fortune--2020-07-10--What to watch this weekend on Netflix, Hulu, and more

Our mission to help you navigate the new normal is fueled by subscribers. To enjoy unlimited access to our journalism, subscribe today.
Between traditional television, video-on-demand releases, and a growing number of streaming services, it can be hard to keep up with what one should watch week to week. Fortune is here to help you keep track of new releases as well as the occasional older title worth checking out. Take a look at this weekend’s notable arrivals, a couple you may have missed earlier in the week, and what else is coming soon:
Netflix
Netflix’s “The Old Guard” tells the story of a covert group of tight-knit mercenaries with a mysterious inability to die, led by a warrior named Andy (Charlize Theron) and joined by a new soldier Nile (KiKi Layne). Aimee Spinks—Netflix
The Old Guard: This comic-book action flick, based on the graphic novel of the same name by Greg Rucka, might be the closest to a summer blockbuster we’ll get this year. Starring Charlize Theron, KiKi Layne, and Chiwetel Ejiofor, the film—which arrives July 10—focuses on a group of immortal mercenaries who have been defending the mortal world for centuries. Read Fortune’s interview with director Gina Prince-Bythewood here.
The Claudia Kishi Club: This documentary short, out July 10, focuses on the beloved character in The Baby-Sitters Club, which just saw its TV revival arrive on the streamer last week.
Down to Earth With Zac Efron: A travel and wellness show featuring Zac Efron? Why not? The first season of this series, which drops July 10, follows the actor as he goes around the world seeking sustainable ways to live.
A couple of kid-friendly titles that also arrive July 10 include Hello Ninja (season three) and The Epic Tales of Captain Underpants in Space.
Hulu
Cristin Milioti (left) and Andy Samberg star in “Palm Springs,” out on Hulu July 10. Jessica Perez—Hulu
Palm Springs: The Groundhog Day mentions are plentiful when it comes to this new flick from Andy Samberg, arriving on Hulu July 10. “When carefree Nyles and reluctant maid of honor Sarah have a chance encounter at a Palm Springs wedding, things get complicated when they find themselves unable to escape the venue, themselves, or each other,” the Hulu synopsis of the time-loop film reads. Reviews for the film are pretty solid so far.
Disney+
They’re not brand-new releases by any means, but if you’re seeking summer blockbuster stories of yesteryear, both Solo: A Star Wars Story and X-Men: Days of Future Past come to Disney+ on July 10.
Apple TV+
Tom Hanks’s “Greyhound” was initially meant for theaters, but will now be on Apple’s streaming service July 10. Apple TV+
Greyhound: Originally intended for theaters, the Tom Hanks war drama—based on C.S. Forester’s The Good Shepherd—will now come to Apple TV+ on July 10.
Little Voice: The new series focuses on a struggling singer-songwriter, with the songs written by a big name: Sara Bareilles. The first three episodes premiere on Apple TV+ on July 10, with the remaining six episodes of the season coming out each Friday after that.
VOD
First Cow: After it was first released in theaters for a brief period before the coronavirus pandemic caused movie theaters to shutter, this Kelly Reichardt film set in 19th-century Oregon is being released via video-on-demand July 10. Read Fortune’s March interview with Reichardt.
Relic: The horror movie from IFC Films, which stars Emily Mortimer, will be available to viewers via VOD, starting July 10. The film received rave reviews at the Sundance Film Festival earlier this year.
Earlier this week, documentary Inmate #1: The Rise of Danny Trejo also became available to watch on demand.
Coming Soon
“Psych 2: Lassie Come Home,” on Peacock, features James Roday (left) as Shawn Spencer and Dulé Hill as Gus Guster. James Dittinger—Peacock
NBC Universal’s Peacock launches nationwide on July 15 after a preview period kicked off in April. With the launch come some new original titles including: Brave New World, Psych 2: Lassie Come Home, Intelligence, Lost Speedways, and The Capture. Older TV and movies will also be part of the package. Read Fortune’s interview with the cast of the second Psych movie. And check out our interview with David Schwimmer and Nick Mohammed on how they paired up for Intelligence.
Meanwhile, a 30 Rock reunion episode, serving as an hour-long upfront special, will arrive on NBC on July 16 at 8 p.m. ET. It will rebroadcast on sister channels before eventually landing on Peacock.


fortune--2020-07-10--Do you trust Big Tech with your personal health data?

The price for publicly supporting President Trump is much more expensive than a can of Goya beans

A few deeper takeaways
1. The richest Americans trust Big Tech the least.
Just 31% of U.S. adults trust Apple with their personal health information. And that is actually the highest level of trust for Big Tech: 8 in 10 U.S. adults are untrusting of Amazon, Google, and Microsoft with their health data.
The customers of Apple and Amazon both lean more affluent. But Americans polled in the highest income bracket trust Amazon and Apple the least. Meanwhile, only 22% of Amazon Prime subscribers trust Amazon with their health data—that’s barely higher than the response from non–Amazon Prime users (16%).
For health care to work, patients must have trust. This lack of trust could be a bigger challenge for Big Tech than they’d like to see.
2. The country is betting on Amazon.
The Apple Watch and Health app are helping their parent company make inroads into health care data. As are Azure and Microsoft Genomics for Microsoft, and Verily and Google Health for Alphabet/Google.
But it’s Amazon that the public sees as the most likely to disrupt the health care industry, with 30% of respondents picking the Seattle-based firm. The least likely? Just 11% of U.S. adults say Microsoft is likely to be the top health care disrupter.
Why Amazon? “Reliable, fast, fewer scandals,” says Danielle Abril, my Fortune colleague who covers tech.
However, 27% of U.S. don’t see any of the Big Tech firms transforming health care.
*Methodology: The Fortune-SurveyMonkey poll was conducted among a national sample of 1,276 adults in the U.S. between June 25–26. This survey’s modeled error estimate is plus or minus 4 percentage points. The findings have been weighted for age, race, sex, education, and geography.


fortune--2020-07-10--What you missed at Fortune’s first-ever virtual Brainstorm Health conference

Our mission to help you navigate the new normal is fueled by subscribers. To enjoy unlimited access to our journalism, subscribe today.
Fortune’s fifth annual, invite-only Brainstorm Health conference arrived as the world reeled from a pandemic caused by the novel coronavirus. As of July 9, COVID-19 has sickened more than 12.2 million people worldwide and claimed the lives of more than 550,000.
It was a fitting moment, then, to convene corporate leaders, thinkers, inventors, entrepreneurs, and health policy innovators to discuss—well, the 800-pound virus in the room.
The event kicked off on Tuesday with Medicare chief Seema Verma, who offered insights from the government response to COVID-19. “Data to me is integral to everything we’re doing here, and the United States’ handling of data is not as robust as it should be,” she said. Next came Mayo Clinic CEO Gianrico Farrugia and IBM Watson Health GM Paul Roma, who shared how we’re tasking supercomputers to help us develop a coronavirus vaccine. “You can get months’ worth of modeling and work done in the course of a day,” Roma said.
Mayo Clinic physicians Elvis L. François and William Robinson appeared on attendees’ screens next. The duo is responsible for famously covering the song “Imagine,” John Lennon’s 1971 ode to world peace. (The acclaim was “one of the most humbling moments in my entire life,” Robinson said.) Following the “singing surgeons” was Bank of America vice chairman Anne Finucane, who joined to talk about racial equity in the wake of the deaths of George Floyd, Breonna Taylor, and others. “Metrics are important,” she said. “If you can’t measure it, how can you determine you’re doing better than a year before that?”
Jessica Mega of Verily Life Sciences highlighted the worsening ailments not named COVID-19 that were also on the rise. A panel featuring executives from the National Academy of Medicine, GE Healthcare, and Baxter International discussed the sudden opportunity to increase telehealth adoption. Aetna president Karen Lynch and National Institute of Mental Health director Joshua Gordon spoke about the impact of the pandemic on mental health. Amgen CEO Robert Bradway offered insight into the company’s clinical trials for a COVID-19 vaccine: “We’re making fast progress.”
It didn’t stop there. Novartis CEO Vas Narasimhan and Bristol Myers Squibb CEO Giovanni Caforio spoke about the pharma industry collaboration sparked by the search for coronavirus solutions. Salesforce chief medical officer Ashwini Zenooz and Upwork VP Erin Thomas spoke about ways companies could tackle racism as a health issue. Cal Berkeley’s Jennifer Doudna, known for codiscovering a powerful genetic engineering technology called Crispr-Cas9, explained how the pandemic was changing the public’s view of her work.
Then came NBA commissioner Adam Silver, who explained how the pro basketball league was getting on with its interrupted season during the pandemic. Moderna Therapeutics CEO Stéphane Bancel closed out the day by discussing how his company developed a coronavirus vaccine candidate in mere days.
And that was only day one. (Phew!)
Wednesday’s proceedings kicked off with Fitbit Health GM Amy McDonough, who shared the activity trends the company was seeing at a time of widespread stay-at-home orders. Reform Alliance CEO Van Jones came on next (alongside Walmart health chief David Hoke) to discuss the relationship between racial injustice and the pandemic. Can parking lots give us a clue about COVID-19 outbreaks? John Brownstein of HealthMap joined to explain how.
Google Health VP David Feinberg and FDA principal deputy commissioner Amy Abernethy offered attendees a progress report on the company’s contact tracing collaboration with frenemy Apple. What’s the deal with anti-vaxxers? Centene CEO Michael Neidorff and Merck chief patient officer Julie Gerberding weighed in on how the maligned movement might affect our pandemic response. The novel coronavirus is also changing what hospitals look like; Intermountain Healthcare CEO Marc Harrison, Stanford Children’s Health CEO Paul King, and IBM chief health officer Kyu Rhee offered participants a glimpse of how. And Vaccine Alliance and Gavi CEO Seth Berkley received a Fortune leadership award for his work vaccinating children around the world.
Rwanda’s former health minister Agnes Binagwaho logged on next to explain how the African country bested the U.S. in its COVID-19 response. Johnson & Johnson CEO Alex Gorsky followed with a warning that solutions for the pandemic were needed far beyond a vaccine. Harvard public health school dean Michelle Williams imagined a future of better preventive health care. Tempus CEO Eric Lefkofsky outlined how so-called dirty data was slowing our pandemic response: “There are so many brilliant minds surrounding health care, but they have, for whatever reason, chosen to not clean out their data warehouse.”
Apple health chief Sumbul Desai and Stanford Medicine dean Lloyd Minor shared ways that academia and Silicon Valley were working together to fight COVID-19. Cisco CEO Chuck Robbins called on fellow executives to take a stand on racism, and San Francisco mayor London Breed accepted Fortune’s first-ever Bernard J. Tyson Memorial Leadership Award, given in honor of the late Kaiser Permanente CEO. “We need to ensure everyone has equal access to resources like health care, education, and most important, housing,” she said.
Closing out the conference was women’s and mental health advocate Sophie Grégoire Trudeau, spouse to Canadian Prime Minister Justin, who joined to discuss the challenges of isolation during the novel coronavirus pandemic. “We’re all in one very similar trauma—experiencing this virus, this pandemic,” she said. “So we have to adapt to this situation and use our creativity to connect with one another and tell our own stories. We’re all connected through our traumas.”


fortune--2020-07-10--Upstart electric-truck maker Rivian raises $2.5 billion in new backing

Our mission to help you navigate the new normal is fueled by subscribers. To enjoy unlimited access to our journalism, subscribe today.
Electric-truck maker Rivian announced it has raised new backing of $2.5 billion to help fund the rollout of its first line of vehicles next year.
Investors led by T. Rowe Price also included Soros Fund Management, Coatue, Fidelity Management and Research, Baron Capital Group, and BlackRock. Amazon, which has pledged to buy 100,000 electric delivery vans from Rivian by 2030 to reduce its impact on the climate, also added to its prior investment, Rivian said.
Rivian CEO RJ Scaringe is planning to sell three models starting next year, a bit later than originally planned. The forthcoming R1T all-electric pickup truck, priced at $69,000, and R1S all-electric SUV, priced at $72,500, both have ranges of up to 400 miles on a single charge. The Amazon delivery vans will incorporate the retailer’s logistics management system right into the dashboard display.
Still, the well-funded startup faces many challenges before its vehicles hit the road. Tesla, which had been staying away from the midsize electric truck market, unveiled a pickup truck in November dubbed the Cybertruck to go on sale starting next year. And other competitors in the electric delivery truck space include Nikola Motor, Workhorse Group, and efforts from some traditional carmakers like Volvo and Daimler. Rivian also could suffer from unexpected manufacturing or supply chain glitches as it works toward bringing its very first products to market.
The new funding is aimed at avoiding any such hiccups. “With all three launches occurring in 2021, our teams are working hard to ensure our vehicles, supply chain, and production systems are ready for a robust production ramp-up,” Scaringe said in a statement. “We are grateful for the strong investor support that helps enable us to focus on execution of our products.”


fortune--2020-07-10--#BoycottGoya movement builds after CEO’s pro-Trump comments

Subscribe to Bull Sheet for no-nonsense daily analysis on what’s happening in the markets, delivered free to your inbox.
The supercharged political landscape in the U.S. has grown even more perilous for companies with the 2020 presidential election looming as Goya, a food company with a tremendously loyal following, has discovered.
The company, which makes many products used on Hispanic cuisine, but whose following extends well outside of that range, is facing a swift backlash after its CEO praised President Donald Trump at a White House event.
Goya was founded in Manhattan in 1936 by Don Prudencio Unanue and his wife Carolina, immigrants from Spain. The company calls itself the largest Hispanic-owned food company in the United States.
Robert Unanue, a grandson and now Goya CEO, spoke at a Rose Garden event announcing a “Hispanic Prosperity Initiative” on Thursday.
“We all truly blessed, at the same time, to have have a leader like President Trump who is a builder,” Unanue said standing at a podium beside Trump.
Almost immediately, #BoycottGoya, #GoyaFoods and #Goyaway began trending on social media platforms like Twitter, with scorn coming seemingly from all directions, including some big political names.
That backlash was answered by those who support Trump showing how any brand, whether they make clothing or, as Goya does, beans, olive oil and adobo, faces potential danger ahead of what may become a highly contentious election.
Those pushing for a boycott of Goya products cited history of derogatory comments and harsh policies toward Hispanics, most notably, the administration’s policy of separating immigrant families at the U.S.-Mexico border.
Former presidential candidate Julian Castro was among those to take to Twitter, saying Unanue praised someone who villainizes Goya’s customer base.
Rep. Alexandria Ocasio-Cortez of New York said she would learn to make from scratch some of the Latin cuisine that Goya makes.
But the backlash was broad, with people posting videos of Goya products being dumped out or donated.
Goya did not immediately comment.
White House adviser Kellyanne Conway in an interview on ‘Fox & Friends’ called Goya a food company that is “really the American dream.”
“It’s just a shame that people make everything so politicized, including food,” Conway said.
Yet the potential danger for companies became clear almost from the first day of the Trump administration. A public statement, political donations, or support, can bring a torrent of unwanted publicity.
In 2017, the CEO Under Armour walked back comments in which he said Trump was “an asset to the country.”
In a full-page advertisement in The Baltimore Sun, where Under Armour is based, CEO Kevin Plank wrote that his choice of words “did not accurately reflect my intent.” He said Under Armour stands for equal rights and job creation and believes “immigration is a source of strength, diversity and innovation for global companies based in America,” Plank wrote.
The company also said it opposes the Trump administration’s travel policies.
Last year, the luxury gym Equinox and indoor cycling studio SoulCycle faced a backlash over a Trump fundraiser.
Merck CEO Kenneth Frazier, at the time one of only four African-Americans leading a Fortune 500 company, was the first to resign from Trump’s business councils over the president’s remarks on the white nationalist protests in Charlottesville, Virginia.
Some business leaders quickly followed Frazier’s lead, including the CEOs of Under Armour and Intel. Others, including the heads Walmart and Johnson & Johnson, publicly condemned Trump’s remarks but initially resisted pressure to leave the councils. Within days, however, the ballooning uproar pushed the companies to shift course, and the panels fell apart.
Demographic changes and the massive Black Lives Matter movement are making race a pivotal issue in the upcoming election.
According to the Pew Research Center, 13.3% of eligible voters in the U.S. this year are Latino, a record high.
Trump has been working hard recently to court Latino voters, who could swing the vote in states such as Arizona and Florida. On Wednesday, he welcomed President Andrés Manuel López Obrador to the White House with lofty language, calling Mexico a cherished partner. Trump’s tone was in stark contrast from when he kicked off his 2016 presidential campaign by referring to Mexicans as “rapists” and railed against migrants entering the United States illegally.
Many of those that came to Goya’s defense Friday pointed out Goya’s history of community service.
In March and April this year, Goya donated over 300,000 pounds of food, or about 270,000 meals, to food banks and other organizations as part of its pandemic relief effort. The company said it also donated more 20,000 protective masks. Last month, Goya showed up with thousands of pounds of food to families in the Bronx and Harlem who have been affected by COVID-19 and gave food to a public school in Queens.
Goya lists 2,500 products, from seasonings and cooking oils, to beans and other Latin American staples as well as frozen products and snacks. Their offerings are ubiquitous in grocery stores across the U.S., sometimes taking up their own entire aisle.


fortune--2020-07-10--Why Postmates decided to sell to Uber instead of IPO

This is the web version of Term Sheet, Fortune’s newsletter about deals and dealmakers. Sign up here.Food delivery startup Postmates considered going it alone.
In the end, the startup sold to Uber for $2.65 billion rather than sell shares via an initial public offering. Why sell rather than try to become your own company?
That’s the question we posed to Nabeel Hyatt of Spark Capital, who sat on the board of Postmates before its acquisition.
Postmates isn’t Spark’s only portfolio company to be acquired in recent days. The firm also invested in at-home fitness startup Mirror, which sold to athleisure retailer Lululemon in late June for $500 million.
Hyatt is on the boards of companies that are facing both the benefits and the struggle that come with the pandemic: Discord (a communication app popular among gamers that recently raised $100 million) and Sonder (a short-term rental company in the same space as Airbnb that recently laid off a reported third of its staff before raising $170 million).
So Term Sheet sat down with the investor to discuss why those companies decided to be acquired—plus the surge of interest in platforms like Discord and Clubhouse of late.
Here’s our conversation, edited for clarity.
When did Postmates start talking to Uber?
One answer is two weeks ago, and the other is all the time for the last four years. It’s a weird situation that I’ve never seen in startups before, which is all of the major [food delivery] players—Grubhub, Doordash, Postmates, Uber—they have all been regularly talking and knew each other’s businesses. On the inside, everybody was trading books. It really heated up [between Postmates and Uber] I would say 48 hours before it hit the press and it all happened very quickly.
The IPO seems to be the dream—to go it alone. And Postmates thought about that path. So why not go public?
That’s probably the most important question, given that Postmates could have absolutely gone public and we were ready to go public. Ultimately, I think it’s a question of price and a question of what is right for the market in the long term. And it’s a very extensive proposition to build a nationwide, on-demand delivery service. Ultimately it was up to the team, and they believed it was better from a price standpoint, that it was better for shareholders, and also that it would be a great opportunity to be able to marry the technology Postmates has built with the balance sheets of Uber so they can actually execute at scale. Postmates has historically been the underfunded competitor and was on the verge of profitability.
I think it could have gone the other way and I would have been happy to be a board member of Postmates if it had gone public, but I also think this is a great marriage. I have no plans to sell [the new Uber shares] right now. I still think there is very low penetration for on-demand delivery, and if you think about where Uber is in the recovery of ride-sharing—I’m an enthusiastic shareholder.
So from a pricing standpoint, Postmates would have raised less, had they decided to go the IPO route?
Yes, it was a richer offer to go with Uber.
Let me ask you the same question of Mirror, which sold to Lululemon recently. Why not go it alone?
It’s the perennial question. I think the decision to sell a company is a really personal decision for a founder or CEO, especially if you are still the CEO. It’s the thing you remember building and remember being the first person to believe in it. Kevin Thau led the deal for us at Mirror, and I have no doubt he had long conversations with Mirror CEO Brynn Putnam about which way to go.
But ultimately…we are not in the business of being majority shareholders, we are stewards, so the CEO is going to make the call they are going to make. It comes down to the person. In the case of Lululemon, they made a very aggressive offer and Brynn saw potential in Lululemon.
You also have portfolio companies that are in the direct route of the coronavirus: Sonder. What has it been like to invest in it?
Sonder pivoted a lot of their outreach to people who are trying to work away from home. Now they are above 70% occupancy by focusing on urban travel markets—so, travelling inside your own city—and on emergency workers and healthcare workers. That combo has made it a viable business. They just changed the business pretty drastically in the last six months.
What is your pace of investing like now, given the disruption of the pandemic?
In the first month and a half, it was really hard to invest in new companies because it was responsible to spend time with your CEOs in crisis management mode. There were a good six weeks of constant, seven-days-a-week work on trying to make sure the companies were making the right moves. That has largely subsided. There have been issues, but it’s more normalized now. We are now investing at a similar pace.
We did not have to shutter any companies due to COVID. Did we have to write some checks to bridge them through the crisis? Absolutely.
You are invested in Discord. Clubhouse often draws parallels—and has more recently been pulled into a quite loud debate, especially on Twitter.
Are you trying to draw me into a media vs. VCs conversation [laughs]? Let’s skip that topic, I’ve stayed out of this for a very specific reason, and I’d rather keep that up.
In that case, what about your purely investing perspective?
I’ve used Clubhouse some. If you want to loop into this topic more loosely, I will say this: In a world where we are all stuck at home and not seeing each other as much, I think synchronous media in general has more value potentially than asynchronous media. We need to find a way to do intimacy at scale. While asynchronous media is a good way to spread a meme, it’s not exactly a good way to get to know a person.
So for products like Discord, Clubhouse, Houseparty—and frankly maybe the most powerful today are computer games like Fortnite or other online multiplayer games like Minecraft—their value to us as a society is pretty high right now. I think it is the best way to connect to people and feel closer to somebody in a world where you can’t all have a dinner party.
Lucinda Shen
Twitter: @shenlucinda
Email: lucinda.shen@fortune.com
VENTURES DEALS
- Rivian, a electric vehicle company, raised $2.5 billion. T. Rowe Price Associates Inc. led the round and was joined by investors including Soros Fund Management LLC, Coatue, Fidelity Management and Research Company and Baron Capital Group.
- Epic Games, the Cary, N.C.-based games company, raised $250 million from Sony valuing it at $17.9 billion. Read more.
- Solugen, a Houston-based decarbonization startup, raised $30 million in extended Series B funding. Refactor Capital led and was joined by investors including Founders Fund, Knollwood Investment Advisory, Valor Equity, LowerCarbon, Box Group, AeraVC, and YC.
- Butler Hospitality, a New York-based ghost kitchen operator, raised $15 million in Series A from investors including &vest, Kraft Group, Scopus Ventures, and Mousse Partners.
- Aryballe, a France-based odor analyzation company, raised €7 million ($7.9 million) in funding. Investors included Samsung Ventures and Seb Alliance.
- NUGGS, a New York-based plant based chicken nugget company, raised $4.1 million via parent company SIMULATE. Lerer Hippeau led the round and was joined by investors including AgFunder and Alexis Ohanian.
- Joe Coffee, a Seattle-based mobile ordering and pay network for coffee shops, raised an additional $1.3 million in seed funding led by Craft Ventures.
PRIVATE EQUITY
- Integrated Rehab Consultants, a portfolio company of Webster Equity Partners, acquired Associated Physicians of Rehabilitation, a Chicago-based physiatry practice. Financial terms weren't disclosed.
OTHERS
- Altman Vilandrie & Co. merged with Solon Management, a London and Munich-based TMT consulting firm. Financial terms weren't disclosed.
- Freshworks Inc. acquired Flint, an IT orchestration and cloud management platform. Financial terms weren't disclosed.
IPOs
- Relay Therapeutics, a Cambridge, Mass.-based oncology startup, plans to raise as much as $265 million in an IPO of 14.7 million shares priced between $16 to $18 apiece. SoftBank backs the firm. Read more.
EXITS
- Coupang Corp., backed by SoftBank, plans to acquire the software of Hooq Digital, a Southeast Asian video streaming service owned by Singtel, Sony and Warner Bros that’s filed for liquidation, per Bloomberg. Read more.
F+FS
- Rethink Impact raised $182 million for its second fund. Read more.
PEOPLE
- HarbourVest Partners hired Rob MacGoey as the chief financial officer.


fortune--2020-07-10--Top U.S. banks set for worst quarter since financial crisis

Subscribe to Bull Sheet for no-nonsense daily analysis on what’s happening in the markets, delivered free to your inbox.
U.S. banks had only a few weeks’ experience with the full-blown pandemic when they last tried to forecast how bad things would get. Now, they’re about to reveal what three more months of Covid-19 did to the industry.
Second-quarter results, set for release next week, will probably show that the trends that took hold at the start of the year only intensified: surging provisions for loan losses and slumping consumer spending, with trading gains helping some banks weather the storm.
“We’ve got a full three months of the pandemic coming through the numbers now,” Kyle Sanders, an analyst at Edward Jones, said in an interview, adding that the second quarter was probably the worst for bank earnings since the financial crisis. “The first quarter was rough, but it really only reflected a couple of weeks in March.”
Soaring unemployment left many consumers unable to pay back their debts or take on new borrowing, forcing banks to set aside more to cover souring loans and crimping their net interest income. At the same time, nationwide stay-at-home orders left once-bustling downtowns and retail districts deserted through much of April, May and June, which probably hurt a cornerstone of banks’ growth in recent years: service charges and credit-card fees.
Shares of the companies reflect how rough this year’s crisis has been on the banks. The S&P 500 Financials index has slumped 26% since the end of December, compared with a drop of just 2.4% for the broader S&P 500. Wells Fargo & Co. is the year’s biggest loser among major banks, tumbling 55%.
Most firms probably set aside even more provisions than in the first three months of the year, and combined earnings at the four biggest U.S. banks will be the lowest in more than a decade, based on estimates compiled by Bloomberg.
For Wells Fargo, already struggling under the weight of a series of scandals before the pandemic hit, second-quarter earnings could be the worst since at least the financial crisis. The company will disclose how deep it has to cut its dividend when it releases results next week, and people familiar with the matter said the San Francisco-based bank is also readying thousands of job cuts for later this year.
Wells Fargo Chief Financial Officer John Shrewsberry said last month he expected the bank to set aside more for bad loans in the second quarter than the $4 billion tally for the previous three months, which itself was the most in a decade. For the industry as a whole, loan-loss provisions are poised to reach their highest levels since the financial crisis, according to analysts at Barclays Plc.
Trading, Underwriting
Trading and underwriting will likely be the silver lining for most banks, as a global hunt for liquidity drove up fees in the second quarter, according to analysts’ estimates.
Combined stock- and bond-trading revenue at the five biggest banks probably jumped 31% from the second quarter of 2019, the estimates show, with JPMorgan Chase & Co. seen posting the biggest increase. The bank expects trading revenue to climb about 50% from a year ago, co-President Daniel Pinto said in June.
Banks’ revenue streams have remained much healthier in this crisis than in previous ones, Credit Suisse Group AG said in a report. Previous cyclical downturns saw investment-banking and trading revenue drop as much as 30%, according to the report.
Citigroup Inc.’s Richard Zogheb, global head of the debt capital-markets division, said last month that he expects record volume for the period.
U.S. investment-grade corporate bond issuance more than doubled in the second quarter from a year earlier, to $757.7 billion, according to data compiled by Bloomberg. High-yield sales jumped 61% to $130.1 billion.
Mortgages
Mortgages are set to be another strong spot for banks in the second quarter as historically low interest rates spur homeowners to refinance. U.S. refinancing activity has almost doubled from last year, according to the Mortgage Bankers Association. The average rate for a 30-year mortgage has tumbled to 3.03%.
Lenders sell most of the loans they make, and the spread between what they charge borrowers and what they’re able to sell the loans for was at its widest in April since 2008. Also that month, a measure of lenders’ profitability maintained by the Urban Institute hit a record high.
Looking Ahead
The outlook now depends on whether businesses continue reopening, or if a resurgent virus in the Sun Belt and other regions forces another nationwide shutdown. States that faced the initial brunt of the pandemic in March and April have managed the spread of the virus, but new outbreaks in states such as Texas and Arizona are stoking fears of a second wave.
While banks’ net income will continue to face a substantial hit, the crisis is still expected to be one that brings temporary earnings pain rather than existential capital concerns, Royal Bank of Canada said in a report.
“Our outlook is cautiously optimistic as we expect the economy to continue to gain momentum into the end of the year,” RBC said in the report.


fortune--2020-07-10--Now this is 5G worth paying for

Now this is 5G worth paying for

This is the web version of Data Sheet, Fortune’s daily newsletter on the top tech news. To get it delivered daily to your in-box, sign up here.
The wireless industry’s usual case for why you should upgrade to a 5G phone lacks a certain oomph today.
After we’ve all switched to streaming music and video apps like Spotify and Netflix, we don’t have to download big music and video files to our phones anymore. So the super-fast download speeds on 5G seem kind of beside the point. And we like to use our mobile phones on the go, in line at the supermarket, waiting for a subway, wherever (prior to the pandemic, at least). So 5G’s super-limited availability seems like a big drawback.
At this point, it’s pretty hard to make the argument that many people should shell out $1,000 or more just to get a 5G phone.
But today’s Data Sheet comes courtesy of a new laptop I’m trying out from Lenovo called the Flex 5G. It’s a pretty standard business PC in many respects, though with a Qualcomm CPU instead of one from Intel or AMD. That means insanely great battery life, but not all Windows apps are compatible. You can read about the Flex 5G’s performance and other features in my review.
It’s also, as the name suggests, the first laptop to hit the market with built-in 5G wireless support (Dell, HP, and others have rival offerings coming soon). And it’s a game changer.
Suddenly, having a super-fast connection is really useful. When you can find an area covered by Verizon’s 5G service, it’s so fast it not only leaves every other mobile connection in the dust, but it’s also even faster than the fastest home Internet speeds. Like twice as fast.
Need to grab a big PowerPoint deck from the office server? Bam, you got it. Want to download a bunch of high-resolution photos from your cloud service? It’s done in seconds. Working with cloud applications is also smoother. I’m not a gamer but I’d have to think that online gaming is another great use case.
Finally, since I’m rarely walking around while working on my laptop, the coverage gaps in 5G don’t matter as much. I can plant myself on a bench in Boston’s Back Bay neighborhood with Verizon’s 5G coverage and I’m in business (in our post-COVID future, I’ll be able to plant myself in the Starbucks down the street, too). There’s still not enough coverage, but it’s expanding regularly.
Someday, there will probably be amazing 5G apps for your phone, maybe offering virtual reality or real-time control of robot butlers or something. But for now, the 5G laptop makes a lot more sense. Enjoy your weekend.
Aaron Pressman
@ampressman
aaron.pressman@fortune.com
NEWSWORTHY
Someone's banging on the keyboard. Speaking of laptops, the pandemic has been good for sales, with so many people around the world now forced to work from home. PC shipments jumped 11% in the second quarter, according to IDC, which includes Chromebooks in its calculations. And speaking of laptops that forgo Intel processors, Apple's shift to its own "Apple silicon" will start with 13-inch MacBook Pro and MacBook Air models later this year, with more fully redesigned 14-inch and 16-inch MacBook Pros coming in 2021, according to usually reliable analyst Ming-Chi Kuo.
Life can only be understood backward. What, Intel is facing some challenges? You don't say. This week, the unthinkable happened when the rally in rival chipmaker Nvidia's stock price pushed its stock market value past Intel's for the first time ever. Nvidia closed on Thursday valued at $259 billion versus $247 billion for Intel, according to Koyfin data. If you include debt and subtract cash and calculate what's called enterprise value, Intel is still ahead $266 billion to $250 billion. But it reminded me of the moment 10 years ago when Apple's stock market value pushed ahead of Microsoft's for the first time. As was the case then, the up and coming rival still trailed way behind in financial results. Intel is expected to have five times more revenue and eight times more cash flow than Nvidia this year, so the market is looking pretty far into the future, as it often does.
But it must be lived forwards. Just like we'd hoped, the travails of Quibi are a never-ending font of material. A day after an outside report said only a tiny fraction of free trial users were converting to paying subscriptions, Kberg and the Whit struck back. The report from market tracker Sensor Tower is “incorrect by an order of magnitude" and the service is “seeing excellent conversion to paid subscribers,” Quibi said on Thursday.
You kids get off my home screen. The teen activists of TikTok, dubbed the TikTok-tivists, are again trying to disrupt the Trump campaign. After flooding a campaign rally with fake ticket requests, now they are flooding the campaign's iPhone app with negative reviews. The President has mused about banning the app, but that's apparently not an easy case to make legally. Still, to fight criticism in the U.S., TikTok owner Bytedance is considering making changes to further distance itself from China, like establishing a separate headquarters in another country.
Ba-Bawk-Bawk-Bawk. The pandemic has spread wildly in meat-packing plants and the big meat processors have a new idea to get people off the line: robots. Tyson Foods has spent $500 million to develop a robot that can debone and cut up chickens at high speed. “We are on the cusp of a significant rollout,” director of manufacturing technology Doug Foreman tells the Wall Street Journal.
All quiet on the western front. There's apparently a bit of an outage of some top mobile apps today. Spotify, Pinterest, and Tinder are offline for many users. Maybe it's time to read a book?
FOOD FOR THOUGHT
The new Bourne Collection has nothing to do with Robert Ludlum's fictional action hero. Rather, it's the personal papers of computer search expert Charlie Bourne put together by the Computer History Museum in Silicon Valley. As curator Marc Weber explains, Bourne invented one of the first search engines.
Charlie wrote the specification for perhaps the earliest example of modern online search, where you search the full text of documents on a remote computer. Lynn Chaitin did the programming. The remote computer was one of the behemoths custom-built for the SAGE nuclear warning system. Engelbart had arranged to use it through his funder, computing giant J.C.R. Licklider at ARPA.
The test worked perfectly, even allowing Boolean qualifiers like "and" and "or." Licklider himself was researching what would become his 1965 book Libraries of the Future, which predicted that by the year 2000 all literature would be online, and searchable, with the massive task of cataloguing eased by weak AI.
FOR YOUR WEEKEND READING PLEASURE
A few long reads I came across this week:
Why the NSA Called Me After Midnight and Requested My Source Code (Data Driven Investor)
The story behind my top secret coffee cup.
How 'Have I Been Pwned' became the keeper of the Internet’s biggest data breaches (TechCrunch)
When Troy Hunt launched Have I Been Pwned in late 2013, he wanted it to answer a simple question: Have you fallen victim to a data breach?
A 28-Year-Old With No Degree Becomes a Must-Read on the Economy (Bloomberg Businessweek)
Subscribers to Nathan Tankus’s newsletter, Notes on the Crises, aren’t bothered by his lack of diplomas.
The remote British village that built one of the UK’s fastest Internet networks (Ars Technica)
The serene, postcard-perfect village of Clapham is becoming known for more than its views.
IN CASE YOU MISSED IT
How TikTok became a geopolitical flashpoint By Naomi Xu Elegant
What is Dogecoin? By Robert Hackett
Professors and universities find creative solutions to keep international students from getting deported By Michal Lev-Ram
Why you shouldn’t completely shrug off those millennial trends By Lucinda Shen
Uncle Sam wants you! To report stimulus fraud By Anne Sraders
Gold is booming during Covid-19. Smuggling is too. By Jeremy Kahn
(Some of these stories require a subscription to access. Thank you for supporting our journalism.)
BEFORE YOU GO
Usually you have to travel to San Diego and pay for airfare and hotels and tickets and stuff to attend the annual Comic-Con show (and dressing as a favorite superhero is encouraged though not mandatory). This year, the show is all online and completely free. It starts July 23 with panels on shows including the upcoming HBO adaptation of His Dark Materials, CBS's Star Trek: Picard, and the new Amazon series Utopia starring John Cusack, Rainn Wilson, and Ashleigh LaThrop.
In need of a more immediate diversion this weekend? The new Charlize Theron thriller The Old Guard is out on Netflix and getting great reviews, while Tom Hanks' latest World War II flick Greyhound is on Apple TV+.


fortune--2020-07-10--What would a ‘feminist city’ look like?

What would a ‘feminist city’ look like?

Good morning, Broadsheet readers! Chelsea Clinton may soon launch her own venture capital firm, Simone Biles covers Vogue, and we ponder the feminist city of the future. Have a wonderful weekend.
– Care-ful cities. Handwringing over the possible demise of urban life has become an established trope of the pandemic. (Serious question: How many stories can the New York Times possibly run about NYC dwellers fleeing to the ‘burbs?) But while reports of the death of cities may suffer from Mark Twain-style exaggeration, there’s little doubt that COVID-19 will lead to major changes to the world’s metropolises.
As city officials and urban planners look ahead, I hope they’ll consider this Bloomberg excerpt from Feminist City: Claiming Space in a Man-made World, by Leslie Kern, an associate professor of geography and environment, and director of women’s and gender studies at Mount Allison University in New Brunswick. Though written before the pandemic (and the recent protests calling for racial justice), Kern’s ideas are perfectly relevant for the moment—and have the potential to create post-COVID American cities where we could live more safely and equitably than ever before.
Kern explores the idea of designing cities to make life easier for caretakers. For too long, she notes, many urban planners have created cityscapes with “the white, cis, able-bodied, middle class, heterosexual man” in mind. That paradigm is starting to change in some parts of the world, where “gender mainstreaming” is increasingly being adopted. As an example, Kern cites Stockholm’s snowplowing strategy (stay with me!):
“In most cases, cities plow major roads leading to the central city first, leaving residential streets, sidewalks, and school zones until last. In contrast, cities like Stockholm have adopted a ‘gender equal plowing strategy’ that instead prioritizes sidewalks, bike paths, bus lanes, and daycare zones in recognition of the fact that women, children, and seniors are more likely to walk, bike, or use mass transit.”
Of course, some of these “gender mainstreaming” efforts have played into gender stereotypes (think women’s parking garage floors with bigger spaces—presumable to accommodate our subpar parking skills). And even those that are less insulting are often built for a certain kind of woman—specifically, writes Kern, “a married, able-bodied mother with a pink- or white-collar job.” Creating a true feminist city would mean thinking of all women, and particularly low-income women, who often feel the toughest parts of urban life—long commutes, gentrification, cramped living quarters—most acutely.
So how do we do it? The Kern excerpt doesn’t have all the answers—but it’s asking all the right questions.
Kristen Bellstrom
kristen.bellstrom@fortune.com
@kayelbee
Today’s Broadsheet was curated by Emma Hinchliffe.
ALSO IN THE HEADLINES
- A new venture. Chelsea Clinton is in the early stages of creating her own venture capital firm, Axios reports. The working name for the firm is Metrodora Ventures, for the author of the first medical text known to have been written by a woman. Axios
- Simone's the star. Record-setting gymnast Simone Biles is on the August cover of Vogue. In the cover story, Biles—who can't quite remember exactly how many medals she's won—discusses beauty standards in sports, her waylaid 2020 Olympics plans, and how USA Gymnastics has failed her and other gymnasts abused by Larry Nassar. "We’ve always represented the U.S. to the best of our ability, and all the time, most of the time, every time I’ve represented, come back with gold medals. It’s like: We’ve done our part. Come on," she says to the organization. Vogue
- Prime time. Journalist Joy Reid will take over the 7 p.m. hour on MSNBC, making her one of very few Black women to anchor an American evening news program. She succeeds Chris Matthews, who resigned after being accused of sexist behavior. New York Times
MOVERS AND SHAKERS: Advantia Health hired MedExpress's Kathy B. Kaluhiokalani as COO.
IN CASE YOU MISSED IT
- Army first. An anonymous soldier is the first woman to earn the title of Green Beret after she graduated from Army Special Forces this week; the Green Berets were one of the last remaining Army assignments without any women. The Army has withheld the soldier's identity as she enters the Special Operations community. New York Times
- Feeding GDP. Here's an idea: What if breastfeeding was measured as work in the GDP? Formula, for its part, is included in GDP calculations, since it's manufactured by companies. A pair of economists found that in Australia, breastfeeding, if measured, would contribute $4 billion to the country's GDP. The Lily
- Working together. The boards of public companies are closely watched, and startup boards face scrutiny from the tech press as they grow. But joint-venture boards—like Google-Uber in autonomous vehicles, Starbucks-PepsiCo in ready-to-drink coffee, and the Amazon-JPMorgan Chase-Berkshire Hathaway health care initiative—are much more opaque. A group of authors found that women only hold 10% of these board roles—which can be stepping stones to future leadership positions—compared to 26% across the S&P 500. Harvard Business Review
ON MY RADAR
South Korean triathlete’s suicide exposes team’s culture of abuse New York Times
Women of color speak out against the whitewashing of reproductive justice Elle
Ziwe Fumudoh asks: ‘How many Black people do you know?’ New York Times
PARTING WORDS
"I did not know that I was going to get the opportunity, the way Hollywood likes to work."
-Gina Prince-Bythewood, the director of Love & Basketball and Beyond the Lights, on directing her first action movie. The Old Guard premieres on Netflix today.


fortune--2020-07-10--Gold is booming during COVID-19. Smuggling is too

Our mission to help you navigate the new normal is fueled by subscribers. To enjoy unlimited access to our journalism, subscribe today.
In a crisis, investors tend to flock to safe havens. And historically, the safest asset class has been gold.
The COVID-19 pandemic has been no exception. Gold is up 14% since the World Health Organization declared a global pandemic on March 12 and is now trading at $1,820 per ounce, a nine-year high.
Not only are people investing in gold contracts in the commodities market, but demand for the real McCoy—physical gold bars—has also been so strong that there’s a global shortage. That’s the result of panic-buying, with both hedge funds and wealthy individuals stashing bars in safety deposit boxes, as well as the fact that some of the refineries that smelt gold bullion and some of the normal routes for shipping gold bars around the world temporarily shut down because of the coronavirus.
But goldbugs beware: If you thought you’d sleep easier with a few lustrous bars tucked under the mattress, you might find your conscience bothering you. There’s growing evidence that demand for gold is stoking an illegal trade that helps fuel wars and contributes to unsafe working conditions in the developing world.
Conflict gold
In the midst of this gold rush, it’s perhaps unsurprising that gold smuggling is booming. The Wall Street Journal reported yesterday that record amounts of gold from small artisanal mines in the eastern war zones of the Democratic Republic of the Congo are being illegally smuggled into Uganda. The United Nations estimates $100 million worth of illicit gold is trafficked through Uganda each month.
More surprising is how that gold is getting to market: In Uganda, the Journal reported, gold is given counterfeit stamps and paperwork, and then shipped out on the very same aircraft that are being used to ferry humanitarian relief and medical supplies into the East African nation to help it deal with the COVID-19 pandemic.
Police in Entebbe recently seized the largest shipment of illicit Congolese gold to date: 205 pounds, worth $5 million. And the U.N. estimates that 95% of the gold shipped out of the country doesn’t actually come from Uganda.
Smuggling has become particularly attractive because fighting in Eastern Congo, plus the coronavirus, has actually forced the small-scale miners operating there to sell gold more cheaply. The Journal reported that prices at the Congolese gold pits have fallen as much as 40%, even as the world price has soared. That means more money for those running the smuggling rings, while the miners themselves struggle.
Human rights groups have found deplorable working conditions in many Eastern Congolese mines, with scores of workers killed each year in accidents.
The scramble for gold is also helping to fuel conflict in the war-torn region, which has seen almost continual fighting over the past two decades, with numerous armed rebel groups at war with the Congolese government and one another. Renewed violence has left at least 1,300 civilians dead since March, according to the U.N. War in the Congo has displaced an estimated 6 million people, including 1.2 million in the gold-rich province of Ituri.
International trade
The U.N. has imposed sanctions on a number of Congolese smugglers and pressed gold smelters, jewelers, and electronics manufacturers, which often use small amounts of gold in components, to rid their supply chains of illicit gold and other conflict minerals. The London Bullion Market Association, which certifies gold smelters, has also sought to stem the tide of gold nuggets from artisanal mines in war zones or which use unethical labor practices. None of it has stemmed the booming illicit trade.
The waves of corruption spread far beyond Uganda. Smuggled Congolese gold has been shipped to Dubai. From there, at least some of it has made its way to India, where demand for physical gold—for use in wedding jewelry and as a hedge against currency fluctuations—is high even during normal times and has intensified during the pandemic.
Earlier this month, customs officials in India’s southern state of Kerala discovered 66 pounds of gold hidden inside a shipment of bathroom fittings that were addressed to the United Arab Emirates’ consulate in the state capital of Thiruvananthapuram. The UAE has denied any involvement and says it has launched an investigation, pinning the blame on an Indian woman who formerly worked for the consulate.
The case has become a political scandal for Kerala’s chief minister, Pinarayi Vijayan, who has faced calls to resign after it emerged that his official secretary associated with the alleged smuggler. Meanwhile, in another Indian state, Tamil Nadu, customs officials have seized twice as much smuggled gold this year as in 2019. To try to conceal the gold, smugglers have used everything from laptops to skateboards to a meat cleaver, officials said.
The high price of gold has tempted many new players into smuggling, N. Anantha Padmanaban, the chairman of All India Gem and Jewellery Domestic Council, said. But Somasundaram PR, the India country director for the World Gold Council, the gold industry’s marketing arm, says that fewer flights into and out of India because of the coronavirus ought to actually reduce overall smuggling levels.
In Australia, a well-known gold smelter, the Perth Mint, which is owned by the government of Western Australia, has also been caught up in a scandal over the origin of some of the gold it produces. Australian newspapers have reported the smelter has accepted gold from a Papua New Guinea company called Golden Valley, which is known to buy gold from artisanal mines in that country that use child labor. Government officials have ordered an investigation.
Gold might save your portfolio. But don’t expect it to do much for your soul.


fortune--2020-07-10--Why Berkshire Hathaway is partly to blame for the S&P 500 being in the red this year

Our mission to help you navigate the new normal is fueled by subscribers. To enjoy unlimited access to our journalism, subscribe today.
For more than two years, Apple stock has been the largest holding in Warren Buffett’s Berkshire Hathaway portfolio, roughly doubling in value over that time. The coronavirus pandemic has tipped the scales further: Apple now accounts for nearly 44% of Buffett’s roughly $214.5 billion in stocks, based on the investor’s most recent disclosures—including his announcement that he sold out of airline stocks in April.
Of course, while the heavy concentration in Apple has, as some observers have pointed out, left the Oracle of Omaha’s portfolio lopsided and less than diversified, that’s as much a reflection of how well Apple stock has performed this year—up some 30% year to date—as it is of how poorly Buffett’s other holdings have done.
Indeed, Buffett’s second-largest holding, Bank of America stock, has plunged 34% so far this year; his next largest, Coca-Cola, has fallen 19%; after that, American Express is down 25%.
Even doubling down on Apple wasn’t enough for Buffett to make up for those dismal returns: In a year in which the S&P 500 is down less than 2% so far, the stocks Buffett owns have fallen an average of nearly 12%. The only stock that did better than Apple in Berkshire’s holdings is Amazon, up almost 67%—but Buffett’s stake in the company, worth $1.6 billion, makes it a tiny holding next to Apple, of which the investor owns $93.5 billion in shares.
Holding those cards, Berkshire Hathaway stock itself has underperformed many of the companies in its own portfolio, as well as the broader market. Berkshire shares have fallen 20% year to date.
Though Buffett is known for his investing prowess, it’s likely many average investors’ returns have easily outperformed his—even if they don’t have nearly half of their money invested in Apple.
Apple has become such a juggernaut, with a $1.66 trillion market cap that makes it the most valuable company in the world, that it dominates every major U.S. stock index and many broad-based mutual funds. Apple accounts for nearly 6% of the value of the S&P 500—a weighting that has helped buoy investors’ returns amid spiking market volatility.
It’s not just Apple, either: The other big four tech companies at the top of the S&P 500—Microsoft, Amazon, Alphabet, and Facebook—have gained significantly in 2020, helping to power the stock index’s comeback from a bear market in March.
Meanwhile, Buffett’s light helping of tech stocks besides Apple has hurt his relative performance compared to the broader market, as tech companies have continued surging this year while other industries faltered. Ultimately, investors would have been better off putting their money in an S&P 500 exchange-traded fund (ETF)—or just Apple stock itself—than they would have been by investing in Berkshire Hathaway.
And here’s an odd twist: Buffett’s own portfolio has been dragging down the broader market. After the five big tech stocks, Buffett’s company, Berkshire Hathaway, is the sixth-biggest constituent in the S&P 500, right after Facebook. Together, those six companies make up a quarter—or 25%—of the total index. Without Berkshire, the S&P 500 might be closer to positive territory by now.


fortune--2020-07-11--Coronavirus-enforced Champions League changes give CBS the platform to build an audience

The perfect storm : What do you do with cruise ships that can not set sail ?

The pandemic-enforced changes to the Champions League presented the perfect format for CBS to find to broadcast European soccer’s showpiece competition earlier than planned in the United States.
Rather than the usual home-and-away series for the quarterfinals and semifinals, UEFA has adopted a rapid two-week, eight-team knockout tournament in Lisbon, Portugal, culminating in the Aug. 23 final.
“It’s a phenomenal format for us in the U.S. to do it this way,” ViacomCBS chief digital officer Marc DeBevoise told The Associated Press. “A single elimination tournament is something these audiences fully understand. Obviously ,there are big soccer fans but March Madness having been effectively canceled, I think people are hungry for things like this.”
CBS was not due to start airing European club competitions until 2021 after signing a three-season deal with UEFA last November. But the rights to the rest of this Champions League season and all of next season became available last month when Turner opted out of its 2018-21 deal for exclusive English language rights in the United States.
“The audience in the U.S. for the sport is younger, more diverse, more active on social media,” DeBevoise said.
The competition will be used to push the CBS All Access digital subscription service, which will stream every game in the Champions League and second-tier Europa League. Marquee matches will air on the main network and CBS Sports Network.
“I think this property is built for the internet in some way — August is a single elimination tournament tournament and that’s an amazing, unique piece,” DeBevoise said. “When it comes to October when you have got six, eight (group stage) games on a Tuesday afternoon at 3 p.m. (ET) — that doesn’t make sense on TV.
“One game can be but getting six games is not possible. So what we’re really focused on is making sure that experience is really great for fans when they come to our service and that it really speaks to them and has the right wraparound pieces.”
Champions League coverage will start on CBS on Aug. 7-8 with the four round of 16 second legs that were not played in March before the competition was suspended due to the worsening coronavirus pandemic.
UEFA announced Thursday that those games will be played as usual at the stadium of the home team.
Bayern is the clearest favorite to advance having won 3-0 at Chelsea in the first leg in London in February. Manchester City won 2-1 away at Real Madrid, Juventus trails 1-0 against Lyon, and Barcelona resumes at 1-1 against Napoli at Camp Nou. Atalanta, Atlético Madrid, Leipzig and Paris Saint-Germain already advanced to the quarterfinals in March.
Attention then shifts to Lisbon with the curtailed format that should allow UEFA to complete a competition that was originally due to finish in May.
Starting on Aug. 12, the Champions League quarterfinals will be played on four straight nights in single-leg knockout games at the home stadiums of Benfica and Sporting Lisbon. The semifinals are on Aug. 18 and 19, and Benfica’s Stadium of Light hosts the final on Aug. 23. No fans will be allowed into the games.
CBS plans to use the world feed commentaries of matches provided by UEFA rather than using its own announcers at this stage. CBS is also racing to create its own content around the games.
“We understand that commitment to the sport and how discerning the fan is in the United States,” DeBevoise said.
The Turner deal was worth a reported $100 million per season, combined with Univision’s Spanish language rights. CBS and Univision are paying a reported $140 million annually during the 2021-24 broadcast deal. That includes the third-tier Europa Conference League, which kicks off next year.
___
AP Sports Writer Graham Dunbar in Geneva contributed to this report.


fortune--2020-07-11--Are we seeing a ‘reverse square root’ symbol economic recovery?

Remember when analysts and economists were saying we’d see a V-shaped recovery? They may be rethinking that thesis now.
There are early indicators that the recovery, which quickly gained traction as states started reopening, may be losing steam as cases continue spike across the country.
New cases of the coronavirus have skyrocketed in recent weeks, hitting a record of roughly 60,000 new cases on July 9. Big states like Texas, Florida, and California, are now battening down the hatches once more, by reimposing restrictions for bars, restaurants, beaches, and more. But cases of the virus are now on the rise in many states.
Moody’s Mark Zandi recently told Fortune there’s a “zero chance” of a V-shaped recovery now.
Instead, another shape may be, well, taking shape.
Deutsche Bank senior U.S. economist Brett Ryan was among those who predicted a “reverse square root symbol” shaped recovery months ago.
“This speaks to what we’ve been saying for a long time, which is that this is not going to be a straight line, lock-step recovery, up and up and up. It’s going to have some bumps along the road,” Ryan tells Fortune. Indeed, Ryan told Fortune in the beginning of June that he thought a reverse square root symbol recovery was likely, “whereby the tail is below the start and gradually upward sloping,” as he described it.
True, the data has been improving. Unemployment fell from a heady 14.7% in April and 13.3% in May to 11.1% in June. Consumer spending came in much-improved in May, jumping to 8.2% (off of two months of massive drops). Ryan points out the sales were “boosted temporarily” by one-time stimulus checks.
Weekly jobless claims, meanwhile, have fallen for the past 14 consecutive weeks, but have remained stubbornly above a whopping 1 million per week for the last 16 consecutive weeks.
Now it’s the slowing pace of recovery (notable in data like weekly unemployment claims) that is worrisome to some analysts. “As the COVID-19 outbreak has recently intensified in some states, hopes for an accelerated, sustained, and successful reopening of the economy have hit roadblocks,” Bankrate.com senior economic analyst Mark Hamrick wrote Thursday. “This raises concern about the economy’s rebound.”
And when examining those reports, Deutsche’s Ryan instead looked into “exactly why perhaps [unemployment and May consumer spending] were better, and the conclusion remains that there are definitely still risks and it seems like those risks are now playing out,” he said.
What might hamper growth
One dark cloud hanging over the overall recovery: Some of the big states now reimposing restrictions amid rising case counts are among the top GDP contributors in the country: Texas, Florida, and California make up roughly one third of the nation’s GDP, according to the U.S. Bureau of Economic Analysis.
What’s more, Bank of America recently wrote in a report that while the initial bounce looked like that hopeful V, “By the time the growth in the virus peaks, we assume roughly half of the country will be impacted. With half of the country slowly opening and half slowly closing, the economy could flatten out overall,” economists at the bank wrote.
That doesn’t mean a hit to activity in some of these states will veer the economy back into negative growth and output, Ryan believes, and spiking cases in some states isn’t necessarily a death-knell for the nation’s recovery at large.
That’s because, as economists at Goldman Sachs wrote in a note Thursday, “While the risks have increased, we see several reasons why renewed broad lockdowns may not be needed,” including that early data suggests states in the Sun Belt (like Arizona and Texas) are increasing mask usage, and that “the bar for broad lockdowns appears significantly higher” than it was in March. But the firm also points out that “risks clearly remain, and further lockdowns cannot be ruled out.”
Even if the bars remained open and the restaurants welcomed guests in the coming weeks, those like Ryan note “you’re seeing consumers kind of self-regulating their behavior even absent state regulations.” That has been a key concern: That even if states do give consumers the green light to go forth and spend, activity may be diminished “on their own volition because of the fears of the virus even before states officially issue shutdown orders,” he says.
Economists like Ryan cite two other factors that might inhibit the fast rebound we’ve seen in data recently: One, “it’s becoming pretty clear that the massive fiscal support that was provided including the [stimulus] checks supported retail sales in May—that’s going to peter out over the next few months,” Ryan says. The second risk, Ryan says, is if the $600 per week enhanced unemployment, set to expire at the end of July, doesn’t get an extension. “That’s going to be a problem,” he says.
Another interesting tidbit? Ryan points out that searches for “unemployment benefits” are on the rise again on Google Trends, and he’s watching jobless claims and unemployment reports closely (specifically for temporary versus permanent layoffs). The latest unemployment report shows that while jobs were recovered in June, the number of permanent layoffs increased to 2.9 million.
Consumer spending has clearly rebounded off of its depths in the crisis (down -6.6% in March and -12.6% April) as it surged in May. But Ryan cautions that the likely positive numbers moving forward may not be boosting some of the worst-hit areas.
“On a sequential basis, it will look really good,” he says. Deutsche Bank is projecting a 10.5% annualized increase in real consumer spending in the 3rd quarter, Ryan notes, but “What you have to remember, though, is of that 10.5%, the health care contribution is going to be the biggest,” he says. “While health care is going to bounce quicker, it’s going to take a long time for restaurants and hotels to come back, and unfortunately that’s a significant part of the labor market and where a lot of damage was done.”
Still, the unprecedented uncertainty of the virus means anyone’s guess is, well, anyone’s guess. But Ryan remarks: “If you had thought that you would have faster growth in the back half of the year, you’re probably thinking, ‘Okay, it’s probably a little slower than I thought.'”


fortune--2020-07-11--Spa appointments balance safety precautions and soothing therapy as coronavirus lockdowns lift

Subscribe to How To Reopen, our weekly newsletter on what it takes to reboot business in the midst of a pandemic.
I rang the doorbell, and there was no answer. I looked in the window, and the lights were on. It was the middle of the day, during open hours, and I had an appointment. Still, no answer. Then I tried the door handle again. Sure enough, though a little stubborn, the door was, in fact, unlocked. After four months of isolation, I had socially contracted so far inward I couldn’t even open a door anymore. (Or maybe the door was just stuck.)
A medical pedicure, also known as “medi pedi” or “medicure,” is a noninvasive, dry procedure that focuses on the hygienic and aesthetic care of the toenails and soles of the feet. Courtesy of MediPediNYC
Earlier this week, I ventured out for the first time since going into self-isolation/quarantine, however you want to call it, in March. (Not counting walking the dog or going to the pharmacy and grocery store.) But this trip was with purpose—and by appointment only. I had a midweek appointment at Medi Pedi NYC, a medical spa for aesthetic and therapeutic foot care, which was now open again as New York City entered phase 3 of its economic reopening in July. Many people have been lamenting for months the need to get a haircut or a massage. As a regular long-distance runner, I was in need of both aesthetic and therapeutic care. (I’ll spare you the details, but let’s just say I have the most common ailments for runners’ feet and then some.)
Specifically, I booked an appointment for a medical pedicure, a noninvasive, dry procedure targeting calluses, dry and cracked heels, ingrown and overgrown nails, discoloration, and more. Even before the pandemic, hygiene protocols for certified technicians were far stricter than what you might have seen at a nail or hair salon, and walking into the facility, it resembles a doctor’s or dentist’s office more than a salon. (In fact, there is a podiatrist office next door, and the two businesses have established a complementary rapport over the past seven years since Medi Pedi opened.)
Among the new requirements for clients upon entry: mandatory temperature checks, hand washing/hand sanitizing upon entering the establishment, and face masks. If the client is not wearing a mask, or does not have one, one will be provided at no charge. And no waiting in the waiting room. (These chairs and the rug have since been removed.) Courtesy of MediPediNYC
After finally making my way through the front door, I walked into the waiting room, now devoid of chairs, replaced by a few circular blue stickers designating spots six feet apart to maintain social distancing between clients and employees at the front desk. Sitting behind the front desk was Medi Pedi NYC’s owner, Marcela Correa, a licensed professional medical pedicurist with over 15 years of experience.
Correa grew up helping out in her father’s podiatry clinic in Uruguay, where (among other countries, including in the European Union) services like those at Medi Pedi are actually covered by health insurance. She opened the first location of Medi Pedi NYC on the West Side of Manhattan in 2013 but moved the business to the current Park Avenue location six years ago.
A new floor sticker indicating safe social distancing. Rachel King
Correa says she was in no hurry to reopen, as she was most concerned with protecting both her employees and her clients. But since reopening, the medical spa has been booked up consistently with regular customers—all of whom, she says, have been completely compliant with new protocols, such as wearing a face mask at all times.
Correa notes that the clinic already offered face masks (and hair nets) to clients upon request before the pandemic, and there were hand sanitizer stations installed on walls in each room before too. The major differences involve appointment times and the waiting room. Although there are three procedure rooms within the medical spa, only two are in operation at any time, and appointments are staggered—none are simultaneous—so there is never more than one client in the waiting room at one time. Medi Pedi is also waiving cancellation fees for the near future so if a client is feeling ill, the person will have no issue with staying home.
The treatment chair allows the medical nail technician to adjust the height and position the client without touching and to maintain distancing. Courtesy of MediPediNYC
Medi Pedi is also offering free services to frontline and essential workers on Mondays as a small way to say thank-you. “There are a lot of people we don’t see, but they’re doing their jobs for us,” Correa says. In the future, Correa hopes to take the business mobile with a roaming facility, as many customers are still reluctant to leave their homes or can’t make the trip. Correa notes many athletes, dancers, and Broadway performers also frequent the medical spa for its restorative services given the pressure and duress their jobs impress upon their feet.
Correa shared all of this while restoring my own feet, which haven’t seen much care since a regular pedicure at the beginning of the year despite running hundreds of miles in the six months since. (Running has been my primary method of dispelling anxiety, well before the arrival of the novel coronavirus.) I’ll admit that before the visit, I didn’t know what to expect—both about what it was like to be outside going to a regular appointment again as well as getting this advanced treatment. At first glance, the tools resemble what a dentist might use, but then in that case, there are local anesthetics. I asked Correa if it would hurt, and she just laughed: “It’s like a facial for your feet.”
All medical nail technicians must wash their hands before and after each client, and technicians must dispose of head coverings, gloves, and surgical face masks after every appointment. Courtesy of MediPediNYC
After an hour, my feet felt better than ever, even knowing I’d go back to destroying them the following morning on my daily run. But even the sheer fact of being outside and doing something “normal” again felt mentally therapeutic. It’s not unlike the initial days and months of the Great Recession, when expensive luxuries and trips might have suddenly seemed out of reach, but the small things like an ice cream cone suddenly tasted better than ever.
More recently, there has been a reexamination of the “lipstick index,” a term coined by Leonard Lauder, chairman of the board of Estée Lauder, used to describe increased sales of cosmetics during economic downturns. The idea is similar to the uptick in ice cream sales, in that consumers will turn to smaller and cheaper forms of retail therapy in the bad times. But with everyone wearing a face mask and so few events to attend right now, lipstick doesn’t have the appeal it once did. Instead, economists are suggesting an alternative—the “nail polish effect“—as nail care products spiked by more than 200% over the past four months.
There is no nail polish application at Medi Pedi, and the price points are different, but the essential concept is the same. Cheaper, but useful, retail products and basic restorative services are therapeutic—both mentally and physically—in this current period of economic and political uncertainty coupled with greatest public health crisis in a century. While the pandemic is still very much ongoing and truly nowhere is safe from the virus, there are some activities that are lower risk, and so if you take precautions seriously, even simple activities go a long away.


fortune--2020-07-11--The perfect storm: What do you do with cruise ships that cannot set sail?

Subscribe to Outbreak, a daily newsletter roundup of stories on the coronavirus pandemic and its impact on global business. It’s free to get it in your inbox.
Hundreds of people lined the banks of Glasgow’s River Clyde a few weeks ago for the rare sight of a small, high-end cruise ship sailing upriver—practically into the heart of the city. The Azamara Journey thrilled socially distanced onlookers by blasting its horn, typically a heralding of lively celebration. But this time nobody was there to wave on the deck of the 700-passenger ship, aside from the couple dozen members of its skeleton crew. This was no celebratory arrival, after all: it was a vessel on life support, just like every other ship dealing with the pandemic’s brutal wake.
Since mid-March, only a small handful of the world’s 400-or-so cruise ships have been able to accept passengers—all on hyperlocal itineraries. A few dozen are sailing the world with purpose, repatriating crew members from every corner of the globe. The rest are sitting idle in cruise ship purgatory, unable to sail commercially for the foreseeable future. (In the U.S., the industry has agreed not to resume business at least until Sept. 15.)
The problem for many cruise lines? Idling through the pandemic isn’t just bad for the company’s bottom line, it’s a potential death warrant for their costliest assets: the ships themselves. From mechanical issues to hurricane risks to regulatory hurdles that can constitute criminal offenses, it’s a quagmire that the industry has never faced on this scale before.
The expense is staggering. In a recent SEC filing, Carnival Corp.—whose nine brands comprise the world’s largest cruise company—indicated that its ongoing ship and administrations expenses would amount to $250 million a month once all its ships are on pause. With the company saying it’s unable to predict when cruises resume, that’s a long-term line item on a balance sheet that logged $4.4 billion in losses in the second quarter alone.
Here a Ship, There a Ship
As with airplanes, the first issue with maintaining an idle cruise ship is simply finding a place to park it. As many as 16,000 planes have been grounded in the pandemic, hiding out in dry and rust-proof places that range from hangars and airport tarmacs to desert boneyards. Ships are similarly scrambling to find the right conditions to weather the storm.
There’s not enough port space for every ship to dock at once, especially for huge ships that ordinarily carry up to 8,880 passengers and crew. This explains the celebratory sounds of the Azamara Journey’s “homecoming” in Glasgow (it docked at a cargo port rather than its usual cruise berth further outside the city). Less lucky vessels have had no choice but to drop anchor at sea, occasionally stopping into the nearest port for provisions and fuel.
This week, a cluster of 15 ships from Carnival Cruise Line, Royal Caribbean, and Celebrity Cruises was hanging out near the Bahamas, according to Cruisemapper.com, a ship-tracking site. The 6,680-passenger Symphony of the Seas, the largest cruise ship in the world, was off the Dominican Republic.
According to Bill Burke, a retired U.S. Navy vice admiral and Carnival’s chief maritime officer, getting the company’s 105 ships to their pause destinations—20 in the Caribbean, 40 in Europe, 35 in Asia, and 10 in the eastern Pacific—is a process that will stretch into the third quarter of the year.
High Maintenance
Parking is just the first pain point. To keep things shipshape and avoid costly repairs (much like how your battery might die if you leave your car sitting too long),the vessels must also be kept operating.
“Modern cruise ships are not designed or built to just be turned off and left at a pier,” says Monty Mathisen, managing editor of Cruise Industry News. “You are talking about massive amounts of machinery, electronics, and even steel that needs maintenance, checking, and preventative work.”
That mostly involves one of two scenarios, referred to in the industry as “warm” or “cold” layup.
In warm layup, most systems are kept functioning; in cold layup more are shut down, such as ballast tanks, turbines, and gear boxes. Cold layups come with extra precautions, too, such as sealing off external doors and windows, moving linens to a dry place, putting mattresses on edge, opening all dresser drawers and closets, and sealing bathroom fixtures, to name a few.
An advantage to warm layup is ships can quickly be put back into operation. Once the word comes down, Burke says, the ship can resume carrying guests within weeks—though it will still need to get a full crew onboard and sail to the appropriate destination.
But warm layup requires more upkeep, and therefore more staff. Each ship has a “safe manning” team—about 120 crew members for a large ship. Among the necessary personnel, according to Carnival’s Burke: a deck crew to drive the ship, an engineering crew to run the electrical power and propulsion, a medical team to tend to staff needs (particularly in the time of Covid-19), security, and enough housekeeping and kitchen staff to keep everyone looked after and fed.
In the event of hurricanes or other bad weather, the ships have to be able to move. They also have to comply with environmental, safety, and other regulations or risk stiff fines, criminal charges, and other penalties, says Burke. In 2016, for example, Carnival received a five-year probation and a $40 million fine on a criminal pollution conviction.
But there’s a time limit on this half-on strategy: According to shipping analysts at maritime intelligence company Lloyd’s List, warm layup is only appropriate in the short term. After as little as six months, ships may lose certain certifications that allow them to sail legally.
A Ship Out of Water
Cold layups require fewer systems to run, and therefore, as little as 40 crew members: a bridge team, engine room operators, fire wardens, and hotel staff. But grinding operations to a near-halt makes it more difficult and expensive to restart. According to Lloyd’s Register’s layup guide, every corner of a ship, from the pump room to the living quarters, needs to be inspected for things like gas leaks and mold; electrical equipment, including the navigation systems, need to be removed from safe storage and reinstalled ; and dehumidifiers all need to be removed before furniture and soft goods can be cleaned and put back in place.That’s why cold layups are seen as advantageous only in the event of an outage stretching to many months.
Burke says Carnival could move in this direction in the long term. According to Mathisen, Royal Caribbean has already committed to this tact. Its fleet is largely being protected by dehumidifiers—deployed everywhere from engine rooms to public areas.
When they’re ready to set sail again, the restart “can take weeks to months,” he explains, detailing delays that range from transporting crew back to the ship, going through bureaucratic recertification processes, or even financing expensive dry dock repairs.
A more drastic option is tying up the ship, shutting down all systems, leaving only some emergency generators running and a few fire safety crew and watchmen on duty. Cruise historian and writer Peter Knego paints a grim picture of what can happen in that scenario.
“The first thing that goes is the plumbing,” Knego says. “If you don’t have the plumbing active and somebody’s actually flushing toilets and running water through the system, rust sets in, the pipe starts to disintegrate, and then you have major problems.”
HVAC systems and wiring are next to go. “And then just the fact they are laid up in salt water, salt air, decaying everything very quickly,” Knego explains. “You literally have to tear the infrastructure to make repairs if a ship has been idle for too long.” With long-term layups, issues like rot start to crop up.
If that sounds like a slow and painful death, some companies are just ripping off the Band-Aid instead. In its second-quarter financial filing, Carnival said it plans to retire at least six older ships, which could potentially be sold another cruise company or for scrap—usually for anyone’s best offer. Costa Cruises brand’s 24-year-old Costa Victoria is reportedly destined for a scrapyard. A ship out of water is, alas, worth less than the sum of its parts.


fortune--2020-07-11--Trump just wore a mask in public for the first time

The mining industry in Peru is threatening one of the world ’ s great nature preserves

Subscribe to Outbreak, a daily roundup of stories on the coronavirus pandemic and its impact on global business, delivered free to your inbox.
President Donald Trump wore a face mask during a visit to the Walter Reed National Military Medical Center, a rare instance of doing so publicly as coronavirus cases continue to pile up.
Trump on Saturday was photographed walking with about a dozen officials in the halls of the hospital, wearing a Navy blue mask adorned with a gold presidential seal.
The president was expected to meet combat-wounded service members and their families, as well as health care workers who’ve been on the front lines of the COVID-19 pandemic.
The event was the first public photo opportunity in which Trump has appeared wearing a mask since the beginning of the outbreak. Trump spent about an hour at the hospital in Bethesda, Maryland.
President Donald Trump wears a mask for the first time in public as he visits Walter Reed National Military Medical Center. ALEX EDELMAN—AFP/Getty Images
An image of a masked Trump surfaced during his visit to a Ford Motor Co. factory in Michigan in May. The president didn’t wear the mask during the public portion of the visit to the plant, which was making ventilators, masks and other medical supplies, saying he didn’t “want to give the press the pleasure of seeing” him in the face covering.
Despite repeated calls to do so, including from members of his own party, Trump has stubbornly refused to wear a mask, defying official guidelines from the Centers for Disease Control and Prevention and behavior modeled by members of the White House coronavirus task force, including Anthony Fauci and Deborah Birx.
Trump hinted in an interview with Fox News on Thursday that he was planning to wear a mask during his hospital visit.
“I expect to be wearing a mask when I go into Walter Reed. You’re in a hospital setting, I think it’s a very appropriate thing,” Trump told host Sean Hannity. “It’s fine to wear a mask if it makes you feel comfortable.”
Trump’s remarks were in contrast with others he’s made on face coverings during the pandemic. The president at times has mocked his Democratic challenger, Joe Biden, for wearing one. Surveys have shown mask wearing has become a topic of partisan debate.
Trump held a rally in June at an indoor arena in Tulsa, Oklahoma, where masks weren’t required. An outdoor rally in New Hampshire on Saturday, where mask-wearing was to have been encouraged, was postponed due to a tropical storm in the vicinity.
With poll numbers falling and criticism of his handling of the pandemic rising, Trump appeared to warm to the idea of wearing a mask in recent weeks. He told Fox Business Network on July 1 that “I’m all for masks, I think masks are good” but added that “I don’t know if you need mandatory.”


fortune--2020-07-11--The real problem with accounting firms: They don’t reward auditors that challenge clients

Britain’s audit regulator, the Financial Reporting Council, put out new rules July 6 intended to boost auditors’ independence. The rules focus on how audit partners are paid—so that fees from consulting, which requires a certain degree of obsequiousness toward clients, do not overly slacken auditors’ skepticism toward those clients.
These new rules are well-meaning. But they are not enough. Auditors could easily use the new rules to raise audit fees on their clients, but that does not mean they will be more challenging toward their clients. Indeed, it is easy to see how the audit firms comply with the letter of these new rules without honoring their intent. The very fact that the audit firms have come out broadly supportive of the new rules should give the regulators some pause as to whether they have been had.
The new rules are seemingly catalyzed by the Wirecard accounting scandal. A DAX 30 company, and one of Europe’s embarrassingly few tech success stories, Wirecard has collapsed under what appears to be a simple cash fraud. The auditors apparently relied on third-party representations of their client’s cash balances. This is absurd. Even my landlord, who is not an auditor and who knows of my professorial role at Oxford, demands a higher standard of proof to verify my income.
It is not that the auditors don’t know how to do their job—most audit partners I have met are hugely competent. It is because the culture in their own firms does not sufficiently reward challenge. To have gone back to Wirecard to chase after more evidence on cash balances would have been unpleasant for the auditors—it suggests to the client that the auditor does not trust them. And to be so aggressive with clients is anathema, even for partners in the firms. Not surprisingly, the juniors also learn how to sing in this choir.
Bethany McLean is a hero among financial journalists. In 2001, the then 30-year-old Fortune magazine reporter authored a critical piece questioning one of the world’s most valuable and feared companies: Enron. Her article helped unravel the massive accounting fraud upon which Enron was built, and it helped bring down both the company and its auditor, Arthur Andersen, which was at the time one of the world’s most revered audit firms.
The story of Bethany McLean’s chutzpah is legend in business school and journalism classrooms—the story of a David who brought down Goliath. I haven’t met a serious financial journalist who doesn’t yearn for a “hit” like McLean’s Enron piece.
What are the McLean-like watercooler stories within audit firms? What are the hero narratives on which novice auditors are initiated and reared into the partnership? These narratives exist—every organization has culture-building stories, even if they are not the ones the CEO likes to tell—but within audit firms today these narratives have little to do with challenging clients’ management.
Rather they are narratives about whistleblowers who get shunted out and troublemakers who get denied promotions. The junior auditors know what is best for them if they want to stay and draw partner-level salaries—and rocking the client’s boat is not advised.
The Wirecard fraud has again brought to public attention the invidious negligence of some auditors. The crisis in auditing is at the heart of the current crisis in capitalism—many people don’t trust capitalism because they see it as an inside job; auditors are supposed to safeguard against expropriation, but they are too often caught asleep at the wheel.
What we need to see from the audit firms is a genuine commitment to getting their internal culture right—a culture of intense challenge and skepticism of clients’ management practices. Many clients will not like this; but that is precisely why we need auditors and why we made audits statutory. Until we know that audit rookies are being inducted with watercooler tales of how their firms’ most respected partners felled duplicitous CFOs through dogged investigation, no amount of new rules will matter.
Karthik Ramanna is professor of business and public policy at the University of Oxford’s Blavatnik School of Government.


fortune--2020-07-11--The mining industry in Peru is threatening one of the world’s great nature preserves

Trump just wore a mask in public for the first time

Peru’s Paracas National Reserve, one of the world’s greatest ecological treasures, is under threat from a group of port management entrepreneurs who are seeking to transport ore concentrate through this protected natural area. The fate of the Paracas Reserve—its salvation or imminent destruction—is at stake.
In 1975, the Peruvian government established the Paracas National Reserve in an effort to “conserve the natural state” of this one-of-a-kind ecosystem. Paracas is known for its wealth of wild fauna, including whales, sea lions, dolphins, and a variety of exotic birds such as flamingos, condors, and penguins, as well as for a handful of animals in danger of extinction, including the green sea turtle and the sea otter.
But the Paracas Reserve is not just a natural paradise in terms of biological diversity. It also protects the archaeological heritage of one of the Americas’ most noted pre-Columbian cultures, the Paracas, whose ancient textiles are on display in many of the world’s most famous museums. This range of features has made Paracas the second-most-popular tourist destination in Peru, behind only Machu Picchu in Cuzco. The Paracas is also recognized by the international community: In 1992, the United Nations designated Paracas for protection under the international convention on wetlands.
As incomprehensible as it may seem, the reserve is now in danger because of a consortium’s intention to transport and export copper and zinc concentrates via the Port of San Martín. This port, located on the Bay of Paracas in the reserve’s “buffer zone,” has been awarded by the national government in concession to the consortium.
A view of the shoreline near the Bay of Paracas. (Photo: Erik Herrera / EyeEm via Getty Images)
A buffer zone is the space neighboring or immediately contiguous to the protected area. By Peruvian law, these zones are subject to special treatment and restrictions in order to provide an additional layer of protection to the areas they surround. However, in what critics argue is a violation of these laws, the Peruvian government carried out a tender process in 2014 for the Port of San Martín with the goal of modernizing it, rather than keeping its impact to a bare minimum.
In this tender process, the contract was awarded to a consortium consisting of the Spanish company Servinoga, which specializes in maritime trade, and the Brazilian companies Pattac and Tucumann, which focus on logistic operations and port terminals. This consortium currently manages the port via the company Terminal Portuario Paracas (TPP).
The port was initially prevented from operating after regulatory agencies raised multiple objections to TPP’s Environmental Impact Assessment (EIA), which was unable to prove that no irreversible damages would be caused to the Paracas Reserve. After Pedro Pablo Kuczynski won Peru’s presidential election in 2016, the EIA was approved, despite the fact that the objections raised at that time had not been rectified. Two years later, in 2018, TPP decided to request an amendment to its EIA so that it could handle and export minerals, which would have to be transported directly through the Paracas Reserve due to the absence of any other possible way of accessing the port.
In 2019, the Peruvian environmental authority (Senace) rejected the request, but TPP appealed the decision. In the coming days, this authority will be required to issue its ruling on whether or not to approve or reject the new EIA, which includes the construction of an Ore Concentrate Storage Area.
TPP claims that they will use technology that would avoid any kind of pollution (e.g. closed containers, hermetic trucks, and storage with negative pressure). But the mere increase in heavyweight vehicle traffic through the reserve—through which up to 13,000 trucks full of ore concentrate would drive each year—already represents an undeniable source of noise and visual pollution. Greater still is the risk of contamination in the event that one of these trucks is involved in an accident or overturns. Indeed, such cases have already been reported in the zone, where winds blow at speeds of up to 100 kilometers per hour (62 miles per hour). And copper and zinc ore concentrates, when discharged into water, are extremely toxic to marine life—making the potential consequences of a spill very dire.
It is unfortunate that even today, in the year 2020, some people still refuse to understand that industrial and mining activities cannot take place in any and all geographic areas. Indeed, it is precisely places like natural reserves that must represent one of the limits to such activities.
If we want to start protecting nature, whether in Peru, Finland, or Sudan, it is time for the citizens of the world to come together and more effectively defend our natural reserves, which recognize no boundaries or passports. If there is something that unites us, regardless of our nationality or our economic status, it should be our respect for those natural sanctuaries that remind us that there is still hope and room for balance between human beings and nature.
If you wish to get involved, please sign the petition to protect the Paracas National Reserve.
Manuel Bartra is a lawyer and activist based in Lima, Peru. He is also a columnist for the online independent journalism platform La Mula.