines for children across the county.
Today, delivering a COVID vaccine is complicated by medical values that prioritize patients’ consent combined with the growth of squirrely conspiracy theories that reject long-held principles of immunization.
Navin also notes the legal climate has likely become more favorable to religious objections to vaccines as a result of Trump Administration policies, and a Supreme Court that has become more conservative.
All of this will complicate attempts by companies and other institutions to compel individuals to get a covid vaccine. According to Segal, the employment law attorney, businesses are likely to face lawsuits whatever they do—or don’t do.
“An employer will have to pick a risk over whether want to be sued by someone complaining about getting a vaccine—or by someone whose loved one has died because of the virus,” Segal says.


fortune--2020-11-29--Kim Jong-un likely to let his missiles do the talking as Biden enters the White House

North Korea has greeted the last two U.S. presidents with tests of missiles or nuclear bombs within weeks of taking office. And experts see the same happening with Joe Biden, whom the regime has called “a rabid dog.”
Kim Jong-un is one of the few world leaders who has yet to congratulate—or even acknowledge—the president-elect, particularly after Chinese President Xi Jinping did so on Wednesday. While it’s not unusual for North Korea to stay silent on the results of U.S. elections, Kim held unprecedented meetings with President Donald Trump that broke the mold of relations between the long-time adversaries.
Ties now are poised to revert to the frostier days of the Obama administration, when the U.S. deployed “strategic patience” to avoid rewarding North Korea for provocations—a policy that stayed in place after Kim took power in 2011. For North Korea, it may not make too much of a difference: Under both Barack Obama and Trump, Kim steadily increased his ability to threaten the U.S. homeland with nuclear weapons even in the face of ever-tighter sanctions.
“Regardless of the U.S. presidency, the North Korean regime is unlikely to change its behavior or shift its strategy toward the U.S.,” said Soo Kim, a Rand Corp. policy analyst who previously worked at the Central Intelligence Agency. “The nukes are here to stay, Kim will continue to build and extort, and the strategy has proven to work for decades. So why change what works?”
North Korea tested Obama with the launch of a long-range rocket and a nuclear device within months after he took power in 2009. Trump was welcomed to the White House with a series of ballistic missile tests that culminated with the launch in November 2017 of an intercontinental ballistic missile that experts said could deliver a nuclear warhead to all of the the U.S.
The most likely missile test this time will be another ICBM. This could include a new rocket North Korea rolled out at a military parade in October, which is designed to carry multiple nuclear warheads to the U.S. homeland. The Pentagon said earlier this month that it had successfully intercepted a mock ICBM simulating one developed by North Korea.
“They need to test the new ICBM in order to demonstrate it is credible in the eyes of adversaries, and they will likely do so when they are ready,” said weapons expert Melissa Hanham, deputy director of the Open Nuclear Network. “North Korea only needs their ICBMs to be accurate enough to deter the United States.”
North Korea sees its nuclear weapons as insurance against a U.S. attack, and has vowed to maintain its deterrent no matter what. Kim has repeatedly rejected the Trump administration’s call for a “complete, verifiable and irreversible” dismantlement before Pyongyang can receive any rewards.
Biden’s camp has signaled more room for negotiations, saying in a policy paper that he wants to “jump start” a campaign with U.S. allies and others for denuclearization. At the second presidential debate in October, Biden called Kim a “thug” but said he could meet the North Korean leader if he made moves to reduce his nuclear arsenal.
Biden’s choice for secretary of state, Antony Blinken, has called Trump’s personal diplomacy a failure and advocated for a multilateral approach that seeks disarmament in stages. In a 2017 opinion piece in the New York Times, Blinken backed a negotiated settlement with North Korea “that first freezes and then rolls back North Korea’s nuclear program, with inspectors to carefully scrutinize compliance” before a more comprehensive deal is reached.
Kim is likely to give clues on how he’ll approach the new Biden administration during an annual New Year’s address—one of the biggest political speeches on the country’s political calendar. North Korea is also expected to hold a rare ruling party congress at around the time of Biden’s inauguration to lay out a new five year plan for its economy, which is headed for its biggest contraction in more than two decades due to sanctions, the coronavirus and a series of natural disasters.
Pyongyang has made clear that it prefers dealing with Trump, who gave Kim a seat at the table as an equal. His regime has extolled the “mysteriously wonderful” chemistry between the two leaders, while denouncing Biden as an “imbecile bereft of the elementary quality as a human being.”
And as Biden seeks to work with allies following Trump’s “America First” approach, Kim may also find that he has more friends now than he did a few years ago. He enjoys much better relations with China and Russia, who joined with the the U.S. in 2017 to support unprecedented United Nations Security Council sanctions against North Korea in response to its nuclear and missile tests.
“This time around, new tests may not have the same effect at the UN,” said Ankit Panda, a Stanton senior fellow at the Carnegie Endowment for International Peace, adding that tensions could escalate quickly if Biden responds with a show of military might. “The greatest risk would be that we reenter a crisis cycle with North Korea.”


fortune--2020-11-29--These 5 major gym chains still make it annoyingly hard to quit

Gyms have been among COVID-19’s most dramatically impacted victims, due to the transmission risks of packing heavily breathing people into a confined space for hours at a time. But there’s one thing the pandemic hasn’t changed: It’s still exasperatingly difficult to get out of a gym contract.
Fitness clubs have long relied on long-term membership agreements to prevent flighty customers from abandoning their New Year’s resolutions without a financial penalty. But given the public health considerations of the coronavirus pandemic, gyms’ generally stringent membership cancelation policies—specifically, requirements that members must visit a physical location or send a certified letter to terminate their contracts—have come into relief.
Information on outbreaks linked to gyms paints a hazy picture. Since the summer, numerous COVID-19 outbreaks have been tied to fitness centers, including ones in Elmhurt, Ill., San Diego, and Hawaii’s Oahu island.
Data released by the Minnesota Department of Health last week showed that 10.7% of all outbreak cases in the state can be attributed to gyms, the fourth most common setting after restaurants and bars, weddings, and sports events. This drove Minnesota’s governor to order a four-week pause on certain public gatherings, including closing gyms, last week. Yet in Louisiana, gyms only ranked 14th out of 19 setting categories in terms of linked outbreak cases. Fitness centers there can still operate at 50% capacity.
Fortune reviewed the policies of 10 of the largest fitness chains in the U.S., using a list compiled by Club Industry of companies ranked by 2018 revenue. Of those chains, five currently allow membership cancelations over the phone, online (either by email or web form), or both: 24 Hour Fitness, Life Time Fitness, Gold’s Gym, Bay Club, and Crunch Fitness. Crunch explains on its site that it allows members to cancel via email or letter because of COVID-19; the other four have no public communications explaining if their policies allowing remote cancelation have always been in place, or are new in response to the pandemic.
The policies of the remaining five—LA Fitness, Blink Fitness (a subsidiary of Equinox Holdings), Planet Fitness, Town Sports International (whose regional brands include New York Sports Clubs, Boston Sports Clubs, Philadelphia Sports Clubs, Washington Sports Clubs, and Lucille Roberts), and XSport Fitness—require members to either visit a location or send a certified letter to cancel. (According to its website, LA Fitness does not require the letter to be certified, but recommends it.)
Certified mail, which is run by the U.S. Postal Service, typically involves customers sending their letter from a physical post office location. Certified mail can be sent from home, but customers will not receive a validated receipt—which, in practice, means they can’t prove they sent the correspondence if the recipient claims not to have received it.
In maintaining their policies, the latter group of gyms, and others that encourage customers to leave their homes if they wish to cancel memberships, could exacerbate the spread of the coronavirus ravaging the nation.
“In the absence of a congressional stimulus package to help such businesses, many are resorting to policies that might, ironically, further spread of COVID-19,” Laurie Garrett, author of The Coming Plague and a Pulitzer Prize–winning public health journalist, told Fortune in an email.
In a sign of the increasing attention on this issue, New York Gov. Andrew Cuomo last week signed a law requiring gyms to offer customers easier and cheaper ways to cancel their memberships, including online or over the phone.
Fortune contacted all of the aforementioned gyms that do not allow phone or email cancelation for comment on the rationale behind their policies, but all either declined to comment or did not respond.


fortune--2020-11-29--U.S. news coverage of COVID has been more negative than in other countries, researchers find

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The Centers for Disease Control and Prevention offers abundant advice for coping with COVID-19, including this recommendation for those troubled by stress: “Take breaks from watching, reading, or listening to news stories.”
Just-published research reveals why that advice may be especially apt for people who consume major media content in the U.S. Its central finding: While the pandemic is definitely no picnic, coverage of it in America’s most-viewed and most-read media outlets is vastly more negative than coverage in U.S. media broadly defined, or in non-U.S. media.
You may wonder how coverage of a deadly global pandemic could be anything other than negative, but day-to-day developments over the past eight months have been good as well as bad. Case counts sometimes decline, therapies are discovered, vaccine research advances. Through it all, America’s most popular media outlets have proved extraordinarily adept at finding the clouds in a blue sky and making them the focus of the story.
The new research paper, “Why is all COVID-19 news bad news?” comes from Bruce Sacerdote and Ranjan Sehgal of Dartmouth College and Molly Cook of Brown University. They analyzed 20,000 COVID-related articles and TV transcripts from U.S. and English-language media in the U.K., India, Canada, and Australia. The researchers measured negativity using established methods, augmenting those results with their own system based on two- and three-word phrases combined with machine learning “to find the phrases that best predict whether the human reader will classify an article as strongly negative.” The articles and transcripts fell into three subtopics—vaccines, case counts, and reopenings.
“The most striking fact,” the researchers report, “is that 91 percent of the U.S. stories are classified as negative whereas 54 percent of the non-U.S. stories are classified as negative.” Within the persistently downbeat U.S. media, no patterns are apparent. Coverage is just as negative when new cases are declining as when they are increasing. A given media outlet’s political leanings are irrelevant; conservative Fox News is more negative than liberal MSNBC, but the liberal New York Times is more negative than the conservative New York Post.
Overall, the major U.S. media outlets—the 14 most viewed and read—are the most negative of all. As an example, the authors cite separate research on schools during the pandemic which found that overall infection rates among students were low (0.14%) and schools didn’t become super-spreaders, as many feared they would. Yet 90% of the school reopening reports in the U.S. major media were negative vs. only 56% in non-U.S. major media.
The big question is why the U.S. media, especially the major media, are so relentlessly gloomy. The authors believe they’ve found the answer, and it isn’t that the pandemic has been worse in the U.S. than in other countries; even in the early days and other periods when it was raging far more fiercely elsewhere, U.S. coverage was still more negative. The answer, they think, is in the New York Times’ daily list of its most popular articles. The researchers found that in the generally negative U.S. media, and then in the even more negative subset of major media, the most popular Times articles were still more negative, and by a wide margin. Extreme negativity is apparently what the readers love.
Or as the researchers say, “Our results suggest that U.S. major outlets publish unusually negative COVID-19 stories in response to reader demand and interest.” That tracks with the findings of a bevy of research about negativity bias in human psychology: People gravitate toward and tend to remember bad news.
The COVID-19 news researchers don’t attempt to explain the next “why,” however, which is why Americans in particular prefer stories that play down the good news and play up the bad. That will require a separate and much deeper study.


fortune--2020-11-30--Moderna to request clearance for COVID-19 vaccine in U.S. and EU

Moderna Inc. plans to request clearance for its coronavirus vaccine in the U.S. and Europe on Monday, after a new analysis showed the vaccine was highly effective in preventing Covid-19, with no serious safety problems.
The primary analysis, which included 196 cases, found the vaccine was 94.1% effective, in line with preliminary findings released earlier this month. None of the participants in the trial who’d received the vaccine developed severe Covid-19. All 30 severe cases observed in the study occurred in participants who received placebo shots, according to a company statement.
The shares extended their gains to as much as 12% before U.S. markets opened, hitting a record of $142.85. They have risen more than sixfold since the year began.
The new results put the Cambridge, Massachusetts-based biotechnology company on track to have one of the first Covid-19 vaccines to be cleared in the U.S. A similar vaccine from Pfizer Inc. and BioNTech SE was submitted to U.S. regulators earlier this month and is scheduled to be reviewed ahead of Moderna’s shot.
Moderna said it plans to apply on Monday for an emergency-use authorization for the vaccine in the U.S. and for conditional marketing authorization in Europe. Advisers to the U.S. Food and Drug Administration will likely scrutinize the data at a public meeting on Dec. 17, the company said, one week after a similar review of Pfizer’s vaccine is expected to take place.
“We have been working nonstop in the last few weeks” to get the vaccine data ready to submit to regulators, Stephane Bancel, Moderna’s chief executive officer, said in an interview. Once authorities sign off, the company will move quickly to distribute the shots, part of a vast vaccination effort that will unfold as hospitals in the U.S. strain under a surge in infections.
“We are ready today to ship the vaccine,” Bancel said. “We have millions of doses ready, we have more and more every couple days.”
If the vaccine is cleared in the U.S., which Bancel said could occur as soon as 24 to 72 hours after the Dec. 17 meeting, Moderna’s entire inventory will be sent to the federal government. New lots will be shipped as soon as they pass muster, Bancel said. The company expects to be able to ship 20 million doses in the U.S. by the end of the year.
The new analysis showed the vaccine worked consistently well in older and younger adults, as well as minorities, the company said. Moderna didn’t disclose the vaccine’s exact efficacy in those groups, and Bancel said that more detailed data is still being finalized.
Overall, there were 185 cases of Covid-19 in trial participants who got a placebo, and 11 cases in people who got the vaccine.
Safety Signals
As mandated by the FDA, Moderna said it had also accumulated two months of safety data from its final-stage trial of more than 30,000 participants. Reported side effects included injection-site pain, fatigue, muscle or joint pain and headache. The side effects were more common and severe after the second dose of the two-dose vaccine, Moderna said.
The results bolster an interim analysis released on Nov. 16, which showed the vaccine was 94.5% effective in preventing symptomatic Covid-19 and successful in preventing the most severe infections.
On Nov. 20, Pfizer and German partner BioNTech became the first to seek emergency U.S. clearance for a vaccine, after their shot was 95% effective in preventing symptomatic Covid-19 in the final analysis of a nearly 44,000 participant trial. That vaccine application will be reviewed by a panel of FDA advisers on Dec. 10, potentially paving the way for it to become available soon after that.
Both the Moderna and Pfizer vaccines rely on a technology called messenger RNA that turns the body’s cells into vaccine-making factories. Messenger RNA has never before been used to develop an approved vaccine. Moderna, which has co-developed the mRNA candidate with the National Institutes of Health, has already reached agreements to supply 100 million doses to the U.S. and 80 million to the European Union, among others.(Updates with pre-market trading in third paragraph.)
–With assistance from Riley Griffin.


fortune--2020-11-30--Why India’s software startups are poised for global dominance

As the contours of the post-COVID global economy sharpen, few would dispute the accelerating importance of software generally and of software as a service (SaaS) specifically. The average U.S. enterprise now uses more than 1,000 SaaS products, demonstrating with their buying power the effectiveness of this model. What fewer recognize is that Indian entrepreneurs are the global economy’s emerging SaaS powerhouse, building on longstanding leadership in IT services. India’s talent pool, local resources and market dynamics, and pay-it-forward attitudes are driving this trend toward longer-term dominance.
Over just the past five years, India has gone from a modest SaaS ecosystem to more than 1,000 SaaS startups, of which more than 150 have exceeded $1 million in revenues. The software reviews website G2 found that reviews and traffic for Indian SaaS companies jumped 350% in 2019 over the prior year, the fastest of any major region in the world. Funding for SaaS startups in India also more than doubled to exceed $1 billion last year for the first time. Although the $30 billion invested in the U.S. dwarfs this amount, the budding Indian SaaS ecosystem’s evident cost efficiencies and other advantages ensure that India matters.
We expect this trend to accelerate. As entrepreneurs ourselves engaged in building and financing Indian SaaS businesses—including serving on opposite sides in one of the first acquisitions by an Indian SaaS leader of a U.S. counterpart—we see a convergence of powerful positives at work here. This convergence undergirds our expectation that in a decade India will be the global center for the then-estimated $1 trillion SaaS software industry—meaning that the country’s entrepreneurs and engineers will help drive the most critical enabler of global productivity. At the very least, this matters to both software vendors and users globally as they consider their own strategies and partnerships.
The roots of India’s opportunity to become the leading fount of SaaS entrepreneurship date to the inception of the Indian Institute of Technology (IIT) campuses across the country during the 1950s, which helped create what is arguably the world’s largest technical talent pool. This in turn helped give birth to India’s IT services industry, which today has the lion’s share of the global market and employs about 4 million people.
As the Indian economy has continued to scale, India’s capable IT services companies have honed a huge talent pool now increasingly focused on product development, guided by leaders at top venture capital and technology businesses in the U.S. and elsewhere. Moreover, many global tech powers such as Amazon, Microsoft, and Google have their largest R&D centers outside the U.S. in India, recognizing cost advantages while helping to build world-class product management and design and engineering talent that is now plunging into startups, particularly in SaaS.
On top of these advantages in the quality and cost of talent, Indian SaaS entrepreneurs see expanding benefits in their home market. While few Indian companies were active SaaS buyers previously, now India has become a huge greenfield consumption playground for software in general and SaaS in particular. The India SaaS market is estimated to be growing at a 36% CAGR (2018–2022) per the local industry association Nasscom, and this is boosting Indian SaaS providers as they can more efficiently learn and scale.
With Indian SaaS companies finding product market fit more quickly with initial customers in India, they can then scale and serve adjacent regions including Southeast Asia and the Middle East. Many SaaS businesses then move quickly to target the U.S., thereby creating attractive U.S. jobs. In our experience, the most successful among them then either move top management to the U.S. or build a large presence quickly through acquisition.
Indian SaaS startups are also coming to market just as the massive new opportunity is developing to deliver artificial intelligence via SaaS at production scale. Building on SaaS’s ongoing replacement of core software segments such as enterprise resource planning (ERP), customer relationship management (CRM), and point of sales (POS) systems, this move into A.I. shows that the shift to SaaS globally is still in its early innings.
Another factor favoring India’s rise as the center of the global SaaS economy is key industry leaders’ “pay it forward” values, which have helped the Indian SaaS community to become a true self-learning machine. At a Chennai gathering for SaaS entrepreneurs earlier this year, successful leaders like Freshworks CEO Girish Mathrubootham devoted hours to educating peers at younger companies about the entire SaaS playbook—for the benefit of all, even potential future competitors. This desire to give back is arguably a particular hallmark of many Indian entrepreneurs and is reflected in longstanding institutions such as The Indus Entrepreneurs (TiE) in Silicon Valley.
As companies emerge from a year dominated by crises, important foundations are being set for an industry that is becoming a lynchpin of the global economy. With a pay-it-forward culture, one of the largest high-growth product startup ecosystems, skilled product development talent, R&D cost advantages, as well as maturing sales and marketing ecosystems in India and beyond, the future of SaaS is evident—in India.
Atul Jalan is the CEO & MD of Manthan Systems, a Bangalore-based SaaS company that provides a suite of solutions for retail and consumer brand companies. He is the author of Where Will Man Take Us? (Penguin, 2019)
Brewer Stone is a partner at Nfluence Partners, where he advises U.S. and Indian technology entrepreneurs and investors, including a U.S. SaaS company being acquired by Manthan.


fortune--2020-11-30--COVID’s impact on higher education

COVID’s impact on higher education

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Good morning.
NYU tech guru Scott Galloway wins the prize for getting the first book to market on the post-Corona economy. He quickly and correctly zeroed in on what makes this economic crisis so distinct from those of the past: it was an accelerant, not a retardant. “A virus one four-hundredth the width of a human hair grabbed a sphere weighing 13 billion trillion tons and set it spinning ten times faster.”
Galloway completed his manuscript in August, and while some of his predictions seem obvious—big tech is a big winner; work from home is here to stay; cash is king—others may prove premature. Like Andrew Cuomo, he might have been prudent to let the crisis play out before penning a book.
But I was taken by his chapter on higher education. The virus, he points out, “has been especially hard on industries whose customers consume the product sitting shoulder to shoulder, like sports, airlines, restaurants, events—and…universities.” In the case of higher ed, it is hitting a sector already overripe for disruption. College tuition has increased 1,400% in the last four decades, demographics is about to deliver a body blow to demand, online higher education is finally maturing, and the best companies—as I’ve said here before—are working hard to retool their hiring systems to focus more on skills, less on college credentials. A pandemic that shuts down campuses could—and probably should—create a perfect storm.
By the way, in a separate chapter, Galloway refers to the “founder-worship era” in the venture capital business. That was the topic of a brilliant piece by Charles Duhigg in last week’s New Yorker, focusing on the spectacular collapse of WeWork. The fundamental problem, says Duhigg, is not the emergence of a charismatic cult leader like Adam Neumann—it is the VC culture that enabled and encouraged Neumann to do his thing, with no constraints. This week’s must-read.
More news below. And an early warning: Fortune announces its Businessperson of the Year on Wednesday. Who should win? Send in your predictions.
Alan Murray
@alansmurray
alan.murray@fortune.com
A correction, courtesy of Heidrick & Struggles, which told us last week that only 3% of new CEOs appointed between March 11 and June 30 in the U.S. this year were women. In fact, they missed one. The number was actually 6%, compared to 12% in the five months before the pandemic.
TOP NEWS
Wall Street data
Two of Wall Street's biggest data providers may merge, as S&P Global is reportedly close to buying IHS Markit for around $44 billion in stock. London-based IHS Markit's market value is around $37 billion, and S&P Global's around $82 billion. Fortune
Biden team
More on President-elect Biden's economic-team appointments: Center for American Progress chief Neera Tanden is reportedly going to head up the Office of Management and Budget, Princeton economist Cecilia Rouse will chair the Council of Economic Advisors (and be the first Black person to do so), and Janet Yellen's top deputy at Treasury will be Adewale Adeyemo. In short, expect more aggressive fiscal stimulus, and more government spending on issues such as education, infrastructure and the green economy. Wall Street Journal
China blacklist
President Trump will reportedly add China's top chipmaker, SMIC, to the U.S. blacklist of companies with alleged ties to the Chinese military. Ditto the oil and gas producer CNOOC. For the companies, that will mean less access to American investors. And of course it's likely to exacerbate tensions between the U.S. and China. Reuters
Wet iPhones
Italy's competition authority has fined Apple around $12 million for claims it made about the water-protection of its iPhones. The AGCM said Apple had claimed various levels of water resistance for models from the iPhone 8 on, but the claims only stood up under lab conditions involving still, pure water. It also noted that the devices' warranties are voided in cases of damage involving liquids. Business Insider
AROUND THE WATER COOLER
Lloyds CEO
The U.K.'s Lloyds Banking Group (the country's biggest lender) has named HSBC wealth chief Charlie Nunn as the replacement for outgoing CEO Antonio Horta-Osorio. Nunn has been at HSBC for nearly a decade, before which he worked for Accenture and McKinsey. CityAM
5G progress
The Swedish telecommunications equipment giant Ericsson predicts that there will be 220 million 5G subscriptions by the end of this year, up from an earlier forecast of 190 million. The increase is mostly down to China. Reuters
Australian wine
China's new tariffs on Australian wine—as much as 212%—will have a "devastating impact" on Australia's smaller wine producers, according to the country's national association of wine and grape producers. Beijing claims Aussie producers dump their product on the Chinese market, but the dispute is really part of a wider argument, relating to a variety of issues, that is rapidly escalating (see also: China's foreign ministry spokesman tweeting a doctored picture of an Australian soldier holding a knife to the throat of an Afghan child.) CNBC
Student debt
What would happen to the U.S. economy if President-elect Biden cancelled most federal student loan debt, as Senate Minority Leader Chuck Schumer hopes will happen? According to research conducted a couple years back, the result would be higher GDP, slightly lower unemployment, more than a million new jobs, and slightly higher Fed interest rates. Fortune
This edition of CEO Daily was edited by David Meyer.


fortune--2020-11-30--S&P Global reportedly in talks to buy IHS Markit, as race for scale among data providers takes off

S&P Global Inc. is in advanced talks to buy IHS Markit Ltd. for about $44 billion, a deal that would accelerate the wave of consolidation among Wall Street’s biggest data providers.
An announcement could come as early as Monday, according to a person familiar with the matter, who declined to be identified because the information isn’t public. IHS Markit was valued at $36.9 billion at the close of New York trading on Friday, after climbing to a record earlier in the week. S&P has a market capitalization of $82 billion after climbing 25% in New York this year.
The proposed tie-up of S&P with IHS Markit, a research firm with more than 5,000 analysts, data scientists, financial experts and industry specialists, is part of a race for scale as the industry’s largest players try to capitalize on surging demand for data and analytics in increasingly computerized financial markets. This follows London Stock Exchange Group Plc’s $27 billion agreement last year to acquire Refinitiv.
Shares of S&P Global, IHS Markit and rivals including MSCI Inc. have soared in recent years, providing ample currency for deal-making.
“This is a huge consolidation of financial databases and services,” said Gary Dugan, chief executive officer of the Global CIO Office, an investment firm in Singapore. “S&P probably gathered that expansion incrementally wouldn’t work and instead has gone for a major acquisition, which will deepen their product range and relevance.”
Bloomberg LP, the parent of Bloomberg News, competes with IHS Markit and S&P Global in providing financial analytics and information.
The deal would be the world’s second-largest acquisition of 2020, second only to the $56 billion set of transactions among China’s biggest oil and gas companies to sell their pipeline networks to a new national carrier, according to data compiled by Bloomberg.
Representatives for S&P Global and IHS Markit didn’t immediately respond to requests for comment.
The takeover would be an all-stock deal, according to the Wall Street Journal, which first reported the talks.
Markit was famously founded in a U.K. barn by Lance Uggla, a Canadian who spotted an opportunity to provide pricing for the opaque world of credit default swaps just as trading of the derivatives was taking off in the early 2000s. Uggla built up the company through a breakneck series of acquisitions, culminating in the 2016 merger with IHS. A 2014 IPO of Markit valued it at about $4.5 billion.
Regulatory scrutiny could pose one risk for the tie-up, given the overlap between the firms’ data offerings, according to Craig A. Huber, founder of Huber Research Partners LLC. The LSE is still negotiating with European Union regulators over its deal for Refinitiv, with competition authorities expressing concerns over how some companies’ control of data can make them gatekeepers for an industry.
“Antitrust could be an issue since both are market data providers,” said Jin Rui Oh, director at United First Partners, an investment and advisory group that specializes in special situations. “That could be a little tricky.”
–With assistance from Max Zimmerman, Linus Chua, Kyungji Cho and Tom Metcalf.


fortune--2020-11-30--Tesla can now sell its made-in-China SUVs in China

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Earlier this month, U.S. electric-vehicle maker Tesla began expanding the production capacity of its Shanghai Giga factory so it could start producing its Model Y vehicles there; now it has permission to sell the Model Y in China, too.
Chinese regulators at the Ministry of Industry and Information Technology on Monday granted Tesla official permission to sell its made-in-China Model Y series of sport utility vehicles in the country.
The Model Y SUV will be the second Tesla model to come out of Tesla’s Shanghai factory, after its Model 3 sedan. The Shanghai factory is slated to roll out its first Model Y cars in early 2021.
The Shanghai Giga factory—Tesla’s first production facility located outside the U.S.—kicked off production in October 2019 and delivered its first made-in-China Tesla cars, the Model 3 series, to Chinese customers last December. Tesla has since exported some of its Shanghai-made Model 3 cars to Europe.
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Tesla didn’t immediately respond to Fortune’s request for comment.
The regulatory approval was expected, but it gives Tesla the official go-ahead to sell a new vehicle to the world’s fast-growing electric vehicle market—a market where it already has a commanding lead over rivals.
In the first half of 2020, Tesla was the No. 1 EV-seller in China, which is also the world’s largest car market overall. Tesla’s share of China’s EV market was 21% during the first six months of 2020, compared with 6% a year earlier. Tesla picked up market share once it started selling its China-made vehicles in China in late 2019; the domestically produced vehicles were 13% cheaper for Chinese consumers than Teslas imported from the U.S.
In the first nine months of 2020, China accounted for 19% of Tesla’s revenue, compared with 12% for the same period of 2019.
Even with its dominant market share in the mainland, the California-based automaker faces growing competition from Chinese electric vehicle firms that are capitalizing on the Tesla hype.
Shanghai-based startup Nio reported record vehicle deliveries in the third quarter of 2020. Xpeng and Li Auto, which both debuted on U.S. exchanges this summer, also reported strong third-quarter sales figures.
Tesla’s shares soared earlier this month after it joined the S&P 500 stock market index of large U.S.-listed companies, and the electric-vehicle maker also reported record deliveries in its third-quarter results.
Tesla’s vehicle production in the third quarter increased around 76% compared with the second quarter of 2020, thanks to the firm’s Shanghai factory, which helped offset a drop in production caused by the coronavirus-induced closure of Tesla’s California plant.


fortune--2020-11-30--AstraZeneca COVID-19 vaccine comes under scrutiny again, this time in India

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A participant in AstraZeneca’s COVID-19 vaccine trial in India claims he had an adverse reaction after receiving a shot of the coronavirus vaccine that is in late-stage testing, adding to a list of recent woes for the British drugmaker’s experimental immunization.
The Indian Council of Medical Research (ICMR), India’s medical research regulator, is assisting an inquiry into the participant’s allegation but told Reuters on Sunday there is currently “no immediate cause of concern,” nor are there any plans to halt the trial.
The 40-year-old trial participant, who received the vaccine shots on Oct. 1 at a trial site in Chennai, India, said he experienced acute “neurological and psychological” side effects after he received the vaccine. He is seeking 50 million rupees—around $676,000—in compensation. The man also called for the testing, manufacturing, and distribution of the AstraZeneca vaccine to be “stopped immediately.”
The Serum Institute of India, the vaccine manufacturer running the AstraZeneca vaccine trials in India, said in a statement to India’s Economic Times that there is “absolutely no correlation” between the man’s condition and the vaccine trial. It called the man’s allegations “malicious and misconceived” and said it would seek around $13.5 million in damages for the allegations.
The Serum Institute has already produced millions of doses of AstraZeneca’s vaccine.
The ICMR, the Serum Institute, AstraZeneca, and the Oxford Vaccine Group, which developed the vaccine with AstraZeneca, didn’t immediately reply to Fortune’s requests for comment.
AstraZeneca experienced a late-stage trial hiccup in September when it halted clinical trials across the globe because of a suspected adverse reaction in a U.K.-based trial participant.
The vaccine’s trials in the U.K. resumed on Sept. 12, four days after the suspension, following safety reviewers’ confirmation that it was safe to do so; the Serum Institute received approval to resume trials on Sept. 16; U.S. trials resumed in October.
The India trial participant’s allegations follow last week’s criticism of AstraZeneca for a perceived lack of transparency in its clinical trial analysis.
On Nov. 23, AstraZeneca announced that an early analysis of its late-stage clinical trial data showed its COVID-19 vaccine candidate was either 62% or 90% effective, depending on how the doses were administered to participants. AstraZeneca’s announcement followed COVID-19 vaccine trial results from Pfizer and Moderna, which had both reported efficacy rates of 90% and up.
AstraZeneca’s results were widely considered positive and promising, especially because its candidate is relatively cheap and easy to produce and a large portion of its doses are slated to go to low-income countries. It’s also easier to transport and store than Pfizer’s and Moderna’s vaccines because it doesn’t require ultralow storage temperatures.
But days after its Nov. 23 news, AstraZeneca and Oxford came under fire for initially omitting some information about the trial results, including that that the 90% efficacy rate was discovered by mistake, when researchers unintentionally gave a group of participants half a dose of the vaccine instead of the full dose.
AstraZeneca defended its results and methods, saying it used the “highest standards” and that it would carry out further analysis.


fortune--2020-11-30--Universal Studios’ long-awaited Super Nintendo World finally gets an opening date

Universal Studios Japan plans to open its $580 million Nintendo attraction on Feb. 4, finally debuting a long-delayed effort to introduce Mario and other beloved characters to real-world theme park visitors.
Super Nintendo World, built on the existing Universal Studios Japan site, is envisioned as a life-sized replica of Nintendo Co.’s most popular games with rides, shops and walk-through activities. One of the first attractions will be a Mario Kart ride inside a recreation of Bowser’s Castle. Borrowing an idea from the Super Mario franchise, visitors can collect virtual coins by wearing a dedicated wristband as they explore the area and interact with park features via a Switch console.
The showcase is one of the largest projects ever conceived by the Osaka-based amusement park operator, which invested more than 60 billion yen ($578 million). It was originally slated for a summer opening but got postponed during the pandemic. Its kick-off could still get pushed back, as Japan grapples with a fresh outbreak and Osaka, where the park is located, becomes one of the nation’s worst-affected cities.
A lot is riding on Super Nintendo World as the theme-park industry struggles with falling revenue and Japan debates whether to promote domestic tourism. Walt Disney Co. is cutting jobs while Comcast Corp.’s NBCUniversal, the owner of the Osaka park, is suspending plans to open another Nintendo area within its Orlando location. Universal Studios Japan is also operating at half its full capacity to help curb the spread of the virus.
An attraction of Super Mario Kart at Super Nintendo World inside the Universal Studios Japan theme park in Osaka, Japan, on Monday, Nov. 30, 2020. Universal Studios Japan plans to open its $580 million Nintendo attraction on Feb. 4, finally debuting a long-delayed effort to introduce Mario and other beloved characters to real-world theme park visitors. Soichiro Koriyama—Bloomberg/Getty Images
The project, which licensed characters from Nintendo, is part of efforts by the Kyoto-based games company to broaden its franchises beyond console players. Movies, merchandise stores and smartphone apps are all designed as a hook to lure new users to buy game-dedicated machines and software.


fortune--2020-11-30--Hong Kong is now paying its leader’s $672,000 salary in cash

Hong Kong’s Chief Executive Carrie Lam says that she has “piles of cash” at home because she is denied basic banking services due to U.S. sanctions.
In a television interview, Lam said the Hong Kong government has to pay her in cash because she does not have a bank account following sanctions imposed by the U.S. on her and other officials for what it called their role in undermining Hong Kong’s autonomy from mainland China, including imposing a national security law on the city at the end of June.
“Sitting in front of you is a chief executive of the Hong Kong SAR (special administrative region) who has no banking services made available to her,” Lam told Hong Kong International Business Channel. “I’m using cash every day, for all the things. I have piles of cash at home because the government is paying me cash for my salary because I don’t have a bank account.”
U.S. President Donald Trump imposed the sanctions in August on Chinese and Hong Kong officials including Lam; Xia Baolong, director of the Hong Kong and Macau Affairs Office of China’s State Council; and Chris Tang, commissioner of the city’s police. Among other things, the sanctions mean any banks that do business with them risk penalties that would threaten their access to the U.S. financial system.
In October, the State Department sent a similar list to Congress naming 10 officials including Lam. U.S. since then has started a 60-day countdown to identify banks that have business with those people, putting lenders at risk of being sanctioned.
Even China’s largest state-run banks operating in Hong Kong have had to comply to preserve their access to crucial dollar funding. Major lenders with operations in the U.S. including Bank of China Ltd., China Construction Bank Corp., and China Merchants Bank Co. have turned cautious on opening new accounts for the sanctioned officials, including Lam, Bloomberg News reported in August.
Lam, who earns about HK$5.2 million ($672,000) in the year of 2020, said she only withdraws part of her salary, with the remaining kept in the treasury and she will take back her unpaid salary “at a point in time,” in comments to the South China Morning Post.
“It’s very honorable in this set of circumstances to be so unjustifiably sanctioned by the U.S. government. It’s an honor,” Lam said. She has repeatedly blasted the U.S. sanctions as unjustified interference in Hong Kong’s internal affairs.
The new national security law, which criminalized subversion, secession, terrorism and collusion with foreign forces, has enabled authorities to clamp down on Hong Kong’s political opposition, arresting pro-democracy activists and banning lawmakers from running in legislative elections.


fortune--2020-12-01--Airlines are facing ‘mission of the century’ in shipping COVID vaccines

What could happen to the economy if Biden canceled the majority of student loan debt ?

In cooled warehouses on the fringes of Frankfurt airport, Deutsche Lufthansa AG is preparing its depleted fleet for the gargantuan task of airlifting millions of doses of the vaccines meant to end the global pandemic.
Lufthansa, one of the world’s biggest cargo carriers, began planning in April in anticipation of the shots that Pfizer Inc. to Moderna Inc. and AstraZeneca Plc are developing in record time. A 20-member task force is at work devising how to fit more of the crucial payload onto the airline’s 15 Boeing Co. 777 and MD-11 freighters, along with hold space in a vast passenger fleet now flying at just 25% of capacity.
“The question is how we scale it up,” said Thorsten Braun, who leads Lufthansa’s part in the global effort.
Laid low by a COVID-19 outbreak that’s decimated passenger demand, airlines will be the workhorses of the attempt to eradicate it, hauling billions of vials to every corner of the globe. It’s an unprecedented task, made more difficult by the carriers’ diminished state after culling jobs, routes and aircraft to survive a crisis that’s reduced air traffic globally by an estimated 61% this year.
“This will be the largest and most complex logistical exercise ever,” said Alexandre de Juniac, chief executive officer of the International Air Transport Association, the industry’s chief lobby. “The world is counting on us.”
IATA estimates that the equivalent of 8,000 loads in a 110-ton capacity Boeing 747 freighter will be needed for the airlift, which will take two years to supply some 14 billion doses, or almost two for every man, woman and child on Earth. It’s a tall order, given about one-third of the global passenger fleet is still in storage, based on data from Cirium.
Katherine O’Brien, the World Health Organization’s head of immunization, likens the task of distributing the vaccines after the months-long development sprint to summiting Mount Everest having reached base camp.
“The climb to the peak is really about delivering the vaccines,” she said on Nov. 16.
Here are some of the biggest challenges along the way:
Cargo capacity
There are around 2,000 dedicated freighters in use, carrying about half of all goods moved by air. The remainder typically goes in the bellies of the world’s 22,000 regular jetliners.
While the freighters are full, air-cargo volume has tumbled this year because so much belly capacity is sitting idle. Airlines have drafted about 2,500 passenger planes into cargo-only roles, but the job of distributing the vaccine would be easier if fleets were flying with usual frequencies to their usual destinations.
At the start at least, space will be limited. The massive undertaking is expected to begin at a peak time for cargo carriers, right as the online Christmas shopping frenzy, boosted this year by COVID-19, reaches its zenith.
Pfizer plans to ship 1.3 billion doses of its vaccine by the end of next year. Moderna, which plans to request U.S. and European approval on Monday, will produce about 500 million. AstraZeneca has manufacturing capacity for 2 billion doses, half of those targeted to low- and middle-income nations.
“What we have to do is very quickly help the world get up on its feet,” said Dennis Lister, vice president for cargo at Emirates, the world’s largest long-distance airline. “Part of that is making sure we get vaccines on planes to people that need it, so we get people flying again.”
To allow more passenger jets to be brought back into service, governments should open up travel, says Glyn Hughes, IATA’s global head of cargo, striking a familiar industry refrain.
Deep freeze
The Pfizer-BioNTech SE vaccine adds an extra layer of difficulty. It must be transported at minus 70 degrees Celsius, colder than winter in Antarctica, and the companies plan to use GPS-enabled thermal sensors to track the location and temperature of each vaccine shipment.
Upon arrival, the vaccine can be stored in ultra-low temperature freezers (which are commercially available and can extend the vaccine’s shelf life for up to six months), or in a fridge in a hospital for five days at 2-to-8 degrees Celsius, or in a special Pfizer thermal shipper, in which the doses will arrive. That can be used as a temporary storage unit by refilling with dry ice for up to 15 days. Once thawed, the vials cannot be re-frozen.
The choreography will be delicate, with controls in place from factory to clinic and all points between. Virtually no aircraft are capable of keeping items so cold. Airlines will instead rely on Pfizer’s specialized containers to cool the medicine.
United Airlines Holdings Inc. has begun flights to ready Pfizer’s vaccine for distribution if it receives regulatory approval, said a person familiar with the matter. The pharmaceutical company and the airline declined to comment on the flights, which were reported earlier by the Wall Street Journal.
American Airlines Group Inc. and Delta Air Lines Inc. are among other carriers that have said they’re prepared to handle shipments of the Pfizer drug. American has both temperature-controlled containers and pre-packaged shipments with cold packs or dry ice.
Delta recently approved use of DoKaSch GmbH’s Opticooler RAP climate-control containers. It also increased allowable levels of dry ice, which is regarded as a “dangerous good,” according to IATA, meaning only about 50% of hold space can normally be filled with vaccine shipments packed this way.
“If all vaccine producers ship within a narrow time frame, the situation would require all cargo carriers to be involved,” said Vittal Shetty, director of innovation and delivery-airport excellence and cargo for American. “While distribution needs continue to evolve, a team approach will ensure that there will be enough air cargo capacity to handle demand.”
American began testing vaccine thermal packaging and handling processes on Boeing Co. 777-200 service between Miami and South America in mid-November, according to a company statement Monday. The carrier didn’t name the pharmaceutical and cargo companies it’s working with.
Storage
Despite the hurdles, a well-established global network for pharmaceutical distribution should expedite the flow of doses. Cities ranging from Miami, Dallas and London, to Liege in Belgium, Dubai, Mumbai, Singapore and Incheon in Seoul have well-established deep-freeze capabilities.
United Parcel Service Inc. has built facilities in Louisville, Kentucky, and in the Netherlands with a total of 600 deep freezers that can each hold 48,000 vials of vaccine at temperatures as low as minus 80 degrees Celsius.
FedEx Corp. has added freezers and refrigerated trucks to its already extensive cold-chain network, and Richard Smith, who’s heading up the delivery firm’s vaccine effort, has pledged to free as much air and ground capacity as needed.
Delivery firms have experience transporting flu vaccines and medical samples at low temperatures. And both UPS and FedEx mobilized earlier this year to fly tons of needed medical supplies into the U.S. when the shortage was acute. They’ve since been coordinating with vaccine makers and government officials to prepare for the vaccine rollout.
“We’re just waiting until they tell us they have a vaccine ready and we will be ready to go out there and deliver it to every ZIP code in the U.S.,” Smith said. “We’ll be ready to deliver it around the world as well.”
Reaching the poor
United Nations humanitarian relief agency Unicef has been recruiting airlines into its vast effort to distribute the vaccine to more than 170 countries.
While transporting vials from their point of manufacture to a major hospital or clinic in a big, developed city is one thing, the challenge gets steep in emerging nations, where infrastructure to remote villages and towns may be rickety and unreliable, or even non-existent.
Unicef held a call in November with about 40 carriers to make plans for the global airlift to 92 of the world’s poorest nations, for which it’s leading efforts to purchase and distribute COVID vaccines. With another 80 higher-income countries that have chosen it to procure inoculations they will buy, the agency’s effort will cover 70% of the world’s population.
PT Garuda Indonesia was certified last month to transport vaccines across a country that has Southeast Asia’s biggest outbreak with more than 520,000 confirmed cases. The nation also presents one of the toughest logistical challenges, with a population of some 273 million spread across the world’s largest archipelago.
Singapore, meanwhile, a close neighbor to some of Asia’s poorest nations, should be able to target a disproportionate share of the transit, according to Alex Hungate, chief executive officer of ground-handling giant SATS Ltd. The former Singapore Airlines unit is IATA CEIV Pharma certified in Singapore, Beijing and Bangalore and is in the process of receiving the designation in Jakarta and Kuala Lumpur, he said.
The last mile
Delivery won’t be just about airlines. Cars, buses, truck—even motorcycles, bicycles and donkeys—may be required to get the vaccine to rural areas. In some places, it may need to be carried in by foot.
“You just don’t have deep-freezers everywhere,” said Adar Poonawalla, chief executive officer of Serum Institute of India Ltd., the world’s biggest vaccine maker. It’s tied up with five developers, making 40 million doses of AstraZeneca’s vaccine so far. The company aims to start manufacturing Novavax Inc.’s contender soon.
“These frozen vaccines, which are highly unstable, the developers need to work on stabilizing,” Poonawalla said.
The possibility of tampering, production of counterfeit shots and even attempts to disrupt distribution are also a concern, according to IATA. Drug companies have responded by requesting end-to-end security escorts, according to Dominic Kennedy, managing director for cargo at Virgin Atlantic Airways Ltd.
De Juniac, the IATA chief, insists that the industry is ready. “We will not disappoint,” he said.
—With assistance from Layan Odeh, Kyunghee Park, Tara Patel, Siddharth Philip, Chris Kay, Anurag Kotoky, Mary Schlangenstein, Thomas Black and Justin Bachman.


fortune--2020-12-01--British economists are extremely bothered that public debt keeps being likened to credit cards

This holiday season, a group of progressive British economists are asking for just one thing: When it comes to explaining the country’s spiraling public debt, a personal credit card is not the metaphor you’re looking for.
The use of such metaphors to explain public finances, including by the U.K.’s state broadcaster, is “inappropriate,” the economists said in an open letter, released by the Progressive Policy Think Tank.
That’s because it gives the oversimplified impression that a country’s debt load works in the same way as an individual’s, with hard limits on borrowing, the economists argued—and that limits the understanding of what options the government has to ease the economic cost of the pandemic.
“Maxing out a credit card would imply that the government is approaching a hard limit on its ability to borrow. This is not the case,” they said. “It is the consensus amongst economists that the government should at this point in time not focus on reducing the deficit, but rather on delivering the spending necessary to secure a recovery from COVID-19.”
As the pandemic has wrought huge costs for the U.K.—the 2020–21 deficit is now expected to be about 19% of GDP, the largest ever in peacetime—the debate over how to manage such costs and ensure an economic recovery has been revived. But whether the impact of those costs should be explained to the British public in personal finance terms is actually a long-standing—and deeply politicized—source of argument in the U.K.
The household economy metaphor was a favorite of Margaret Thatcher, the country’s Prime Minister through the 1980s, who foreshadowed her restructuring of the British economy—including huge cuts to public services—with an early, often repeated quote: “Any woman who understands the problems of running a home will be nearer to understanding the problems of running a country.”
It then reappeared during a period of cuts to public spending under George Osborne, the former Chancellor of the Exchequer—the country’s chief financial minister—who said that such cuts were necessary to reduce the national deficit, as the previous Labour government had “maxed out” the country’s credit card.
Many economists have long argued that it’s misleading to use the language of personal finance to describe a country’s economy: Countries have access to a wide range of complex economic levers, including tax rates and interest rate changes, that people do not, allowing governments to borrow and invest when individuals themselves are strained.
In Europe, including the U.K., pandemic costs include huge expansions to public benefits and services, tax breaks, and furlough programs that have paid millions of salaries as employees were temporarily laid off. As of mid-November, in the midst of the country’s second nationwide lockdown, around 9.6 million people were on the program, according to government statistics. Meanwhile, the U.K. economy is facing down what is predicted to be the worst economic crisis in 300 years, just as the government attempts to finalize its messy divorce with the EU.
The scale of that spending has also overturned political orthodoxy in the U.K. Those spending programs—first announced in March—were historic both in their sheer size and also for coming from a Conservative government, which for years had presided over massive cuts to public services. More government spending, including a huge push to invest in infrastructure and a national expansion of clean energy, has been announced this fall.
But if you’re going to compare the U.K. to the U.S., a credit card and a household budget as metaphors for national debt may sound appropriately quaint.
As of September, the U.S. fiscal debt for 2020 was $3.1 trillion—102% of GDP.


fortune--2020-12-01--A morose Monday can’t mess up the markets’ magnificent November

This is the web version of Bull Sheet, a no-nonsense daily newsletter on what’s happening in the markets. Sign up to get it delivered free to your inbox.
Good evening, Bull Sheeters. This is Fortune finance reporter Rey Mashayekhi filling in this week for Bernhard, who’s taking a well-deserved break. While he’s out, I’ll be recapping the day’s finance- and market-related news with a special PM edition of the newsletter.
Positive developments on the COVID-19 vaccine front couldn’t prevent global markets from pulling back on Monday, bringing a tepid end to what was a historically good November. Here’s what to know as we head into the final month of this most remarkable year.
The New York Stock Exchange is seen decorated for Christmas on Monday. Tayfun Cokun—Anadolu Agency/Getty Images
Markets update
U.S.
Neither Moderna ’s request to clear its COVID-19 vaccine, nor news that Pfizer is already shipping out its treatment, gave the markets a boost Monday. The Dow lost more than 270 points (-0.9%), while the S&P 500 dipped nearly half a percent (-0.46%) and the Nasdaq closed down a shade (-0.06%). Still, it was a historic November for U.S. markets, with the Dow’s 12% gain representing its best month since January 1987 . The Nasdaq also ended the month up nearly 12%, while the S&P gained around 11% in November.
’s request to clear its COVID-19 vaccine, nor news that is already shipping out its treatment, gave the markets a boost Monday. The lost more than 270 points (-0.9%), while the dipped nearly half a percent (-0.46%) and the closed down a shade (-0.06%). Still, it was a historic November for U.S. markets, with the Dow’s 12% gain representing its . The Nasdaq also ended the month up nearly 12%, while the S&P gained around 11% in November. President-elect Joe Biden has officially unveiled the economic team that will be advising him in the White House. As expected, former Federal Reserve chair Janet Yellen will likely become the first woman to serve as Treasury Secretary . Biden also tapped a diverse and experienced group—most of whom served in the Obama administration—to round out his economic braintrust.
has officially unveiled the economic team that will be advising him in the White House. As expected, former Federal Reserve chair will likely become the . Biden also tapped a diverse and experienced group—most of whom served in the Obama administration—to round out his economic braintrust. S&P Global has agreed to acquire IHS Markit in a $44 billion deal that would combine two of Wall Street’s largest financial data providers. In other deal news, General Motors has passed on an equity stake in electric truck manufacturer Nikola , a development that sent Nikola shares down 27% Monday. And DoorDash’s IPO could value the food delivery startup at up to $32 billion .
has agreed to acquire in a that would combine two of Wall Street’s largest financial data providers. In other deal news, has passed on an equity stake in electric truck manufacturer , a development that sent Nikola shares down 27% Monday. And could value the food delivery startup at . On the regulatory front, the Federal Reserve has urged banks to stop using LIBOR by the end of next year. The Fed is also extending through March four emergency lending facilities that it launched to deal with the pandemic’s economic impact.
has urged banks to stop using by the end of next year. The Fed is also extending through March four emergency lending facilities that it launched to deal with the pandemic’s economic impact. HSBC is considering exiting its retail banking business in the U.S., the Financial Times reported over the weekend.
Europe
The European bourses all posted losses on Monday, with London’s FTSE (-1.6%) and the CAC 40 in Paris (-1.4%) seeing the biggest slips and Frankfurt’s DAX (-0.3%) falling more slightly. The pan-European STOXX 600 was down nearly -1% on the day, but still climbed 14% in November—its best month on record.
all posted losses on Monday, with London’s (-1.6%) and the in Paris (-1.4%) seeing the biggest slips and Frankfurt’s (-0.3%) falling more slightly. The pan-European was down nearly -1% on the day, but still climbed 14% in November—its best month on record. The European Union is reportedly angling for an alliance with the Biden administration that would look to confront the “strategic challenge” posed by China .
is reportedly angling for an alliance with the that would look to confront the “strategic challenge” posed by . The International Monetary Fund has warned that Europe could feel the “scarring” economic effects of the COVID-19 pandemic well into next year, and suggested that additional stimulus measures may be needed to support the region.
has warned that Europe could feel the “scarring” economic effects of the COVID-19 pandemic well into next year, and suggested that additional stimulus measures may be needed to support the region. The spying scandal plaguing Swiss financial giant Credit Suisse has thickened, as additional instances of employees being surveilled by private investigators have come to light.
Asia
The major Asian indexes all fell on Monday, forecasting declines to come across the rest of the world. Tokyo’s Nikkei slipped -0.8%, while Hong Hong’s Hang Seng dropped more than -2% and South Korea’s KOSPI fell -1.6%. On mainland China, the major indexes in Shanghai (-0.5%) and Shenzhen (-0.2%) saw slight losses.
all fell on Monday, forecasting declines to come across the rest of the world. Tokyo’s slipped -0.8%, while Hong Hong’s dropped more than -2% and South Korea’s fell -1.6%. On mainland China, the major indexes in Shanghai (-0.5%) and Shenzhen (-0.2%) saw slight losses. The CEO of the Tokyo Stock Exchange has stepped down, taking the fall for an unprecedented system failure that halted trading for a full day on Oct. 1.
of the has stepped down, taking the fall for an unprecedented system failure that halted trading for a full day on Oct. 1. Trade tensions between Australia and China continue to escalate, with the Aussies prepared to take action through the World Trade Organization over barley import tariffs imposed by China.
and continue to escalate, with the Aussies prepared to take action through the over barley import tariffs imposed by China. It appears increasingly unlikely that Jack Ma ’s Ant Group will go public via its highly anticipated IPO before the end of next year, according to Bloomberg.
’s will go public via its highly anticipated IPO before the end of next year, according to Bloomberg. JPMorgan Chase plans to double down, literally, on its wealth management business in Singapore by doubling the number of private bankers serving wealthy Chinese clientele from the southeast Asian city-state.
Elsewhere
Gold dipped Monday and is now below $1,800/ounce after a poor November in which investors abandoned the safe haven.
dipped Monday and is now below after a poor November in which investors abandoned the safe haven. The dollar ticked up but also had a weak month overall. Meanwhile, Bitcoin hit another all-time high as it edges closer to the vaunted $20,000 mark.
ticked up but also had a weak month overall. Meanwhile, hit another all-time high as it edges closer to the vaunted $20,000 mark. Crude oil slipped as OPEC continues to deliberate extending output cuts, with Brent settling at less than $48/barrel.
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That’s all for now; please be sure to check out today’s reads below. Have a pleasant evening and see you tomorrow.
Rey Mashayekhi
@reym12
Rey.Mashayekhi@Fortune.com
As always, you can write to bullsheet@fortune.com or reply to this email with suggestions and feedback.
Today's reads
A burden lifted. There’s been much talk that President-elect Biden could pursue measures that would alleviate the astonishing $1.7 trillion student debt burden assumed by Americans today. Fortune’s Aric Jenkins examines some of the proposals currently being floated—and what impact they could have on a U.S. economy still struggling with the effects of the pandemic.
Guessing game. With current Securities and Exchange Commission chairman Jay Clayton set to depart at the end of the year, there will soon be a new sheriff in charge of one of the most important regulatory posts in Washington, D.C. Fortune’s Jeff John Roberts considers the candidates who could succeed Clayton, and the varying approaches they would bring to the SEC.
Are you experienced? As Wall Street basks in its bullish mood, Fortune’s Anne Sraders spoke with Goldman Sachs Asset Management’s Katie Koch about the stocks that will lead the post-COVID recovery in 2021. For Koch, it all comes down to millennials, who are the “world’s most powerful consumer” and will fuel a bounce-back for “experience-based companies” that got hammered in 2020 thanks to lockdown measures.
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Market candy
$9.7 trillion
That’s the amount of debt issued by companies and governments in 2020 as of Nov. 26, according to Refinitiv—a record amount fueled by the unprecedented stimulus measures pursued by central banks this year. According to the Institute of International Finance, global debt will hit $277 trillion by year-end, representing 365% of the world’s gross domestic product.


fortune--2020-11-30--Meet Rumble, the YouTube rival that’s popular with conservatives

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Three months ago, YouTube copycat Rumble was filled with home recordings of people’s family, friends, and pets. But after Republican Rep. Devin Nunes of California joined the service in August, other conservatives followed, helping add tens of thousands of new subscribers.
Seven-year-old Rumble now has nearly 80 million users, up from 40 million in August. Video streaming on the service has soared 26-fold, as measured by the amount of bandwidth used.
“The way I look at this as we’re neutral,” said Rumble CEO Chris Pavlovski. “We won’t discriminate against anyone or any group.”
The rapid rise of Toronto-based Rumble coincides with growing criticism of big tech services like Google, Facebook, and Twitter, which conservatives say unfairly censor their views. In addition to joining Rumble, many Trump supporters have flocked to right-leaning social media services such as Parler and MeWe.
Here’s everything to know about Rumble.
What is Rumble?
Similar to YouTube, Rumble lets users upload their videos and create their own channels. The service debuted as a desktop website in 2013 after Pavlovski saw people complaining that YouTube was making their videos harder to find because it favored clips from professional video publishers.
This year, Rumble grew rapidly, mostly from conservatives frustrated by Twitter and Facebook cracking down on hate speech and misinformation. As a result, Rumble’s top trending videos include ones from conservative political commentators Dinesh D’Souza, Dan Bongino, and Sean Hannity as well as the conservative news organization Just the News.
Pavlovski said he never intended Rumble to become a hub for conservatives, but he has no problem with it.
“Our politics was cute cats and dogs prior to the last three months,” he said.
How is Rumble different?
Pavlovski compared Rumble to what Twitter, Facebook, and YouTube were like 10 years ago: It uses far fewer algorithms for recommending content, and it displays videos in chronological order to users based on who they follow on the service.
Rumble also imposes fewer rules other than banning videos that include pornography, exploitation of children, illegal activity, and harassment. Videos claiming election fraud and that the coronavirus is a hoax therefore remain on the site.
“We’re not involved in fact-checking; we’re not arbitrators of truth,” Pavlovski said.
When Rumble removes videos, it’s only after humans review them, Pavlovski said—drawing a distinction between his service and Facebook, which uses artificial intelligence to filter many posts. And with about five people policing Rumble, there’s only so much they can do.
Unlike YouTube, which often boosts content that has high engagement, giving popular creators an advantage, Rumble said it doesn’t play favorites. Pavlovski said this puts all creators on an even playing field, helping some gain popularity faster than they would have on YouTube.
For example, in just a few months, Republican Rep. Jim Jordan of Ohio, a big supporter of President Trump, amassed more than 100,000 subscribers on Rumble versus the 42,000 on YouTube that he’s attracted over 12 years.
How is it funded?
Pavlovski said he bootstrapped the company on his own, starting with just a handful of employees and constantly reinvesting any profits back into the company. But that wasn’t by choice.
“We did try” to raise money, he said. “When we said we’re trying to develop a YouTube competitor, it wasn’t exactly well-received.”
Pavlovski said Rumble is financially “self-sustaining,” though he declined to provide details about its revenue. Rumble, he said, is focused on maintaining its rapid growth, which has created new infrastructure challenges.
Rumble makes money from ads and sponsorships as well as its business-oriented product that helps companies host videos on their own websites.
Where did the name come from?
The name Rumble is somewhat happenstance. Pavlovski, now 37, said that on his 30th birthday one of his friends gave him the domain Rumble.com with the expectation that he would do something with it. Pavlovski had already been considering creating a YouTube competitor, and he thought the name worked for the service.


fortune--2020-11-30--Why today’s GM news is devastating for Nikola

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From its name on down, it’s clear that zero-emissions vehicle startup Nikola aims to emulate Tesla’s soaring trajectory. But over the past six months, Nikola’s efforts to follow that blueprint have faced a series of setbacks including fraud allegations, key resignations, and a reported fraud inquiry by federal regulators.
On Monday, the headwinds grew stronger when Nikola announced that General Motors will effectively withdraw from a planned partnership that was announced in September. Investors had seen the deal as a huge win for Nikola, by giving it a massive jolt of credibility.
Under the proposed agreement, GM would have provided battery and fuel-cell technology to Nikola and manufactured Nikola’s planned Badger electric pickup.
In exchange, GM was to take an 11% stake in Nikola, as well as cash payments for its services. The deal would also have given GM a stronger foothold in the emerging zero-emissions vehicle market.
Now, instead, GM will become little more than a supplier to Nikola. Under the revised deal, GM would take no stake in Nikola. Instead, Nikola would pay GM the cost of tailoring GM’s Hydrotec fuel cells to Nikola’s planned freight trucks, and then pay more down the road to buy those fuel cells.
GM will no longer be involved in producing the Badger pickup, which Nikola says it will now cancel entirely.
In a statement, GM patted itself on the back for becoming a supplier to Nikola. But it did not comment about why the initial and much broader agreement was scaled back.
The revised agreement, which must still be finalized, was seen by analysts as negative for Nikola. The startup’s stock crumbled nearly 27% on Monday, to $20.41. That’s a decline of more than 74% from the stock’s peak of $79.73 on June 9, a few days after it went public using what’s known as a SPAC.
Dan Ives, an EV and tech analyst with Wedbush securities, called the announcement of the collapsed GM deal a “clear negative” for Nikola. Emmanuel Rosner, an analyst for Deutsche Bank, described the revised deal as “particularly negative,” because it indicates not just a shift in business strategy but GM’s more fundamental loss of faith in Nikola.
According to Rosner, the elimination of any equity from the deal “makes it clear that after months of additional due diligence, GM is not willing to take any risk on Nikola.” By opting for a cash-only deal, Rosner says, GM is signaling lowered expectations for Nikola’s long-term growth.
The announcement ends months of speculation about the GM-Nikola deal, which was tentatively announced in September. Just days later, a scathing report by short-selling Hindenburg Research alleged a variety of misrepresentations by Nikola of its technology. Most notoriously, Hindenburg claimed that Nikola had faked a promotional video that seemed to show one of its hydrogen-powered semitrucks in motion. Instead, as the company later admitted, the truck had been rolled down a hill.
That unleashed a torrent of fallout. The SEC reportedly started a fraud inquiry, and Nikola founder Trevor Milton, who was directly implicated in Hindenburg’s report, resigned from his role as CEO. And of course, Nikola’s stock slid sharply.
Analysts and investors have since then speculated about whether GM would stick to the deal, given the new evidence of possible bad faith by Nikola, and sharp declines in the current value of GM’s promised stake in the startup. The uncertainty pushed Nikola in October to signal that it could do without the partnership.
There is arguably a narrow silver lining here. The battery-powered, consumer-focused Badger pickup never entirely made strategic sense for Nikola, whose focus has always been on creating long-haul freight trucks fueled by liquid hydrogen. Its elimination may help clarify exactly what Nikola is trying to accomplish, even if it means scaling back the company’s ambitions.
That’s how Nikola is spinning today’s announcement. “We are 100% focused on hitting our development milestones to bring clean hydrogen and battery-electric commercial trucks to market,” Nikola CEO Mark Russell, Milton’s replacement, said in a statement.
But more broadly, the implications are grim. Before the downsized deal was announced, Rosner had pointed out that “Nikola’s outlook [is] highly dependent on its partnerships,” since the company, which has yet to deliver any vehicles, had not convincingly demonstrated a deep well of technical or manufacturing expertise. (Another allegation of the Hindenburg report was that Nikola had overstated claims about its progress on developing its own batteries.)
The timing of the news is particularly bad for one player: Trevor Milton. Despite leaving his CEO post under a cloud, Milton retained ownership of 85.6 million shares of Nikola, or nearly one-fourth of all outstanding shares. Milton was prohibited from selling those shares in the months following Nikola’s September stock market debut, but that prohibition expires tomorrow, Dec. 1—just as his company sheds billions of dollars in value.