fortune--2020-12-16--Google’s three-day workweek plan raises questions

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Good morning.
Google’s announcement that it is planning to give employees a three-day “flexible workweek” when they return to the office next September raises as many questions as it answers. If the company wants to encourage collaboration, how will it manage which three days people come to work? And if workers choose to live further from the office, will three days a week allow sufficient flexibility? Kudos to the Googleplex for trying to provide some clarity. But the future of work remains hazy.
To cut through the haze, Fortune is hosting a series of virtual discussions in partnership with the Future Forum by Slack. A few takeaways from yesterday’s:
—Work-from-home has helped democratize the workplace, according to Jenny Johnson, CEO of Franklin Templeton Investments. Everyone’s box is equal on Zoom.
— “Sense of belonging” is where work-from-home falls short, according to Future Forum’s Brian Elliott. The problem is most pronounced among middle managers. You can read the Future Forum’s research findings here.
—A key issue is “watercooler” type interactions. But Prithwiraj Choudhury, an associate professor at Harvard who has studied companies that work remotely, says that problem can be addressed with what he calls “planned random interactions.” More on Choudhury’s work here.
—Transparency is key to making work-from-home work. “Many organizations are set up not to be transparent,” says Gitlab’s Darren Murph. “There are gaps and silos. And you feel like you belong less.” It’s important to make goals and project updates available to all.
—Burnout is a real problem. “Most of what we have done during the pandemic we need to keep doing,” said Tracy Layney, chief human resource officer at Levi Strauss. “We will continue to focus more on burnout, well-being, and mental health.”
One thing that’s clear is the new normal will be very different from the old. “You can’t put the genie back in the bottle,” says Murph. Whether companies allow work-from-home “is going to massively affect their ability to attract talent,” he believes. “This is peoples’ lives.”
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
SMIC CEO
China's largest chipmaker, Semiconductor Manufacturing International Corp or SMIC, suddenly lost its co-CEO under strange circumstances, lopping nearly a tenth off its share price. Liang Mong Song allegedly authored a resignation letter that's been circulating on social media, and SMIC has been trying to contact him. Liang was apparently irked about the company making a board appointment without asking him. Fortune
MSCI delisting
Another reason SMIC's share's aren't so hot right now: along with six other Chinese companies that were labelled by the U.S. government as having military ties, it will be removed from MSCI's global equity indexes on January 5. The Trump administration's move means U.S. investors are barred from holding stakes in SMIC and the others, which include construction, communications and surveillance firms. Financial Times
EU vaccines
The European Medicines Agency has moved forward its potential authorization of Pfizer/BioNTech's COVID-19 vaccine. The agency was to have met to discuss the vaccine on December 29, but that's been shifted to next Monday, with official authorization possibly following around Christmas. Meanwhile, the U.S. is likely to approve a second vaccine, Moderna's, this week. Politico
Gmail outage
Gmail suffered its second outage in as many days yesterday, this time conking out for over two hours rather than one. The initial outage was apparently down to an authentication error, affecting all of Google's services that require users to log in with a Google account. Fortune
AROUND THE WATER COOLER
Digital tax
China has become the latest country to mull the introduction of a "digital tax" on companies that have enormous troves of data, judging by the comments of a senior securities-watchdog official, Yao Qian. Comparing such firms with mining companies, Yao suggested that "governments should study in depth whether it’s necessary for them to levy digital taxes to platform-like enterprises, just like they levy taxes on natural resources." Reuters
BP trees
BP has bought a controlling stake in Finite Carbon, the U.S.'s largest producer of carbon credits (it helps landowners sell parts of their forests as carbon sinks). BP innovation chief David Eyton: "Finite Carbon has the potential to build a global platform for managing and financing natural climate solutions." Wall Street Journal
Shale prospects
U.S. shale producers should be worried about the incoming Biden administration, said U.S. Energy Secretary Dan Brouillette: "There are some in Congress who are going to drive a climate policy that’s going to be very aggressive." (Bonus read: Princeton scholars reckon Biden's target of "net zero" by 2050 will require 50 million electric vehicles and a quadrupling of wind and solar capacity in the next decade alone.) CNBC
Scott generosity
MacKenzie Scott has given away $4 billion of her $60-billion-ish fortune in just four months. Scott—Jeff Bezos' ex-wife—has seen her stash surge along with Amazon's share price this year, and she's asked her team to come up with ways to give more away more quickly. Her focus: groups "operating in communities facing high projected food insecurity, high measures of racial inequity, high local poverty rates, and low access to philanthropic capital." Fortune
This edition of CEO Daily was edited by David Meyer.


fortune--2020-12-16--CEOs found their voice in a year of upheaval

Vise , a company founded by two high school graduates , raises $ 45 million in funding with Sequoia at @ @

An unusual thing happened in 2020, a year marked by a global pandemic and domestic protests over how police treat people of color: CEOs found a voice.
Previously known for avoiding sensitive topics, for fear of upsetting customers and investors, many business leaders actually made some waves. The waves they created weren’t tsunamis, and the spectrum of topics they chose to wade in on was limited, but their outspokenness nevertheless stood out compared with years past.
“Our people want to know that they work for an organization that’s willing to visibly stand up for our values and speak out in favor of those societal changes that are near and dear to us,” Joe Ucuzoglu, CEO of Deloitte U.S., the domestic arm of the business consulting giant, said during a discussion on Fortune’s Leadership Next podcast.
Following the police killing of George Floyd in Minneapolis, many CEOs had conversations with their employees about race for the first time while promising to do more to make their workforces more diverse. Others chimed in about climate change and the need to protect the environment.
The push by corporate leaders to address social problems has recently been branded “stakeholder capitalism.” Yes, companies still want to make their shareholders happy, but they also want to ensure their workers, local communities, and suppliers aren’t left behind.
The question is whether companies are just paying lip service to the idea of doing good. After all, talk is cheap, while action can be costly.
How will CEOs handle automating their workplaces, which can put employees in the unemployment line? What about standing up to a President, even one who likes to use Twitter to attack anyone who dares to speak out against him?
To be sure, CEOs will pick and choose which problems to solve and which ones to ignore in their push for profits. In general, though, Ucuzoglu said, the overall benefit will be positive.
“We, the business community, have an obligation to help make certain that this prosperity is inclusive, that we’re focused on upskilling, retraining—making certain that all communities participate equitably in a tech-driven future,” he said. “But ultimately, this will lift the opportunities for a broad cross section of society in ways that are incredibly beneficial.”


fortune--2020-12-16--The markets are betting a stimulus deal will finally get done—and soon

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 morning, Bull Sheeters.
U.S. futures are on the rise again on Wednesday as investors bet Congress could strike a long awaited stimulus deal at some point this week. If it feels as if we’ve been saying this for months, it’s because we have. And yet you bulls have never once lost faith.
That optimism is lifting global stocks.
Let’s check in on what’s moving markets ahead of a big update today from the Fed that could impact the bond market.
Markets update
Asia
The major Asia indexes are awash in green in afternoon trading with the Nikkei up 0.3% .
are awash in green in afternoon trading with the up . In Washington they can’t seem to agree on budgets and stimulus, and yet Japan is about to pass its third “extra” budget this year—this one involving an extra $210 billion to help the COVID-battered economy. Call it “Suga-nomics.”
is about to pass its third “extra” budget this year—this one involving an extra to help the COVID-battered economy. Call it “Suga-nomics.” If you think America’s IPO market is frothy, take a gander at China’s. Startups in China have raised a record amount so far in 2020, Bloomberg calculates.
Europe
The European bourses are higher out of the gates, with the Stoxx Europe 600 up 0.9%. That’s despite worsening COVID data from around the continent, and new lockdown measures going into force.
are higher out of the gates, with the up That’s despite worsening COVID data from around the continent, and new lockdown measures going into force. Shares in Amazon, Facebook and Alphabet’s Google nudged higher on Tuesday (but underperformed the wider Nasdaq) after Brussels and Britain proposed tough new antitrust and content measures for tech giants. Big fines and even break-up are the big sticks they’ve pulled out.
and proposed tough new antitrust and content measures for tech giants. and are the big sticks they’ve pulled out. The Euro Stoxx Banks index was up 0.3% in early trading this morning after the ECB lifted its ban on dividends and share-buybacks for Europe’s lenders.
U.S.
U.S. futures have been gaining all morning. That’s after the S&P 500 snapped a four-day losing streak on Tuesday, and as all three major indexes closed higher on the session.
have been gaining all morning. That’s after the snapped a on Tuesday, and as all three major indexes closed higher on the session. Stocks climbed on Tuesday, and the Nasdaq notched a new ATH, on hopes of a stimulus deal. An actual deal. If I got a fractional share in some bland, all-market ETF for every time I heard that one… I’d be writing this newsletter from Portofino. (I’d still need to borrow a Bull Sheeter’s yacht. Ahem.)
notched a new ATH, on hopes of a stimulus deal. An actual deal. If I got a fractional share in some bland, all-market ETF for every time I heard that one… I’d be writing this newsletter from Portofino. (I’d still need to borrow a Bull Sheeter’s yacht. Ahem.) Shares in Moderna fell 5% yesterday after the FDA disclosed the drugmaker gets high marks for its COVID vaccine, paving the way for emergency authorization. Don’t feel bad for Moderna. Shares are up 652% in 2020.
Elsewhere
Gold is up, trading near $1,870/ounce .
is up, trading near . The dollar is down.
is down. Crude is up, with Brent futures trading near $51/barrel .
is up, with futures trading near . Bitcoin is up nearly 2% on Tuesday, trading around $19,500.
***
The most crowded trade
Yesterday, we talked about the loneliest trade. Today, let’s go in the opposite direction, and talk about the you-too? trade of the moment.
I’ll give you a hint. It rhymes with “wreck.”
Yes, being long tech is seen as the most crowded trade out there. Again.
That’s according to BankofAmerica’s latest global fund manager survey.
But, as the chart above shows, the tech-bull crowd is thinning. As the great growth-to-value rotation picks up steam, a tech-heavy portfolio is becoming less de rigueur. Meanwhile, the trades that are gaining favor are shorting the poor dollar (grumble, grumble), jumping on the Bitcoin wagon, and going long corporate bonds.
What else caught my eye? Gold too is losing favor, no doubt as Bitcoin appreciates. Gold bulls must be losing patience. The shiny yellow stuff has been trading in a tight range for months, and is down 10% since its August high.
Long gold, however, isn’t the most contrarian of trades. Investors are also rotating out of healthcare and U.S. stocks, and, most of all, they’re getting out of cash.
According to BofA, the flight from cash is at a seven-and-a-half-year high, and that’s triggering a “sell signal.”
What does that entail? “We say sell the vaccine 1Q21,” BofA advises.
Note: this BofA advice is for the contrarian investor, the ones who wants to get into a new position ahead of the crowd.
***
Have a nice day, everyone. I’ll see you here tomorrow… But first, there’s more news below.
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
As always, you can write to bullsheet@fortune.com or reply to this email with suggestions and feedback.
Today's reads
The great give-away. MacKenzie Scott is giving her money away at a record clip. Scott, the ex-wife of Jeff Bezos, is ranked as the world's 18th-richest person with a net worth of $60.7 billion. That was before she announced she decided to donate more than $4 billion to hundreds of organizations. Here are some of those recipients.
Because every billionth of a second matters. High-frequency traders are eyeing a new technology to get an extra jump on the competition. It's called hollow-core fiber. The Wall Street Journal has a great (and geeky) explanation for why this tech is so much faster—in purely relative terms—than its fiber optic predecessor, and what it could mean for traders.
Some of these stories require a subscription to access. There is a discount offer for our loyal readers if you use this link to sign up. Thank you for supporting our journalism.
Market candy
Quote of the day
Policy makers shouldn’t worry that raising taxes on the rich to fund the financial costs of the pandemic will harm their economies.
That's David Hope of the London School of Economics who co-authored new research that takes a big swipe at the dogma of trickle-down economics. Tax cuts for the rich enacted over the past 50 years have largely benefited only the rich, and have further bred inequality, his research finds. Now, before you send me an angry email, telling me I'm being an agent of the Scrooge-the-rich Left, at least cc Hope. Here's his webpage.


fortune--2020-12-16--Shares of China’s chief chipmaker plunge after co-CEO departs without warning

Semiconductor Manufacturing International Corp. plunged almost 10% Wednesday after disclosing it’s looking into reports about the surprise resignation of a top executive.
China’s largest chipmaker said it’s trying to reach co-Chief Executive Officer Liang Mong Song after online media outlets circulated a resignation letter they said originated with the industry veteran. Liang quit after SMIC appointed a vice chairman to the board without consulting him, according to the reports. The company is now attempting to clarify his intentions, it said in an exchange filing without elaborating. Liang couldn’t immediately be reached for comment.
SMIC’s Shanghai shares dropped 7.2% after trading as much as 9.8% lower, the most intraday in three months. Its stock was suspended from trading in Hong Kong. Liang handed in his resignation after learning about the appointment of Chiang Shang-yi — a former senior executive at larger rival Taiwan Semiconductor Manufacturing Co. — to the board, media including Taiwan’s Digitimes reported.
Liang, a fellow TSMC alumnus, was considered integral to SMIC’s efforts to become a major player in the business of fabricating wafers for global tech giants. The Shanghai-based firm, a supplier to Qualcomm Inc. and Broadcom Inc., lies at the heart of Beijing’s intention to build a world-class semiconductor industry and wean itself off a reliance on American technology. But it’s now also among a plethora of Chinese corporations Washington has labeled a national security threat, a designation that threatens to cripple its longer-term ambitions by denying it access to crucial gear and circuitry.
“SMIC’s recent technology progress was directly attributable to Liang,” Bernstein analysts including Mark Li wrote. “Though the addition of Chiang is a positive, as the vice chairman his role is advisory. Liang, however, has been personally leading SMIC’s technology development and his contribution directly resulted in the mass production of 14nm, for example. Considering them both, we believe Liang’s departure will have a bigger effect, and SMIC’s future technology progress may see a setback.”
Chinese tech companies including Huawei Technologies Co. have been caught in the middle of worsening tensions between the two countries, which have clashed on a multitude of issues ranging from trade to the coronavirus pandemic and a Beijing-imposed security law for Hong Kong.
In response to the widening U.S. crackdown, China is planning to provide broad support for so-called third-generation semiconductors in its next five-year plan to increase domestic self-sufficiency in chip manufacturing, according to people with knowledge of the matter.


fortune--2020-12-17--‘Santa Claus’ rally could take stocks higher, even after an ‘unbelievable’ year

MacKenzie Scott is giving away her $ 60 billion fortune at a record pace

This year was a historic year by pretty much all measures—and that includes the stock market. To those like LPL’s Ryan Detrick, the market’s wild moves in 2020 can be summed up in one word: “Unbelievable,” he tells Fortune.
“This is going to be the first year in history that stocks were down 30% for the year at one point and managed to finish higher,” Detrick says. “That, to me, summarizes a lot—We’ve never seen a round-trip like 2020.”
Indeed, after a record-fast plunge into a bear market in March, stocks have managed to completely recover and are currently trading around all-time highs, up 14% for the year at Tuesday’s close.
Though stocks of late have traded rather sideways, December is typically a strong month for investors, and some strategists see reason to believe stocks might close out the year on a high note.
A late December rally?
To be sure, historical patterns don’t always hold up when it comes to the market (that’s been true of 2020 at times as well).
But LPL’s Detrick points out that historically (going back to 1950 for the S&P 500), the latter half of December tended to be strong for investors.
December is usually a strong month for stocks, but Santa doesn't show until the second half of the month. pic.twitter.com/MLcAMnUZp9 — Ryan Detrick, CMT (@RyanDetrick) December 11, 2020
He says on average December is up approximately 1.5%, but “nearly all” the gains tend to build from Dec. 15 on.
And even though 2020 has been unpredictable to say the least, “We wouldn’t want to bet against that this year,” he says. That’s because with a vaccine starting to be distributed, a stimulus bill likely to be passed, and traders and investors beginning to take vacation for the holidays, Detrick believes volume and volatility should be light. “That can lead to a little bit of a higher move into the end of the year, this historical Santa Claus rally,” he says.
Others like Charles Schwab’s chief investment strategist Liz Ann Sonders note that going into 2021, there are two main tail risks: One is that “things are even better than what we expect,” which could create the “possibility of overheating growth, maybe more inflation, and putting the Fed in a pickle in terms of, ‘do they have to back away from this easy policy?’,” Sonders tells Fortune. “The other extreme would be the opposite: That we built in a pretty positive set of assumptions, and what if several or a bunch of them go wrong?”
Prepare for a pullback
Indeed, some on Wall Street are already antsy that the markets have gotten overheated and a sell off—or at least pause—might be in the cards.
One big theme many strategists noticed this year was its eerie similarity to the 2009 bull market. (See chart via Schwab Center for Financial Research below.) And according to some strategists, that map could be signaling some turbulence ahead.
“No one knows if the roadmap will continue into 2021, but if it does, the latter half of January looks a bit worrisome,” Charles Schwab’s vice president of trading and derivatives Randy Frederick wrote in a recent tweet.
But even if 2021 doesn’t continue to follow the 2009-10 map, LPL’s Detrick believes some of the “record run” of the past several months in the market “might be stealing, if you will, a little bit from some of the gains next year,” he says, pointing to valuations as one of the “biggest concerns.” He thinks something like a 10% correction would make sense in the 1st quarter of 2021, and suggests investors consider rebalancing with moves up or down.
But in the meantime, Schwab’s Sonders believes investors can glean a pretty big lesson from 2020 heading into next year: “I don’t think the market should rest on an assumption that the Fed is always going to have the market’s back,” she says.
“When we get the next correction—and we’ll get one, I don’t know when—if it doesn’t threaten financial systems stability, if it’s not crisis-driven, I don’t think we can rely on the so-called ‘Powell Put,’ that the Fed’s just always going to be there,” Sonders says. “We have to be mindful of that in 2021.”


fortune--2020-12-17--Online retailer Wish falls in 2020’s worst debut for big U.S. IPO

Online retailer Wish fell 16% in its trading debut Wednesday, in a more muted start to life as a public company than for DoorDash and Airbnb last week.
Shares of Wish opened at $22.75 apiece, below the $24 they were sold for in its $1.1 billion initial public offering. The shares closed at $20.05, giving the company a value of at roughly $14 billion on a fully diluted basis, which includes options and restricted stock units as well as the outstanding shares listed in its filings.
Wish, the 31st on a U.S. exchange to exceed $1 billion this year, scored the worst debut of that group, according to data compiled by Bloomberg. Its listing follows last week’s blockbuster trading debuts by DoorDash and Airbnb. DoorDash soared 86% after its $3.14 billion offering, while Airbnb closed its first day up 113% after a $3.83 billion IPO including so-called greenshoe shares.
Market volatility should be expected in the first few days and weeks of trading and won’t detract from the company’s long-term focus on serving bargain-hunters on a site designed for shopper discovery, Peter Szulczewski, chief executive officer of San Francisco-based Wish parent ContextLogic, said in a Bloomberg TV interview.
“We’re very much focused on the longer term,” Szulczewski said. “If we just focus on that, in the long run the markets will reward us.”
Investor ‘Lesson’
Shares of both DoorDash and Airbnb have fallen this week, which may have been a factor in the lukewarm reception for Wish, said Kathleen Smith, principal and manager of IPO exchange traded funds at Renaissance Capital. Smith said the performance of last week’s listings “teaches investors a lesson” about buying at the open.
Wish is also part of a competitive landscape. While e-commerce stocks have traded well this year, some investors compare Wish to Amazon.con Inc., which Smith said has a similar growth rate. “If I can own Amazon, why should I own Wish?” she added.
At its IPO price, Wish would trade at about four times its projected 2022 sales, according to a person familiar with the matter. Amazon trades at 3.6 times its 2021 sales estimates, according to data compiled by Bloomberg. EBay Inc. trades at 3.37 times the same metric. A representative for Wish declined to comment.
Wish board member Hans Tung, a managing partner at GGV Capital, said he isn’t worried about competition with Amazon. “I made my living as a venture capitalist who bet on being anti-Amazon,” he said.
Tung said he also wasn’t concerned about the the first day of trading. He noted that Peloton Interactive Inc., in which he was also an investor, fell in its debut last year and is now trading at more than four times its IPO price. GGV isn’t selling any shares in Wish, he said. Tung compared Wish to Pinduoduo Inc., the Chinese e-commerce company that has risen 665% since its 2018 U.S. debut. The strong stock market performance of brick-and-mortar chains Dollar General Corp. and Dollar Tree Inc. show the potential for the niche, he said.
Record December
Online lender Upstart Holdings Inc. rose 47% in its trading debut Wednesday after pricing its IPO at the bottom of a marketed range to raise $240 million. Upstart, based in San Mateo, California, closed its first day with a market value of $2.14 billion. More than $22 billion has now been raised in IPOs on U.S. exchanges in December — a record for the month. The 2020 total is now more than $174 billion, also an all-time high, the data show.
Two other consumer-oriented, web-based companies, online video-game company Roblox Corp. and installment loans provider Affirm Holdings Inc., are also pursuing IPOs. Roblox told its employees that it was delaying its IPO until next year.
Wish differentiates from other online retailers by focusing on value conscious consumers, according to its filings.
Founded in 2010 by Szulczewski and Danny Zhang, who met at the University of Waterloo in Ontario, Canada, Wish connects sellers to potential buyers of everything from clothing to electronic goods and kitchenware. ContextLogic owns other online marketplaces, including Geek, Mama, Home and Cute, according to the Wish website.
Sales, Losses
Wish’s losses, as well as its sales, have increased during the coronavirus pandemic, according to its filings. It had a net loss of $176 million on revenue of $1.7 billion during the first nine months of this year, compared with a net loss of $5 million on revenue of $1.3 billion during the same period in 2019.
The offering was led by Goldman Sachs Group Inc., JPMorgan Chase & Co. and Bank of America Corp. The shares are trading on the Nasdaq Global Select Market under the symbol WISH.


fortune--2020-12-17--Google workers escalate fight over ouster of top A.I. researcher

A group of Google artificial intelligence researchers sent a sweeping list of demands to management calling for new policies and leadership changes, escalating a conflict at one of the company’s prized units.
The note centers on the departure of Google AI ethics researcher Timnit Gebru, which set off protests inside the company. Citing that situation, the employees called for a company vice president, Megan Kacholia, to no longer be part of their reporting chain. “We have lost trust in her as a leader,” the researchers wrote, according to a copy of the later obtained by Bloomberg.
Gebru has said she was fired after the company rejected a research paper she co-authored that questioned an AI technology at the heart of Google’s search engine. The company has said she resigned and Google’s CEO Sundar Pichai told staff he is investigating the incident.
“Google’s short-sighted decision to fire and retaliate against a core member of the Ethical AI team makes it clear that we need swift and structural changes if this work is to continue, and if the legitimacy of the field as a whole is to persevere,” the letter reads.
It was sent Wednesday to officials including Pichai by employee Alex Hanna, who worked with Gebru, on behalf of Google’s Ethical AI team.
“This research must be able to contest the company’s short-term interests and immediate revenue agendas, as well as to investigate AI that is deployed by Google’s competitors with similar ethical motives,” the researchers added.
The letter urges Google to offer Gebru the chance to return to the company “at a higher level” than the one she had before. The researchers also asked that Kacholia and Jeff Dean, the AI division chief, apologize to Gebru for their treatment of her. It also calls for the company to issue a public commitment to academic integrity and to establish racial literacy training for management.
The is the latest worker uprising at Google. In 2018, thousands of employees walked out and some of them sent the company a list of reform demands, including placing an employee representative on the board. While the company made some changes, such as no longer forcing employees to arbitrate workplace claims, the bulk of those demands remain unmet.


fortune--2020-12-17--How A.I. can make digital advertising less creepy

We all know the shortcomings of digital advertising. You buy something online, and for days afterward you might be deluged with advertisements for the very same product on Facebook, Instagram, or wherever you digitally roam.
There are two big problems with our current digital advertising system. First, many consumers hate it because they feel like their privacy is being invaded. Who knew I wanted a garlic press, and how did they know it?
And, second, it’s not as effective as it could be. I’m unlikely to buy more of what I’ve just bought. So why does no one ever try to sell me a bag of garlic instead of another press?
Our entire digital ecosystem is about to change, and I believe for the better. Consumers will feel less spied on, and companies will be able to do a better job of anticipating needs.
In early 2021, Apple will require that users give permission to share their information when they use mobile apps. Marketers can continue to advertise, but they will no longer be able to tailor and assess their work in the same way, if users choose to opt out.
As significantly, by the end of 2022, Google will disallow the use of so-called third-party cookies on Chrome, the Google browser that accounts for more than 60% of global Internet use.
Cookies are little bits of data that are loaded onto your browser that let publishers, marketers, and others know what you do online. Without them, advertisers will have fewer ways to reach their potential customers.
In this new world, third-party cookies will be disallowed, but first-party cookies will remain. So if you are reading a newspaper site, the publisher will be allowed to use first-party cookies to see what you are reading and give you more of what you like. But third-party cookies, placed on that publisher’s site by, say, a tire company, will be forbidden.
The end of third-party cookies is a good thing, because it will make way for smarter technology. I believe that artificial intelligence is poised to transform the digital advertising industry—proving better value for consumers, advertisers, and publishers alike.
My company is partnering with a number of others to create a digital advertising ecosystem, based on A.I., that is open, transparent, and privacy-first—instead of walled and mysterious. IBM has a substantial operation built on helping bring A.I. to business, with IBM Watson clients spanning a variety of industries, including financial services, health care, and advertising. And we could benefit from the widespread deployment of A.I. in digital advertising.
A.I. can understand massive and diverse data inputs quickly, recognize patterns to make predictions, and continuously learn. A.I. technology, which includes machine learning, is already proving its worth in a broad array of contexts—like accurate weather forecasting, fast response times by government agencies to citizen inquiries, and cybersecurity systems that can monitor a welter of network noise to detect and disable threats. And so, A.I. should be able to help deliver what marketers have been seeking for years: a more precise way to aim their messages at the right customer at the right time.
Consumers want relevant, insightful advertising without the creepiness created by the cookie, which is essentially a tracking device. A.I. can recognize patterns and glean insights in ways that cookies cannot. It can see that a computer user lives in Washington, D.C., note that the weather is forecast to be humid and stormy, and pitch an ad for an allergy medicine—all without needing any personally identifiable data.
A.I. can pull from a range of data sets—such as zip codes, weather, retail membership cards, and shopping habits—to anticipate human needs. It can assemble and sort voluminous data sets, filter trillions of data points every second, and produce inferences about what a user’s next most likely transaction will be.
Some of the innovation in digital advertising in recent years has been superfluous, creating more opportunities for venture capitalists than true value for consumers, brands, and publishers. In many cases, brands are not getting much ad inventory for their money because an increasingly large portion of the spending is going to middlemen.
Sometimes, going back is a smart way to move forward. Advertisers, for example, may be interested anew in an old technique: the web crawler. It can see what is on your screen without needing to know who you are. If I’m on a tennis site, I might be served an ad for a tennis racket. The crawler does not get stored on your browser; it is just looking at the page you are on. Infused with A.I., the venerable web crawler can be a powerful inference engine without invading a consumer’s personal privacy. It’s but one example of how the future of digital advertising can work better for brands and consumers.
There’s a potentially big downside, though, to the end of third-party cookies: It will empower what we in the business call walled gardens—and that’s a bad thing for brands and an even worse thing for consumers. With cookies allowed only in first-party situations, platforms like Google, Amazon, and Facebook will have a walled garden advantage. They alone will have access to the data that advertisers want and need.
Increasing that walled garden power would be a disservice to users and to the digital economy, especially to small and upstart businesses. Worse, publishers risk making less money from advertising. And when that happens, they must live off subscriptions or shut down. The last thing we need is to lose independent publishers.
A.I. offers a way around the power of the walled garden and provides a positive new path forward for the digital economy. It’s time for consumers to benefit from a technology that is far smarter than the cookie.
Bob Lord is senior vice president of cognitive applications, blockchain, and ecosystems at IBM.


fortune--2020-12-16--Elon Musk’s Vegas Strip transit system is one step closer to reality

Elon Musk’s tunneling company Boring Co. is already building a transit system for Las Vegas convention-goers. Now, he wants to build one for the rest of the city.
On Wednesday, the Las Vegas City Council voted unanimously to advance plans to dramatically expand Musk’s Loop project from a convention center transit system to a citywide network that would include hotels and, one day, potentially even the airport.
The proposed expansion brings the tunnel-based transportation system as far north as Ogden Avenue, near attractions such as the Downtown Container Park and classic casinos like the Golden Nugget. Proposed stops en route include the Arts District and the Stratosphere tower, the spaceship-like landmark that is part of a hotel. The precise location of stations will be determined later in the process, according to documents submitted to the council.
“Zero public dollars would be going into this system,” said Steve Davis, Boring Co.’s president, who addressed the city council with a blue medical mask tugged down around his chin. Davis added that about half the company’s employees were now working in Las Vegas.
Wednesday’s vote was a crucial first step in Boring Co.’s Las Vegas tunnel expansion. The next step is a more detailed city staff review of the plans for the Loop, which whisks passengers underground using Tesla vehicles. The company would also need to return to the city council for approval of a franchise agreement—the ability to use a right-of-way corridor—before construction could actually begin.
The cost of the main portion of the tunnel that falls within city limits is estimated at $35 million to $45 million, according to the documents. Officials at the Las Vegas Convention and Visitors Authority, which originally brought the project to the city, have said that Boring Co. will cover the cost of building the main artery of the Loop. Hotels that want Loop stations will be responsible for paying those costs, a spokeswoman for the agency said.
Boring Co. also has big plans for areas that sit outside of the boundary of the city of Las Vegas, but include well-trafficked destinations such as the bulk of the Las Vegas Strip, Allegiant Stadium and possibly McCarran International Airport, if authorities there agree.
Those plans, which include two separate routes, need approval by Clark County, whose commissioners will review the company’s applications in February.
Earlier this year, Boring Co. completed tunnels under the Las Vegas Convention Center complex. Originally, the convention center project was set to debut in time for CES, the annual consumer electronics show, but that event will now take place virtually due to the coronavirus pandemic.
The county commission in August approved plans from two hotels, the Wynn Las Vegas and Resorts World Las Vegas, to use Boring Co. tunnels to connect their properties to the convention center Loop.
If approved to its full proposed length, the Vegas Loop will run for about 15 miles, about 10 miles in Clark County and 5 miles in the City of Las Vegas, according to city spokesman David Riggleman.


fortune--2020-12-16--America needs a National Guard for scientists

What do some of the most important institutions in the United States—the Social Security Administration, the U.S. National Laboratories, the National Science Foundation (NSF), the Defense Advanced Research Projects Agency (DARPA), NASA, and the Department of Homeland Security—have in common? All of them have their origins in crises, ranging from the Great Depression and the Second World War to the Cold War and 9/11.
Crises have always been catalysts for institutional renewal and reinvention, and the coronavirus pandemic will be no exception. Even now, when all we can see is tragedy and emergency, the coalitions that are forming and the solutions that are emerging will lay the foundation for the institutions of the future.
The creation of the largest public-private supercomputing partnership in history is a prime example. The COVID-19 High Performance Computing Consortium, of which I’m a cochair, has brought together tech industry leaders, seven U.S. National Labs, the National Science Foundation, NASA, and over a dozen universities at an unprecedented scale, and has given researchers worldwide access to the world’s most powerful computing resources.
The sophisticated computing systems available through this consortium can process massive numbers of calculations related to bioinformatics, epidemiology, and molecular modeling, helping scientists develop answers to complex scientific questions about COVID-19 in hours or days versus weeks or months.
The collaboration is yielding results. There are teams using machine learning to determine the structures of certain proteins in the virus, which are important in the development of therapeutics and vaccines. A Utah State University team has measured just how rapidly breath droplets from a person speaking or coughing propagate in a room—a result that could help hospitals decide where to place equipment or patients’ beds. Meanwhile, a group of researchers from Cornell have used the consortium’s computing boost to simulate for the first time precisely how and where the virus penetrates the human cell. This research could help design new drugs against COVID-19. There are also scientists at Iowa State University who are looking at why African-Americans may be more susceptible to the disease. And the consortium is doing so much more.
For now, the pandemic is raging on. It will be over one day, but we know it won’t be the last major threat the world will face. To beat COVID-19 and to prepare for the next global crisis, the incoming Biden administration and Congress must put science front and center by creating a new national (and in the future, international) body. I call it the Science Readiness Reserves (SRR).
Think of this organization as a (inter)National Guard of volunteer scientists from industry, academia, and government laboratories who rigorously prepare for a natural disaster or national security threat that lurks around the corner, to then be able to respond with the most effect, saving lives. Modeled on the HPC Consortium, and also inspired by the idea of reserve forces that extend the capacity of the military in times of need, this body of global experts will stand ready to apply cutting-edge and emerging technologies like high-performance computing, artificial intelligence, genomic sequencing and biotechnology (and in the future, quantum computing) to crises, helping us address challenges and emergencies in health care, climate, food and energy security, and so much more.
The SRR’s core leadership team would also collaborate with experts inside governments to help speed up the response and recovery process. A potential model would call for the creation of a government Program Office that would take responsibility for coordination across agencies (such as the Department of Energy and the National Science Foundation) and for approving trigger and resource allocation policies. In the case of the U.S., such an office could be sponsored and run out of the Office of Science and Technology Policy (OSTP) within the executive branch.
Scientists stand ready to serve the nation—and the world. Now is the time to empower them. By enabling researchers in private and public sectors to pool their scientific and technical expertise, we can make a dent in the next crisis before it balloons, preventing harm and creating prosperity in the process. The Science Readiness Reserves offer an opportunity to create a new type of institution for our times, recognizing that the scientific capacity of our nation is distributed among government organizations, academia, foundations, and the private sector. (It is worth remembering that the private sector is responsible for 70% of the annual $600 billion of R&D expenditures in the U.S.)
At IBM, we stand ready to participate and commit both leadership and resources to this effort, tapping into the passion and talent of our researchers, and leveraging our hybrid cloud infrastructure to bring the best of open-source software, A.I., high-performance computing, and quantum computing to bear. Working with my fellow board members of the HPC Consortium, we are already discussing the possibility of evolving it into a National Strategic Computing Reserve. We can imagine multiple such reserves being created, with a National Strategic Genomic Sequencing Reserve as another example. A network of these bodies would then form the (Inter)National Science Readiness Reserves.
We must put emerging technologies, global talent, and infrastructure at the forefront of the government’s response to crises to accelerate discoveries that will save lives—now and in the future.
The scientists of America stand ready to serve, and the world cannot risk waiting any longer.
Dario Gil is the director of IBM Research, one of the world’s largest and most influential corporate research labs. He cochairs the COVID-19 High Performance Computing Consortium and is a member of the National Science Board of the United States.


fortune--2020-12-16--Texas sues Google over antitrust violations

Texas is suing Alphabet’s Google for anticompetitive conduct, Attorney General Ken Paxton said Wednesday.
“I’m proud to announce that the state of Texas is filing a multistate lawsuit against Google for anticompetitive conduct, exclusionary practices and deceptive misrepresentations,” Paxton said in a video posted on Twitter. “Google repeatedly used its monopolistic power to control pricing, engage in market collusions to rig auctions in a tremendous violation of justice.”
Paxton said on Twitter that his suit centers on the lucrative market for digital ads, where Google obtains most of its revenue. Google didn’t immediately respond to a request for comment.
The case marks the second antitrust action against the search giant after the U.S. Justice Department filed a landmark monopolization case against the company in October.
Pressure on dominant technology companies has escalated under President Donald Trump. Last week, Facebook Inc. was sued by the Federal Trade Commission and a coalition of states that want to break up the company by unwinding its acquisitions of Instagram and WhatsApp, deals the government says were part of a campaign to illegally crush competition.
The push is expected to continue under President-elect Joe Biden as the power of internet platforms has become a rare issue that’s raised concerns from both parties.
Paxton had also joined the Justice Department’s case in October, along with 10 other Republican state attorneys general, in the most significant monopolization case in more than two decades. The federal case focuses on Google’s position in online search, alleging that it used exclusive deals to extend its monopoly.
The Google adtech business, which sells services that handle almost every step a digital ad takes on its journey from a brand’s creative team to a consumer’s screen, generated more than $21 billion in revenue in 2019.
Paxton disclosed on Tuesday he would hire the law firm of mass-torts practitioner Mark Lanier, who won a multi-billion verdict against Johnson & Johnson in 2018, to lead the trial team. Paxton also said he plans to hire the firm Keller Lenkner LLC, which has sued Facebook. Ken Starr, the former independent counsel whose probe led to President Bill Clinton’s impeachment, will also be a part of the team from Lanier’s firm, Bloomberg reported.
Another group of states led by Colorado are also investigating Google and could file a third lawsuit as soon as Thursday focusing on the search and advertising business, according to two people familiar with the matter.
The Justice Department also investigated the adtech market, where Google operates technology for online publishers and advertisers as well as the exchanges that connect the two, Bloomberg reported. All the cases could eventually be consolidated before a single judge.
Critics and competitors say Google is breaking antitrust laws in its advertising technology business by providing discounts and special features to push advertisers and publishers to use only its products instead of mixing and matching with competing services. On top of being one of the world’s biggest providers of advertising space, Google also sells software tools used by nearly every part of the complex digital marketing industry.
Publishers and advertisers have long complained that Google’s vast and complex digital advertising system is a “black box” that leaves them in the dark about how ad placements are fulfilled and how prices are set. News publishers in particular have alleged the company is not adequately compensating them for content, leading to a precipitous decline in financial viability for journalism.
Google has previously said it has driven down the prices for ads while expanding opportunities for small businesses to reach customers. It has also boasted that it sends 70% of revenue from digital ads back to publishers, and has criticized the U.S. search case as “deeply flawed.”
Although Google began as a search engine, it grew quickly through acquisitions, including that of the DoubleClick digital advertising company in 2007, to control vast swaths of the digital advertising ecosystem. Google also stockpiled immense troves of data — decades’ worth of consumer and business buying preferences and surfing habits — to power its ads and make it harder for new entrants.
In September 2019, Paxton announced on the steps of the U.S. Supreme Court that he was leading 50 attorneys general in a probe of Google’s position in onlines ads. The move signaled bipartisan concerns about the company and heralded escalating public pressure.
Yet the Texas-led coalition began to split in the ensuing months as other states pursued their own lines of inquiry beyond the ad market, including Google’s search business and its Android mobile operating system, Bloomberg News reported.
Paxton, a conservative Republican, in October was accused by senior aides of potential crimes including bribery, which he has denied. The allegations, which aren’t related to the Google case, drew a rebuke from the campaign arm for Democratic attorneys general, which said his failure to resign threatened their “joint work.”
Google is also facing increasing pressure in Washington from other corners. A House panel that spent more than a year probing dominant tech companies accused Google of stealing content from rivals to create a “walled garden” to keep users on its properties, rather than directing them to other sites. The panel, led by Representative David Cicilline of Rhode Island, has proposed measures including prohibiting the companies from participating in markets that they also operate, which could effectively break some of them up.


fortune--2020-12-16--Facebook attacks Apple’s changes to iOS 14

Facebook lashed out at Apple in a series of full-page newspaper ads, claiming the iPhone maker’s coming mobile software changes around data gathering and targeted advertising are bad for small businesses.
The ads, running Wednesday in the New York Times, Wall Street Journal and Washington Post, carry the headline “We’re standing up to Apple for small businesses everywhere.” They home in on upcoming changes to Apple’s iOS 14 operating system that will curb the ability of companies like Facebook to gather data about users and ply them with targeted advertising.
Facebook previously told investors that Apple’s changes, scheduled to go live early next year, will lead to significant headwinds because most of its advertisers are small businesses. Apple has pushed back, accusing Facebook in November of showing a “disregard for user privacy.”
“While limiting how personalized ads can be used does impact larger companies like us, these changes will be devastating to small businesses,” Facebook said.
Ads that disregard personalized targeting generate 60% fewer sales than ads that do target consumers, Facebook added, citing its own data. Apple’s new feature at the heart of the issue — App Tracking Transparency — won’t forbid companies like Facebook from collecting targeting data, but will ask them to disclose it and seek user opt-in.
In a conference call and blog post Wednesday, Facebook continued its attack, saying Apple’s business stands to gain from these changes. “Apple is behaving anti-competitively by using their control of the App Store to benefit their bottom line at the expense of creators and small businesses,” said Dan Levy, head of Facebook’s small business program. Facebook was sued earlier this month by state and federal regulators for alleged anticompetitive behavior.
The newspaper ads are the latest in what has become a vicious public battle between two of the world’s most valuable companies. Facebook has argued repeatedly that Apple’s App Store fees and the upcoming iOS changes hurt small businesses trying to recover from the pandemic. It’s used those attacks to paint itself as a champion for such users, many of which rely on Facebook’s advertising services to drive sales. That reliance can also put small businesses in a bind, if they’re cut off from the social network.
Facebook on Wednesday also said that it will provide supporting documents for Epic Games in its ongoing lawsuit against Apple. Epic, maker of the popular Fortnite video game, sued Apple after Apple removed Fortnite from the App Store for violating in-app-purchase rules.
Earlier this week, Apple launched a nutrition-label style feature in its App Store that outlines what data third-party apps collect, a move that some saw as an attack on Facebook’s app given the amount of information it collects.
Facebook Chief Executive Officer Mark Zuckerberg has also criticized Apple’s smartphone prices. After his company joined a chorus attacking Apple’s 30% fee for in-app purchases for certain services that moved online because of the pandemic, Apple said it wouldn’t take such a cut through the end of 2020. Last month, it extended that waiver through June 2021.
Apple defended its ad tracking changes, pointing to recent comments from two of its top executives. Its head of privacy, Jane Horvath, recently said Apple made the change “because we share your concerns about users being tracked without their consent and the bundling and reselling of data by advertising networks and data brokers.”
Horvath, in a public letter, also criticized Facebook for its approach. “Facebook executives have made clear their intent is to collect as much data as possible across both first and third party products to develop and monetize detailed profiles of their users, and this disregard for user privacy continues to expand to include more of their products,” she wrote.
Craig Federighi, Apple’s head of software engineering, spoke on a panel for an event hosted by the European Data Protection & Privacy conference in Brussels last week.
“It’s already clear that some companies are going to do everything they can to stop the App Tracking Transparency feature I described earlier — or any innovation like it — and to maintain their unfettered access to people’s data,” Federighi said.
While not applicable to Facebook apps, Apple will reduce its App Store revenue cut from 30% to 15% starting next year for developers that generate up to $1 million per year. The company said it’s implementing the change to support small businesses.


fortune--2020-12-16--U.S. watchdog blasts agencies for failing to implement key tech security safeguards

As details of the most audacious hack on the U.S. government in recent memory continued to stun lawmakers and the public, a government watchdog released a blistering report saying that federal agencies have failed to implement key safeguards for their information technology supply chains.
The report by the U.S. Government Accountability Office was completed in October but only made public on Tuesday in the wake of the recent attacks, which are believed to be the work of elite Russian hackers. It found that 14 out of the 23 surveyed federal agencies hadn’t implemented any of the “foundational practices” to protect their “information and communications technology” supply chains that were recommended in 2015 by a government standards group.
None of the agencies had implemented all the recommended changes. Among the agencies surveyed were several that were hacked by suspected Russian attackers: Commerce, Treasury and State.
Lawmakers who received a recent classified briefing on the attack indicate that it is among the most serious in recent years. Senator Richard Blumenthal, the Connecticut Democrat, said in a tweet Tuesday that the briefing left him “deeply alarmed, in fact downright scared.” Dick Durbin, the Senate’s second highest-ranking Democrat, said on CNN Wednesday that the hack was “virtually a declaration of war.”
The Office of Management and Budget required the agencies in 2016 to implement the recommendations, which were made by the National Institute of Standards and Technology, according to the GAO.
“Supply chains are being targeted by increasingly sophisticated threat actors, including foreign cyber threat nations such as Russia, China, Iran and North Korea,” the report states. “Attacks by such entities are often especially sophisticated and difficult to detect.” The report warns of hackers inserting a so-called ‘backdoor’ into the supply chain, which appears to be exactly what happened in the attack on federal agencies.
The report offers the first clues to a crucial question about the recent cyber-attack: how did the U.S. government miss hackers in the computer networks of so many agencies?
Those hackers are believed to be tied to the Russian government, and they also breached the Department of Homeland Security and parts of the Pentagon, according to a person familiar with the matter. The hackers installed a malicious vulnerability, or backdoor, in a popular software product made by information technology provider SolarWinds, whose customers include numerous U.S. government agencies and Fortune 500 companies, according to the company and cybersecurity experts.
It remains unclear what the hackers accessed, or how many agencies and other entities were successfully breached.
Representatives at GAO and OMB didn’t return a message seeking comment.
The GAO report also warned of the potentially dire consequences of a successful supply chain attack.
“For example, threat actors could take control of federal information systems; decrease the availability of materials or services needed to develop systems; destroy systems, causing injury and loss of life, and compromising national security; or steal intellectual property and sensitive information,” the report says.
Federal agencies remain vulnerable to supply chain attacks until they implement all the recommend changes, the GAO said. Until then, according to the report, “They will continue to be vulnerable to malicious actors that could exploit the ICT supply chain risks to disrupt mission operations, cause harm to individuals or steal intellectual property.”


fortune--2020-12-16--Coinbase adds Cisco vet to board ahead of rumored IPO

Brian Armstrong, the CEO of cryptocurrency giant Coinbase, announced on Wednesday that the company would be adding Kelly Kramer to its board of directors.
Kramer, a longtime Silicon Valley executive, is currently the CFO of Cisco but is in the process of retiring from that role. She also sits on the board of Gilead Sciences and data company, Snowflake, a company that went public earlier this year.
Coinbase adding Kramer to its board comes as the company is reportedly planning to announce its own IPO. The year 2020 has been a bonanza for companies going public while Coinbase is currently riding high thanks to Bitcoin prices that just broke $20,000.
In another significant move, Armstrong announced that current board observer Marc Andreessen will be taking on the role of full board member. The move is another possible sign that a Coinbase IPO might be imminent given that Andreessen is one of Silicon Valley’s most prominent investors and has had a hand guiding the growth of numerous companies, including Facebook.
In a blog post announcing the changes, Armstrong noted that Kelly will be replacing Chris Dodds as the Chair of the Audit and Compliance Committee, and that Dodds intends to spend more time on matters related to his family.
Wednesday’s announcement comes after Coinbase made another board shuffle in August, adding Andreessen and Gokul Rajaram, an executive at DoorDash and a veteran of Google and Square.
Since it was founded in 2013 as a place for non-technical people to buy Bitcoin, Coinbase has emerged as the pre-eminent cryptocurrency company. Insiders say the company, which earns commissions when customers trade, is flourishing thanks to a booming crypto market. But Coinbase has also endured recent tumult as a result of a controversial blog post by Armstrong declaring the company to be “apolitical” and from accusations of tacit racism by former Black employees.


fortune--2020-12-16--Doctors and patients face a  painkiller crisis, even as they fight COVID

Surgery is never fun. But surgery during a global pandemic is an especially frightening prospect. When I went under the knife for a corrective hernia procedure recently, COVID-19 got added to the long list of potentially fatal outcomes I had to worry about.
Long list? Yes: The operating room and I go way back, which has left me with a lot of risk factors. I had open-heart surgery a decade ago to fix an aortic aneurysm and calcified valve. I have a titanium valve in my chest. I’m also on blood thinners, that means I can’t take traditional NSAID painkillers like ibuprofen, aspirin, and naproxen, because their side effects—which include gastrointestinal perforations and bleeding—could seriously injure or kill me. And I don’t want to take opioids, which pose the risk of addiction, not to mention severe constipation and a host of other side effects.
When I went under the knife, I had to make do with acetaminophen, which just isn’t suitable for durable pain relief—and does nothing for the inflammation that follows surgically injured tissue. It hurt like hell.
I wish I could say that my experience was unique, but many others face the same kind of pain and the same kind of choices around its treatment—8 million Americans take blood thinners, according to a recent report from Pharmacy Times.
However, as chief medical officer of a pain-focused biotech research company, I have better than usual line of sight into the requirement for medications for acute and chronic pain. And if I’ve learned one thing, it’s this: Society needs new drugs and remedies that don’t turn common ailments or routine health care procedures into unnecessary gambles.
It’s hard enough to be unable to use NSAID pain relievers after surgery. But there’s also chronic pain, which a quarter of all adults suffer from in one form or another. Again, my own story is relevant and not unusual. I experience regular pain throughout my body stemming from teenage sports and military service injuries, and due to the simple fact that I’m aging. For anyone with multiple risk factors, the wrong decision about what pain pill to take could have severe consequences. We need to seriously weigh the pros and cons of everything we ingest.
Many of us try opioids, which are often used for moderate to severe pain. But that risks turning even more people into statistics in North America’s raging addiction crisis. Opioids were a factor in two-thirds of America’s 72,000 drug overdose deaths in 2019.
In my previous life as a U.S. Navy doctor, I moonlighted in various North Philadelphia primary-care settings and rural clinics, where I saw the real and devastatingly human impact of opioids close up. They’re addictive—plain and simple. Even light misuse can lead to serious neurological effects, including coma, brain damage, or death—not to mention the persistent stigma around addiction. Medical professionals and pharmaceutical providers need to play a leading role in encouraging addiction awareness and stigma reduction conversations within communities like these.
Pennsylvania farm country, the military, the business world—everywhere I’ve spent time, I’ve seen opioid addiction. The crisis runs rampant in cities and towns, on farms and in mansions, far away and next door. And now, the global COVID-19 pandemic has made the opioid crisis even more deadly, by creating insecurity, isolating users, disrupting the flow of uncontaminated drug supplies, and taxing our health services.
When I had my latest surgery, I was given opioid medications during and immediately after the procedure. But once I left the hospital recovery area, I made the call to live with my postoperative pain, opioid- and NSAID-free, in the name of living beyond it. My decision, and the physical discomfort that came with it, was another reminder of how desperately we need alternative medications.
Fortunately, I’m part of a strong community of biotech and medical professionals looking for nonaddictive pain relief solutions.
As the medical community sprints toward rolling out COVID-19 vaccines in the coming months, we need to keep racing in parallel on the research and development required to introduce effective, lower-risk pain relief. My own company is developing three pain medications that are derived from traditional NSAIDs but designed to be safer for the gastrointestinal system.
We also need to renovate the traditional drug discovery process—a famously lengthy endeavor. We need a model that allows science to do its thing while empowering medical professionals to move quickly from R&D to trial to government approval to deployment phases of bringing alternatives to market.
I believe we’ll get there, just like I believe we’ll beat COVID-19. I am optimistic that future surgeries like mine will be as routine as it gets, even for people with risk factors. To succeed, we just need to make sure that pain is the only thing we’re killing with painkillers.
Dr. Joseph Stauffer is the chief medical officer at Antibe Therapeutics.


fortune--2020-12-16--Trump has barely said anything about the COVID-19 vaccine rollout he has long promised

Donald Trump pinned all his hopes for ending the pandemic on a vaccine, but as shots started going into American arms this week, the president has barely acknowledged the moment and has wavered on when he’ll be inoculated.
The first shipments of a coronavirus vaccine created by Pfizer and German company BioNTech arrived on Monday, with front-line health-care workers receiving injections on live television to mark the occasion. The rollout coincides with the U.S. setting records for daily cases, daily deaths, and hospitalizations.
The president has had little to say about any of it, beyond a single congratulatory tweet buried among a stream of false assertions and conspiracy theories about the election he lost. He has not made a public appearance since Saturday, when he attended the Army-Navy football game at the U.S. Military Academy at West Point.
Trump’s administration bet heavily on fast-tracking vaccine development, defying critics who said it would be nearly impossible for a shot to reach consumers less than a year after the coronavirus hit American shores.
The White House is now preparing to publicly inoculate a handful of officials in an event to celebrate the breakthrough and encourage Americans to get vaccinated. Vice President Mike Pence, who is not known to have contracted the virus, said he’ll receive a vaccination within days, but his office declined to say if it would be in front of cameras.
Pence will lead a meeting of the coronavirus task force on Wednesday at the White House, which Trump will not attend.
Public vaccination of top government officials, including the president, is regarded as a confidence-booster by health authorities for Americans wary of the shots. The director of the National Institute of Allergy and Infectious Diseases, Anthony Fauci, has said he intends to receive an injection in public as soon as practicable.
But Trump said Sunday he is not “scheduled” to be vaccinated, after Bloomberg News reported that top White House officials including the president had been given priority for shots. His press secretary, Kayleigh McEnany—who has called the shots the “Trump vaccine”—wouldn’t say Monday whether Trump would be vaccinated while he’s still in office.
“He will receive the vaccine as soon as the medical team determines it’s best,” she said. “These are vaccines that he oversaw the development of, he has great confidence in. He wants to see all Americans get this vaccine and he wants to see the most vulnerable among us get it first.”
President-elect Joe Biden said Tuesday that he would get the vaccine in public, but also didn’t say when. “Dr. Fauci recommends I get the vaccine sooner than later. I want to make sure that we do it by the numbers and when I do it you’ll have notice and we’ll do it publicly.”
The course of the pandemic has become intertwined with Trump’s own political fortunes. The U.S. outbreak soared under his watch, with far more publicly reported cases and deaths than anywhere else in the world, even as Trump promised the virus would fade away and downplayed its danger. Most Americans rated his handling of the crisis poorly, opening the door for Biden’s victory.
But now the efficacy of the U.S. vaccination campaign rests in part with Trump. Before he was president, Trump gave credence to the American anti-vaccine movement by publicly questioning the childhood vaccine schedule and suggesting, falsely, that pediatric inoculations may be linked to autism.
Former presidents have already volunteered to publicly take the vaccine as a signal of its efficacy. Recent polls have shown that confidence in the vaccine is increasing but that many Americans still harbor doubts.
Fauci, who has agreed to be the new president’s top medical adviser, said Tuesday that the pandemic will only truly be curbed when 75% or 80% of Americans are vaccinated.
McEnany said Trump was trying to send a “parallel message” by waiting to get it himself: promoting the vaccine as safe but wanting higher-risk groups to receive it first. Trump was hospitalized with COVID-19 in October, and the president has described himself as “immune,” though the extent and duration of protection from naturally attained antibodies is unknown.
“Even though the president himself was infected, and he has, likely, antibodies that likely would be protective, we’re not sure how long that protection lasts. So, to be doubly sure, I would recommend that he get vaccinated as well as the vice-president,” Fauci said.
Senate Majority Leader Mitch McConnell said he’d get the shot when his turn comes and encouraged other leaders to do so. “I think all of us who do have at least some following in the country need to step up—as the former presidents are and as I’m sure people in the entertainment world will as well—to encourage people to do this,” McConnell said Tuesday. “It’s the right thing to do for yourself, for your family and for the country.”
Trump has said he’d be criticized for getting a shot too early.
“If I’m the first one, they will say, ‘He’s so selfish, he wanted to get the vaccine first,’” he said in a Fox News interview over the summer, before he was infected. “Either way, I lose on that one, right?”
By many metrics, the pandemic is worse than ever, and continues to worsen. Trump has met the milestones with silence, saying nothing on Friday when daily deaths hit a record of 3,306, or on Monday when there were 264,000 new cases, also a record. He hasn’t asked Americans to do anything to slow transmission of the virus, such as wearing masks.
Pence has found himself filling the vacuum. At a roundtable event on the vaccine rollout Tuesday in his home state of Indiana, he assured Americans the vaccine is safe and pledged to get a shot himself.
“We have come to the beginning of the end of the coronavirus pandemic in America, but as I expect you will hear from our panel and you’ll continue to hear, we have a ways to go,” he said. “Wear a mask and put the health of your family and your neighbors first.”
The Pfizer vaccine’s arrival, with others expected to follow shortly, will focus attention on distribution efforts, the infrastructure developed by the Trump administration and the question of who should receive shots first.
‘Instilling public confidence’
McEnany said Tuesday that two groups of White House officials would get an early vaccine. “Some career staff, national security staff, for the purposes of continuity of government, will have access, in addition to a very small group of senior administration officials for the purpose of instilling public confidence,” she said.
McEnany, like Trump himself and several White House staff, tested positive for the virus earlier this year. She said she “absolutely would be open to taking the vaccine.”
Moncef Slaoui, a leader of the Trump administration’s “Operation Warp Speed” program to accelerate vaccine development, also said Tuesday that both Biden and Trump should be inoculated.
“It is very important that our leaders, departing ones and arriving ones, are protected. And I think both President Trump and President-elect Biden, they are both parts of the higher age group and, therefore, higher risk. So, yes, I think they should be vaccinated,” he told CNN. “That’s an example for the population to follow.”


fortune--2020-12-16--Massachusetts regulators accuse Robinhood of exposing novices to ‘unnecessary trading risks’

Robinhood Markets drew millions of users to investing with a colorful app that makes trading seem empowering instead of intimidating.
That very appeal thrust it into the regulatory crosshairs yet again on Wednesday.
Massachusetts securities regulators filed a complaint against Robinhood Financial LLC, alleging the popular online brokerage aggressively marketed to novice investors and failed to put controls in place to protect them.
Robinhood exposed Massachusetts investors to “unnecessary trading risks” by “falling far short of the fiduciary standard” that requires broker-dealers to act in their clients’ best interests, according to a 23-page administrative complaint from the office of Secretary of the Commonwealth William Galvin.
It focuses on the tactics that Robinhood employs to keep consumers engaged, alleging that it encourages them to use the platform through what it calls “gamification.” One Robinhood customer with no investment experience made more than 12,700 trades in just over six months, according to the complaint.
“As a broker-dealer, Robinhood has a duty to protect its customers and their money,” Galvin said in a statement. “Treating this like a game and luring young and inexperienced customers to make more and more trades is not only unethical, but also falls far short of the standards we require in Massachusetts.”
The company said it disagrees with the allegations and plans to defend itself.
“Robinhood is a self-directed broker-dealer and we do not make investment recommendations,” the company said in a statement. “Over the past several months, we’ve worked diligently to ensure our systems scale and are available when people need them. We’ve also made significant improvements to our options offering, adding safeguards and enhanced educational materials.”
The Wall Street Journal reported on the complaint earlier Wednesday.
Galvin has built a reputation for going after financial firms over the past two decades, including cases against big mutual fund firms over alleged trading abuses, enforcement actions accusing Wall Street banks of saddling customers with auction-rate securities at the height of the 2008 financial crisis and even fining Morgan Stanley $5 million over its handling of Facebook Inc.’s 2012 initial public offering.
Massachusetts is home to several prominent asset managers, including Fidelity Investments and State Street Corp., which are both based in Boston, and was the birthplace of the mutual fund.
Robinhood, founded by Vlad Tenev and Baiju Bhatt, exploded in popularity this year amid a boom in retail trading. Equity indexes cratered in March as the world went into lockdown to contain the spread of Covid-19, only to bounce back. As self-guided investors tried to cash in on the chaos, Robinhood surpassed 13 million users, with 3 million of those signing up in the first four months of 2020 alone.
Tenev and Bhatt have said they’re on a mission to make investing available to all, while critics contend the app encourages users to experiment with financial instruments and risks they may not fully understand. Trades can be placed with a quick swipe and may be heralded with a burst of virtual confetti.
“There is a legitimate concern about the impact gamification has on financial decisions,” said Charles Rotblut, vice president of the American Association of Individual Investors. “Speculating is not investing and is frequently very dangerous to one’s financial health.”
Technical trouble and growing pains have accompanied Robinhood’s blockbuster growth. In March, the firm was struck by a service disruption that lasted for more than a full trading day. Months later, a hacking attack spurred outrage from users. At one point in October, access to more than 10,000 email login credentials tied to Robinhood accounts were available on the dark web.
Massachusetts adopted rules earlier this year that require broker-dealers to meet a fiduciary level of care with customers. As of last week, Massachusetts had more than 486,000 Robinhood customer accounts with a total value of about $1.6 billion, according to the state. About 68% of Massachusetts Robinhood customers approved for options trading identified as having limited or no investment experience.
Robinhood is already facing scrutiny from federal regulators. The Securities and Exchange Commission and the Financial Industry Regulatory Authority, which polices brokerages, are investigating the company’s handling of the March outages following a deluge of customer complaints that it was unresponsive to their concerns, Bloomberg reported in August.
The SEC is separately probing whether Robinhood properly informed brokerage clients that it sold their stock orders to high-frequency traders and other Wall Street firms. The investigation is focused on Robinhood’s disclosures prior to 2018, when it altered its website to make information easier for customers to find.
Finra fined Robinhood $1.25 million last December over how it routed customer orders. Known as payment for order flow, the controversial practice is employed by almost all retail brokerages and entails selling client trades to outside firms that execute them.


fortune--2020-12-16--Your boss is expressing gratitude all wrong

Every week, this newsletter will share analysis on the state of work by S. Mitra Kalita, a veteran media executive, author, and journalist.
In this week’s edition Kalita tackles a subject that is trickier than in sounds: how to thank your employees.
Because many workplaces cannot have a holiday party this year, company leaders say the season is a chance to rethink what such gestures were really all about in the first place.
“Gratitude is not about a one-time holiday party, day off, or spot bonus,” said Aron Ain, the CEO of Ultimate Kronos Group, a workplace software company. “It cannot be an afterthought or a check-the-box activity. It is about creating a culture of gratitude.”
He said UKG plans to invest $35 million next year in enhanced benefits programs to acknowledge the extraordinary burdens on employees at every stage of life—including caregivers—right now. For example, complimentary tutoring and virtual afterschool programs will be offered for the children of employees.
That’s just one example of what David Novak, former CEO of Yum Brands calls “purposeful recognition.” Kalita goes on to outline 7 specific ways any boss can give employees what they really want this year.
This week's reads
Get ready for '21
We haven’t seen a racial reckoning yet. That’s the message from Nasdaq’s five workplace trends to watch in 2021. The first is about diversity, equity and inclusion with customers, boards and investors demanding action. (Nasdaq)
Not checking in
Airbnb has been the biggest IPO of the year. What’s it like to work there right now? The windfall for its early employees is significant. Those wondering what could have been: 1,800 employees laid off earlier in the pandemic. (Barron's)
3 day workweek
Google’s announcement that it is planning to give employees a three-day “flexible workweek” when they return to the office next September raises as many questions as it answers. If the company wants to encourage collaboration, how will it manage which three days people come to work? And if workers choose to live further from the office, will three days a week allow sufficient flexibility? Kudos to the Googleplex for trying to provide some clarity. But the future of work remains hazy. (Fortune)
First in line
Hospital workers will be among the first to get the COVID vaccine. A Chicago-area hospital “set up 10 vaccination bays and hopes to soon vaccinate about 1,000 workers a day; this is assuming each vaccination takes roughly five to seven minutes to administer and that the shots will be given from 6 a.m. to 8 p.m.” (Chicago Tribune)
Get the job
Learn to code and apply for jobs within 24 hours of postings going up. That’s the advice from an Arizona job placement expert who estimates he has helped 100,000 people find work under his watch. And you might have to settle. “Do what you can now to add value to any company at any level and then work your way up," he said. (12News.com)


fortune--2020-12-16--Why the unemployment system is broken and how Biden plans to fix it

Next month President-elect Joe Biden will be sworn in to lead a nation amid an unemployment crisis—and it could get worse before it gets better.
In all, more than 19 million Americans are still receiving unemployment benefits, including around 13 million covered by pandemic unemployment benefits created by the CARES Act. But unless Congress acts before the end of the year to extend pandemic unemployment benefits, around 13 million of those jobless Americans will lose them.
Even if Congress renews those benefits, economic recovery may still be at risk. The rebound that started off strong in the summer, with 4.8 million jobs added in June alone, has since slowed to an anemic pace. The country only netted 245,000 jobs in November, and at that pace, it could take until late 2023 to fully recover.
The unemployed will look to the Biden administration to resolve the weakened economic recovery and bolster pandemic unemployment benefits. But those issues come hand in hand with something else plaguing the jobless: an inept unemployment insurance system that is struggling to get Americans their benefits, let alone on time.
The problem: An inundated system
At the onset of the pandemic, states abruptly closed their economies, and jobless claims soared. In total, more than 40 million initial claims were filed in the first eight weeks of the crisis, including 6.9 million the week ended March 28. And that volume of claims completely overwhelmed state unemployment offices: In many states it took weeks, if not months, to process an unemployment claim.
That’s exactly what happened to Karen Engels. She quickly applied for unemployment insurance after losing her job at a Florida country club in mid-March. However, the 44-year-old told Fortune that she didn’t end up getting her first check until late May.
Long processing periods mean jobless Americans are forced to go weeks without pay. For Engels, that meant cutting back on everything that wasn’t essential. “The grocery bill was cut in half. Our kids need clothes, but we can’t buy clothes,” she told Fortune back in August.
And as jobless claims rise again, the backlogs are starting to return. In California the number of unpaid unemployment claims—the best indication of a logjam—is up 34% in the past three weeks.
Why exactly are state unemployment systems struggling to process claims and make payments on time? Experts tell Fortune it largely boils down to outdated technology systems that are struggling with large upticks—an issue that predates the pandemic—and reprogramming coverage for Americans covered by new pandemic UI programs.
“We saw all of this coming, and we’ve been lighting our hair on fire about this since the Great Recession and before. We’ve known that this system didn’t handle the Great Recession nimbly at all, that it wasn’t going to handle the next crisis well at all, and this is worse than anything we predicted,” says Judy Conti, government affairs director at the nonprofit National Employment Law Project (NELP).
And it isn’t just backlogs: State unemployment offices have been underpaying millions of jobless Americans all year, a recent report by the Government Accountability Office found. States have also failed to weed out fraudulent unemployment claims, the same report finds. And according to NELP, for years the federal appropriations for states to run the UI programs have either stayed the same or decreased, resulting in states “running their programs on so much less money than they used to and that they should,” Conti suggests.
What Biden wants to do for unemployment insurance
President-elect Biden says he wants to turn unemployment insurance into “employment insurance.”
Biden’s plan advocates getting all 50 states, plus Washington D.C., Puerto Rico, and the Virgin Islands, to “adopt and dramatically scale up” short-time compensation programs, also called work sharing. With short-time compensation, companies are able to reduce employee hours—and therefore save on their payroll—when times are tough, and the government contributes to their compensation in lieu of businesses laying off employees.
Currently, 27 states have adopted work sharing, and Conti agrees that President-elect Biden’s plan to make the program mandatory for all 50 states is a sound idea. “We’re huge fans of short-time compensation. It doesn’t solve every problem, but it’s a great layoff aversion strategy,” she says. That’s because it allows businesses to hold on to their trained talent and be able to easily revamp operations, while employees can keep their benefits and paychecks in the meantime.
Apart from getting all states to participate, Biden has indicated he wants to change the tax implications of work sharing. Biden’s platform suggests the government “temporarily waive the need for states to…force employers to pay higher taxes in the future if they use short-time compensation now.” And as is the case during emergencies like the pandemic, Biden wants it to permanently be 100% federally backed. Per his plan, Biden would also seek to create a refundable tax credit for companies to use for employee health care benefits if they participate in work sharing.
But those are longer-term fixes. To immediately help unemployed Americans, Biden supports the extension of pandemic unemployment programs that expand who is eligible for unemployment benefits, such as contract workers, and he advocates the return of $600 enhanced weekly unemployment payments, per his platform. The CARES Act initially paid unemployed Americans an extra $600 per week, but that benefit expired in July, and Congress has yet to fund a replacement. Current deliberations in Congress indicate that if enhanced benefits were to return, they would be in the ballpark of $300 a week—not the $600 Biden has advocated.
Meanwhile, both work sharing and pandemic unemployment benefits are key, says Conti, but she argues that the current unemployment system itself needs a big update. “In a perfect world” the system would be federally run, but she estimates something in the ballpark of $5 billion would be appropriate for the government to invest in modernizing states’ technology and systems, while other reforms may require state tax increases to bolster unemployment trusts in order to pay better benefits. (Biden has acknowledged the need for the government to help states with staffing and technology solutions during the pandemic.) Conti believes all states need to provide at least 26 weeks of benefits and replace at least 60% of wages.
The Biden transition team did not comment further to Fortune on the President-elect’s plan for unemployment.
When could we see a system overhaul?
It’s no secret that a split Congress doesn’t get along. And if Republicans maintain control of the Senate following two January runoff elections in Georgia, the Biden administration will find it even harder to pass legislation.
But unemployment reform might be an area where the two sides could find some common ground—especially considering its price tag could be much smaller than other legislative measures the Biden camp would like to pursue. Dante DeAntonio, senior economist at Moody’s Analytics, tells Fortune even a small percentage increase in the unemployment insurance funding the federal government sends annually to states could go a long way in helping obtain the proper administrative and system upgrades.
“I do think there will be bipartisan support at least to some degree for a lot of these substantive reforms to the terms of the program,” Conti says.
While unemployment insurance reforms likely won’t come this year, Conti suggests there is enough bipartisan understanding of “just how bad the current program is” that Congress may turn their attention to passing legislation in 2021.
And in terms of support from both sides of the aisle, she adds, “I don’t know yet if I would characterize it as ‘robust’…[but] would it be robust enough to get 60 votes on the Senate floor? Yeah, quite possibly.”


fortune--2020-12-16--Germany prepares to put some financial securities on the blockchain

Germany’s tech sector has hailed the government’s decision to allow some electronic-only securities—a move that paves the way for “crypto securities” to be entered into a blockchain-based register.
However, with the shift initially ushering in only paperless bearer bonds—shares and mutual funds will come later—the sector says this move doesn’t go far enough.
Until now, Germany’s securities laws forced holders and issuers to use paper certificates for transactions. Now, e-securities will be treated exactly the same way as paper-based notes under the country’s financial regulations.
Finance Minister Olaf Scholz hailed the shift as “driving the digitization of Germany’s financial center.”
“The paper certificate may be dear to some for nostalgic reasons, but the future belongs to its electronic version,” Scholz said following a cabinet meeting at which the decision was taken. “Electronic securities reduce costs and administrative work.”
Blockchains are secure, decentralized ledgers that are stored and updated simultaneously on many people’s or organizations’ computers, making it nearly impossible to forge entries. The technology is best known as the foundation for cryptocurrencies such as Bitcoin, though they have many other potential uses, ranging from finance to supply-chain authentication.
The acceptance of paperless bearer bonds does not necessarily mean electronic securities have to be registered on a blockchain; the newly enabled entries could just be on a register at a central securities depository or a custodian bank.
However, the government made clear in a statement, the introduction of digital securities is “one of the central requirements of the federal government’s blockchain strategy.” It added that, because the new rules are framed in a technology-neutral way, they should be able to handle further technological developments in the future.
“The digitization of the financial market is already well advanced and will be accelerated even further through the use of technologies such as blockchain,” said Justice Minister Christine Lambrecht. “Today’s cabinet decision significantly expands the innovative potential of these technologies for the German financial center. At the same time, we create legal certainty in an area that is characterized by constant change through technological innovations.”
Bitkom, the German digital sector’s trade body, welcomed that legal certainty and said the law showed the government “is serious about its blockchain strategy.”
However, it noted disapprovingly that stocks are initially not included in the shift, only bonds. This, said Bitkom blockchain chief Patrick Hansen, meant the “full potential” of the technology was “still far from being tapped.
“The benefits of blockchain for representing and trading securities are now well known,” he said in an emailed statement. “Now it is important at the German, but especially also at the European level, that the government creates the right conditions for this.”
Germany’s staged approach appears cautious, but it also seems to go further than other European countries that already allow electronic securities. France, notably, has for two years allowed the blockchain-based trading of securities, but only non-listed securities that do not use existing securities settlement systems.