fortune--2020-02-10--Video of Pelosi tearing up Trump speech brings renewed attention to ‘cheapfakes’

The issue of misleading political messages on social media has arisen again, as President Donald Trump tweeted an edited video showing House Speaker Nancy Pelosi repeatedly tearing up his State of the Union speech as he honored audience members and showed a military family reuniting.
Pelosi did tear the pages of her copy of the speech — but only after it was finished, and not throughout the address, as the video depicts.
Pelosi’s office asked Twitter and Facebook to take down the video. Both services refused, saying it does not violate their policies intended to prohibit intentionally deceptive videos.
Researchers worry the video’s “selective editing” could mislead people if social media companies don’t step in and properly label or regulate similar videos. And with the proliferation of smartphones equipped with easy-to-use editing tools, the altered videos are simple to make and could multiply as the election approaches.
How long has doctored content been an issue?
Political campaign ads and candidate messages showing opponents in a negative light have long been a staple of American politics. Thomas Jefferson and John Adams attacked each other in newspaper ads. John F. Kennedy’s campaign debuted an ad showing different videos edited together of Richard Nixon sweating and looking weak.
So, to some extent, the video of Pelosi, which appears to be created by a group affiliated with conservative organization Turning Point USA, is not novel. What’s different now, said Clifford Lampe, a professor of information at the University of Michigan, is how widely such content can spread in a matter of minutes.
“The difference now is that the campaigns themselves, the president of U.S. himself, is able to disseminate these pieces of media to the public,” he said. “They no longer have to collaborate with media outlets.”
The Pelosi team has pushed back against doctored online content in the past. A video released last year was slowed down to make it seem the speaker was slurring her words.
What policies from social media companies govern these videos?
Facebook, Google and Twitter have all been emphasizing their efforts to cut down on disinformation on their services, hoping to avoid some of the backlash generated by rampant misinformation on social media during the 2016 election.
But the video of Pelosi does not violate existing policies, both Twitter and Facebook said. Facebook has rules that prohibit so-called “deepfake” videos, which the company says are both misleading and use artificial intelligence technology to make it seem like someone authentically “said words that they did not actually say.”
Researchers say the Pelosi video is an example of a “cheapfake” video, one that has been altered but not with sophisticated AI like in a deepfake. Cheapfakes are much easier to create and are more prevalent than deepfakes, which have yet to really take off, said Samuel Woolley, director of propaganda research at the Center for Media Engagement at University of Texas.
That editing is “deliberately designed to mislead and lie to the American people,” Pelosi deputy chief of staff Drew Hammill tweeted on Friday. He condemned Facebook and Twitter for allowing the video to stay up on the social media services.
Facebook spokesman Andy Stone replied to Hammill on Twitter saying, “Sorry, are you suggesting the President didn’t make those remarks and the Speaker didn’t rip the speech?” In an interview Sunday, Stone confirmed that the video didn’t violate the company’s policy. In order to be taken down, the video would have had to use more advanced technology and possibly try to show Pelosi saying words she didn’t say.
Twitter did not remove the video either and pointed toward a blog post from early February that says the company plans to start labeling tweets that contain “synthetic and manipulated media.” Labeling will begin on March 5.
What does the law say?
Not much. Social media companies are broadly able to police the content on their own services as they choose. A law, section 230 of the Communication Decency Act, shields tech platforms from most lawsuits based on the content posted on their services, leaving responsibility largely in the companies’ own hands.
Most platforms now ban overtly violent videos and videos that could cause real-world harm, though of course much of that is up to internal company interpretation. Facebook, Twitter and Google’s YouTube have received a significant amount of criticism in recent years about live-streamed and offensive videos that have appeared on the services. The companies sometimes bend to public pressure and remove videos, but often point to people’s rights to freedom of expression in leaving videos up.
What happens next?
Misinformation on social media, especially surrounding elections, is a varied and ever-changing conversation. Jennifer Grygiel, a professor at Syracuse University, called for legislation to better regulate social media in cases of political propaganda. It gets tricky though, they admit, because the “very people who will be regulating them are the same ones using them to get elected.”
More must-read stories from Fortune:
—2020 candidates’ positions, and records, on economic issues that affect women
—How a company with 120 Facebook likes ended up at the center of the Iowa caucus firestorm
—Europe’s refugee crisis is getting worse—for these children
—Fortune Explains: The debt ceiling
—America’s young voters could sway 2020 results. What will it take to get them to the polls?
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fortune--2020-02-10--Colorado State University launches cannabis degree program

Trump is proposing nearly $ 3 billion in additional funds for a 2024 moon landing .
Will it be enough @

Few college campuses are strangers to marijuana, but Colorado State University-Pueblo is going to be awash in it starting this fall. It’s purely for academic reasons, however.
The school plans to launch a bachelor’s of science program in Cannabis Biology and Chemistry this fall, according to a Facebook post from the now-ironically named Colorado Department of Higher Education.
Colorado led the nation when it came to legalizing cannabis, but it has fallen a bit behind when it comes to education about the drug. Though officials call the school’s degree program “among the first in the nation,” it was proceeded by Northern Michigan University, which offers a bachelors degree in medicinal plant chemistry, with a primary focus on cannabis.
The program will focus on the science necessary to work in the cannabis field, looking at both natural products, including the genetics of cannabis, and analytical chemistry, which helps them determine which sort of cannabis product is best suited for new products.
College officials expect as many as 60 people will elect the major in the next four years, a respectable start for a new degree. Hiring in the pot business, was up 76% in 2018, with some average salaries reaching as high as $528,090.
Colorado State University is also opening a research center at the Fort Collins campus this spring to study cannabinoids
Pot is big business in Colorado, with annual sales topping $1 billion since its legalization in 2012. Other states have followed suit, though, and Colorado is losing ground in both research and tourism as marijuana becomes more readily (and legally) available across the country.
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—Why China is still so susceptible to disease outbreaks
—The rich own stocks, the middle class own homes. How betting it all on real estate is a wealth gap problem
—Bakkt aims to turn your rewards points into a wallet you can spend anywhere
—Stock scammers are using the coronavirus outbreak to dupe investors, SEC warns
—WATCH: Why CEOs are pessimistic about 2020 business outlook
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fortune--2020-02-10--Popeyes sales up 42% thanks to chicken sandwich

What a difference a sandwich makes.
Sales at Popeyes restaurants were up 42% to $1.3 billion in the fourth calendar quarter of 2019, says Restaurant Brands International, the parent company of the chain. That’s due almost entirely to the seemingly endless popularity of the chain’s chicken sandwich.
The quarterly results are really the first chance investors have had to get a true idea of the sandwich’s impact. The initial burst of popularity, when the chain sold out of the sandwich in under two weeks, didn’t give a good picture as to the impact the sandwich would have on the bottom line. The reintroduction in November, though, has been more than a short term event.
The sandwich “has proven to be a game changer for the brand in every way,” said Restaurant Brands International (QSR) CEO Jose Cil in a statement.
For the year, Popeyes saw sales growth of 18.5%.
Sales were also on the rise at corporate cousin Burger King, which is also owned by RBI. Buoyed by the Impossible Whopper, sales jumped 8.4% at the burger chain in the fourth quarter and 9.3% for the year.
The success of Popeyes in its fight with Chick Fil A has emboldened other restaurant chains to focus on chicken sandwiches. McDonald’s is currently testing two versions of a chicken sandwich in several states. The Crispy Chicken Sandwich, it says, is topped with butter and crinkle cut dill pickles while the Deluxe Chicken Sandwich is topped with tomatoes, lettuce, and mayo. Both are served on a buttered potato roll.
More must-read stories from Fortune:
—Why China is still so susceptible to disease outbreaks
—The rich own stocks, the middle class own homes. How betting it all on real estate is a wealth gap problem
—Bakkt aims to turn your rewards points into a wallet you can spend anywhere
—Stock scammers are using the coronavirus outbreak to dupe investors, SEC warns
—WATCH: Why CEOs are pessimistic about 2020 business outlook
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fortune--2020-02-10--Trump’s $4.8 trillion budget proposal revisits rejected cuts to domestic programs

President Donald Trump is offering a $4.8 trillion election-year budget plan that recycles previously rejected cuts to domestic programs to promise a balanced budget in 15 years — all while boosting the military and leaving Social Security and Medicare benefits untouched.
Trump’s fiscal 2021 plan, to be released Monday, promises the government’s deficit will crest above $1 trillion only for the current budget year before steadily decreasing to more manageable levels.
The plan has virtually no chance, even before Trump’s impeachment scorched Washington. Its cuts to food stamps, farm subsidies, Medicaid and student loans couldn’t pass when Republicans controlled Congress, much less now with liberal House Speaker Nancy Pelosi, D-Calif., setting the agenda.
Pelosi said Sunday night that “once again the president is showing just how little he values the good health, financial security and well-being of hard-working American families.”
“Year after year, President Trump’s budgets have sought to inflict devastating cuts to critical lifelines that millions of Americans rely on,” she said in a statement. “Americans’ quality, affordable health care will never be safe with President Trump.”
Trump’s budget would also shred last year’s hard-won budget deal between the White House and Pelosi by imposing an immediate 5% cut to non-defense agency budgets passed by Congress. Slashing cuts to the Environmental Protection Agency and taking $700 billion out of Medicaid over a decade are also nonstarters on Capitol Hill, but both the White House and Democrats are hopeful of progress this spring on prescription drug prices.
The Trump budget is a blueprint written as if he could enact it without congressional approval. It relies on rosy economic projections of 2.8% economic growth this year and 3% over the long term — in addition to fanciful claims of future cuts to domestic programs — to show that it is possible to bend the deficit curve in the right direction.
That sleight of hand enables Trump to promise to whittle down a $1.08 trillion budget deficit for the ongoing budget year and a $966 billion deficit gap in the 2021 fiscal year starting Oct. 1 to $261 billion in 2030, according to summary tables obtained by The Associated Press. Balance would come in 15 years.
The reality is that no one — Trump, the Democratic-controlled House or the GOP-held Senate — has any interest in tackling a chronic budget gap that forces the government to borrow 22 cents of every dollar it spends. The White House plan proposes $4.4 trillion in spending cuts over the coming decade
Trump’s reelection campaign, meanwhile, is focused on the economy and the historically low jobless rate while ignoring the government’s budget.
On Capitol Hill, Democrats controlling the House have seen their number of deficit-conscious “Blue Dogs” shrink while the roster of lawmakers favoring costly “Medicare for All” and “Green New Deal” proposals has swelled. Tea party Republicans have largely abandoned the cause that defined, at least in part, their successful takeover of the House a decade ago.
Trump has also signed two broader budget deals worked out by Democrats and Republicans to get rid of spending cuts left over from a failed 2011 budget accord. The result has been eye-popping spending levels for defense — to about $750 billion this year — and significant gains for domestic programs favored by Democrats.
The White House hasn’t done much to draw attention to this year’s budget release, though Trump has revealed initiatives of interest to key 2020 battleground states, such as an increase to $250 million to restore Florida’s Everglades and a move to finally abandon a multibillion-dollar, never-used nuclear waste dump that’s political poison in Nevada. The White House also leaked word of a $25 billion proposal for “Revitalizing Rural America” with grants for broadband Internet access and other traditional infrastructure projects such as roads and bridges.
The Trump budget also promises a $3 billion increase — to $25 billion — for NASA in hopes of returning astronauts to the moon and on to Mars. It contains a beefed-up, 10-year, $1 trillion infrastructure proposal, a modest parental leave plan, and a 10-year, $130 billion set-aside for tackling the high cost of prescription drugs this year.
Trump’s U.S.-Mexico border wall would receive a $2 billion appropriation, more than provided by Congress but less than the $8 billion requested last year. Trump has enough wall money on hand to build 1,000 miles of wall, a senior administration official said, most of it obtained by exploiting his budget transfer powers. The official requested anonymity to discuss the budget before it is made public.
Trump has proposed modest adjustments to eligibility for Social Security disability benefits and he’s proposed cuts to Medicare providers such as hospitals, but the real cost driver of Medicare and Social Security is the ongoing retirement surge of the baby boom-generation and health care costs that continue to outpace inflation.
With Medicare and Social Security largely off the table, Trump has instead focused on Medicaid, which provides care to more than 70 million poor and disabled people. President Barack Obama successfully expanded Medicaid when passing the Affordable Care Act a decade ago, but Trump has endorsed GOP plans — they failed spectacularly in the Senate two years ago — to dramatically curb the program.
Trump’s latest Medicaid proposal, the administration official said, would allow states that want more flexibility in Medicaid to accept their federal share as a lump sum; for states staying in traditional Medicaid, a 3% cap on cost growth would apply. Trump would also revive a plan, rejected by lawmakers in the past, to cut food stamp costs by providing much of the benefit as food shipments instead of cash.
More must-read stories from Fortune:
—2020 candidates’ positions, and records, on economic issues that affect women
—How a company with 120 Facebook likes ended up at the center of the Iowa caucus firestorm
—Europe’s refugee crisis is getting worse—for these children
—Fortune Explains: The debt ceiling
—America’s young voters could sway 2020 results. What will it take to get them to the polls?
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fortune--2020-02-10--What Glossier’s grandiose plans for expansion mean for its brand identity

This article originally ran in Term Sheet, Fortune’s newsletter about deals and dealmakers. Sign up here.
Over the last several years, countless profiles have been written about cult beauty startup Glossier and its CEO Emily Weiss.
In 2017, Entrepreneur Magazine called Weiss “a millennial girlboss.” In 2018, The Cut dubbed her “the millennials’ Estée Lauder.” In 2019, she became Vanity Fair’s “prescient founder [who] created a beauty start-up for the ages.”
Now, in 2020, Weiss has her eye on global expansion. As the founder of a billion-dollar company, she recently told Wired that she aims to build “a very big, long-term, enduring business and company.” Over the weekend, I read that Wired feature, which lays out Weiss’s plan to reach new customers and convert them into Glossier loyals. Here’s the part I found the most interesting:
While being selective about which products to release has become a key part of Glossier’s brand, Emily Weiss says that the one thing she constantly hears from customers is that they want more.
“They want more makeup. They want more merch. They want things we had never considered that we should even have any business making,” she says. In 2019, the company pushed the boat out into more colourful waters with its first sister line, Glossier Play, which includes makeup products such as coloured eyeliners and glitter gels for a more dramatic look. People have also asked for non-beauty products: Glossier candles, Glossier lingerie, a Glossier-designed apartment. Weiss once wrote a post on her Instagram Story asking her 500,000 personal followers what they thought the company should make next.
“Someone asked us if we could make Milky Jelly lube,” she says. “And I was like, that’s actually a really good idea.”
The key to Glossier’s brand identity has been its minimalistic approach. The skincare company offers a tiny selection of products by beauty brand standards. But now, as people ask for more, it risks becoming “everything to everyone” and losing some of what attracted its cult-like following in the first place.
As Glossier expands, it will need to grapple with how to grow its customer base without losing the cool factor that comes with a devoted following—and I’m not sure it’s possible to have both.
‘EQUALITY CAN’T WAIT:’ Bill and Melinda Gates published their 2020 annual letter this morning. In it, they emphasized two areas of focus in their philanthropy going forward. Bill will address climate change, while Melinda will focus on gender inequality.
In October, Melinda pledged $1 billion toward expanding women’s power and influence in the next decade. As part of the plan, she recently announced her plans to invest $50 million in creating more tech opportunities for women across three “inclusive tech hubs” in Chicago and two yet-to-be-named cities over the next five years.
“Over the past several years, we’ve invested to close data gaps, strengthen advocacy, and support women’s economic empowerment,” the letter says. “My message is simple: Equality can’t wait.”
WOMEN WRITING CHECKS: The number of venture capital firms with two or more female partners doubled last year to 14%, according to a study published by All Raise. A record number of 52 women became partners or general partners at venture firms last year. Most firms have zero women as partners, however—65% still have an all-male partner/general partner structure. Read more at Fortune.
Polina Marinova
Twitter: @polina_marinova
Email: polina.marinova@fortune.com
VENTURE DEALS
- Snowflake, a San Mateo, Calif.-based cloud-based data warehouse company, raised $479 million at a $12.4 billion valuation. Dragoneer Investment Group led the round, and was joined by investors including Salesforce Ventures, Altimeter Capital, ICONIQ Capital, Madrona Venture Group, Redpoint Ventures, Sequoia, and Sutter Hill Ventures.
- Boulder, a Portland-based digital treatment program that supports long-term recovery for opioid use, raised $10.5 million in Series A funding. Tusk Venture Partners led the round, and was joined by investors including Greycroft Partners, First Round Capital and BoxGroup.
- OptimoRoute, a Palo Alto, Calif.-based route planner tech startup, raised $6.5 million in Series A funding. Prelude Ventures led the round, and was joined by investors including Congruent Ventures and Michael Stoppelman.
- AllVoices, a Los Angeles-based developer of an encrypted communications platform for offices, raised $3 million in seed funding. Investors include Crosscut, Greycroft, Halogen Ventures, and Vitalize VC.
PRIVATE EQUITY DEALS
- Manna Tree Partners invested $15 million in Verde Farms, a Woburn, Mass.-based provider of organic beef for retail. Financial terms weren't disclosed.
- General Atlantic made an investment in Creative Planning, an Overland Park, Kansas-based wealth management firm. Financial terms weren't disclosed.
- One Rock Capital Partners acquired Innophos Holdings, Inc, a Cranbury, N.J.-based international producer of essential ingredients. Financial terms weren't disclosed.
- All Star Auto Lights, a portfolio company of Atlantic Street Capital, acquired Headlights 101, a provider of refurbished headlights to the collision repair industry, automotive dealers, and consumers. Financial terms weren't disclosed.
- Probo Medical, which is backed by Varsity Healthcare Partners, acquired Elite Medical Technologies, a wholesale provider of medical imaging equipment, and Future Medical Equipment, Ltd, a U.K.-based company that specializes in the de-installation, purchasing and sales of pre-owned medical equipment. Financial terms weren't disclosed.
- Align Capital Partners acquired METCO Environmental, a Lewisville, Texas-based provider of source emissions (or stack) testing services, from TestAmerica, a subsidiary of Eurofins Scientific.
OTHER DEALS
- Fidelity National Financial, Inc. (NYSE: FNF) will acquire FGL Holdings (NYSE: FG) for approximately $2.7 billion.
IPOs
- The AZEK Company, a Chicago-based maker of outdoor living products for residential and commercial buildings also known as CPG Newco, filed for an $100 million IPO. The company posted revenue of $794.2 million and loss of $19.3 million in the year ending in September. Ares Management and Ontario Teachers Pension Plan back the firm. It plans to list on the NYSE as “AZEK.” Read more.
- OneWater Marine, a Buford, Ga.-based recreational boat retailer, raised $55 million in an offering 4.6 million shares priced at $12, the low end of its $12 to $14 range. The firm posted revenue of $603 million in the year ending Sept. 2018 and income of $29.3 million. LMI Holdings, and Goldman Sachs back the firm. It previously planned to list on the Nasdaq under “ONEW.” Read more.
EXITS
- Kian Capital Partners sold Empire Group, a wholesale distributor and manufacturer representative of foodservice equipment, to PNC Riverarch Capital. Financial terms weren't disclosed.
- Upland Software acquired Localytics, a Boston-based mobile engagement platform, for $67.7 million. Localytics had raised approximately $69.8 million in venture funding from investors including Sapphire Ventures, Foundation Capital, and Polaris Partners.
- Prytek Group acquired a controlling stake in Global Fintech Solutions, a Luxembourg-based fintech integrator, from Da Vinci Capital. Financial terms weren't disclosed.
PEOPLE
- Index Ventures promoted Nina Achadjian to partner.
- Balderton Capital hired Rana Yared and David Thévenon as general partners.


fortune--2020-02-10--A lameduck CEO and a spying scandal that won’t go away—Credit Suisse braces for an awkward earnings

A lameduck CEO and a spying scandal that won’t go away—Credit Suisse braces for an awkward earnings call

A spying scandal at Credit Suisse, which led last week to the surprise resignation of chief executive Tidjane Thiam, is turning into the banking world’s biggest Rohrschach test, an assembly of data points on to which viewers can effortlessly project their inner feelings and thoughts.
For some, it’s a witch hunt motivated by petty jealousies with a twist of racism. For others, it’s about rescuing the good name and culture of a storied institution before it’s damaged beyond repair by a shabby corporate espionage saga.
The truth remains frustratingly out of reach, due to the gaping holes in the explanations so far from the protagonists for their actions—or inaction. What is almost a certainty: Credit Suisse’s Feb. 13 earnings call, scheduled to be Thiam’s last act at CS, ought to be a cracker, at least by the standards of the genre.
David Herro of U.S.-based Harris Associates, the bank’s largest active shareholder with around 8.4%, raged last week that Thiam had been the victim of an “orchestrated” campaign in the Swiss media, which he insinuated was motivated by racism. Thiam, the son of a former government minister in Cote d’Ivoire, is arguably the most famous black face in the world of business.
“It either seems envy from the competitors, or perhaps there’s something else, given that, you know, Mr. Thiam looks a bit different from the typical Swiss banker,” Harris told Bloomberg last week in an emotional call-in interview, adding that he thought it should have been chairman Urs Rohner to take responsibility for the debacle.
“Absurd,” countered Christian Dorer, editor-in-chief of the tabloid Blick, for years the authentic voice of prickly Swiss nationalism. “No Swiss, no German or American CEO could have survived the spying scandal undamaged.”
In an interview this weekend with a Swiss media outlet, Rohner himself condemned “in the strongest possible terms” those critics who might suggest race played a factor in Thiam’s resignation. It did not have “any influence on the decisions of the board of directors,” he said.
Watching the detectives
Thiam’s departure came less than two months after it emerged that a second senior executive, HR director Peter Goerke, had been placed under covert surveillance by senior management two years ago. That revelation obliterated the bank’s claim that a separate surveillance campaign into the man then seen as Thiam’s “crown prince,” wealth management Iqbal Khan, was a one-off ordered by a rogue chief operating officer. Switzerland’s financial regulator Finma immediately announced an investigation, which it expects to last several months.
Reached by Fortune, Credit Suisse declined to comment on the matter.
CS’s supervisory board had eagerly accepted the findings of Homburger, a local law firm it hired to look into the affair, which said last year that COO Pierre-Olivier Bouée had been responsible for hiring private detectives to tail Khan when the star banker left the fold last summer for arch-rival UBS. Rohner, meanwhile, has never explained why he allowed Khan to start work at the bank’s biggest competitor without a lengthy period of gardening leave, which would have been the usual procedure.
Homburger’s conclusions never convinced the skeptics who felt that Bouée–who followed Thiam to Credit Suisse from their previous employer Prudential—would not have risked so much without authorization from higher up. Many suspected a cover-up, and the drama soon became a huge distraction at the bank.
“It remained Thiam’s secret, how his most trusted lieutenant could have ordered surveillance without he himself being aware,” Blick’s Dorer summed up on Sunday. “The price: no one believed him any more.”
Thiam repeated on Friday in a press release that he knew nothing of either surveillance operation.
Overseeing a comeback
Thiam already had a track record for overstepping the mark before arriving at CS: while at Prudential, he had been censured by the U.K. regulator for not telling it of his plans to buy the Asian arm of AIG back in 2010. Prudential had been fined 30 million pounds ($39 million).
But Credit Suisse’s board was loath to risk losing a CEO who had seemingly fixed most of the bank’s problems over the previous four years. He cut a bloated and risky investment bank, raised capital buffers and successfully pivoted to the more stable business of wealth management.
Back in October, when the bank first acknowledged the spying scandal, chairman Rohner was quick to sign up to Homburger’s “rogue COO” thesis, laying the blame squarely on Thiam’s lieutenant. But Bouee, who initially agreed to go quietly, is now considering suing CS, according to the Swiss news site finews.ch.
Further allegations of unethical, if not unsavory, behavior continued to dribble out, painting an increasingly detailed picture of an overbearing management culture. The bank’s denials fell flat. So did a tin-eared response by Thiam, who launched his own Instagram account to get his side of the story across: three paragraphs complaining of “false and defamatory” articles jammed in between a dozen shots of him surrounded by CS acolytes with forced grins, or hob-nobbing with the likes of Xi Jinping, rapper Jaden Smith or Queen Maxima of the Netherlands. The indispensable leader, and don’t you (all 8,383 followers, anyhow) forget it.
Only, CS’s share price performance under Thiam did not, ultimately, support that star billing. Since he took over, Credit Suisse stock has fallen 52%, compared to a loss of only 43% for the Stoxx 600 banks index during that period. Negative interest rates and global trade conflicts have made life miserable for most European banks since 2015.
After a company press release on Friday that glossed over all these tensions with some warm and uplifting phrases, Thiam leaves the bank with his reputation open to debate. But the price he’ll pay in escaping without official blame for the spying scandal will be to see the credit for the bank’s turnaround going to his successor and protégé Thomas Gottstein.
As his friend Bouée could tell him—there are worse fates.
More must-read stories from Fortune:
—Why China is still so susceptible to disease outbreaks
—The rich own stocks, the middle class own homes. How betting it all on real estate is a wealth gap problem
—Bakkt aims to turn your rewards points into a wallet you can spend anywhere
—Stock scammers are using the coronavirus outbreak to dupe investors, SEC warns
—WATCH: Why CEOs are pessimistic about 2020 business outlook
Subscribe to Fortune’s Bull Sheet for no-nonsense finance news and analysis daily.


fortune--2020-02-10--ARM unveils two new A.I. computer chip designs

Arm Holdings, the U.K.-based semiconductor design company owned by SoftBank, unveiled two new computer chip designs for artificial intelligence applications on Monday.
One chip, called the Arm Cortex-M55 processor, is the latest in Arm’s line of microcontrollers, the kind of relatively low-cost and power-efficient chips that are used to run sensors and perform simple computational tasks in everything from automobile engines to remote-controlled toys to power tools.
In the past, these sorts of chips generally lacked enough computing power to perform machine-learning functions efficiently. Instead, most of those tasks had to be performed on higher-powered chips, such as Arm’s Cortex-A microprocessors, which are found in most of the world’s smart phones.
The other new chip, called the Arm Ethos-U55 NPU, is designed to run in conjunction with the M55 as a way of accelerating applications that require neural networks, a kind of machine learning loosely-based on the human brain.
Over the past decade, much of the progress in A.I. has come from running these neural networks on graphics processing units, specialized computer chips originally designed to handle the intense number-crunching needed to render images for video games and animation.
But, more recently, a number of companies have created NPUs, or “neural processing units,” chips designed specifically for running neural networks. In benchmark tests, these chips can run neural networks much faster and efficiently than GPUs. Arm claims the Ethos-U55 is the industry’s first “microNPU”—in other words, the first of these neural network-specific chips small enough and power-efficient enough to run on the smallest electronic devices.
Consultants McKinsey & Company forecast that by 2025, AI-related semiconductors could account for $67 billion in annual sales, or about 20% of all computer chip demand. Another consulting firm, Deloitte, has forecast that the market for A.I.-specific chips designed to run on “the edge”—on devices such as mobile phones and smart speakers and not on datacenter-based servers—will total about $2.6 billion this year and double by 2024.
Arm made its first foray into the A.I.-specific chip market in 2018 when it introduced designs for a machine learning processor and another aimed specifically at detecting objects in images. But both of those processors were designed for environments where power efficiency and cost were less critical.
The U.K. firm is not the only chipmaker looking to provide machine learning capabilities designed for low-cost, power-efficient sensors and electronics. Huawei, as part of its push for 5G mobile, has invested in inexpensive NPUs, but it has packaged these as part of larger chips for higher-end mobile phones, such as its Kirin 970 chip. Intel has generally not been active in the edge-computing market, targeting data centers and personal computing devices instead. AMD has created some chips designed to run A.I.-applications on devices such as smart televisions.
Arm, which does not manufacture semiconductors itself but licenses its designs to others, says chips based on these two new designs will ship to customers in 2021. And while the company declined to name customers for the new designs, in the past Arm has licensed its A.I.-specific designs to companies that include Samsung, STMicroelectronics and NXP.
The company says that by yoking the two new chips together as a team, it managed to achieve a 480-times increase in the speed of running machine learning tasks compared to its previous Cortex M chips in benchmark tests. (The first 15-times speed-up comes from the M55, with an additional 32-times improvement from marrying it with the Ethos-U55.) Using the two chips together also results a 25-times improvement in energy efficiency, which is critical for many devices which must depend on battery power. Arm did not say how its new chips perform against competing A.I.-specific ones.
The new chips allow A.I. applications to be brought to areas such as farming, where hundreds or thousands of low-cost sensors equipped with machine learning, can be used to carefully calibrate how much water, fertilizer, or insecticide each plant should receive, Dipti Vachani, ARM’s senior vice president and general manager for automotive and IoT business, says. IoT stands for the Internet of Things, the idea of connecting all kinds of new devices, from security cameras to toasters, to the Internet.
Vachani also says that getting A.I. to function on relatively low-powered devices, rather than having to be in constant communication with cloud-based data centers where most A.I. workloads are run today, is critical for data security and privacy.
For instance, she says smart speakers, such as Alexa or Google Home, could run speech recognition and some machine learning applications directly on the device. Today, those devices have to transmit data through the Internet to remote data centers, raising the concerns about cybersecurity and eavesdropping.
She also says that getting A.I. to work on non-connected, relatively low-powered devices is essential for making connected automobiles and, ultimately, self-driving cars, a reality, and for bringing machine learning to medical devices.
Arm says that the M55 itself will be able to take on machine learning tasks ranging from very simple vibration detection—something even the previous generations of Cortex-M can handle—through to detecting objects in images. When coupled with the Ethos U-55, it can take on higher-level tasks such as detecting specific gestures, deciding whether your fingerprints or your face match the biometrics already stored on the device, and even speech recognition. But more computationally-intensive duties, such as categorizing a wide variety of objects or recognizing faces in real-time from video of a crowd, will still require more power-hungry, and expensive, chips.
Vachani also says that the new chip designs are only intended to perform what is known as A.I. “inference” —which involves taking a data input and using a statistical model that has already been trained to make a prediction from that data. The actual training of the model, the “learning” part of the machine learning, still needs to be done in a data center on more powerful chips.
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fortune--2020-02-10--The old guard of media is earning enough money to make startups drool

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.
I’ve been thinking a lot lately about incumbents versus upstarts. The Silicon Valley assumption is that the latter always beats the former. It’s more complicated than that.
Consider the three legacy media companies that reported earnings of varying degrees of success on the same day last week. The New York Times, the growing king of digital subscriptions, reported $68 million in fourth-quarter profits on $508 million in revenue. News Corp., the newspaper rump of the former film and TV empire, posted December-quarter profits of $103 million on $2.5 billion in revenue, both declining figures. Magazine and lower-tier broadcaster Meredith, which briefly owned Fortune, had profits of $38 million on shrinking revenues of $810 million.
One obvious takeaway is how much harder News Corp. works for its earnings. But note also that each of these greybeards makes the kind of money that would make much ballyhooed digital startups salivate. After all these years and all the venture-capital investments, the so-called disruptors of the American journalism landscape don’t hold a candle to the stalwarts that are very much hanging in there.
Much has been made, too, of the rocket-ship valuation of Tesla, $134 billion at last count, compared with its established competitors. Tesla made $105 million in the fourth quarter; Ford lost $1.7 billion. The Detroit icon (market cap: $32 billion) acknowledged last week that turnaround CEO Jim Hackett’s days are numbered by tapping car guy Jim Farley as Hackett’s No. 2 and heir apparent. Ford also announced the retirement of Joe Hinrichs, its manufacturing chief.
A bevy of self-driving car companies is losing money by the trunkloads, but there’s no sign the incumbent carmakers know how to stop Tesla.
One size doesn’t fit all in the incumbent-versus-disruptor narrative.
***
The diminutive lady who spoke at the very end of the Oscars last night, after Parasite won best picture, was Miky Lee, vice chairwoman of CJ Group, which financed the film. I wrote in December about the unlikely role of the granddaughter of Samsung’s founder backing a film about income inequality; the Hollywood Reporter profiled her extensively last week.
***
Before I go, I want to direct your attention to four Fortune Brainstorm conferences on the horizon: Brainstorm Health in Los Angeles, April 21-22; Brainstorm A.I. in Boston, April 27-28; Brainstorm Finance in Montauk, N.Y., June 17-18; and the one that preceded them all, Brainstorm Tech in Aspen, Colo., July 13-15. The agendas for each are coming along nicely, and there are still spots to attend these invitation-only events. Email me if you’d like to be considered.
Adam Lashinsky
Twitter: @adamlashinsky
Email: adam.lashinsky@fortune.com
This edition of Data Sheet was curated by Aaron Pressman.
NEWSWORTHY
Contagion. As the coronavirus still spreads, its global impact expands as well. Airbnb suspended check-ins at properties in Beijing until March, offering refunds to travelers. And Sony is the latest tech giant to pull out of the Mobile World Congress in Barcelona, joining Nvidia, Amazon, and others.
The arc of justice. A record 52 women became partners or general partners at venture capital firms last year, according to a study by advocacy group All Raise. The number of VC firms with two or more female partners doubled to 14%. The number of firms with no female partners fell to 65% from 85% a year earlier.
I've got 911 on speed dial. It didn't make much sense and now it's over. Intercontinental Exchange, owner of the New York Stock Exchange, abandoned its quixotic quest to buy eBay. ICE's stock had plunged after its offer to buy eBay for about $30 billion surfaced last week.
Valuable bits. The on-again, off-again rally in bitcoin is on again. The price of the cryptocurrency exceeded $10,000 on Sunday for the first time since September.
FOOD FOR THOUGHT
There are all kind of systems and strategies for keeping organized and a million apps to help. But Jeff Huang, a computer science professor at Brown, has a simple system. He keeps track of everything in a huge plain-text file.
That daily todo list is where I also take notes, so it's a to do list that turns into a what done list. The best thing about these daily lists is I keep them all in a single text file separated by dates, so I have a record of everything I have ever done and when I did it. My current file was created almost 7 years ago when I started my current job. It serves as a research notebook, and as meeting minutes. I have 37,773 handwritten lines in one file now, documenting everything I have done as a professor, and nearly every person I have met with, along with notes about what we discussed or ideas I had.
IN CASE YOU MISSED IT
The strange tale of Jeff Bezos’s $16,840 parking ticket bill By Chris Morris
5 things Beats president Luke Wood always packs when traveling By JP Mangalindan
Why the world’s toughest activist hedge fund is after SoftBank By Lucinda Shen
T-Mobile has its cake and eats it too as sales and profits rise By Aaron Pressman
Coronavirus fears spread to European conferences By David Meyer
Why zero-dosage, super-dry Champagnes are popping everywhere By Stephanie Cain
BEFORE YOU GO
You may have read over the weekend that Bill Gates was paying over $600 million for a massive yacht that will be powered by liquid hydrogen. Shown off at a boat show last year, Aqua is almost 400 feet long, carries 14 passengers, and can sail from London to New York without refueling. Alas, now comes the denial. The Microsoft co-founder has not ordered the high-tech, very green floating transport.
Aaron Pressman
On Twitter: @ampressman
Email: aaron.pressman@fortune.com


fortune--2020-02-10--The Oscars snub female directors, but women still win the night

This is the web version of the Broadsheet, Fortune’s daily newsletter for and about the world’s most powerful women. To get it delivered daily to your in-box, sign up here.
Good morning, Broadsheet readers! France loses its only female CAC 40 chief, a new literary prize will honor women writers, and women overcome Oscar snubs. Have a lovely Monday.
– And the Oscar goes to… At the Academy Awards last night, women were honored for some important achievements—from the female directors behind four of the five best documentary nominees to Joker composer Hildur Guðnadóttir, the first woman to win for best original score since the current category was created in 2000.
Laura Dern took home her first statue for best supporting actress. Renée Zellweger won best actress. The filmmakers behind the animated short Hair Love, including Karen Rupert Toliver, used their win to advocate for the CROWN Act, which would ban hair discrimination nationwide. And the best documentary award went to American Factory, the Obama-backed project co-directed by Julia Reichert, who has spoken about the meaning of winning the honor while battling cancer.
What’s more, Eimear Noone was the first woman in the Oscars’ 92 years to conduct the ceremony’s orchestra.
But the tone of the evening was mixed. Before the ceremony even started on ABC, the network reportedly rejected an advertisement from the company Frida Mom, which sells products for personal care after giving birth, that it said was “too graphic,” showing mesh underwear and other bodily realities of the postpartum experience. Then, Natalie Portman showed up in an incredible garment that didn’t let us forget who would be missing from the stage later in the evening: the female directors overlooked in the best director category. Their names—Scafaria, Wang, Gerwig, Diop, Heller, Matsoukas, Har’el, Sciamma—were embroidered on her cape. (It was a more effective statement than Chris Rock’s opening comment that “vaginas” would be missing from the nominees that night.)
Once the awards actually started, there were a few more snubs. Little Women lost all the awards it was up for except best costume design—a bummer for that movie’s fans that also seemed to betray some bias in which aspects of a female-focused movie are valued by the Academy’s voters.
And in either a moment of brutal honesty or a complete lack of self-awareness—depending on your perspective— sound editor for Ford v. Ferrari Donald Sylvester thanked his wife for giving up her own career as a sound editor to raise their children so that he could win an award last night.
The big winner and history-maker of the night was Parasite, the first non-English language film to win best picture. Producers Kwak Sin-ae and Miky Lee got to close out the evening with heartwarming speeches. Lee, a media mogul in South Korea, thanked the country’s moviegoing audiences for their devotion, preventing the filmmakers from becoming “complacent”—a message she delivered after protests from the Oscars crowd forced the night’s producers to turn the lights back on and let her speak.
Let’s hope that next year, more women will be nominated in behind-the-scenes categories. In the meantime, I’m off to watch some documentaries.
Emma Hinchliffe
emma.hinchliffe@fortune.com
@_emmahinchliffe
ALSO IN THE HEADLINES
- One last question. Reporter Megan Twohey, who with Jodi Kantor broke the Harvey Weinstein story, was interviewing Weinstein's current defense attorney Donna Rotunno when she asked one last question: Had Rotunno ever been sexually assaulted? The lawyer's response was stunning: She hadn't been, "because I would never put myself in that position." Listen to the jaw-dropping moment here: New York Times
- Au revoir. France is about to lose its only female CEO of a top publicly listed, or CAC 40, company. The board of energy utility Engie chose not to reappoint Isabelle Kocher to another term when her current one expires in May. Kocher, No. 5 on Fortune's Most Powerful Women International list, spent four years trying to push the $42 billion company away from fossil fuels toward renewable energy. The state owns 24% of Engie, and political battles contributed to Kocher's ouster. Bloomberg
- Awarding talent. A new literary award, the Carol Shields Prize for Fiction, will give $150,000 Canadian (about $113,000) to a female or nonbinary author each year starting in 2022. The financial reward dwarfs the amount that the usually male winners of the Booker Prize, Pulitzer Prize for fiction, or National Book Award receive. The new prize is named for the late Shields, a Canadian and American author whose work often revolved around domestic life. New York Times
- Dem report. In Friday night's Democratic debate, Sen. Elizabeth Warren stayed out of the fray—speaking less than Sen. Bernie Sanders, Joe Biden, Pete Buttigieg, and Sen. Amy Klobuchar. Klobuchar, for her part, sparred with Buttigieg. Before the debate, a Politico story reported that women of color had quit Warren's Nevada campaign en masse, complaining of a toxic work environment and tokenization. Warren apologized, saying, "I take personal responsibility for this, and I'm working with my team to address theses concerns."
MOVERS AND SHAKERS: Deputy managing director Carla Grasso will leave the International Monetary Fund, along with another official, as new chief Kristalina Georgieva seeks "more direct contact" with her department heads. The Wing hired Foursquare and Reddit alum Celestine Maddy as SVP of marketing and communications.
IN CASE YOU MISSED IT
- Lawyers up! For the first time ever, the editors-in-chief of the law journals from the country's top 16 law schools are all women. The milestone was visible this week when Supreme Court Justice Ruth Bader Ginsburg addressed the group—noting that its makeup was wildly different from her time on the Harvard Law Review. The editors all collaborated on a Women & Law journal with essays from prominent female lawyers. Washington Post
- Laying off the subscriptions. Birchbox, the subscription beauty service founded by CEO Katia Beauchamp, is laying off 25% of its staff. One of the earliest direct-to-consumer brands, Birchbox faces ever-growing competition from Ipsy to Sephora in the subscription beauty space. Beauchamp says the company is seeking "more synergy across markets and consolidating globally." Adweek
- Block party. Engineer Tracy Chou, an outspoken advocate for diversity in tech, is launching a new app called Block Party. The app is designed to prevent online harassment and abuse, integrating features that let users control who they want to hear from in ways social platforms like Twitter have not. Chou says her company's vision is to "bring a safer online experience to everyone." CNET
- The other billions. After money manager Ken Fisher made a sexist comment at a conference, headlines eagerly followed the $4 billion in assets his firm lost as a result. But Fisher still controls $121 billion, as he discusses in this profile: Bloomberg
ON MY RADAR
I don't want to be the strong female lead New York Times
How Glossier turned itself into a billion-dollar beauty brand Wired UK
Dee Rees and the art of surviving as a black female director New York Times
How Margot Robbie changed her Hollywood destiny BuzzFeed
PARTING WORDS
"To the girls, to the women, to the mothers, to the daughters, who hear the music bubbling within, please speak up. We need to hear your voices."
-Joker composer Hildur Guðnadóttir, accepting the Academy Award for best original score


fortune--2020-02-10--‘Vastly underestimated:’ Coronavirus outbreak may infect 500,000 in Wuhan alone before it peaks

The new coronavirus might have infected at least 500,000 people in Wuhan, the Chinese city at the epicenter of the global outbreak, by the time it peaks in coming weeks. But most of those people won’t know it.
The typically bustling megacity, where the so-called 2019-nCoV virus emerged late last year, has been in effective lockdown since Jan. 23, restricting the movement of 11 million people. Recent trends in reported cases in Wuhan broadly support the preliminary mathematical modeling the London School of Hygiene & Tropical Medicine is using to predict the epidemic’s transmission dynamics.
“Assuming current trends continue, we’re still projecting a mid-to-late-February peak” of virus cases in Wuhan, Adam Kucharski, an associate professor of infectious disease epidemiology, said by email Sunday. “There’s a lot of uncertainty, so I’m cautious about picking out a single value for the peak, but it’s possible based on current data we might see a peak prevalence over 5%.”
That would potentially mean at least 1 in 20 people would have been infected in the city by the time the epidemic peaks, Kucharski said, adding that this may change if transmission patterns slow in coming days. The prediction doesn’t indicate a coming surge in cases in Wuhan, but that the current cumulative total doesn’t reflect all infections, especially mild ones, that have occurred.
Slowing Spread
Health authorities in China and around the world are anxiously waiting to know whether the world’s largest known quarantine effort has been effective in slowing the spread of the pneumonia-causing virus in Wuhan and across other cities in Hubei province, a landlocked region of 60 million people.
Kucharski, whose research focuses on the dynamics of infectious diseases, and colleagues have based their modeling on a range of assumptions about the 2019-nCoV virus. These include an incubation period of 5.2 days, a delay from the onset of symptoms to confirmation of infection of 6.1 days, and about 10 million people being at risk of infection in Wuhan.
Based on that, a prevalence of 5% equates to about 500,000 cumulative infections. That’s many times more than the 16,902 cases provincial health authorities had counted in Wuhan as of midnight Sunday.
A volunteer carries out disinfection work in Jiang’an District of Wuhan, central China’s Hubei Province, Feb. 9, 2020. Cheng Min—Xinhua /Getty Images
Researchers will gauge the proportion of people in the population who have been infected with 2019-nCoV after a test becomes available that enables them to conduct a so-called serosurvey to identify those whose blood contains antibodies produced in response to exposure to the virus.
By comparison, about 10% of the population may be infected with influenza during severe epidemics, and typically 1-2% catch the respiratory virus in a normal year, said Ian Barr, deputy director of the World Health Organization’s Collaborating Center for Reference and Research on Influenza in Melbourne.
‘Vastly Underestimated’
Currently, the true number of people exposed to the 2019-nCoV virus in Wuhan “may be vastly underestimated,” Manuel Battegay and colleagues at the University of Basel in Switzerland said in a study published Friday. “With a focus on thousands of serious cases, mild or asymptomatic courses that possibly account for the bulk of the 2019-nCoV infections might remain largely unrecognized, in particular during the influenza season.”
Authorities in China have counted more than 40,000 cases — of which more than 900 have been fatal — over the past two months. Official statistics are likely a “severe underestimate of the total,” Battegay and colleagues said, adding that “accounting for this underestimate will decrease the case fatality rate.”
In the first 17,000 or so cases, about 82% are mild, 15% severe and 3% critical, the WHO said Friday. Of 138 patients admitted to Zhongnan Hospital of Wuhan University in the first four weeks of January, 26% were placed in intensive care and 4.3% died, a study in the Journal of the American Medical Association published Friday found.
Not So Deadly
While the fast-moving, infectious coronavirus has caused thousands of people to fall gravely ill and overwhelm hospitals, once researchers understand the full spectrum of illness associated with the virus, the overall case-fatality risk is likely to be much less than 1%, said Ian Lipkin, director of the Center for Infection and Immunity at Columbia University’s Mailman School of Public Health in New York.
People with mild or no apparent symptoms aren’t currently being counted among cases, he told reporters Sunday. A slowdown in the increase in reported cases over the past few days is “meaningful,” according to Lipkin, who recently returned to the U.S. from China, where he was advising on the outbreak. He spoke with journalists during a 14-day home quarantine.
High speed trains remain in the train yard on Feb. 9, 2020 in Wuhan, China. Flights, trains and public transport including buses, subway and ferry services have been closed for 18 days. Getty Images
If measures taken so far to contain the outbreak are effective, some “dramatic reductions” in infections should be observed in the third or fourth weeks of February, he said. Warmer, early-spring weather might also impede transmission, he said.
Some studies indicate an infected person may not display symptoms for 14 days or more, with testing and confirmation of cases adding to delays. This will prolong the time it will take to identify whether China’s unprecedented disease-control measures have worked.
Next Weeks ‘Critical’
“The next two weeks are really critical to understand what’s been happening,” said Benjamin Cowling, head of epidemiology and biostatistics at the University of Hong Kong, in an interview in Melbourne on Thursday. “And, is this going to spread into other locations, or have we avoided what could be a global pandemic because of the control measures that have been implemented to date?”
The number of cases reported in Wuhan and across Hubei province has been tracking downward over the past several days.
“There has been a stabilization in the number of cases reported from Hubei, and we’re in a four-day stable period where the number of reported cases hasn’t advanced,” Mike Ryan, executive director of the WHO’s Health Emergencies Program, told reporters in Geneva Saturday. “That’s good news and may reflect the impact of the control measures that have been put in place.”
There has been a “low, but steady incidence” of infections in places outside Hubei, Ryan said. It’s unclear which of those provinces may control the disease or where it might escalate, he said.
“We hope that the same stabilization that appears to be occurring in Wuhan also occurs outside,” Ryan said. “But, again it’s very, very, very early to make any predictions about numbers.”
“This is still a very intense disease outbreak in Wuhan and Hubei, and there are still great risks in practically all of the other provinces, so we will wait and see,” he said.
More must-read stories from Fortune:
—Stock scammers are using coronavirus to dupe investors, SEC warns
—Asia worries about big events like the Olympics amid coronavirus spread
—Why China is still so susceptible to disease outbreaks
—Looking to cut emissions, Europe eyes a “sustainability” tax on meat
—Fortune Explains: Tariffs and trade wars
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.


fortune--2020-02-10--Bill and Melinda Gates add climate change and gender equality to their foundation’s focus

Bill and Melinda Gates, co-founders of the world’s biggest private foundation, said fighting climate change and promoting gender equality will be prominent issues in their philanthropy going forward.
In a letter marking the 20th anniversary of the foundation’s inception, the couple said that climate has emerged as a key issue for the Microsoft Corp. co-founder, while gender equality has become a focus for his wife.
The foundation plans to work on technologies for lowering carbon emissions –- including ideas that can provide zero-emission energy cheaply to low-income countries –- and on ways to help vulnerable populations like subsistence farmers adapt to climate change.
“Tackling climate change is going to demand historic levels of global cooperation, unprecedented amounts of innovation in nearly every sector of the economy, widespread deployment of today’s clean-energy solutions like solar and wind, and a concerted effort to work with the people who are most vulnerable to a warmer world,” wrote Bill Gates, ranked by the Bloomberg Billionaires Index as the world’s second-richest man.
The Bill and Melinda Gates Foundation has almost $47 billion in its endowment, including funds from Gates’ friend and Berkshire Hathaway Inc. founder Warren Buffett, and has granted more than $50 billion. The foundation has historically worked on improving global health and U.S. education and has more recently begun investments in climate and gender-equality programs.
Melinda Gates identified a need for more women in leadership roles in government, finance technology and health. She also emphasized the importance of tackling barriers that females from all backgrounds face, such as unpaid labor and gender-based violence.
Harder Life
“No matter where in the world you are born, your life will be harder if you are born a girl,” she said.
The couple reviewed successes and failures in their two decades of global health philanthropy in areas like vaccination, malaria and AIDS prevention. Bill Gates reinforced the importance of promoting global health to the foundation.
“Global health will always be a core focus of our foundation,” he wrote in the letter. “This work will only become more important in the future, as climate change makes more people susceptible to disease.”
The foundation plans to fund work on family planning, maternal and newborn health and new ways to prevent malnutrition.
Its other main funding objective, U.S. education, has seen less success than its work on health, Melinda Gates said.
“In global health, there’s a lot of evidence that the world is on the right path — like the dramatic decline in childhood deaths, for example,” she said. “When it comes to U.S. education, though, we’re not yet seeing the kind of bottom-line impact we expected. The status quo is still failing American students.”
More must-read stories from Fortune:
—Stock scammers are using coronavirus to dupe investors, SEC warns
—Asia worries about big events like the Olympics amid coronavirus spread
—Why China is still so susceptible to disease outbreaks
—Looking to cut emissions, Europe eyes a “sustainability” tax on meat
—Fortune Explains: Tariffs and trade wars
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.


fortune--2020-02-10--Michael Pollan and ‘How Caffeine Created the Modern World’

Anyone who has considered him- or herself a regular coffee drinker and then gone cold turkey off the bean-based drug knows the pain of trying to quit. Withdrawal is vicious. It can last for days—maybe even more than a week, depending on how many cups a day one was consuming previously.
That’s because—yes, while some people might not want to admit it—a prime component of coffee, caffeine, is a drug. And according to Michael Pollan, a prolific scribe who has penned books in the science and nature world from plants to LSD, caffeine is “the most-used drug in the world.”
The journalist and Harvard professor is following up his bestselling works—including The Omnivore’s Dilemma, Cooked, and How to Change Your Mind—with Caffeine: How Caffeine Created the Modern World. But you won’t find it on your Kindle or local bookstore. (At least not yet.) Similar to what chef Marcus Samuelsson did last year, Pollan made his first audiobook-only debut via Audible. And for anyone who wants to extend New Year’s resolutions or Dry January goals into February, or at least stay mindful about them, Caffeine will be available to Audible members free during the month of February.
Courtesy of Audible
Caffeine’s hold over the world is actually not that hard to believe, as Pollan reminds us early in his new book that it’s often the first drug introduced to children—by their parents, no less—in the form of caffeinated soda. Pollan cites at least one estimate that more than 150 million adult Americans drink coffee daily, and more than 2 billion cups of coffee are consumed worldwide each day.
But this isn’t an extended science journal essay as Pollan goes deep on the history of caffeine, which traces its origin to a small corner of East Africa. Pollan goes on to charge that caffeine itself has changed the course of human history, influencing politics, economics, and even the course of war. (Some people in media might joke—or seriously argue—that caffeine is what truly keeps news coverage going on a 24/7 basis.)
Pollan recently shared some additional thoughts with Fortune, lightly edited for clarity, below.
Fortune: What inspired you to write about caffeine?
Pollan: I’ve had a longstanding interest in the plant-human relationship and the ways plants have figured out ingenious ways to get us to spread them around the world by gratifying our desires. One of those desires is to change consciousness, and coffee and tea plants do this in a way we find irresistible. As a result, we do a lot for coffee—giving it habitat all around the world, taking exquisite care of it—and coffee in turn does a lot for us. Addicting us to caffeine is just another example of the genius of plants. We don’t give them nearly enough credit.
Why did you decide to launch this in audiobook-form only? Will it be made available in print later?
I was attracted to the freedom of an audiobook. There are hardly any magazines today that will give you the space for a deep dive into a subject like this (20,000 words!) and the freedom to write it the way you would a book, without having to conform to the conventions and limitations of a magazine.
Someday, when I publish a collection of my favorite essays, I hope to include this piece.
What do you like about audiobook as a medium versus print (or ebook)? Do you think it has the potential to reach more readers?
How to Change Your Mind, my last book, sold an unusually large number of copies in audio, convincing me this is where a substantial part of my audience is these days. I’m happy to meet them in this medium, which I’m told is the fastest-growing segment of the book market. As a storyteller, I also enjoy reading my work aloud.
What was the most surprising fact you learned about caffeine?
There were so many!
But probably, the fact that 80% of humanity consumes it daily—children included (in the form of soda). That means to be caffeinated is not an exceptional state, but is now baseline human consciousness.
Also, the fact that coffee and tea are the largest sources of antioxidants in the American diet surprised me—it suggests how few plants we’re eating and probably explains many of the health benefits of coffee and tea, which are impressive.
What was the most devastating fact you learned about caffeine?
That whatever its effect on the quantity of your sleep, caffeine is almost certainly undermining its quality—the amount of so-called deep sleep we have each night, which is important for our mental and physical health. I was surprised to learn that the sleep researchers I interviewed all avoid caffeine.
What do you hope to change with this book? People’s daily habits? Awareness about addiction?
I’m not trying to encourage or discourage caffeine consumption. What I hope to do with this book to get people to take a fresh look at something remarkable that’s hidden in plain sight: their complex relationship to this drug, and how these two plants have changed our lives.
More must-read stories from Fortune:
—The most anticipated books of 2020, according to Goodreads
—Why this sustainable Icelandic sea salt is becoming a chef favorite
—The magic of the wedding industry’s most exclusive conference
—Just in time for Dry January: No-alcohol whiskey and gin alternatives
—The best travel destinations for every season of 2020
Follow Fortune on Flipboard to stay up-to-date on the latest news and analysis.


fortune--2020-02-11--The importance of caffeine

The importance of caffeine

Amid rocky transition to electric cars , Daimler cuts its dividend to lowest in a decade

This is the web version of CEO Daily. To get it delivered to your inbox, sign up here.
Good morning.
If the oil fueled the 20th century, what will fuel the 21st?
The most common answer these days is: data. But at a time when intellectual capital holds dominant sway, author Michael Pollan suggests an alternative: coffee. More than 150 million adult Americans drink coffee daily, and more than 2 billion cups of coffee are consumed worldwide each day. If alert and engaged employees are today’s key to business success, then surely coffee is the critical input!
Pollan’s book is called How Caffeine Created the Modern World, and it is available only in audio format. I confess I haven’t listened yet. (Reading is so much more efficient!) But I enjoyed Pollan’s other books—particularly The Omnivore’s Dilemma—and was intrigued by his interview with Fortune’s Rachel King, which you can read here. A few excerpts:
What inspired you to write about caffeine?
I’ve had a longstanding interest in the plant-human relationship and the ways plants have figured out ingenious ways to get us to spread them around the world by gratifying our desires…Addicting us to caffeine is just another example of the genius of plants.
What was the most surprising fact you learned about caffeine?
There were so many! But probably the fact that 80% of humanity consumes it daily—children included (in the form of soda). That means to be caffeinated is not an exceptional state, but is now baseline human consciousness.
What was the most devastating fact that you learned about caffeine?
That whatever its effect on the quantity of your sleep, caffeine is almost certainly undermining its quality.
So grab your morning latte, and read on. There is more news below. And while you are waiting for the New Hampshire primary results tonight, take time to read editor-in-chief Clifton Leaf’s argument for replacing this whole silly system with a national primary, here.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Coronavirus update
There are now more than 42,000 coronavirus cases in China, and the death toll has cleared 1,000. Analysts are predicting an over-30% year-on-year drop in smartphone shipments for Q1. And if you'd like a very useful Q&A on how the virus is spread and how it's best contained, Fortune's Naomi Xu Elegant has you covered. Fortune
T-Mobile and Sprint
A federal judge is likely to clear the merger of Sprint and T-Mobile US today, in a victory for the carriers over the concerns of various state attorneys general. The $26 billion all-stock deal was proposed two years ago, and got federal regulatory clearance last year thanks to concessions from the firms. Wall Street Journal
Google HR
Google's HR chief, Eileen Naughton, is stepping down. Google said the move is so Naughton can spend more time with her family, though her departure later this year does also come against a backdrop of rising tensions between Google staff and management, over issues such as the company's handling of sexual misconduct cases. Fortune
Daimler profits
Mercedes-Benz sales hit a record high last year, but manufacturer Daimler reported its biggest drop in net profit—almost two-thirds—in a decade. The reason: legal and restructuring charges, stemming from diesel probes, the scrapping of the X-Class pickup truck, and the restructuring of Daimler's mobility services unit. Fortune
AROUND THE WATER COOLER
Equifax hack
The Justice Department has charged four Chinese army members over the 2017 Equifax breach that led to 145 million Americans' data being stolen. But as the New York Times' Charlie Warzel writes, Equifax isn't just a victim here—like other data brokers, it amassed all that personal information without the subjects' consent, and then didn't properly secure it. NYT
Bad trip
A Holland America Line cruise ship has been turned away by four countries and territories—Guam, the Philippines, Japan and Thailand—over fears that coronavirus may lurk onboard. There is however no evidence that the virus has actually infected anyone on the Westerdam, but it's yet more trouble for operator Carnival, which also has a cruise ship quarantined at Yokohama. Bloomberg
NASA budget
NASA's budget is being boosted for the next fiscal year, with much of the extra cash being earmarked for the Artemis lunar exploration program. However, the 2021 federal budget still needs to clear Congress, and its slashing of civilian and foreign aid programs may constitute a major hurdle. Fortune
Medical A.I.
Are "A.I."-based diagnostic apps as reliable as clinicians? Not by a long shot, warns the British Medical Journal, which just published research about skin-lesion-diagnosing apps: "Little evidence indicates that current AI apps can beat clinicians when assessing skin lesion risk, at least not in a verifiable or reproducible form." The evidence point is crucial, because it's hard to evaluate what goes on inside an app developer's algorithms. BMJ
This edition of CEO Daily was edited by David Meyer.


fortune--2020-02-11--The case for a national primary

The case for a national primary

Each edition of The Big Idea puts forward a provocative proposal for making the world better.
The event prompted a thesaurus’s load of invective. It was a “fiasco,” blared the headlines—a “debacle,” a “system-wide disaster.” The Democratic Party’s Iowa caucuses, held on Feb. 3—whose outcome was still unofficial, and unclear, a week later—was “a major-league failure,” conceded Tom Perez, the chair of the Democratic National Committee.
That it was. Vote counts in dozens of precincts didn’t add up, and a party-commissioned app that was supposed to report results quickly and accurately did neither—leaving a vast chad of uncertainty to hang over what should have been a sacred civic process. Republicans, no surprise, seized on the moment to troll the opposition. But it wasn’t long ago that they, too, found themselves in the same muddle. In the GOP’s 2012 Iowa caucuses, Mitt Romney was declared the winner—until some two weeks later, when Rick Santorum was. Odder still was who ended up receiving the bulk of Iowa’s delegates at the Republican convention that summer: third-place finisher Ron Paul. (Don’t ask.)
For this year’s snafu, it’s easy to blame, as Sen. Bernie Sanders did, the Iowa party bosses who “screwed it up badly.” But the true culprits aren’t a handful of local pols, or a poorly designed app, or even the state party’s Byzantine caucus rules. Rather, the fault lies with the current presidential nominating system itself—and with the counterintuitive, counterproductive, and counter-democratic tradition of beginning the process in Iowa, or in any other single state, for that matter.
Here’s a modest proposal: Have each major party switch to a one-day national primary.
The argument against such a change, as is so often the case in politics, centers on money: “You go to a national primary, and it’s all about money, right? It’s all about who can spend the most money advertising across the country at once,” says Caitlin Jewitt, an assistant professor of political science at Virginia Tech. “You don’t have nearly as much chance of a Pete Buttigieg, for instance, emerging as a strong candidate under a national primary as you do under the sequential system that we have now,” she adds, referring to the former South Bend, Ind., mayor. It’s that famed small-town “retail politicking” of Iowa and New Hampshire, say boosters—months and months of diner pop-ins, meet-and-greets at the VFW, and backyard Q&As—that makes a Buttigieg-like rise possible.
What the mythology leaves out, of course, is that the young mayor was already on the cover of Time magazine, a prodigious fundraiser, a darling of late-night talk shows, and gaining in the national polls long before Iowa. The popular lore also ignores the flip side: Candidates with little national recognition rarely survive the quadrennial Hunger Games of Iowa and New Hampshire, no matter how much time they spend chatting in coffee shops. Witness the nearly two dozen elected officials and other prominent figures who have quit the race or faded into the background like showroom furniture.
What the mythology also leaves out is that money is already on the ballot everywhere. You may have noticed that our quaint rolling landscape of caucuses and primaries hasn’t kept three billionaires from entering the race.
Former New York City Mayor Mike Bloomberg didn’t join the fray until November, but nonetheless spent a record $188 million in the last quarter of 2019. He continues to trail three other Democrats in national polls. Former hedge fund manager Tom Steyer has spent some $200 million of his own money so far, and he’s a favorite of just 2% of voters nationally. Money, it would seem, is necessary, but insufficient. (President Trump, our third billionaire, has so far spent little of his own money, though his 2020 campaign has raised over $200 million.)
But money isn’t the only investment that candidates make. Even more precious is time. Consider former U.S. Congressman John Delaney, a respected centrist Democrat, who declared his candidacy in July 2017, long before any of his rivals—and spent most of the days since then in Iowa. After barnstorming each of the Hawkeye State’s 99 counties, holding 400 public events, and shaking some 24,000 hands, however, Delaney dropped out of the race—three days before a single vote was cast.
He was polling at close to 0% nationally, but perhaps his message might have resonated more with the rest of the country if he hadn’t sequestered himself in a single small state—particularly one that doesn’t quite reflect the demographic complexity of the nation.
Voters across America deserve their chance to winnow the field. And a pair of national nominating primaries, one each for Republicans and Democrats, offers the best chance of producing two nominees who can appeal to the broadest swath of the electorate come November—candidates who can connect with the fast-growing number of voters unaffiliated with either major party; those who can draw support from rural, urban, and suburban Americans; those who can stand up for collaboration and compromise without being cast out by their party as a pariah.
No wonder that 58% of Democratic voters, in a Monmouth University poll this January, said they’d rather have a single, one-day national primary than keep the nominating process as is. If the majority of Democrats aren’t thrilled with their leading candidate after Super Tuesday on March 3—when 16 contests are up for grabs—you can bet the call for a national primary will grow even louder.
A version of this article appears in the March 2020 issue of Fortune with the headline “Scrap the primaries. Here’s a better way.”
More must-read stories from Fortune:
—2020 candidates’ positions, and records, on economic issues that affect women
—How a company with 120 Facebook likes ended up at the center of the Iowa caucus firestorm
—Europe’s refugee crisis is getting worse—for these children
—Fortune Explains: The debt ceiling
—America’s young voters could sway 2020 results. What will it take to get them to the polls?
Get up to speed on your morning commute with Fortune’s CEO Daily newsletter.


fortune--2020-02-11--Macy’s plan to build billion-dollar private label brands faces tough odds

Macy’s wants to take more of its fate into its own hands.
One of the key components of the comeback plan the struggling department store company unveiled to Wall Street last week is its ambition to turn four of its long established in-house fashion brands—I.N.C. International Concepts, Alfani, Style & Co, and Charter Club—into billion-dollar names.
The retailer, which has suffered sales declines in five of the past six years, plans to close about 125 Macy’s stores in the next three years, or 20% of its current fleet. It also has to contend with a number of major national brands like Ralph Lauren, Coach, and Levi Strauss focusing more on building their own stores as shields against the ongoing department store apocalypse.
All that means that Macy’s has much more riding on its own brands than ever before. As part of its private brand reset, Macy’s junked six minor brands that had run out of steam, and will focus on the warhorses that chief executive officer Jeff Gennette says still have a lot of life in them.
“We were ready to make the decision to put some brands into the graveyard, but these four were ready to be accelerated,” Gennette, who has been at Macy’s since 1983 and CEO for nearly three years, tells Fortune.
At the investor day last week, Macy’s chief merchandising officer Patti Ongman said the goal for private label merchandise is to generate 25% of overall revenue by 2025, up from about 20% currently. Add in exclusive products from outside brands like Ralph Lauren and only-at-Macy’s merchandise would hit 40% of total sales.
Private label appeal—and challenges
When done well, private labels offer shoppers merchandise they can’t find elsewhere, giving them reason to choose one retailer over another. Add in higher profit margins thanks to the lack of an intermediary, and that retailers have more control over the production process and in-store presentation, and the lure of private labels is clear.
The textbook case of private-label success is Target’s extensive brand overhaul. Since 2017,Target has eliminated some of its biggest private label brands, including Merona and Mossimo, while adding dozens of new ones that have caught on instantly with shoppers, most notably its $2 billion Cat & Jack kids’ clothing brand. The upshot has been 11 quarters of sales growth for Target, more consumers shopping the stores, and market share gains.
But here’s the rub: private label only works if consumers want what the brand sells. Indeed, trying to rejuvenate older brands is not easy. Just ask Kohl’s and J.C. Penney. Nearly five years ago, Kohl’s said it was working with a New York branding firm to “re-energize” its billion-dollar Sonoma brand. Kohl’s does not break financial results by brand but it has since de-emphasized its own labels: private brands are behind about 39% of sales, down from 50% five years ago. Penney is also struggling to rejuvenate its business.
Adding to the challenge, sales in women’s apparel, Macy’s top category, have been sluggish industry-wide thanks to a glut of merchandise. Macy’s has its work cut out for it.
“They just can’t say, these brands exist and put some marketing dollars behind them,” says Wendy Liebmann, CEO of consulting firm WSL Strategic Retail. “They have to assess them from scratch as if they were starting over: What do they keep? What goes away? What do they add?”
Part of the problem Target faced with some of its now-defunct brands was that over time, its merchants kept adding products to a brand, ultimately diluting what the name stood for with shoppers.
Gennette is cognizant of that risk and said I.N.C., for example, has been cleaned up. Macy’s streamlined the men’s products assortment that used to be “all over the map.”
“You’ve got to make sure that it doesn’t end up being a catch-all for all things that are trending,” Gennette says.
At the same time, he wants to be cautious about not going too narrow and losing out on sales, as happened with the Style & Co. brand.
Striking the right balance between those opposing forces while making sure the merchandise stands out in a glut of clothing will be imperative to attracting the younger shoppers Macy’s needs to renew itself. “We know our private brand customers do skew older,” Ongman told Wall Street analysts.
Macy’s, Ongman said, has 5% of the U.S. ready-to-wear market in women’s clothing, making it second only to Walmart. But that drops to 3% for shoppers under 40.
When Macy’s gets it right, private brands can be a boon: sales of its fine jewelry last year rose 15%, a nice bump in a category where its own products make up nearly half of sales.
And Gennette expects that having fewer stores down the line will free Macy’s up to give its brands better in-store presentation. At many of the closing stores, primarily in failing malls, Macy’s wasn’t selling much fashion-forward merchandise anyway. Ultimately a nicer setting for better products will be the key to achieving the billion-dollar goals.
“It should be some of our best product,” the CEO says of Macy’s store brands.
More must-read stories from Fortune:
—Mall developer Simon’s Taubman purchase shows high-end is the last refuge
—Global companies enter lockdown mode as coronavirus rocks China—Land O’Lakes wants to introduce you to the farmer behind your butter
—Why Bud Light gave its new hard seltzer the family name
—WATCH: Inside the algorithm powering Stitch Fix
Follow Fortune on Flipboard to stay up-to-date on the latest news and analysis.


fortune--2020-02-11--Amid rocky transition to electric cars, Daimler cuts its dividend to lowest in a decade

The dreaded ‘ black swan ’ —and what that rare event means for the markets

Daimler AG slashed its dividend to the lowest since the financial crisis and promised deeper cost cuts as Chief Executive Officer Ola Kallenius frees up cash to pay for an accelerated electrification effort in the coming year.
Kallenius, whose restructuring push has failed to gain traction in his first nine months on the job, is cutting the dividend by two thirds to 0.90 euros ($0.98) a share. Daimler will also reduce personnel costs by more than 1.4 billion euros by the end of 2022 and review non-core operations to channel more money into auto making, the German manufacturer said Tuesday.
The 50-year old CEO is under pressure to improve operations in 2020 after he issued three profit warnings since taking office last May. Daimler faces mounting vehicle recall and legal costs amid allegations of diesel-cheating. And the company has been slower than Volkswagen AG to electrify its fleet and now faces rising competition from Tesla Inc., which plans to build a factory outside Berlin.
“We are determined to materialize our technological leadership and at the same time to significantly improve profitability,” Kallenius said in a statement. “Measures to cut costs and to increase cash flows are necessary.“
Last year, Daimler’s profit was hampered by production hiccups, ballooning expenses to fix diesel vehicles, and the cost of shifting to electric cars. Now Kallenius expects the efficiency measures to unleash a turnaround starting this year, with earnings before interest and taxes forecast to grow “significantly” compared to 2019. But the CEO faces several headwinds to make that happen — from the persistent threat of higher tariffs to the coronavirus outbreak that hit its largest market China.
Daimler rose as much as 4% in early Frankfurt trading, giving the company a market value of about 47 billion euros — less than half of Tesla’s current valuation. The stock is the second-worst performer on Germany’s benchmark DAX index this year.
Job cuts are a critical component of the effort to make the manufacturer leaner. While Daimler didn’t detail any new personnel changes, the carmaker said last year it would eliminate more than 10,000 positions worldwide, using voluntary measures such as early retirement and attrition.
Alongside moves to rein in spending, Kallenius has outlined plans to introduce more than 20 new plug-in hybrid and fully-electric Mercedes cars by 2022.
Mercedes-Benz will introduce a fresh iteration of its S-Class flagship sedan this year and roll out the EQA, a compact electric SUV that will flank the slightly larger EQC and the EQV minivan. The brand plans to quadruple the share of plug-in hybrids and fully electric vehicles in its deliveries this year, the company said Tuesday.
More must-read stories from Fortune:
—Stock scammers are using coronavirus to dupe investors, SEC warns
—Credit Suisse making a comeback, but spying scandal drags down outlook
—Why China is still so susceptible to disease outbreaks
—A new coronavirus red flag on the horizon—a stronger dollar
—Fortune Explains: Tariffs and trade wars
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.


fortune--2020-02-11--The dreaded ‘black swan’—and what that rare event means for the markets

This is the web version of the Bull Sheet, Fortune’s no-BS daily newsletter on the markets. Sign up to receive it in your inbox here.
Good morning. It’s another strong start to the trading day. Let’s get right to the numbers that matter.
Market movers
Global equities are leading the way this morning. The Chinese markets are in positive territory, as is the benchmark Stoxx Europe 600. The U.S. futures too are all pointing up, following on yesterday’s impressive gains. And the unsinkable dollar? Yep, it’s gaining too.
Investor enthusiasm once again defies some bleak coronavirus data coming out of China. The death toll now is above 1,000 (the biggest 24-hour jump yet). There may be a slowdown in the infections rate—though that’s hardly comforting to those poor souls on the quarantined Diamond Princess cruise ship where the situation is truly dire. Elsewhere, companies continue to shut down offices well outside Wuhan to avoid the risk of contagion.
Still, the markets continue to shake off the bad news. The S&P 500 and Nasdaq pushed further into record territory yesterday, and that’s fueling today’s surge in overseas markets.
It hasn’t been an across-the-board rally, however. And that’s what I’ll focus on today.
The “black swan”
Even as the markets were soaring yesterday, there was a prominent sector flashing red: energy.
The coronavirus outbreak has decimated Chinese demand for oil by up to 3 million barrels per day. That kind of demand shock was not built into anyone’s models. Analysts are calling the crude/energy collapse a “black swan“—an exceedingly rare and unpredictable market event.
Today’s chart explains what they mean by that.
Brent crude, while up slightly today, is down more than 17% since the mid-January coronavirus outbreak started to rattle markets. That’s close to bear territory. The NYSE Energy Index usually follows the arc of oil prices, and this time is no different. It’s down more than 9% in that period, as the chart shows.
Meanwhile, the wider S&P, as we’ve been covering, is up slightly over the past three-and-a-half weeks.
If we truly are seeing a black swan event in the energy markets, history tells us crude may have further to fall, and that will spill over into energy stocks and the wider economy.
The longterm question becomes: is this a blip, or a permanent shock? Energy price fluctuations have a huge impact on the global economy, influencing everything from inflation to emissions. It should be interesting then to see how economists adjust their models.
Fed Chairman Jerome Powell will no doubt be asked about the coronavirus impact when he speaks to Congress this week.
***
Before I leave you, I want to flag a few events for your calendar. There will be four Fortune Brainstorm conferences in 2020: Brainstorm Health in Los Angeles, April 21-22; Brainstorm A.I. in Boston, April 27-28; Brainstorm Finance in Montauk, N.Y., June 17-18; and Brainstorm Tech in Aspen, Colo., July 13-15. I’m planning to be at Brainstorm Finance in June. I’d love to see you there.
Have a great day.
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
Today's reads
Talking merger. There may finally be light at the end of the tunnel in the long-running T-Mobile U.S.-Sprint Corp merger attempt. T-Mobile U.S. is set to win approval for its $26.5 billion takeover of Sprint, defeating a state-led lawsuit that sought to block the industry-altering wireless deal. U.S. District Court Judge Victor Marrero in Manhattan is expected to rule as soon as this morning. Sprint shares soared by up to 70% in extended trading, while T-Mobile rose as much as 12%.
Dollar up, dollar down. Investors searching for a safe port amid the coronavirus storm have driven the dollar to a four-month high against other currencies. But the strong dollar adds another potential headwind to U.S. growth above and beyond the risks to the economy from the intensifying coronavirus outbreak, the Financial Times reports. It makes U.S. exports less competitive, putting pressure on the Federal Reserve to keep monetary policy bias easy, one analyst said.
Catastrophe bonds. The coronavirus outbreak may be about to claim an unexpected victim. While few may have heard about it, the World Bank in 2017 issued a $320m catastrophe bond backing its Pandemic Emergency Financing Facility. The two tranches of PEF bonds were originally scheduled to mature in July of this year. Thanks to the coronavirus, they are teetering on the edge of default, the Financial Times reports.
Market candy
Quote of the day: “It either seems envy from the competitors, or perhaps there’s something else, given that, you know, Mr. Thiam looks a bit different from the typical Swiss banker.”
That was David Herro, of U.S.-based Harris Associates, a leading Credit Suisse shareholder, raging in a Bloomberg interview that Tidjane Thiam, the bank’s Ivory Coast-born CEO who resigned last week after a spying scandal, had been the victim of an “orchestrated” campaign in the Swiss media, which he insinuated was motivated by racism.


fortune--2020-02-11--Boeing says it will take ‘several quarters’ to return 737 Max fleet to the skies once grounding is l

Boeing says it will take ‘several quarters’ to return 737 Max fleet to the skies once grounding is lifted

Boeing Co. said it will take “several quarters” to return the global 737 Max fleet to the skies following a grounding that has left about 700 planes on the tarmac.
“We are not going to over-stress the system,“ Randy Tinseth, Boeing’s vice president for marketing, said in an interview Tuesday at the Singapore Airshow.
The Chicago-based manufacturer will first ensure the 400 planes with customers and the 300 more stored in factories are flying again before ramping up production, Tinseth said. “The process of doing this will take several quarters,” he said.
Boeing suspended production of its best-selling aircraft in January, 10 months after regulators grounded the plane following two fatal crashes linked to a software issue. The company said last week it had discovered another software problem on the plane, but still aims to get the jet flying again by mid-2020, a deadline it previously said includes room for additional flaws.
The time needed to return the Max fleet to service, before Boeing picks up the pace of production, will do little to ease pressure on Boeing’s suppliers.
Spirit AeroSystems Holdings Inc., a maker of fuselage, engine pylons and wing components which depends on the Max for half of its sales, has slashed its dividend to preserve cash and laid off 2,800 employees. Supplier United Technologies Corp. has said sales and profit will take a hit this year from the crisis that has engulfed the Max.
One key element of returning the jet to service is training pilots on simulators. While countries like India have advised Boeing to set up simulators locally, Tinseth on Tuesday said existing equipment should cover all training requirements.
“The training that will be linked to the Max is manageable with the simulators that are in the market,” Tinseth said. “If we look at the footprint today that we see in the market, we look at the retraining that is going to be needed to bring those planes back into the marketplace, we’re OK.”
More must-read stories from Fortune:
—Stock scammers are using coronavirus to dupe investors, SEC warns
—Credit Suisse making a comeback, but spying scandal drags down outlook
—Why China is still so susceptible to disease outbreaks
—A new coronavirus red flag on the horizon—a stronger dollar
—Fortune Explains: Tariffs and trade wars
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.