fortune--2020-12-27--The biggest business scandals of 2020

The biggest business scandals of 2020

In a normal year, the wickedest corporate scandals and worst executive malfeasance are impossible to forget. But in 2020, many of us found ourselves hard-pressed to even recall what evil acts went down over the past 12 months. To that end, Fortune‘s editors have rounded up the 10 strangest, juiciest, most out-there business scandals of the year.
Nikola’s roll
Perhaps inspired by infamous blood-testing firm Theranos, liquid hydrogen trucking startup Nikola has been taking the mantra “fake it ’til you make it” a bit too literally. Short-seller Hindenburg Research claimed in September that Nikola and its CEO, Trevor Milton, had made a string of misrepresentations of its technology. That included a 2016 promotional video that purported to show an operational Nikola freight truck but was in fact staged by rolling the truck down a long hill.
Nikola later confirmed that claim. But the company brazenly argued there was no deception, since the firm at the time described the video as showing the vehicle “in motion”—technically true, even if gravity was doing the work instead of hydrogen. Regardless, Milton soon fell on his sword, resigning as CEO.
For fans of corporate scandal, the truly scintillating element here is that Hindenburg’s report landed a mere two days after General Motors announced plans for a major partnership with Nikola (timing that surely helped Hindenburg profit from its short position). The deal would have seen GM take a major equity stake and manufacture Nikola’s planned Badger electric pickup. GM took its sweet time wiping the egg off its face, waiting until late November to announce that it would effectively back out of the deal.
From a June peak of $79.73, Nikola’s stock today trades at closer to $17 per share. —David Z. Morris
Wirecard’s collapse
The Wirecard saga offers two scandals in one. Former CEO Markus Braun seemed to think the financial services company had $2.1 billion that didn’t exist, to put the most charitable construction on events; the company collapsed in June and investors lost billions. The parallel scandal is the failure of regulators and auditors to spot the looming disaster despite years of warning signs. Bruce Dorris, a former prosecutor who is president of the Association of Certified Fraud Examiners, says, “When you look at the magnitude of what happened, this is the Enron of Germany.”
Wirecard, now insolvent and dismembered, was Europe’s preeminent fintech firm, offering mobile payment and banking services worldwide. Founded in 1999, it was near failure in 2002 when Braun, a former KPMG consultant, put in some capital and became CEO. The company expanded, went public, attracted new capital, and kept growing.
Its success extended beyond financial growth. Wirecard was also a source of pride for Germany and Europe, a seemingly thriving global player in an important new industry dominated by startups in China and the U.S. Its rocketlike ascent peaked in 2018, when investors valued it at 24 billion euros ($27 billion) and it joined Germany’s business aristocracy as one of the 30 members of the DAX stock index.
But something wasn’t right. Outsiders, notably journalist Dan McCrum of the Financial Times, had been finding discrepancies in Wirecard’s accounts since 2015. Wirecard always denied vehemently that anything was wrong, but the drumbeat of doubts continued. In 2019, Germany’s market supervisor, BaFin, launched an investigation—not of Wirecard, but of the Financial Times. When the Singapore police raided Wirecard’s offices there a month later, BaFin banned short-selling of Wirecard stock for two months.
Matters came to a head last June when Wirecard announced that 1.9 billion euros (about $2.1 billion) was “missing.” Braun quickly resigned. The company soon announced “a prevailing likelihood” that the missing funds “do not exist.” Braun was arrested the next day and remains in custody. The stock, which once traded at 191 euros ($233), was recently at 0.43 euros (52 cents).
A report ordered by the European Parliament calls the Wirecard debacle “a potentially pivotal event for Europe’s capital market” that should trigger wholesale reform of financial market oversight. Enron’s collapse inspired the Sarbanes-Oxley Act. If the Wirecard scandal can spark a similar response, it may do at least some good. —Geoff Colvin
Luckin Coffee’s frothy finances
For a business named Luckin, its luck sure ran out quick. Founded in October 2017, the upstart coffee chain grew at an apparently breakneck pace to overtake Starbucks as China’s biggest bean-brew slinger by the start of the year. But as its acknowledgment of rampant fraudulent accounting would later reveal, the company’s caffeine fever-dreamed ambition—to hook a tea-drinking nation on joe—featured far more froth than substance.
As one of China’s youngest, hottest so-called unicorn startups, Beijing-based Luckin pitched itself as a tech company rather than a glorified barista biz. Luckin lured people to order drinks for takeout and delivery through its mobile app. The company served up copious discounts and “free” beverage vouchers, cutting the price of its drinks to about a third of the competition’s. Like any good tech startup, executives prioritized growth over profits.
The strategy worked well, for a while. By the end of 2018, a little more than a year after its founding, Luckin opened more than 2,000 stores and acquired a $2 billion valuation from private investors. By May 2019, it raised $561 million at a $4.2 billion valuation going public on the Nasdaq stock exchange. In early 2020, after supposedly usurping the Chinese market’s coffee crown from Starbucks’s tiara-donning merlady—as measured by total number of stores (4,500 versus Starbucks’ 4,300)—its valuation soared to an all-time high of $12 billion.
Then came the accusations of fraud. Luckin initially denied a report, circulated on Jan. 31 by Muddy Waters, the prominent U.S. short-seller firm, alleging fabricated sales. A few weeks later, though, on April 2, Luckin came clean, fessing up to $310 million in made-up money inflows—a large portion of its reported revenue for 2019. The company acknowledged the inflated figures, saw its stock delisted, reorganized its leadership team, and in December reached a $180 million settlement with the U.S. Securities and Exchange Commission.
Jinyi Guo, Luckin’s recently instated chairman and chief executive, said in a statement that the deal “reflects our cooperation and remediation efforts, and enables the company to continue with the execution of its business strategy.” He added that the company is “committed to a system of strong internal financial controls, and adhering to best practices for compliance and corporate governance.”
Carson Block, Muddy Waters’ founder, tells Fortune that he believes Luckin is just the tip of the iceberg when it comes to securities fraud by Chinese-based companies. “I’m of the view that almost every single one of them is committing fraud to some extent,” he said, noting that it is difficult for the SEC to enforce its rules on businesses based abroad. —Robert Hackett
Twitter’s security slip
On the afternoon of July 15, 2020, a series of increasingly famous Twitter accounts, including those of Elon Musk, Kim Kardashian, and Barack Obama, appeared to be getting a little weird, tweeting out a simple Bitcoin scam. Twitter had to shut down all tweeting by verified accounts while it raced to find the security hole.
Had the accounts been hijacked by an elite hacking team from Russia? State-backed operatives from North Korea? Hardly. A bored teenager in Florida named Graham Ivan Clark and some friends had managed to fool a Twitter employee over the phone into revealing the credentials needed to reset account passwords and email addresses. Clark was arrested a few weeks later and is awaiting trial. “It’s the oldest trick in the book,” says Rachel Tobac, CEO of San Francisco security firm SocialProof Security.
Twitter moved to limit how many employees had access to such power and took other steps to tighten security. It also issued a comprehensive report about how the hack had occurred. And that helped raise awareness and improve training at many companies to guard against further “social engineering” hacks, says Tobac. “Humans are the first line of defense.” —Aaron Pressman
Tesla’s lockdown defiance
Electric-auto maker Tesla wildly outperformed expectations in 2020, starting with a largely pre-COVID first-quarter earnings beat, and powering itself all the way onto the S&P 500. But CEO Elon Musk’s reaction to California measures to curb the coronavirus pandemic saw his company caught with its halo on crooked.
The first shots were fired in April, when Tesla attempted to defy lockdown orders by calling workers back to its Fremont factory but was stopped by Alameda County officials. Days later, during the April earnings call for that impressive first quarter, Musk shocked an audience of investors and analysts by describing California’s lockdown orders as “fascist,” which sounds even worse 300,000 dead Americans later.
On May 9, Tesla sued to get out of lockdown, reasonably pointing to conflicting statements from Alameda County about Tesla’s status as an “essential business.” But just days later, Tesla simply restarted vehicle production without permission. Alameda officials seemingly caved in to Musk’s libertarian defiance, announcing on May 13 that it would approve Tesla’s plan to reopen the plant—after Tesla already had done so.
Conditions at the factory were subsequently described as unsafe, including lax face mask enforcement, and Tesla workers started testing positive for the coronavirus almost immediately. As if seeking to prove that he could devote much of his life to fighting climate change and still moonlight as a James Bond villain, Musk told workers they could stay home if they were concerned over safety—then sent termination letters to some who did. —David Z. Morris
A McDonald’s pickle
At the end of 2019, McDonald’s CEO Steve Easterbrook was fired for sexting with a subordinate in what the company said was a consensual relationship. “Given the values of the company, I agree with the board that it is time for me to move on,” Easterbrook said at the time in an email to employees.
Since then, things have gotten much, much messier. In August, McDonald’s filed a lawsuit against Easterbrook, alleging that he had physical sexual relationships with three McDonald’s employees in the year before he was fired and approved stock grants worth hundreds of thousands of dollars to one of those women. The company also claimed that he concealed evidence during its initial investigation, deleting emails from his phone. With these alleged new revelations, McDonald’s argued it had cause to fire Easterbrook and that he should repay his severance. Easterbrook fired back that the company knew about the stock awards and had the information about his other relationships when they negotiated his severance.
The litigation is ongoing, but what is clear is in its attempts to distance itself from the behavior of its former CEO, McDonald’s is willing to publicly air its dirty laundry in a way rarely seen in corporate America. —Beth Kowitt
PPP fraud
The $670 billion behemoth known as the Paycheck Protection Program is, by most measures, the largest small-business relief program in American history—a cornerstone of the federal government’s response to a once-in-a-generation pandemic that has devastated small-business owners across the country.
Yet nine months after it was enacted as part of the $2.2 trillion CARES Act pandemic aid package, PPP is swiftly becoming more synonymous with the least flattering aspects of government intervention: namely, waste, graft, and fraud that critics say was enabled by mismanagement and a lack of transparency on the part of the Trump administration.
Instances of PPP fraud are legion and continue to pile up, from the fake Florida ministry that allegedly received more than $8 million in government funds to the Texas man who allegedly poured nearly $1 million of PPP money into cryptocurrency. Those cases appear to be only the tip of the iceberg; there are suggestions that hundreds of millions, if not billions of dollars of taxpayer funds, may have been fraudulently allocated through PPP, with government watchdogs acknowledging the possibility of “widespread potential fraud and abuse.”
The Trump administration, for its part, points to the program’s successes in allocating more than $520 billion to roughly 5.2 million American businesses, enabling many to save jobs and keep workers on their payroll during a time of severe economic distress. But even on a legitimate basis, the program clearly had its flaws. Data recently released by the Small Business Administration suggests that more than half of all PPP funds went to only 5% of recipients and more than a quarter went to only 1%, with large and well-capitalized public companies among the beneficiaries of that lopsided distribution.
What’s more, there’s ample evidence that many small businesses—particularly minority-owned ones, which were hit disproportionately hard by the pandemic—weren’t able to get the money they needed through the program. Meanwhile, wealthy celebrities and well-connected politicians found it all too convenient to get the funds they desired.
As one government watchdog put it: “Fundamentally, this program was poorly designed and irresponsibly run by the Trump administration.” —Rey Mashayekhi
Wells Fargo
Wait—Wells Fargo is a top business scandal of 2020? Didn’t that mess happen in 2016?
Turns out it’s more accurate to say the scandal started in 2016. Four years later it’s still going strong, meriting a Special Achievement Award among business scandals and thus a place on our list.
D-Day was Sept. 8, 2016, when news broke that the bank had created more than 2 million fake accounts and would pay $185 million in penalties. That spectacular revelation led the news; within weeks congressional committees held hearings, and CEO John Stumpf abruptly retired. With penalties paid and leadership changed, the trouble seemed well on its way to resolution. But it wasn’t.
Fast-forward to 2020: In January, Stumpf agreed to pay a $17.5 million fine to the Office of the Comptroller of the Currency for his role in the scandal, and the OCC sought $37.5 million in fines from five other ex-officers. Wells Fargo in February agreed to pay $3 billion to resolve federal criminal and civil investigations of the scandal—an amount that was “appropriate given the staggering size, scope, and duration of Wells Fargo’s illicit conduct,” said U.S. Attorney Andrew Murray. In November, Stumpf agreed to pay the Securities and Exchange Commission a $2.5 million fine. The SEC also brought charges against Carrie L. Tolstedt, who led Wells Fargo’s retail bank when the fake accounts were created.
And those are just the main developments of 2020. In the intervening years the scandal got bigger, not smaller. The bank discovered it had created 3.5 million fake accounts, not 2 million. It also discovered it had charged more than 800,000 car loan customers for auto insurance they didn’t need or even know about (fine: $1 billion; class-action lawsuit settlement: about $400 million).
Most damaging of all, the Fed in 2018 prohibited Wells Fargo from growing its assets beyond their level at the end of 2017, $1.95 trillion—an unprecedented sanction. That’s a major reason Wells Fargo has badly underperformed the S&P 500 and the other biggest banks (JPMorgan Chase, Bank of America, Citigroup) since the scandal began.
Wells Fargo’s February settlement with the Justice Department includes a deferred prosecution agreement that’s contingent on the bank “continuing to cooperate with further government investigations.” Further investigations? After four years, this epic scandal is still far from over. —Geoff Colvin
eBay on the attack
In August 2019, Ina and David Steiner, founders of online retail blog eCommerce Bytes, experienced harassment in a variety of forms: oddly threatening items mailed to their home including a bloody pig mask, live spiders and cockroaches, pornography, and a book about grieving a spouse; an expensive late-night pizza order; and Craigslist ads advertising a swingers party and an estate sale at their home address.
The couple, of Natick, Mass., reported the occurrences to police. It wasn’t until they noticed people in cars watching and following them that authorities began to connect the dots, the Wall Street Journal reported: Two different cars were rentals issued to eBay employees. A criminal investigation found ongoing internal animosity at eBay toward the bloggers, who sometimes had been critical of eBay in their coverage.
According to an FBI affidavit, former eBay chief communications officer Steve Wymer read an eCommerce Bytes post about eBay’s then-CEO Devin Wenig’s salary back in April 2019, then texted Wenig, “We are going to crush this lady,” referring to its author, Ina Steiner.
Wenig and Wymer departed the company in September 2019. In a statement, eBay said “that while Wenig did not authorize the harassment campaign, his ‘inappropriate communications’ regarding the blog were among ‘a number of considerations leading to his departure from the company,’” Fortune’s Aaron Pressman reported in a summary of the scandal earlier this year.
In another statement, obtained by Bloomberg, eBay said “neither the company nor any current eBay employee was indicted” and that eBay “was notified by law enforcement in August 2019 of suspicious actions by its security personnel toward a blogger, who writes about the company, and her husband.” The company said it “terminated all involved employees…in September 2019.”
Investigators found that the group behind the plot used prepaid debit cards, burner phones, anonymous email accounts, and VPN software to try to obscure their identities, and deleted messaging records. In September, four of the six individuals allegedly involved in the plot admitted to their involvement and soon pleaded guilty to conspiracy to commit cyberstalking and conspiracy to tamper with witnesses. —Lydia Belanger
Carlos Ghosn
Technically it was Dec. 29, 2019, when Carlos Ghosn boarded a bullet train from his home in Tokyo (where he was facing charges of financial misconduct and was free on bail). But it wasn’t until the early days of January that the full details about Ghosn’s escape from what he has called a “rigged Japanese justice system” began to emerge in the press. The train ride would be the first leg of his escape to Lebanon that seemed plucked from a Hollywood movie. Aided by an ex–Green Beret, he hid in a box designed to transport stereo equipment and was shuttled onto a private plane that flew to Istanbul, then transferred to a smaller plane that took him to Beirut (a country where he has a home and would face no extradition to Japan).
Perhaps the most astounding thing about the Ghosn saga? The fact that so many of us naively assumed in January that it would certainly be the business story of 2020. —Lee Clifford


fortune--2020-12-27--Why a key Georgia country flipped from red to blue—and what it means for Democrats

Congress just passed the most important anti-corruption reform in decades , but hardly anyone knows about it

Joe Biden’s victory in Georgia was surely the most surprising red state flip in the 2020 presidential election. Exploring the strikingly rapid transformation of Gwinnett County, the state’s largest suburban county, shows how this upset happened, while offering insights into the state’s upcoming U.S. Senate runoffs.
At the midpoint of the 20th century, Gwinnett, 30 miles northeast of Atlanta, was largely rural, with just 32,000 inhabitants, more than 95% of them white. Scarcely 2% of the residents had completed four years of college, and only 25% of the workforce held professional or managerial jobs. Who could have imagined that today, Gwinnett County would be home to nearly 950,000 people and one of the most diverse counties in the country?
Gwinnett’s path would be shaped by nearby Atlanta, which lost 162,000 white residents between 1960 and 1980. Gwinnett saw its white population swell by 102,000 over the same period. The county also grew with the arrival of thousands of white migrants from elsewhere in the nation, drawn by the dynamic metropolitan Atlanta economy. By 1990, some 357,000 people, more than nine out of 10 of them white, lived in Gwinnett County.
Growth in Gwinnett would accelerate, even as the new arrivals became more diverse. By 1990, metro Atlanta, including suburban counties like Gwinnett, was becoming a top destination for African-Americans on the move from other parts of the U.S. Meanwhile, the allure of the suburbs was accelerating the outmigration of upwardly mobile Black people from Atlanta itself. The share of Gwinnett’s population that was African-American more than doubled in the 1990s, and the Black population grew by 140% in the decade that followed. With this influx continuing, and many Gwinnett whites heading off to the decidedly whiter exurbs like Barrow and Walton counties, by 2020, 30% of Gwinnett residents were Black.
This is only part of the story of Gwinnett’s diversification. The explosion of construction jobs spawned by the 1996 Olympic Games, in combination with a falloff in employment in the Texas and Louisiana oilfields, exerted a push-pull effect on Latino in-migrants, so that today, Latin Americans constitute 20% of the county’s population. The heated pursuit of foreign investment, reflected in a current count of more than 600 foreign-owned companies in the county, also drew a steadily expanding stream of Asian and Asian-American workers, who liked the county’s highly touted schools and relatively low living costs. By 2020, residents of Asian descent accounted for 13% of Gwinnett’s population.
These arrivals made Gwinnett more prosperous and diverse but were not universally welcomed by the non-Hispanic white population. While Gwinnett officially became a majority nonwhite county by around 2007, it wasn’t until 2018 that representatives of other ethnic groups first managed to win seats on the county commission and the board of education.
White resistance had partisan implications. Gwinnett became a Republican stronghold in presidential elections in 1964, and the county voters strayed from the GOP camp only once in the next 50 years, to support fellow Georgian Jimmy Carter for President in 1976.
But as the county’s nonwhite population grew, Democrats gained ground in Gwinnett during presidential elections.
Barack Obama, running only five points behind John McCain in Georgia in 2008, captured Newton, Rockdale, and Douglas, three other metro Atlanta counties whose nonwhite populations were on the rise. Obama maintained this suburban beachhead in 2012, and four years later, Hillary Clinton picked up Gwinnett and two other diversifying counties.
With Democratic hopes buoyed by Clinton’s showing, state legislator Stacey Abrams, who is African-American, ran for governor in 2018. She narrowly lost to Republican opponent Brian Kemp—but bested him in Gwinnett by more than 14 percentage points. Abrams’s performance persuaded the national Democratic Party to mount a serious presidential effort in Georgia.
But instead of persisting in futile efforts to bring blue-collar whites back into the fold, the Democrats would concentrate on molding a growing and more politically engaged nonwhite population into a potent political force in the state. To that end, Abrams and her allies fought voter suppression, expanded registration, and boosted turnout. The effort was decisive for Biden, who carried essentially the same counties as Abrams two years ago, while besting her number of votes statewide by more than 550,000.
This was the culmination of a speedy political reversal in Gwinnett. Obama lost the county by nine points in 2012 only to see Biden win it by 18 points just eight years later.
This swing is not explained by the “hot take” that Biden owes his victory nationwide to disgusted white establishment Republicans in the suburbs, who crossed party lines rather than vote for Donald Trump but otherwise stuck with GOP candidates down-ballot. Trump certainly lost some support among white suburban voters in Georgia. But ultimately, it was a racially and culturally diverse group of relative newcomers to the burbs who put Democrats over the top.
Sure, the pundits are right that Biden won in the suburbs—the state’s three most populous suburban counties (DeKalb, Cobb, and Gwinnett), along with Fulton, where Atlanta is located, accounted for over half of Biden’s vote gains over Hillary Clinton’s totals from four years ago. But it’s also true that of those counties, Cobb is the only one where nonwhites are not the majority. (And Cobb misses being majority nonwhite by a single percentage point.)
There are limits to what may be inferred from comparing voter registration percentages to shares of the actual vote, but in Gwinnett County the correlation is too close to ignore: Whites now account for 40% of the county’s registered voters, and Trump won 40% of the vote. Likewise, in Georgia’s Seventh District, the only House seat in the state that Democrats flipped, Carolyn Bourdeaux’s vanquished Republican adversary garnered the same share of the vote in Gwinnett as Trump.
Moreover, the perceived national pattern of white suburban Republicans voting for Biden but for the GOP in other races certainly did not play out in Gwinnett. Instead, Democrats racked up large margins in the two senatorial contests, while local matchups saw more ousters of white Republicans by nonwhite candidates, including the election of Gwinnett’s first Black sheriff. Here Democrats didn’t raid the traditional Republican base, but simply overwhelmed it.
Despite this, Republicans in January’s U.S. Senate runoffs are doubling down on their presidential election strategy of tailoring their message to the die-hard Trumpers and casting Democratic challengers Jon Ossoff and Raphael Warnock as America-hating socialists, communists, or anarchists.
The Republicans are gambling that the traditional wisdom that nonwhite turnout fades badly in runoff elections will hold true yet again. But much has changed in the nonwhite population, especially in the suburbs.
Should Georgia Democrats prevail in these two races, they will have managed an even greater feat than the one they pulled off on Nov. 3. They will also have shown the rest of the country that the demographic forces transforming Georgia’s politics could fuel further Democratic success in rapidly diversifying suburban areas nationwide.
James C. Cobb is a contributing editor at Zócalo Public Square and the Spalding Distinguished Professor of History Emeritus at the University of Georgia. His latest book is The South and America Since World War II. This piece was written for Zócalo Public Square.


fortune--2020-12-27--Tried and true tricks for getting over jet lag

Even seasoned travelers frequently suffer the most common problem after a long flight: jet lag. Much like a hangover, there is no precise cure for this ailment. But frequent fliers often pick up a few tricks over the years to recover from the worst of it quickly in order to get on to the next.
Here, from the editorial staff of Fortune, is a roundup of the best tips and tricks for going the distance. (But if you suffer from serious woes after traveling, check with a medical professional first about what might work best for you.)
After checking into my hotel, I go for a run. Exercise always helps me adjust to the new time zone, reenergize, and it feels good to get moving after sitting on a plane for hours on end. —Rachel King, editor
I love jet lag going from London back to North America; I’m thrilled that it turns me into the morning person I wish I was naturally. Going back the other way is the real challenge. I book transatlantic flights from North America to Europe as late in the evening as possible, take eye masks and a water bottle, and try not to eat on the plane—I find it’s better to eat right before you get on, and then have a snack and a coffee when you get off the plane. Once you’ve arrived, keep moving for as long as you can the first day, take it as easy as you can for the first couple days, and be realistic: You’re not going to sightsee or work straight off a red-eye unless you want to make yourself sick. (It WILL catch up with you.) —Katherine Dunn, associate editor
One: Avoid alcohol; stay hydrated. Your body will thank you. Two: Get sun. Exposure to daylight in a new time zone can help reset your circadian rhythm. —Robert Hackett, senior writer
On a travel day to Europe, I get up at 4 a.m. Eastern Time, go run for 90 minutes, and then go to work for the day to ensure I will be dead tired by 8 p.m. on my flight to Europe after they’ve served dinner—always take a flight leaving at no later than 7:00 p.m.—and snooze for most of the flight. That way I get four to five hours of sleep by the time it’s morning at my destination, enough to power through that first day in Europe without needing a nap, which would only prolong the jet lag. —Phil Wahba, senior writer
If you’re traveling east (and for leisure) I find it’s actually beneficial to have a big night out right when you arrive. I realize that this is very counterintuitive, but it’s a good way to reset your internal clock. I was a mess in Japan; I’d get cranky at 4 p.m. each day until my friend and I had an evening that ended in late-night karaoke and magically awoke at a normal (not crack of dawn) hour the next morning! —Nicole Goodkind, politics writer
I’ve read over and over that the only way to ameliorate jet lag is to get your body clock on the clock of where you are as quickly as possible. I keep a tiny amount of Ambien next to my bed when I travel abroad, and if I wake up before 4:00 a.m. or so, I take it so I can force myself back to sleep until something closer to morning. I also try to go running outside in the daylight when I arrive. It just plain makes me feel good, and I feel like the sunshine hammers home to my body what time it is supposed to be. —Adam Lashinsky, executive editor
Walk, walk, walk. Wherever I go, I try to land when there’s daylight and go for a walk as soon as possible, and for as long as possible, to maximize my body’s exposure to sunlight. The last thing I want to do is spend ANY amount of time in my hotel room, because inevitably I will gravitate toward taking a nap. And we all know how that goes. Of course, if I’m traveling with my kids, this all goes out the door. The best advice I can give for getting over jet lag with kids is to have very, very low expectations. They always adjust the day before you leave to come back home. —Michal Lev-Ram, senior writer
When it comes to work travel or jet lag in general, I always give myself a minimum of 20 minutes of no-screen time. I put my phone away, disable my Apple Watch notifications, and take a minute to actively meditate or stroll within a few blocks of my hotel. This always gets me to slow down, be present, and set myself up for my new setting. There have been too many times when my head is buried in my phone, answering texts, scrubbing through e-mails. With 20 minutes or more of disconnection from tech, I am reset. —Devin Hance, video producer
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fortune--2020-12-27--The E.U. begins to vaccinate its 450 million citizens as COVID-19 deaths darken the Christmas holida

The E.U. begins to vaccinate its 450 million citizens as COVID-19 deaths darken the Christmas holiday

European Union countries began vaccinating against Covid-19 as members of the 27-nation bloc struggle with a rising number of people killed by the virus.
The coordinated rollout launched on Sunday is getting underway less than a week after the EU cleared a shot developed by Pfizer Inc. and BioNTech SE. Several European countries, including Germany, have imposed tougher restrictions in an effort to contain a winter surge in infections and deaths.
It will take months to inoculate enough people to have an impact on the spread of the disease, but the sense of urgency has grown after neighboring Britain locked down parts of the country, blaming a faster-spreading strain.
“Once enough people have been vaccinated, we can start traveling, meeting our friends and family again and have normal holidays, which we all long for,” European Commission President Ursula von der Leyen said Saturday in a video message.
The head of the EU’s executive arm was marking what she called “Delivery Day,” when doses of the vaccine were sent out across the continent. She emphasized that immunization will be a gradual process and caution is still needed.
“We have to continue being careful,” she said. “We have to protect ourselves and our loved ones.”
Weeks behind
Europe is starting the campaign to inoculate its 450 million citizens weeks after the U.K. and U.S. began their own vaccination programs. More than 600,000 people in Britain and nearly 2 million in the U.S. have received their first shot of the standard two-dose regimen, according to data collected by Bloomberg.
Despite the agreed EU rollout date, some nations, including Germany and Hungary, already began administering vaccines on Saturday, local media reported.
In the eastern German city of Halberstadt, a 101-year-old woman and around 40 others in a care home for the elderly were inoculated, according to DPA. “Every day we wait is a day too many,” the news agency quoted the head of the home, Tobias Krueger, as saying.
The start of the EU’s vaccination campaign comes amid an effort to contain the mutant virus strain that the U.K. government said is spreading more easily.
While that’s spurred concern that testing, treatments and shots might not be as effective, officials at BioNTech and the European medicines regulator said they’re optimistic the vaccine will work against the new strain. The variant has appeared in countries including Germany, Japan, Australia, Singapore and Italy.
The EU has ordered 200 million doses of the Pfizer-BioNTech shot on behalf of member states, with an option to obtain 100 million more, and the goal is to provide access to all countries at the same time on the basis of population size. Supplies will be limited in the early days, although another vaccine may soon help bolster availability.
The rollout will unfold gradually. The EU may have enough vaccine for two-thirds of its population in the middle of September, three months behind the U.S., according to London-based research firm Airfinity Ltd.


fortune--2020-12-28--Trump signs COVID relief bill, averts government shutdown

President Donald Trump has signed a $900 billion pandemic relief package that will deliver long-sought cash to businesses and individuals.
A congressional Republican aide tells The Associated Press that the president has signed the measure. The aide was not authorized to discuss the matter publicly and requested anonymity.
The massive bill includes $1.4 trillion to fund government agencies through September and contains other end-of-session priorities such as money for cash-starved transit systems and an increase in food stamp benefits.
Democrats are promising more aid to come once President-elect Joe Biden takes office, but Republicans are signaling a wait-and-see approach.
This is a breaking news update. AP’s earlier story follows below.
The fate of an end-of-year COVID relief and spending bill remained in doubt Sunday as millions lost unemployment aid, the government barreled toward a mid-pandemic shutdown, and lawmakers implored President Donald Trump to act and sign it.
On Sunday evening, Trump offered the vaguest of updates, tweeting, “Good news on Covid Relief Bill. Information to follow!” The White House did not respond to questions about what he meant.
The bipartisan package remained in limbo after Trump blindsided members of both parties with a demand for larger COVID relief checks and complained about “pork” spending, even as help for millions of Americans struggling to make ends meet lapsed overnight. The federal government will run out of money at 12:01 a.m. Tuesday if Trump refuses to sign the bill as he spends the holidays in Florida.
In the face of economic hardship and spreading disease, several lawmakers urged Trump to sign the legislation immediately, then have Congress follow up with more relief.
“What the president is doing right now is unbelievably cruel,” Sen. Bernie Sanders of Vermont said Sunday. “So many people are hurting.”
Republican Sen. Pat Toomey of Pennsylvania also said Trump should sign the bill, then make the case for more. “We’ve got a bill right now that his administration helped negotiate,” he said. “I think we ought to get that done.”
That point was echoed by Maryland Gov. Larry Hogan, a Republican who’s criticized Trump’s pandemic response and his efforts to undo the election results. “I just gave up guessing what he might do next,” he said. Hogan and Sanders spoke on ABC’s This Week, Toomey on Fox News Sunday.
In South Bend, Ind., Lanetris Haines, a self-employed single mother of three, stood to lose her $129 weekly jobless benefit unless Trump signed the package into law or succeeded in his improbable quest for changes.
“It’s a chess game and we are pawns,” she said.
Trump was spending Sunday golfing at his West Palm Beach course.
He has given no indication he plans to sign the bill as he spends the last days of his presidency in a rage. Indeed, his dissatisfaction with the legislation seems only to have grown in recent days as he has criticized it both privately to club members and publicly on Twitter.
“I simply want to get our great people $2000, rather than the measly $600 that is now in the bill,” he tweeted Saturday. “Also, stop the billions of dollars in ‘pork.’”
Washington has been reeling since Trump turned on the deal, without warning, after it had won sweeping approval in both houses of Congress and after the White House had assured Republican leaders that Trump would support it.
Instead, he assailed the bill’s plan to provide $600 COVID relief checks to most Americans—insisting it should be $2,000. House Republicans swiftly rejected that idea during a rare Christmas Eve session. But Trump has not been swayed in spite of the nation being in the grip of a pandemic.
As the impasse dragged on, Dr. Anthony Fauci of the National Institutes of Health warned that the country is at a “critical point” in COVID-19 infections, with the Christmas and New Year’s holidays posing the threat of a “surge upon a surge” as people congregate with families and others, against the advice of public-health officials.
“As we get into the next few weeks, it might actually get worse,” he said on CNN’s State of the Union.
President-elect Joe Biden called on Trump to sign the bill immediately as the midnight Saturday deadline neared for two federal programs providing unemployment aid. He accused Trump of an “abdication of responsibility” that has “devastating consequences.”
The impact is already beginning. Lauren Bauer, a fellow in economic studies at the Brookings Institution, has calculated that 11 million people would lose aid from the programs immediately without additional relief; millions more would exhaust other unemployment benefits within weeks.
Andrew Stettner, an unemployment insurance expert and senior fellow at the Century Foundation think tank, said the number may be closer to 14 million because joblessness has spiked since Thanksgiving.
How and when people would be affected by the lapse depended on the state they lived in, the program they were relying on and when they applied for benefits. In some states, people on regular unemployment insurance would continue to receive payments under a program that extends benefits when the jobless rate surpassed a certain threshold, Stettner said.
About 9.5 million people, however, had been relying on the Pandemic Unemployment Assistance program that expired altogether Saturday. That program made unemployment insurance available to freelancers, gig workers, and others who were normally not eligible. After receiving their last checks, those recipients would not be able to file for more aid, Stettner said.
While payments could be received retroactively, any gap would mean more hardship and uncertainty for Americans who had already grappled with bureaucratic delays, often depleting much of their savings to stay afloat while waiting for payments to kick in.
They were people like Earl McCarthy, a father of four who lives in South Fulton, Ga., and had been relying on unemployment since losing his job as a sales representative for a luxury senior living community. He said he would be left with no income by the second week of January if Trump refused to sign the bill.
McCarthy said he already burned through much of his savings as he waited five months to begin receiving about $350 a week in unemployment benefits.
“The entire experience was horrifying,” said McCarthy. “I shudder to think if I had not saved anything or had an emergency fund through those five months, where would we have been?”
He added, “It’s going to be difficult if the president doesn’t sign this bill.”
The bill would also activate a weekly $300 federal supplement to unemployment payments. In addition to the unemployment benefits that have already lapsed, Trump’s continued refusal to sign the bill would lead to the expiration of eviction protections and put on hold a new round of subsidies for hard-hit businesses, restaurants and theaters, as well as money for cash-starved transit systems and for vaccine distribution.
Sharon Shelton Corpening had been hoping the extra help would allow her 83-year-old mother, with whom she lives, to stop eating into her Social Security payments to make their $1,138 rent.
Corpening, who lives in the Atlanta area, had launched a freelance content strategy business that was just taking off before the pandemic hit, prompting several of her contracts to fall through. She was receiving about $125 a week under the pandemic unemployment program and says she would be unable to pay her bills in about a month. This, despite her temporary work for the U.S. census and as an elections poll worker.
“On the brink,” Corpening, who lobbies for Unemployment Action, a project launched by the Center for Popular Democracy to fight for relief, said of her predicament. “One more month, if that. Then, I run out of everything.”
The relief was also attached to a $1.4 trillion government funding bill to keep the federal government operating through September, which would mean that failing to sign it by Tuesday would trigger a federal shutdown.
Editor’s note: This story has been updated. Fortune published an earlier version of this story on Dec. 27, 2020 at 1:10 p.m. ET with the headline, “Lawmakers urge Trump to sign relief bill as unemployment aid expires.”


fortune--2020-12-28--How your personal finances can survive a pandemic

It has been a tough year.
Yes, there was a global pandemic, but the economic fallout from shutdowns and entire industries collapsing has wreaked continual havoc on the personal finances of many Americans. Though those at the upper end of the income ladder may have seen their portfolios buoyed by a rising stock market, those on the opposite end have had a very different experience, which may have included unemployment and trouble paying bills. All investors sweated through a record-fast dive into a bear market, yet enjoyed an unbelievably strong rally to end the year. But wherever you found yourself on the spectrum, there were some personal finance rules that became especially important during this wild year. Here are a few that stood out, thanks to regular Fortune contributor Ben Carlson.
Avoid credit card debt like the plague
The first rule of personal finance is to never carry a credit card balance. Credit card borrowing rates are egregiously high and paying those rates is an easy way to negatively compound your net worth. If you carry credit card debt for a prolonged period of time, you’re not ready to invest your money in the markets.
Saving is more important than investing
Pay yourself first is such simple advice, but so few people do this. The best investment decision you can make is setting a high savings rate because it gives you a huge margin of safety in life. You have no control over the level of interest rates, stock market performance, or the timing of recessions and bear markets, but you can control your savings rate.
Check your borrowing
As Carlson wrote in March, when the economy takes a beating there can be some silver linings. If you took out a $350,000 mortgage 12 months earlier, you likely locked in a 30-year fixed-rate mortgage at around 4.5%. That equates to a monthly payment of roughly $1,775 (ignoring taxes and insurance). Then 30-year fixed-rate mortgages moved closer to 3.3%. On that same $350,000 mortgage, that works out to a monthly payment of around $1,530, a savings of $245 a month. That extra money can provide a cushion during a potential economic slowdown. The one bright spot from the crashing stock market is interest rates have made borrowing more affordable.
Get the big purchases right
As Carlson puts it, “I know I shouldn’t be so judgmental, but whenever I see $50K to $70K SUVs on the road or enormous McMansions the first thing that pops into my head is, ‘I wonder how much they have saved for retirement?’” Personal finance experts love to debate the minutiae of lattes, but the most important purchases in terms of keeping your finances in order will be the big ones—housing and transportation. Overextending yourself on these two purchases can be a killer because they represent fixed costs and come with more ancillary expenses than most people realize.
Young investors should look forward to bear markets
Young investors should pray for bear markets because it allows them to buy more shares at lower prices. Human capital is your biggest asset as a newbie investor, meaning your future earnings potential should enable you to save money over time and allow compounding to do the heavy lifting for you.
Don’t succumb to fear
A bear market is one of the worst times to completely overhaul your asset allocation because your decision-making ability will be clouded by your emotions. The all-in or all-out game is one of the most dangerous you can play when investing. Sure, you could luck out once or twice, but eventually you’re going to end up selling out before a huge boom or buying before a huge bust. The four times Carlson advocates selling: when you need to rebalance, when you need to diversify, when you’ve been proven wrong about an investment thesis, and when you’ve “won the game” and are ready to retire.
Near retirement, get conservative
A bear market at the outset of retirement can make things more challenging than a rip-roaring bull market, but there are ways to prepare yourself for the scenario that befell investors recently—and no doubt will again. A minimum of at least three years’ worth of spending cash in high-quality bonds or cash would give you enough coverage so you don’t have to panic-sell stocks at the worst time. Those approaching retirement could at a minimum begin funneling some of their savings in their later years into a safe savings account to cover their first year or two of expenses in retirement.
And, as we surely saw in 2020, even in the scariest bear market, a new bull market may be right around the corner.


fortune--2020-12-27--What to know about the CDC’s new COVID vaccine guidance for people with health conditions

The Centers for Disease Control (CDC) released new guidance on Saturday on the COVID-19 vaccination process for people with underlying health conditions. The new guidelines follow reports of some health care workers and COVID vaccine recipients experiencing side effects.
In releasing this information, the CDC seeks to assuage the concerns of people with underlying medical conditions, including rare disorders and inflammatory diseases. And, as is also the case with how the vaccine will affect broader demographics, there is still some real-world evidence left to parse.
COVID vaccines from Pfizer and partner BioNTech and competitor Moderna were developed in record time this year. But with that developmental urgency came an inevitable tradeoff: Clinical trials still need to encompass more people who may be at high risk of contracting COVID-19 in order for the scientific community to understand how the vaccine may affect various demographics.
The CDC cites clinical research showing that the COVID vaccine should be safe for the vast majority of people. But certain groups will require more vigilant monitoring.
“People with HIV and those with weakened immune systems due to other illnesses or medication might be at increased risk for severe COVID-19. They may receive a COVID-19 vaccine,” writes the CDC in its new guidance. “However, they should be aware of the limited safety data. People living with HIV were included in clinical trials, though safety data specific to this group are not yet available at this time.”
There’s also not a whole lot of hard data on the vaccine’s effect on people with autoimmune conditions, although the CDC says these people can still receive an mRNA vaccine along the lines of Pfizer’s or Moderna’s. Americans who have had rare disorders such as Guillain-Barre syndrome (GBS) or Bell’s palsy also may receive the vaccine, with side effects expected at no higher level than the general population.
Any immunization campaign is an experiment, usually with disparate results that pour in minute by minute. For instance, some patients who have already received vaccine doses have experienced adverse events such as fatigue and muscle aches.
The available clinical trial data suggest that side effects vary wildly by age and other factors, such as a history of serious allergies, and they tend to hover between mild and moderate symptoms.


fortune--2020-12-27--New York luxury real estate could be a bargain in 2021

Judging by the last quarter of 2020, New York’s luxury real estate market should enter 2021 with confidence.
Sales of homes that cost more than $4 million were a little above those of the same three months in 2019, says Donna Olshan, president of luxury real estate broker Olshan Realty. “Now, some of that has to do with demand that was never met, because we lost the most important quarter—the spring,” she says.
But the tick upward is also, she says, “because most of these sales are [to] New Yorkers, or from the New York metro area, betting on the home team. They are getting COVID-19 discounts, they’re looking at the long-term prospects of New York, and they’re buying.”
As the city looks toward next year, the known unknowns loom large. The timeline of the vaccine rollouts is opaque. A proposed pied-à-terre tax, dreaded by everyone in the industry, remains possible. And the economic futures of the city, the country, and the world are up in the air.
But the city’s luxury residential market has enough momentum to make experts feel comfortable making some conditional predictions.
Suburb mania is over
“The way I think of the suburbs is that they had their moment,” says Jonathan Miller, president and chief executive officer of Miller Samuel appraisers, who adds: “The ‘fleeing the city’ narrative is already extremely dated.”
While suburban sales are still up year over year, “it’s just no longer a rocket ship of growth,” he says. “And the jump in pricing, largely caused by what I would call panic buying—where people left the city out of fear—that was front end-loaded, and I don’t see a compelling reason why that [price growth] can be sustainable.”
John Walkup, COO and co-founder of UrbanDigs, agrees. He says the move to the suburbs this year was really part of an older trend. “We were in year three in this shift to the suburbs picking up in demand, relative to New York City,” Walkup says.
This spring’s hysterical exodus to New York’s suburban areas was “a bit of a flash,” Walkup continues. “Prices and deal activity have spiked.”
Brooklyn will stay hot
“Houses were on fire,” Olshan says. “Townhouses in Brooklyn did very well during the pandemic.”
The median price for luxury home sales in the fourth quarter in Brooklyn is expected to be up 5.5% year-over-year, according to UrbanDigs data. (“Luxury” in Brooklyn is defined by UrbanDigs as anything over $2 million.) Contracts signed are up an anticipated 26.2% for the same period, and days on the market are down by nearly half.
Overall, despite the nonexistent spring sales season, this year’s median luxury sales price in Brooklyn, according to UrbanDigs, was only down 1.5% compared to last year. The number of contracts signed will only be down an estimated 12% year-over-year, according to the company’s data.
“A lot of it has to do with the lower price point,” says Walkup. “A million dollars buys you a bit more space, or a Zoom room, and once you get into that luxury sector, that value grows quite a bit.”
The demand shows no signs of abating.
“Brooklyn is certainly accelerating,” Walkup says, “and I don’t see any reason for that to stop.”
Foreign buyers will keep away
“Foreign buyers are a bit of a straw man because sometimes they’re blamed for the ups, and sometimes they’re blamed for the downs,” Walkup says.
Still, many luxury buildings—particularly condominiums along the stretch of W. 57th Street known as “Billionaires Row”—“were predominantly positioned for the foreign market, and that’s where oversupply is at its greatest,” Olshan says.
“Unless the deployment of the vaccine is very, very successful, we won’t see the foreign market back” for at least the first half of next year, she adds.
Manhattan will still have too much of the wrong thing
The new luxury condominium market “is burdened with a tremendous amount of supply,” Miller says.
“In 2020 we had 8.7 years of sellout, meaning it would take 8.7 years to sell all unsold Manhattan new-development condos,” he says. That is likely to drop to 7.2 years in 2021, because there’s an anticipated “decline of new product coming into the market,” Miller says. Plus, additional sales will occur as buyers are drawn by discounted pricing, he says.
“I think in 2021 we’ll see a continued drop in price trends,” he says.
…and that means major discounts
That’s a nice way of saying there could be serious deals to be found. The only question is at which buildings.
“The problem with developers is that they are held hostage to the bank or their lenders,” Olshan explains. That means that a developer can’t just price on a whim. It’s a negotiation. Whichever buildings sort out their discounts first might have the upper hand.
“These things take a long time, and you know the buyers go where the next project is. If you don’t lower your price, they’ll move on. It’s just that simple.”
The next few months, Olshan says, “are going to be remembered as the time when it was optimal to go out and strike a deal.”


fortune--2020-12-27--Chinese regulators order Ant Group to focus on payments, stop short of breakup

Chinese regulators ordered Jack Ma’s online financial titan Ant Group Co. to return to its roots as a provider of payments services, threatening to throttle growth in its most lucrative businesses of consumer loans and wealth management.
The central bank summoned Ant executives over the weekend and told them to “rectify” the company’s lending, insurance, and wealth management services, the People’s Bank of China said in a statement Sunday. While it stopped short of directly asking for a breakup of the company, the central bank stressed that Ant needed to “understand the necessity of overhauling its business” and come up with a timetable as soon as possible.
The series of edicts represent a serious threat to the expansion of Ma’s online finance empire, which has grown rapidly from a PayPal-like operation into a full suite of services over the past 17 years. Before regulators intervened, Ant was poised for a public listing that would have valued it at more than $300 billion. The Hangzhou-based firm now needs to move forward with setting up a separate financial holding company to ensure it has sufficient capital, and protect personal private data, the central bank said.
“This is the culmination of a string of regulations and sets the direction for Ant’s business going forward,” said Zhang Xiaoxi, a Beijing-based analyst at Gavekal Dragonomics. “We haven’t seen clear indication of break-up yet. Ant is a giant player in the world and any breakup needs be to be cautious.”
Authorities also blasted Ant for sub-par corporate governance, disdain toward regulatory requirements, and engaging in regulatory arbitrage. The central bank said Ant used its dominance to exclude rivals, hurting the interests of its hundreds of millions of consumers.
China last week intensified its scrutiny of the twin pillars of billionaire Ma’s internet domain when it also kicked off an investigation into alleged monopolistic practices at Ant affiliate Alibaba Group Holding Ltd. The e-commerce firm’s U.S.-listed shares tumbled the most ever on news of the probe.
The State Administration for Market Regulation dispatched investigators to Alibaba on Thursday and the on-site investigation was completed on the day, according to a Saturday report posted on a news app run by the Zhejiang Daily. The report cited an unnamed official from the local market regulation watchdog in Zhejiang province, where Alibaba is based.
Ant said in a statement on Sunday that it will set up a special team to create proposals and a timetable for an overhaul. It will maintain business operations for users, vowing to keep costs for consumers and financial partners unchanged, while stepping up risk control.
The pressure on Ma is central to a broader effort to curb an increasingly influential internet sphere.
Once hailed as drivers of economic prosperity and symbols of the country’s technological prowess, the empires built by Ma, Tencent Holdings Ltd.’s chairman, “Pony” Ma Huateng, and other tycoons are now under scrutiny after amassing hundreds of millions of users and gaining influence over almost every aspect of daily life in China.
Ma’s own empire is in crisis mode. As of early December, with Ant under regulatory scrutiny, the man most closely identified with the meteoric rise of China Inc. was advised by the government to stay in the country, a person familiar with the matter has said. Alibaba has shed more than $200 billion of market value since November, when regulators torpedoed what would have been a record $35 billion Ant debut.
Alibaba chief executive officer Daniel Zhang said in a meeting with local regulators on Friday that the company will only prosper in the future by complying with the rules, state-backed China News Service reported.
Ant’s top executives are part of a task force that already has almost daily interactions with watchdogs. Meanwhile, regulators, including the China Banking and Insurance Regulatory Commission, are weighing which businesses Ant should give up control of to contain the risks it poses to the economy, officials with knowledge of the matter have said. They haven’t settled on whether to carve up its different lines of operation, split its online and offline services, or pursue a different path altogether.
Ant’s backers include Warburg Pincus LLC, Carlyle Group Inc., Silver Lake Management LLC, Temasek Holdings Pte, and GIC Pte.
Read more: Jack Ma goes quiet after Ant Group’s spectacular undoing
“Ant’s growth potential will be capped with the focus back onto its payments services,” said Shujin Chen, the Hong Kong-based head of China financial research at Jefferies Financial Group Inc. “On the mainland, the online payments industry is saturated and Ant’s market share pretty much reached its limit.”


fortune--2020-12-27--Investors are starting to demand better of the companies they own

In 1970, Milton Friedman wrote an op-ed that would embolden investors and enrage activists for decades. Its title: “The social responsibility of business is to increase its profits.” Despite insistence from many that his doctrine is dead, Friedman acolytes still count at least one powerful ally: the U.S. Labor Department.
In a new rule to become effective this January, the department will require public pensions to select investments “based solely on financial considerations,” specifying that assets “may never be enlisted in pursuit of other social or environmental objectives at the expense” of these financial considerations. It’s a splash of cold water on the responsible investing movement, which has quadrupled in assets over the past decade.
The new rule is an example of how adversarial capitalism can be. Corporations maximize profits for shareholders—workers, communities, and the environment be damned. No wonder only half of Americans under 40 have a favorable view of capitalism—and only one-third of all Americans believe that our financial system benefits society.
As an impact investor who helped launch Bain Capital’s social impact fund, I take a different view. Many impact investors believe shareholders are best served when corporations focus on creating long-term value for customers, workers, communities, and the environment.
To understand why, we have to ask a basic question: Who exactly are these shareholders?
There are 137 million shareholders in the U.S. That’s 137 million Americans who own stock directly, through pension funds or through investment funds like those managed by BlackRock or Fidelity.
Stock ownership, like all wealth in the U.S., is distributed unequally: The top 10% hold four-fifths of stock market wealth. But what if we focused not on the wealthiest shareholders but instead on the typical shareholder? When the Labor Department sets policy—like a new workplace safety rule—it seeks to benefit the typical worker rather than the wealthiest. Treating shareholder interests as separate from broader social and environmental considerations misses a critical point.
Of all Americans who own stock, the typical shareholder is 51 years old, with a retirement account worth $65,000. They’re often invested in broadly diversified index funds. A Vanguard Target Retirement Fund, for example, holds shares in more than 11,000 stocks and 15,000 bonds across every industry and region worldwide.
They also work for a living. Shareholders rely on our economy’s ability to provide good, high-paying jobs. They’re customers of the companies they own. They live in the environment companies may pollute, and they are citizens of the democracy some companies seek to influence.
Of all the roles they inhabit, shareholder is a relatively minor one.
And so most shareholders benefit when companies invest for the long term in worker training, sustainable operations, and fair business practices. They benefit even if these practices reduce short-term profits, because they own a representative share of the global economy for decades. They are shareholders, yes. But they are long-term shareholders who care more about creating sustainable value than hitting quarterly earnings expectations.
All the stranger, then, that our economy so poorly reflects their interests. Over half of Americans believe corporations should take action on climate change. But over the past two years, investors have voted to pass only four out of 42 shareholder proposals related to the environment.
Two-thirds of Americans believe corporations wield too much political influence, but shareholders have passed only 8% of proposals that would address lobbying.
Nearly three-quarters of workers say CEOs make too much. Every year, shareholders have a right to vote on CEO pay. And every year, over 97% of executive compensation packages are approved with an average of 90% support.
In the capital markets today, there’s little accountability for anything but short-term profits.
Many investors are beginning to demand more. According to one recent Morgan Stanley survey, 95% of millennials and 85% of all investors are now interested in sustainable investing strategies. Nearly nine in 10 believe that “it is possible to balance financial gains with a focus on social and environmental impact.”
To meet this growing demand, many asset managers have begun offering responsible investment funds. These funds are often called “ESG funds” because they focus on companies’ environmental, social, and governance characteristics. They have been amassing billions of dollars in assets in recent years as investors seek to realign their portfolios with their values.
Impact investing, where investors buy private companies with the specific aim to make them more socially and environmentally responsible, has grown to over $715 billion today.
But retirement accounts and investment funds are not the only dollars invested on behalf of most Americans. Insurance companies invest our premiums, banks invest our deposits, and endowments—at universities, foundations, and otherwise—invest our donations. Institutions with over $14 trillion in assets have committed to divesting from oil and gas in a movement often led by students.
Even the Labor Department is not immune. After it proposed the new ESG rule this summer, it received nearly 9,000 comments, 96% of which opposed the rule change. This helps explain why the final rule walked back language that initially took even greater aim at environmental and social concerns.
Pressure is growing on companies to better reflect the values of the people who own them. No one thinks twice about the small business that sponsors the local Little League team or makes sacrifices to keep people on payroll through a crisis. But as companies grow and go public—and as ownership grows dispersed, intermediated, and anonymous—we lose sight of this truth. It’s up to shareholders to recognize that their interests are being ill-served, and to demand better.
Michael O’Leary is coauthor of Accountable: The Rise of Citizen Capitalism. He was on the founding team of Bain Capital’s impact investing fund. The views expressed here are his own.


fortune--2020-12-28--What another lockdown means for January gym sales

It’s a truth universally acknowledged that as the festivities of the holiday season wind down and New Year’s resolutions set in, gyms and fitness centers are most crowded during the first quarter—if not the first month or even the first week—of the year.
But with another round of shutdowns occurring in many states as positive COVID-19 case numbers continue to spike to dire levels, this could present severe repercussions for businesses forced to close their doors again.
“January and February have always been an important time of the year for the fitness industry, on the heels of New Year’s when health and wellness resolutions are top of mind for consumers,” says Chris Rondeau, CEO of Planet Fitness. “Now more than ever, taking care of your physical and mental health is critical, particularly given chronic health conditions like obesity, diabetes, and heart disease, which worsen COVID outcomes. Exercise also helps to build healthy immune systems, and fitness centers are a critical piece of the health care delivery system to prevent chronic diseases.”
In recent years, the first two weeks of January account for, on average, 12% of new member activations for the entire year—the largest sales periods for gyms around the country, according to the International Health, Racquet, and Sportsclub Association (IHRSA). Within the first five months, nearly 70% of those on month-to-month memberships cancel, but as many infrequent gym members learn, it’s not so easy to cancel your membership once you have signed up.
“The New Year is a unique opportunity for gyms to attract new members; nearly 50% of those who make New Year’s resolutions include ‘exercising more’ as a top item,” says Mohammed Iqbal, CEO of SweatWorks, a software development agency that has produced fitness products with brands such as Nike, Cityrow, Equinox, Tough Mudder, and SoulCycle. “Because of those reasons, the first month is a critical time for the fitness industry looking to attract new members.”
In a typical year, most YMCA locations nationwide net 15% to 25% of their annual membership sales in the month of January. But branches across the country are bracing for a rough start to 2021.
“The current environment of the last 30 days is resulting in many more closures and will certainly result in the usage percentages dropping,” says Paul McEntire, executive vice president and chief operations officer for the YMCA. “However, the answer is we just don’t know how we will be affected in 2021. While more shutdowns are likely, there is hope with the distribution of vaccines that we could slowly start returning to normal.”
With all facilities closed for the greater part of two to three months last spring, limited operation of summer camps, hesitation by members to return to wellness facilities, and mandated shutdowns as COVID numbers rise again, McEntire says the YMCA has seen upwards of $2 billion in lost revenue since March and has been faced with devastating decisions regarding furloughs, layoffs, and permanent facility closures in certain areas.
“Charities like the Y need immediate relief from Congress if they are to continue to provide these vital support services and to help communities rebuild when this crisis is over,” he says.
Earlier this year, investment bank Harrison Co. estimated that the pandemic’s impact on lost sales will exceed upwards of $10 billion, which this late in the game could be a conservative forecast.
Based on data from major payment processing companies serving gyms and health clubs, 15% of health and fitness centers were permanently closed as of September, according to the IHRSA, and as many as one in four clubs may close by the end of the year.
As of the third quarter of 2020, gyms that were still open were reporting a nearly 38% drop in revenue. That is not including several gyms that have gone bankrupt already, including iconic brands such as 24 Hour Fitness, Town Sports (the parent company of New York Sports Club, among others), and Gold’s Gym.
“The industry is still tracking the complete impact of the pandemic and ensuing lockdown to brick-and-mortar facilities,” Iqbal says. “March and April were record months for gym membership cancellations, with nearly a third stating that they won’t be coming back even if their gym were to reopen at full capacity.”
Upon the temporary closure of its locations in mid-March, Planet Fitness, which runs more than 2,000 clubs nationwide, proactively froze all members’ accounts to ensure they were not billed for any days their club was closed.
“As a result of COVID-19, our membership levels have been under some pressure, primarily, we believe, from pent-up cancellations in reopened clubs following the resumption of billing,” Rondeau says. “However, we saw improved trends in gross new-member joins and increased usage rates as a result of kick-starting our national marketing efforts in September, and then again in October and November. We believe fitness is an essential component of our physical and mental well-being, and this momentum shows that demand is there and people do want to safely return to the gym.”
Still, the outlook for gyms is not looking great for the start of the new year. Iqbal suggests there are two key drivers that gyms are up against. First, states are rolling back their openings and closing down establishments, including gyms and restaurants. The second is that consumers have evolved and adopted other sources of fitness including connected and digital offerings.
“Gyms will not see a growth in memberships until consumers feel that they are safe, which will not happen until vaccines are widely available,” Iqbal predicts.
“It is clear that, unfortunately, not every brand in the industry will be able to weather this storm,” Rondeau says. “We are hearing from many franchisees that locally owned gyms in their markets are not reopening, on top of the bankruptcies and reported store closures at a number of national chains. We believe that health and wellness is more important now than ever before, and this increased focus on physical activity will continue to grow and play an important role in people’s everyday lives.”
Upon reopening later in 2020, Rondeau says Planet Fitness developed what he described as a “robust COVID-19 operations playbook,” outlining new protocols such as cleanliness and sanitization policies, physical distancing measures in its larger and more spacious clubs (measuring approximately 20,000 square feet), mask requirements systemwide, and touchless check-in via mobile app. The enhanced mobile app features a series of COVID-19 wellness questions upon check-in, and a crowd meter that allows members to check club capacity levels before coming into the gym.
“Certainly, the operating environment for the short term will remain volatile given the virus,” Rondeau says. “With respect to operating our locations now and into 2021, we firmly believe we can continue to operate safely and responsibly in this environment as we have strict COVID guidelines in place.”
New year, new normal
Most gyms still in business have attempted to pivot to digital offerings. Planet Fitness, for example, offers more than 500 free workouts via app for both members and nonmembers, developed in partnership with iFit to provide streaming workouts and additional content. But many are still playing catch-up to established home-based exercise brands, such as Peloton, Cityrow, and MYXfitness.
“Consumers have evolved during the lockdown in everything from how they work to how they work out,” Iqbal notes. “While some COVID trends including retail shopping, Broadway, restaurants, and bars will bounce back to pre-COVID rates once a vaccine is widely available, other trends, such as work from home and digital fitness are here to stay: 2020 has seen the acceleration of connected and digital fitness across the board.”
SweatWorks expects that trend to continue into 2021 with significant improvement in hardware, artificial intelligence, and personalization.
“Peloton has done for fitness what Netflix has done for streaming,” Iqbal says. “Digital fitness will continue to be an increasing source of experience and consumption to a broader audience in 2021. You no longer need to live on the coasts and in a major city to have access to the best coaches, facilities, and programs—you can get immersed in your wellness right where you are.”
Data from IHRSA’s upcoming 2020 Health Club Consumer Report shows that 20% of health club members now use a premium online fitness service. “Offering virtual fitness training and exercise classes will continue,” says Melissa Rodriguez, a senior research manager at IHRSA. “Considering the boost that home fitness equipment sales met over the pandemic, clubs stand to gain from this development. It shows the importance of physical activity and overall well-being resonates with consumers.”
And with a massive COVID-19 vaccine rollout getting underway in the United States and medical experts predicting millions of Americans should be vaccinated by the summer, the fitness industry should see a much wider reopening during the second half of the year. The real test, at that point, will be convincing patrons it’s safe to come back to the gym.
Members returning to YMCAs for wellness varies significantly based on local restrictions, guidelines, and personal attitudes, according to the nonprofit’s COO. So far, just a fifth of the YMCA’s membership base has returned in urban areas with tighter shutdown restrictions, compared with 40% to 60% in rural areas and Southern states.
“We know there is a base that will come back as soon as it seems safe,” McEntire says. “There is another group that will come back when they are absolutely certain it is safe. There is a third group that presently seems to be 15% to 25% that is unlikely to ever come back to a facility to meet their fitness needs.”
McEntire suggests there are a number of important elements that fitness centers need to get right to ensure patrons come back, starting with having a clean, safe, and secure facility as a base-level requirement.
“We know some about what will influence people to return to YMCAs, but people’s perspectives and attitudes continue to evolve, and will continue to evolve, as the situation and circumstances change over time,” he says. “Attitudes on procedures involving things such as distancing, masks, and size of group varies greatly. What is seen as too strict to some can be seen as too lax to others.”
And, even with virtual fitness classes, at-home workouts can never fully replicate the feeling of being around friends and teammates, and many people cooped up at home or working out alone outdoors could be itching—if not desperate—for a more social experience next year. “We know there is a significant group of people for whom success with their fitness goals has a critical social component, and they want to be with others,” McEntire says.
Feedback collected by the IHRSA from gymgoers shows that they missed their local gyms and fitness centers while they were closed. A recent study conducted by Kelton Global found that the only thing that health club members missed more than their health clubs while they were closed was visiting with family and loved ones. The study also pointed out the importance of the variety of equipment, facilities, services, and programs clubs offer that are challenging to duplicate at home.
“Health clubs provide the accountability and sense of community a lot of exercisers need to stick with an exercise program and make healthier choices to improve overall well-being,” Rodriguez says. “Once health clubs and gyms can operate with less limiting restrictions, and when COVID-19 gets under control, we expect consumers to want to engage in programs at their health and fitness centers. We believe consumers will especially want social and community-oriented offerings—small group/team training and group exercise.”


fortune--2020-12-28--Seniors face steep drug costs as Congress stalls on capping Medicare out-of-pockets

Sharon Clark is able to get her life-sustaining cancer drug, Pomalyst—priced at more than $18,000 for a 28-day supply—only because of the generosity of patient assistance foundations.
Clark, 57, a former insurance agent who lives in Bixby, Okla., had to stop working in 2015 and go on Social Security disability and Medicare after being diagnosed with multiple myeloma, a blood cancer. Without the foundation grants, mostly financed by the drugmakers, she couldn’t afford the nearly $1,000 a month it would cost her for the drug, since her Medicare Part D drug plan requires her to pay 5% of the list price.
Every year, however, Clark has to find new grants to cover her expensive cancer drug.
“It’s shameful that people should have to scramble to find funding for medical care,” she said. “I count my blessings, because other patients have stories that are a lot worse than mine.”
Many Americans with cancer or other serious medical conditions face similar prescription drug ordeals. It’s often worse, however, for Medicare patients. Unlike private health insurance, Part D drug plans have no cap on patients’ 5% coinsurance costs once they hit $6,350 in drug spending for the year (rising to $6,550 in 2021), except for very low-income beneficiaries.
President-elect Joe Biden favors a cap, and Democrats and Republicans in Congress have proposed annual limits ranging from $2,000 to $3,100. But there’s disagreement about how to pay for that cost cap. Drug companies and insurers, which support the concept, want someone else to bear the financial burden.
That forces patients to rely on the financial assistance programs. These arrangements, however, do nothing to reduce prices. In fact, they help drive up America’s uniquely high drug spending by encouraging doctors and patients to use the priciest medications when cheaper alternatives may be available.
Growing expense of specialty, cancer medicines
Nearly 70% of seniors want Congress to pass an annual limit on out-of-pocket drug spending for Medicare beneficiaries, according to a KFF survey last year. (KHN is an editorially independent program of KFF.)
The affordability problem is worsened by soaring list prices for many specialty drugs used to treat cancer and other serious diseases. The out-of-pocket cost for Medicare and private insurance patients is often set as a percentage of the list price, as opposed to the lower rate negotiated by insurers.
For instance, prices for 54 orally administered cancer drugs shot up 40% from 2010 to 2018, averaging $167,904 for one year of treatment, according to a 2019 JAMA study. Bristol Myers Squibb, the manufacturer of Clark’s drug, Pomalyst, has raised the price 75% since it was approved in 2013, to about $237,000 a year. The company believes “pricing should be put in the context of the value, or benefit, the medicine delivers to patients, health care systems and society overall,” a spokesperson for Bristol Myers Squibb said via email.
As a result of rising prices, 1 million of the 46.5 million Part D drug plan enrollees spend above the program’s catastrophic coverage threshold and face $3,200 in average annual out-of-pocket costs, according to KFF. The hit is particularly heavy on cancer patients. Last year, Part D enrollees’ average out-of-pocket cost for 11 orally administered cancer drugs was $10,470, according to the JAMA study.
The median annual income for Medicare beneficiaries is $26,000.
Medicare patients face modest out-of-pocket costs if their drugs are administered in the hospital or a doctor’s office and they have a Medigap or Medicare Advantage plan, which caps those expenses.
But during the past several years, dozens of effective drugs for cancer and other serious conditions have become available in oral form at the pharmacy. That means Medicare patients increasingly pay the Part D out-of-pocket costs with no set maximum.
“With the high cost of drugs today, that 5% can be a third or more of a patient’s Social Security check,” said Brian Connell, federal affairs director for the Leukemia & Lymphoma Society.
This has forced some older Americans to keep working, rather than retiring and going on Medicare, because their employer plan covers more of their drug costs. That way, they also can keep receiving financial help directly from drugmakers to pay for the costs not covered by their private plan, which isn’t allowed by Medicare.
“This is a little nuts“
All this has caused financial and emotional turmoil for people who face a life-threatening disease.
Marilyn Rose, who was diagnosed with chronic myeloid leukemia three years ago, until recently was paying nothing out-of-pocket for her cancer drug, Sprycel, which has a list price of $176,500 a year. That’s because Bristol Myers Squibb, the manufacturer, paid her insurance deductible and copays for the drug.
But the self-employed artist and designer, who lives in West Caldwell, N.J., just turned 65 and went on Medicare. The Part D plan offering the best deal on Sprycel charges more than $10,000 a year in coinsurance for the drug.
Rose asked her oncologist if she could switch to an alternative medication, Gleevec, for which she’d pay just $445 a year. But she ultimately decided to stick with Sprycel, which her doctor said is a longer-lasting treatment. She hopes to qualify for financial aid from a foundation to cover the coinsurance but won’t know until January.
“It’s just strange you have to make a decision about your treatment based on your finances rather than what’s the right drug for you,” she said. “I always thought that when I get to Medicare age I’ll be able to breathe a sigh of relief. This is a little nuts.”
Given the sticker shock, many other patients choose not to fill a needed prescription, or delay filling it. Nearly half of patients who face a price of $2,000 or more for a cancer drug walk away from the pharmacy without it, according to a 2017 study. Fewer than half of Medicare patients with blood cancer received treatment within 90 days of their diagnosis, according to a 2019 study commissioned by the Leukemia & Lymphoma Society.
“If I didn’t do really well at scrounging free drugs and getting copay foundations to work with us, my patients wouldn’t get the drug, which is awful,” said Dr. Barbara McAneny, an oncologist in Albuquerque, N.M., and past president of the American Medical Association. “Patients would just say, ‘I can’t afford it. I’ll just die.’”
The high drug prices and coverage gaps have forced many patients to rely on complicated financial assistance programs offered by drug companies and foundations. Under federal rules, the foundations can help Medicare patients as long as they pay for drugs made by all manufacturers, not just by the company funding the foundation.
But Daniel Klein, CEO of the PAN Foundation, which provides drug copay assistance to more than 100,000 people a year, said there are more patients in need than his foundation and others like it can help.
“If you are a normal consumer, you don’t know much about any of this until you get sick and all of a sudden you find out you can’t afford your medication,” he said. Patients are lucky, he added, if their doctor knows how to navigate the charitable assistance maze.
Yet many don’t. Daniel Sherman, who trains hospital staff members to navigate financial issues for patients, estimates that fewer than 5% of U.S. cancer centers have experts on staff to help patients with problems paying for their care.
Sharon Clark, who struggles to cover her cancer drugs, works with the Leukemia & Lymphoma Society counseling other patients on how to access helping resources. “People tell me they haven’t started treatment because they don’t have money to pay,” she said. “No one in this country should have to choose between housing, food or medicine. It should never be that way, never.”
This article is part of a series on the impact of high prescription drug costs on consumers made possible through the 2020 West Health and Families USA Media Fellowship.
KHN (Kaiser Health News) is a nonprofit news service covering health issues. It is an editorially independent program of KFF (Kaiser Family Foundation) that is not affiliated with Kaiser Permanente.


fortune--2020-12-28--With $30,000 Bitcoin in sight, analysts wonder how high it could go

Bitcoin is on track for its longest monthly winning streak in more than a year after touching a record above $28,000 over the weekend.
The largest cryptocurrency reached an all-time high of $28,365 on Sunday before paring some of the advance, according to a composite of prices compiled by Bloomberg. The run of outsized returns over October, November and December so far is the longest such stretch since mid-2019.
“My sense is we’re very close to a top — we could hit $30,000 though,” said Vijay Ayyar, head of business development with crypto exchange Luno in Singapore. “We should definitely see a pullback, but the magnitude is probably lesser. We might only see 10% to 15% drops.”
Bitcoin has divided opinion as its price more than tripled in 2020 amid a worsening pandemic. Believers see it as a hedge against dollar weakness and the risk of faster inflation amid huge stimulus injections, and cite growing interest from institutional buyers. Others question Bitcoin’s validity as an investment and point to the digital currency’s history of wild rallies followed by crashes.
Regulatory scrutiny of the still-nascent cryptocurrency industry continues to be a variable for investors to consider.
The Securities and Exchange Commission last week accused Ripple Labs Inc. and its top executives of misleading investors in affiliated token XRP. While Ripple plans to challenge the accusation in the courts, the development underscores the prospect of stricter oversight of digital assets.
Ayyar said investors are shifting to Bitcoin and other digital coins in the wake of the XRP development.
Bitcoin climbed as much as 3.6% on Monday and was trading at about $27,100 as of 7:07 a.m. in London. The cryptocurrency has advanced about 279% this year, while the wider Bloomberg Galaxy Crypto Index is up 266%.


fortune--2020-12-28--These Asian countries have masterfully limited COVID outbreaks. Here’s how they did it

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Many of the Asian countries with the most admirable COVID-19 responses share borders with and receive frequent travelers from China, the original epicenter of the coronavirus pandemic.
A combination of early travel restrictions, mass testing, contact tracing, and strict quarantine measures helped Taiwan, Mongolia, and Vietnam avoid mass outbreaks and keep coronavirus deaths low.
The recent surge in COVID-19 case numbers in Thailand, another model country in coronavirus outbreak management, shows how even countries with a handle on the spread of the virus can be set back.
In mid-December, Thailand had recorded more than 4,000 total cases and 60 deaths since February, and daily new cases were low. On Dec. 19, Thailand reported 19 new cases; on Dec. 20, the figure shot up to 576, more than three times as high as the country’s previous daily record for highest new case tally.
Authorities have locked down Samut Sakhon, the province where the outbreak is centered, and are testing tens of thousands of people in Samut Sakhon and surrounding regions, many of which have reported new cases.
Thailand is ramping up restrictions again to prevent the spread of the virus and warned that a nationwide lockdown may be necessary if cases continue to rise. The country’s total COVID-19 cases as of Dec. 28 stood at 6,285, still extremely low, relative to much of the world, and the number of deaths remains at 60. But the sudden outbreak is a stark reminder of how quickly things can change when it comes to the coronavirus.
Taiwan
In late October, thousands of people thronged the streets of Taipei, hugging, cheering, and waving rainbow flags to celebrate Taiwan’s annual LGBTQ pride parade. Two days earlier, Taiwan reached the milestone of 200 consecutive days without a single domestically transmitted COVID-19 case.
Early travel restrictions and a singular focus on ensuring an adequate domestic supply of face masks were key to the management of COVID-19 in Taiwan, which on Dec. 22 reported its first locally transmitted coronavirus case since April 12 after a New Zealand airline pilot violated quarantine rules and infected three people. (In response, Taiwan instituted new restrictions on airline crews.)
Taiwan’s Central Epidemic Command Center (CECC) publishes detailed daily accounts of COVID-19 testing and new cases, including information about each person’s symptoms, travel history, and whether they had tested positive for antibodies.
Commuters wear face masks at a railway station on Dec. 2, 2020, in Taipei, Taiwan. Masks remain mandatory in many public places in Taiwan, including transportation. An Rong Xu—Getty Images
Taiwan’s handling of COVID-19 epitomizes a swift, preemptive response to potential disease spread. Taiwan recorded its first COVID-19 case on Jan. 21. The patient was a man who had returned from Wuhan, the central Chinese city where the first COVID-19 outbreak occurred. Two days later, Taiwan banned travelers from Wuhan, and on Feb. 6 banned travelers from the rest of China. On March 18, Taiwan shut its borders entirely.
On Jan. 22, the day after Taiwan’s first confirmed case, Taiwan’s government began distributing face masks to convenience stores, releasing 1 million masks per week and advising people “to remain calm and not rush to buy them.”
Before January was over, Taiwan had banned exports of face masks, placed limits on the number of masks that outbound travelers could take with them, and capped the number of masks each person could buy at one time. The government also fixed the price of face masks to prevent opportunistic vendors from price gouging.
People across East Asia were quick to don face masks at the outset of the coronavirus outbreak, and their governments encouraged them to do so. The U.S. would not follow suit until April, when the Centers for Disease Control and Prevention (CDC) recommended that all Americans wear face coverings in public. (Previously, the CDC had said only medical workers and sick people should wear face masks.)
Mongolia
Mongolia has not recorded any deaths from the coronavirus. As of Dec. 28, the northeast Asian nation had recorded around 1,100 COVID-19 cases. The country kept its cases low with early lockdown measures, strict travel bans, and a longer than usual mandatory quarantine period for returnees.
Judges in face masks during an archery competition at Mongolia’s annual Naadam sports festival on July 11, 2020. Concerns about the spread of COVID-19 meant the festival proceeded without a live audience for the first time in 800 years. BYAMBASUREN BYAMBA-OCHIR—AFP/Getty Images
In late January, Mongolia closed all schools and kindergartens, restricted interregional travel, and limited cross-border travel with China to limit the spread of the coronavirus—even though it had zero confirmed COVID-19 cases at that time.
Mongolia recorded its first coronavirus case one and a half months later, on March 10, when a man traveling to Mongolia from France tested positive. The next day, the World Health Organization (WHO) classified COVID-19 as a global pandemic.
Mongolia on March 12 became one of the first countries to close its borders to international travel, apart from repatriated citizens; the latter were required to quarantine for three weeks after arrival.
The Prime Minister said at the time that the country would keep the restrictions in place “until a vaccine becomes available.”
Vietnam
Over the summer, a surprise coronavirus outbreak in the beach city of Da Nang threatened to derail Vietnam’s model coronavirus response. Vietnam had not recorded a locally transmitted case in 99 days—and had not recorded any coronavirus-related deaths—when people started testing positive in Da Nang in late July.
The government quickly shut the city’s borders, told everyone who had traveled to Da Nang that they had to quarantine at home for 14 days, and carried out widespread testing and contact tracing to clamp down on the outbreak before it spiraled out of control. It worked: Daily new case numbers dropped throughout August, reaching zero on Aug. 30.
As of Dec. 28, Vietnam had recorded 1,441 cases and 35 deaths from the coronavirus. Early travel bans, a strict lockdown when cases were still relatively low, and a much-lauded testing and quarantine system helped Vietnam avoid large disease outbreaks, which could have overburdened the nation’s medical system.
A child in a Santa Claus costume watches the Christmas Eve concert at St. Joseph’s Cathedral on Dec. 24, 2020 in Hanoi. Vietnam has been one of the most successful countries in the world at containing the spread of COVID-19. Linh Pham—Getty Images
Like Mongolia and Taiwan, Vietnam imposed travel restrictions relatively early and in immediate response to coronavirus developments abroad, stopping Wuhan flights on Jan. 24, banning travelers from China as of Feb. 15, and suspending all inbound flights on March 22.
Vietnam also closed all schools on Feb. 3 and made mask-wearing mandatory on March 16. The country’s previous experiences with viral outbreaks of SARS and H1N1 prompted the government to act quickly and with transparency to ensure it could keep cases low. Authorities tested hundreds of thousands of people, using contact tracing to determine who had interacted with positive coronavirus cases, and set up government-run quarantine camps that housed tens of thousands at a time and ensured that people at risk of spreading the virus weren’t flouting stay-at-home rules.
And then on April 1—when Vietnam had a total of 204 confirmed cases—the government imposed a national lockdown, ordering all nonessential businesses to close and telling residents nationwide to stay at home for 15 days.
Vietnam’s clampdowns on the spread of the coronavirus within its borders let it safely reopen the domestic economy, which helped it reach positive economic growth in the third quarter. Economists say Vietnam will likely be the only major Asian economy besides China to record positive economic growth in 2020.
Leo Cheng and Veta Chan contributed reporting.