fortune--2020-03-18--There are still more questions than answers about the costs of coronavirus testing

The Dow ’ s gains under Trump have been wiped out by coronavirus

As COVID-19 testing is poised to ramp up following the federal government’s recent measures and the rollout of a range of private initiatives, there are still more questions than answers about who will be able to access these tests, who will pay for them or any potential treatment, and how successful these measures will be in deterring the spread of the coronavirus across all parts of American society.
Speaking at the White House press conference on Sunday, Vice President Mike Pence once again stressed that the measures will support all Americans, but offered few details. Last week, he announced that “all the insurance companies” agreed “to waive all copays on coronavirus testing and extend coverage for coronavirus treatment in all of their benefit plans.”
“As we expand testing, we’re so pleased that Congress joined with our administration to make sure that cost is never going to be a barrier to anyone getting a coronavirus test,” Pence said at the briefing. “Now all coronavirus testing is free, and it’s free for every American, including uninsured Americans.”
The full extent of the insurers’ commitment to shoulder the burden of the outbreak, and the level of support from the federal and state level, remains to be seen.
Blue Cross Blue Shield, Aetna, Cigna, Humana and UnitedHealth Group were among the attendees at the event, according to the White House. So far most insurance companies have committed to waiving co-pays for COVID-19 testing only, not for treatment. Fortune reached out to all insurers named by the White House, and most referred to an online statement or offered comments via e-mail. Cigna did not respond to a request for comment.
For example, Blue Cross Blue Shield’s COVID-19 guidance says coverage “will be consistent with the standard provisions of the member’s health benefits.”
Some are also covering telemedicine co-pays. “If a commercial member sees a telemedicine provider for their follow-up visit, there are no co-pays as part of our zero co-pay telemedicine offering available for the next 90 days,” according to an e-mailed statement from Aetna.
Even for those with insurance, there are still a lot of details to be worked out.
“Coronavirus doesn’t care if you’re insured, uninsured, Republican, Democrat, black, or white,” said Dena Grayson, a biotechnology executive who was among a group of voices calling for tougher measures since mid-January. “This is not a disease that only hits rich people or insured people. We can see that the number of cases is accelerating, and we’re barely testing.”
For the majority of Americans who have their insurance plans through their employer, a lot of it depends on the new bill and the requirements the federal government will decide to put in place. The House of Representatives passed the Families First Coronavirus Response Act on Saturday, which includes some provisions for testing and financial support for workers. The Senate will be reviewing it this week.
The bill includes establishing “requirements for providing coronavirus diagnostic testing at no cost to consumers, expanding unemployment benefits, and temporarily increasing Medicaid assistance.” While for many the symptoms may be mild, a portion of those infected may require hospitalization, ventilators, and other costs.
“[For] people with insurance but high deductibles, the concern is that those deductibles will be a barrier because they could face hundreds or even thousands of dollars,” said Sabrina Corlette, codirector of the Center on Health Insurance Reforms (CHIR) at Georgetown University’s McCourt School of Public Policy. “The House bill would address those folks by requiring insurers and employers to waive cost-sharing, not just for the tests but for the emergency room visit or an office visit as well.”
The financial uncertainties are potentially even bigger for about 30 million of Americans who are not insured.
The most immediate concern and deterrent for many is access to testing. There is a disconnect between reports of a successful testing rollout from the White House and the experiences of many patients with potential symptoms being turned away because they don’t meet specific criteria, yet may still be carriers and present a health risk to others.
Nicole Badrinath, a doctoral student at Fielding Graduate University in Santa Barbara, was denied a coronavirus test despite displaying symptoms at Palo Alto Medical Foundation in Fremont, Calif.
“They said they will not test me because I was not high-risk,” Badrinath said. “I was told I was not meeting the requirements like shortness of breath.”
She was denied the test even though she lives with her parents who are in their late eighties.
“I was told to wear the mask at home and to stay away from them,” she said, frustrated and giving up on the idea of getting a test. “That’s fantastic. I’ve been at home with them for the last week.”
At the doctor’s office, she was told to come back if she started having breathing issues.
It’s clear that the White House overstated the speed and scope of testing last week. Trump campaign national spokesperson Kayleigh McEnany said in a tweet on March 12 that “1 million tests have already been distributed, with 4 million distributed by the end of the week,” an assertion that was retweeted by the U.S. President.
According to data published by the CDC as of March 17, a total of 4,255 tests have been run by CDC labs and 27,623 by public health labs.
When comparing the rate of testing per million people, the United States is in the bottom pack of the countries impacted by COVID-19. The U.S. has administered less than half the volume of tests France has, a country with a much smaller population.
Despite limited testing capacity, some high-net-worth patients have been able to access in-home tests as a part of the “house calls” offered by concierge doctors such as David Nazarian, Business Insider reported. Celebrities like Heidi Klum also shared being able to access a test, invoking a reaction on social media about how the “rich and famous” have access to these provisions.
Pence reiterated in Sunday’s press conference that all coronavirus testing will be free, but a lot of the responsibility will likely fall on the states and private companies to enforce.
Several states like Massachusetts, Pennsylvania, and California are moving to mandate waiving co-pays both for COVID-19 testing and treatment.
In a report published by Imperial College London on Monday, researchers estimate COVID-19 could infect 81% of the U.S. population and as many as 2.2 million could die in the U.S. alone if severe, immediate measures are not taken to mitigate the epidemic. The volume of calls to nurses and call centers is surging across the country.
“We’re definitely concerned,” said registered nurse Jason Phillips, who has witnessed the tripling of his daily volume of calls over the past few days. A lot of people are calling in for basic information, he noted, as well as how and where to get tested.
“There were many people I feel should have been tested right away to help the public health effort in Southern California, but our hands were tied,” said Phillips. “The best we could do was to set up the patients with a telephone appointment and to ask them to self-quarantine until receiving instruction from a provider.”
He is also concerned about the shortages of basic protective equipment and masks.
“We’re going to lose whole groups of health care workers due to illnesses and quarantines during this initial wave of community infections,” Phillips said.
Who will carry the bulk of the costs of the COVID-19 outbreak might also depend on how effective current measures are, an analysis of the insurance companies last week by S&P suggested.
“Most insured individuals, especially in group or employer plans, don’t meet their deductible limits until later in the year,” S&P analysts wrote in a report published March 12. “So if the spread of COVID-19 is limited to the first half of the year, the insured will bear a greater proportion of treatment costs. However, if COVID-19 continues to spread later in the year, when insured individuals have met their cost-sharing requirements, the insurer will bear more of the medical costs directly.”
While some communities and other countries are moving to address potential financial hardships and even bankruptcies that may result from the outbreak, the details on health care provisions for workers without health insurance remain very limited.
There are other health care experts who are urging the federal government to expand federal provisions and ease Medicaid enrollment by taking measures like “creating a one-page application form and keeping people continuously enrolled without the need for constant recertification” or allowing “states to temporarily increase Medicaid eligibility higher up the income scale in all states beyond their current income limits.”
Until then, a lot of people from the most vulnerable and most exposed sectors, such as food-service workers, may be the least likely to get tested.
“If you don’t have insurance—either you can’t afford insurance or you’re not working—if you did go to get tested, you’re going to have a tough time getting a test that’s free, because the capacity is so low,” Grayson noted. “Then you get stiffed for a bill that’s a couple thousand bucks, and you can’t go back to work if you’ve tested positive. So why would you get tested? You wouldn’t, there is no incentive.”
More coronavirus coverage from Fortune:
—How to prepare your personal finances for a coronavirus recession
—The coronavirus could upend America’s business relationships with China
—10 questions about the 2020 election during the coronavirus pandemic, answered
—3 months before the coronavirus, a war game showed we weren’t ready
—How hackers are exploiting the coronavirus—and how to protect yourself
—The coronavirus pandemic could mark a huge shift for the fitness industry
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEOs
—WATCH: The race is on to create a coronavirus antiviral drug and vaccine
Subscribe to Fortune’s Outbreak newsletter for a daily roundup of stories on the coronavirus and its impact on global business.


fortune--2020-03-18--The Dow’s gains under Trump have been wiped out by coronavirus

There are still more questions than answers about the costs of coronavirus testing

Subscribe to Fortune’s Outbreak newsletter for a daily roundup of stories on the coronavirus outbreak and its impact on global business.
Today, markets did something historic. They turned back the hands of time.
The Dow Jones Industrials Average at 2:30 was down more than 2,200 points, or 10.5%, to barely over 19,100. The index’s value at Donald Trump’s inauguration was 19827.25. The index has given up all the gains of the last three years and two months and effectively landed back in 2016. By the time the market closed, the Dow had recovered slightly to 19,898.92.
The market will surely continue to swing in the coming days and weeks, but the evaporation of three years of gains in a matter of weeks has been swift and sharp. The Russell 2000 has been back at pre-Trump values for days now, while the S&P 500 and Nasdaq are nearing—but have not yet touched—their values on the date of Trump’s inauguration.
Infographic by Nicolas Rapp
Trump himself has frequently pointed to market successes and claimed credit for them.
But this appears to be an entirely new era. “We had the fastest 10% drop in the S&P 500 ever,” said Lauren Goodwin, an economist and multi-portfolio strategist at New York Life Investments. “We had the fastest move from bull to bear market ever. Compared to previous time periods, this is volatility and a pace of volatility that we’ve never seen.
Given the way stocks are weighted in indexes, a big change in one stock can mean an outsized impact on the overall index value. As of 1:10 p.m., UnitedHealth Group, which makes up 7.8% of the Dow, had lost 15.4% Tuesday. Home Depot, 5.6% of the index, was off by 9.7%. The two represented 1.6 percentage points of fall for the Dow.
“One of the phrases that I hate is ‘this time is different.’ But I think it’s accurate with respect to [the market drop],” said Robert Johnson, a professor of finance at Creighton University’s Heider College of Business.
What started the huge selloff were the impacts of the coronavirus, the oil price war being waged by Saudi Arabia and Russia, and all the uncertainty accompanying them.
“Presidents and parties in power get way too much credit when economies are good and way too much blame when economies are bad,” Johnson said. “Trump had the wind at his back when he took office. Now he has a gale wind in his face.”
“There is no model that exists that says an entire industry would be closed down,” noted Marty Wolf, president and founder of martinwolf M&A advisors. No matter how diversified a company is within its industry, “you can’t have a business that can have that much self-insurance,” he said. “Coronavirus is much worse than 9/11. I don’t think there’s anything meaningful to comparing the stock market to Obama.”
That said, the Administration’s slow initial response, or at least mixed signals and unclear communication, have arguably made things worse.
Investors may also be expecting too much. “In a little over three years we’re treading water. Is that cataclysmic?” asked Johnson. “The decade of the 2000s—they call it the ‘lost decade’ in the market—the whole decade had negative returns. Three years of a flat market isn’t cataclysmic.”
“There are plenty of people doing plenty of freaking out. We don’t need to add to it,” notes Goodwin. She suggests focusing on companies that continue to pay dividends because that way there is still some financial gain.
“For the average investor, having a plan and sticking to it is your best bet,” said Goodwin. “The advice we have for most investors is not to look at your 401(k).”
Because if you do, you might think that you’ve traveled back in time.
More must-read stories from Fortune:
—How to prepare your personal finances for a coronavirus recession
—The Fed made a bold move to calm shaky markets. But is it enough?
—Why return CEOs are usually bad news for a company’s stock
—Dormant PayPal Credit accounts are coming back to hurt credit scores—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: What’s causing the looming recession
Subscribe to Fortune’s Bull Sheet for no-nonsense finance news and analysis daily.


fortune--2020-03-18--Famed economist Robert Shiller doesn’t think we are headed for another Great Recession

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It’s hard to think of a more qualified expert than Nobel laureate Robert Shiller to address the question baffling America’s CEOs, consumers, and investors amid the coronavirus pandemic: Is 2020 a repeat of the long-running, near depression starting in 2008, or a relatively short-lived panic recalling the sharp selloff in 1987?
I reached Shiller, a Yale professor, at his home in New Haven, where he’s hunkered down for the duration, venturing out mainly to stock up every few days for routine shopping. As usual, Shiller’s views on the coronavirus crash were highly original, and he noted that “narratives” that capture our emotions are just as powerful as forecasts based on economic data, including the famed CAPE ratio, that he displays on his home page.
Here’s a sampling of Shiller’s observations.
The coronavirus selloff is worldwide, and that’s a signal
The gigantic drop in stock prices, he points out, is a global phenomenon. Hence, its cause probably isn’t big weaknesses specific to the U.S. economy, such as the mid-2000s housing bubble. “It’s happening everywhere,” he notes. “It’s happening in markets that were expensive like the U.S., and ones that are inexpensive.”
He says that drop is far bigger than is probably justified by the economic fundamentals, even though they’re deteriorating. “I haven’t been prepared for this from the standpoint of efficient markets,” he says. “Based on what we’re seeing so far, the stock market shouldn’t go down this much,” he says. More likely, the depth of the selloff is an overreaction to the severity of the crisis. “People are getting the idea that this virus will get the market to crash,” he says. “People go to the supermarket and see the empty shelves, and they panic.” Those signs of desperation from daily life darken their view of the economy’s future and undermine their confidence in the stock market.
This probably isn’t the Great Recession 2.0
Shiller acknowledges that the rapidity and scale of the stock market’s 30% retreat since mid-February point more to another Great Depression or Great Recession than a shock triggered by a passing crisis. “This doesn’t seem to be another 1929 or 2008,” he observed. “The story isn’t the same. This time the bad news comes from something outside the economy. This time it’s a virus story that turned into a stock market story.” He notes that the current crisis resembles the Spanish flu epidemic of 1919 far more than the vanishing credit that caused the Great Depression.
The selloff isn’t a vindication of the CAPE
Shiller’s cyclically adjusted price-earnings ratio, or CAPE, adjusts the reported P/E by smoothing peaks and valleys in earnings. Its methodology can give a more accurate snapshot of whether prices are rich or slim, since valuations can appear low when profits are unsustainably high, and inflated when earnings are poised to rebound. At the market’s all-time high in mid-February, the CAPE stood at a level only exceeded prior to the meltdowns in 1929 and 2000.
Shiller says that the high CAPE “did make the markets more vulnerable to a selloff.” But surprisingly, he asserts that sudden fear of gravity-defying prices didn’t cause the drop. “If prices fell by roughly the same degree in other markets where the CAPE isn’t high, then it wasn’t the high prices relative to earnings in the U.S. that trigger the fall,” he says. “It was the worldwide epidemic.” He instructed me to look at the Barclays data that calculates the CAPE for 26 countries. Shiller’s assessment was correct. According to Barclays, the CAPE in the U.S., the world’s most expensive major market, has dropped from the February peak of 31 to 26. But Japan at 22, Germany at 20, and the U.K. at 18, all started with CAPEs much lower than the U.S., and all suffered comparable drops in equities.
The coronavirus crisis could be a reversal of the Trump narrative
America, says Shiller, has had what he labels a “triumphant narrative” under President Trump. “Trump got the U.S. thinking it’s a capitalist country, and isn’t ashamed of it,” notes Shiller. “So the stock market sets records.” But for Shiller, the stunning retreat has rewritten the heroic plot line: “In 2008, it was a housing story, not a stock market story like today, and people were getting accused of all kinds of bad behavior. This narrative is something different, but it’s also a Trump narrative. He’s getting his own vicious attacks, this time for not believing the scientists about coronavirus. That narrative is very big now.”
Shiller professes to be mystified by the Trump phenomenon. “I don’t know what drives his thinking,” Shiller allows. “It might have worked without the coronavirus. It looked like he was trying to wish it away.” For Shiller, a student of great economic narratives, Americans believed in the scenario of good times ahead until they didn’t believe. The great unknown in the tale to come is how deep their doubt will grow, and the time it will take them to believe again.
More must-read stories from Fortune:
—How to prepare your personal finances for a coronavirus recession
—The Fed made a bold move to calm shaky markets. But is it enough?
—Why return CEOs are usually bad news for a company’s stock
—Dormant PayPal Credit accounts are coming back to hurt credit scores
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: What’s causing the looming recession
Subscribe to Fortune’s Bull Sheet for no-nonsense finance news and analysis daily.


fortune--2020-03-18--Will Facebook ever learn?

Will Facebook ever learn?

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Two Facebook-related news items point to business as usual for the platform. The first relates directly to its coronavirus response.
Facebook is being acknowledged for offering their 45,000 employees a $1,000 bonus to help them defray any additional costs or burdens they may be facing while now quarantining in place, setting up home offices, childcare, and the like. Yes, it’s a very good move.
(According to the Securities and Exchange Commission, the median annual salary for a Facebook employee was $228,651 in 2018. Just leaving this here for the moment.)
The corona-bonus story was first reported by The Intercept, who immediately connected the bigger dots: The tens of thousands of hourly contractors, who work from centers around the world, would not get the benefit.
“The [$1,000] is for full-time employees who are working from home,” a Facebook spokesperson told The Intercept. “For contract workers, we are sending them home and paying them in full even if they are unable to work—which as you can imagine is much more meaningful than a one-off payment.”
I’m not sure that’s how cash works, but let’s press ahead anyway.
Facebook, which according to CNBC, had some $52 billion in cash on its balance sheet as of December 2019, has a spotty record supporting their contract workers who mostly do the dirty work of content moderation on the site, and who are consistently exposed to the most violent, depraved, and disturbing content humans can create.
A damning story of their workplace conditions, published last June by The Verge, was made possible when many such contractors defied non-disclosure agreements to share how and why their jobs were untenable.
It opened with the story of an overtaxed moderator who literally died at his desk on the overnight shift. Keith Utley, a former lieutenant commander in the U.S. Coast Guard and father of two, had been haunted by the content he’d seen—hate speech, murders, child pornography. He is believed to have collapsed under the strain of impossible benchmarks and poor management. “The stress they put on him—it’s unworldly,” one of Utley’s managers told The Verge. “I did a lot of coaching. I spent some time talking with him about things he was having issues seeing. And he was always worried about getting fired.”
Many contractors work two or three jobs to make ends meet. “We have never been, nor will we ever be worthy of dignity and respect in their eyes,” one contract worker told The Intercept. When asked if a $1,000 payment would be meaningful, another made it plain. “That’s almost two months of rent for me,” they said. With those margins, work-provided meals are a legitimate bonus. “Would help ease the cost of not having hot food and snacks at work five days a week also.”
In other news, the Wall Street Journal recently reported that Ken Chenault, the chairman of venture-capital firm General Catalyst and former American Express chairman and CEO, will not be seeking re-election to Facebook’s board, “following disagreements with Mark Zuckerberg over the company’s governance and political policies.”
His decision caps a year of turnover for the board. Three other independent directors have also left—former White House chief of staff Erskine Bowles, Netflix CEO Reed Hastings, and former Genentech executive Susan Desmond-Hellmann. The Journal thinks there may be a plan afoot, as they were replaced in some instances “with people who have preexisting social or business relationships with Mr. Zuckerberg.”
Chenault became the first African-American member of Facebook’s board in February 2018, and was seen as a sign that the company had become more serious about representation.
People familiar with Facebook’s quest to diversify their board expressed concern at the time that the company’s efforts would prove to be cosmetic. “They think of this as a public relations problem to be solved, and not a systemic issue to be addressed,” one told raceAhead, under conditions of anonymity because they were not authorized to speak about the search for new directors.
But these two news items intersect powerfully with a third: Chenault, along with Rachel Carlson, CEO and co-founder of Guild Education, have recently launched Stop The Spread, a non-profit coalition to galvanize the business community around effective responses to the COVID-19 crisis. Their goal is to make the dream of stakeholder versus shareholder value come true.
It also offers a pretty good snapshot of Chenault’s leadership philosophy.
“Over the past few years, we have watched the American business community move beyond caring simply about shareholders and bottom lines to embrace their relationships with their communities, employees and customers,” the pair wrote on Medium. “Now is the time for us to live up to those commitments.”
They’ve asked CEOs and other leaders to join the effort by taking a COVID-19 action pledge, and in a post updated this morning, the collective action has begun:
“Starting today, we are asking our 1,500 signatories to stand together and make a significant financial commitment to support COVID-19 support and recovery. We’ll be focused primarily on funding national healthcare needs—tied to ventilators, respirators and supplies for our hospitals around the U.S.”
But they’re also posting other interventions. This one, called #PayItForward, caught my eye. It’s “an initiative to ask large companies with flexible balance sheets to immediately pay their small business vendors, rather than waiting 30–45 days to pay their accounts payable. This will help them stay afloat for the next 30 days and pay their employees as best they can.”
It sounds like smart and effective advice.
I hope Facebook, who despite itself managed to create a robust supplier diversity program, will take it to heart.
Ellen McGirt
@ellmcgirt
Ellen.McGirt@fortune.com
On Point
How did Facebook's supplier diversity program come about? Bärí A. Williams does not get enough credit for her efforts to help create a supplier diversity network for the social platform, work that was outside her scope as former lead counsel. “When I was an attorney at Facebook, the company lacked a proactive program of partnering with minority-, LGBTQ-, and women-owned businesses,” she tells Wired. “Our consultants, service providers, hardware, and infrastructure suppliers reflected the majority company itself. So, taking the cue from my favorite black woman proverb, ‘Fuck it, I’ll do it,’ I decided to take matters into my own hands and start a supplier diversity program.” Let’s hope they all get paid.
Wired
Medical device company threatens to sue volunteers who 3-D printed lifesaving respirator valves I’m sure they’ll think better of it, but it points to some interesting tensions when field innovations run afoul of business-as-usual IP rights. The valve became an essential tool to save lives at a besieged hospital in Italy, but their typical supplier couldn’t keep up with demand. Enter Cristian Fracassi and Alessandro Ramaioli from the Italian startup Isinnova, who offered their company’s printer and a literal lifehack. The actual valve typically costs around $1100, but only took about $1 to fabricate. The valve has been used successfully on 10 patients, so far.
The Verge
The Root’s Michael Harriot has some thoughts on the economy I’m not quite sure how I missed the fact that Harriot, everyone’s beloved white-people-explainer, had a degree in—and taught—International Business and Macroeconomics, but he does. So this fascinating thread explaining what might be ahead for an economy rocked by COVID-19 is really a gift. “First, we have to come to grips with the fact that this country has been quietly building an economy that benefits corporations—NOT NECESSARILY INDIVIDUAL RICH PEOPLE,” he begins, explaining how we’ve already lost the middle vendors and service people who make up the middle class. “It's all a house of well-placed cards… What happens when the house of cards tumbles?”
Michael Harriot on Twitter
On Background
Bodegas tell the history of immigration, aspiration, and communities They’re always open. You can buy a lottery ticket, an egg sandwich, or a clutch of daisies. And if you live in or visit New York City, there’s one on almost every corner. But these mom-and-pop shops, owned by families from countries from the Dominican Republic to Yemen, were already struggling to stay afloat before COVID-19, under pressure from chain stores and rising rent prices. But they’re worth saving. NPR’s Code Switch has a terrific story featuring many of the bodega owners, most of whom are equal parts business champions and community therapists. "Corner stores play a huge part in anyone's life living in New York," says Brooklyn's Abdul Sulaimani. "If you're not cool with your corner store guy, you're not from New York."
Code Switch
Somewhere in the dream we had an epiphany. Now we right the wrongs in history If you’re digging into history by watching the Ava DuVernay film Selma about the 1965 marches for voting rights with your quarantots, then add on to the experience with this extraordinary performance of the Oscar-winning song “Glory.” John Legend and Common won Best Original Song at the 2015 Golden Globe Awards and the 87th Academy Awards for the song. But the staged version, which was performed at the Oscars ceremony, offers a subtle lesson in grace in racial partnership that’s easy to miss. As the “marchers” fill the stage to sing during the dramatic finale, the white performers march shoulder to shoulder with the black ones—but stand in silent solidarity. The glory is in the details.
YouTube
A list of podcasts for little kids The New York Times has compiled this wonderful list of podcasts for little kids, to help all the #quaranteaching folks out there to manage all the quality time they’re now enjoying. If you’ve got kids ages 2 to 6 at home, it seems like a great start. Any to add? Hit us back.
New York Times
Tamara El-Waylly produces raceAhead and manages the op-ed program.
Quote
“Nothing is more punitive than to give a disease a meaning—that meaning being invariably a moralistic one. Any important disease, whose physical etiology is not understood, and for which treatment is ineffectual, tends to be awash in significance. First, the subjects of deepest dread (corruption, decay, pollution, anomie, weakness) are identified with the disease. The disease itself becomes a metaphor. Then, in the name of the disease (that is, using it as a metaphor), that horror is imposed on other things… Feelings about evil are projected onto a disease. And the disease (so enriched with meanings) is projected onto the world.”
—Susan Sontag, "Disease as a Political Metaphor," The New York Review of Books, Feb. 23, 1978.


fortune--2020-03-18--Here’s why Zoom was zooming even before the coronavirus pandemic

Over the past few days, everyone around me seems to have caught on to Zoom, the Silicon Valley–based videoconferencing software company. My elementary school–age kids are using it to keep in touch with their teachers while their school is shut down, and my septuagenarian aunt, under orders to “shelter in place” in the San Francisco Bay Area, reported that her weekly piano lessons will now take place over Zoom as well (as she marveled via text message: “Zoom—who knew?”).
Indeed, the coronavirus pandemic is forcing us to adopt all sorts of new ways of interacting, learning, and working. And for many, that includes using Zoom for the first time. Not surprisingly, the virus outbreak has supercharged demand for the tech company’s video-chat service. Zoom won’t disclose usage numbers beyond its last reported quarter, but CEO Eric Yuan said on March 4 that the company has seen a “large increase in the number of free users, meeting minutes, and new video cases.” Then again, Zoom has actually been zooming for quite some time.
“For years, I told everyone [technology journalists and analysts] they were undercovering Zoom,” says Dan Scheinman, an angel investor who gave Zoom founder Yuan his first check, a $250,000 seed investment, in 2011. “Then it went public, and it was like, ‘Oh, my God, look at Zoom.’”
By going public, he means Zoom’s hot initial public offering in April. Since then, the company’s shares have soared about 200%, giving it a market cap of more than $31 billion.
Scheinman says it was easy for people to dismiss the company when it launched nearly 10 years ago, because videoconferencing was already considered to be a crowded market. To be sure, Microsoft’s Skype, Cisco’s Webex, and Apple’s FaceTime were already in existence in 2011, to name just a few. So why and how did Zoom take off?
I reached out to a few power users to find out.
“Previous to Zoom, I felt like the debate around videoconference apps was ‘Which do you feel is least terrible? Let’s use that one,’” says Hunter Walk, another Silicon Valley–based seed-stage investor. (Walk did not invest in Zoom, but he is a longtime user.) “Zoom had an intersection of stable, high-quality performance plus ease-of-use, and the network effect started snowballing from there.”
Ask other avid users, and they bring up that same theme: While there were plenty of other options out there, Zoom just provided a better one.
“They built a system with a super simple, modern UX [user experience] and very few clicks to get working,” says Aileen Lee, founder of venture capital firm Cowboy Ventures (again, Lee is not an investor but a regular user of Zoom). “You’d think big tech companies with more resources would have been able to offer something as good, but they never did.”
It’s possible that the incumbents didn’t immediately see Zoom as competition. Early on, the fledgling startup went after the education space and small and medium businesses, including young tech companies—classic early adopters who were eager to sign up for a simplified alternative to the bigger, incumbent vendors.
“Zoom has done an unbelievable job making sure they delivered a product experience that was dead simple and worked every single time,” says Aaron Levie, the founder and CEO of enterprise file-sharing service Box.
If you ask Scheinman, Zoom’s first investor, just how the company managed to do that, he says it all comes down to Yuan and his background. The CEO and founder of Zoom spent more than a decade at Webex, but has said repeatedly that when he wanted to completely rethink the collaboration software with a video- and cloud-first architecture, they turned him down. So Yuan left and started Zoom, taking 40 engineers along with him.
“He built Zoom from the ground up, for a world of video,” says Scheinman.
That meant developing a product that was geared to work even with suboptimal Internet coverage, easily available whenever and wherever someone needed to dial in via video. “The architecture was built to work on as crappy an Internet connection as possible,” says Scheinman.
Zoom added plenty of other popular features along the way, from customizable backgrounds to an automated in-meeting transcription service, which theoretically eliminates the need to take notes, helping to set new standards for other videoconferencing services.
“The company was built with the philosophy of making customers happy,” says Scheinman.
“Isn’t every company?” I ask.
“No,” says Scheinman.
I’m betting Cisco and Apple and Microsoft (which owns Skype) would disagree. Earlier this week, Cisco, which owns Webex, said that it too is seeing record usage numbers in light of the virus outbreak. Other companies that offer videoconferencing tools are likely seeing big spikes as well. But video chats are all that Zoom does, and it is now basking in the glory of what it has created—albeit in the midst of a painful economic hit that the vast majority of companies of all kinds will not be benefiting from. Case in point: Over the past three months, Zoom’s stock has risen nearly 63%; the Nasdaq Composite, meanwhile, is down more than 17%. (Cisco stock, in case you’re wondering, went down nearly 26% in the same time period.)
“This is a very critical moment,” Yuan said during a call with analysts that took place earlier this month.
Indeed, the demand for Zoom is higher than ever. As of the end of January, Zoom says it had 81,900 business customers with more than 10 employees. (The company doesn’t break out the exact number of free vs. paying users.) And analysts estimate that it has already brought in more mostly active users over the past two and a half months than in the whole of 2019.
But just how many of its current influx of new users will convert to paying customers remains to be seen. The company offers free access to its videoconferencing software for meetings that max out at 40 minutes; paid subscriptions start at $15 per month for small teams. So far, its chief financial officer, Kelly Steckelberg, has acknowledged that a lot of its recent uptick in usage is on the “free side.”
What’s more, Zoom can expect the ensuing scrutiny, good and bad, to be just as intense as its rapid growth. Already, an optional “attendee attention tracking” feature, which lets video-call facilitators track which participants are focusing on their meeting versus other tabs or applications, is raising some concerns. (Zoom’s online support page says that this function doesn’t track any audio or video.)
Ultimately, though, Zoom has not only managed to quietly turn into the videoconferencing tool du jour. It has managed to do so at just the right time—when, all of a sudden, everybody from my kids and retired aunt to companies forced to join the “work from home” trend desperately seems to need it.
“It turned out that the market for video communication is just so much larger than anyone ever realized,” says Levie, Box’s CEO, pointing to the rise of remote work, billions of mobile devices, and people collaborating globally.
And that was before the pandemic.
Update: This story has been updated to include a comment from investor Aileen Lee.
More must-read stories from Fortune:
—Inside Xerox’s audacious quest to buy much bigger rival HP
—How A.I. is aiding the coronavirus fight
—How early GPS gadget-maker Garmin mapped out success against Big Tech
—Dormant PayPal Credit accounts are coming back to hurt credit scores
—WATCH: Best earbuds in 2020: Apple AirPods Pro vs. the Sony WF-1000XM3
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.


fortune--2020-03-18--FDA pushes virtual clinical trials during coronavirus outbreak

This is the web version of Brainstorm Health Daily, Fortune’s daily newsletter on the top health care news. To get it delivered daily to your in-box, sign up here.
Happy Wednesday, readers.
I want to start off with an announcement: Our 2020 Fortune Brainstorm Health conference, which was scheduled for April, has been postponed.
This was a difficult but necessary decision given the realities of the coronavirus outbreak and the advice of public health officials. We will still be holding a virtual and interactive gathering of the greatest minds in health care on July 7 and reconvening in California in April 2021. If you had already registered and want more information, head over here.
It’s just another example of how this situation is upending our daily lives (and will continue to for many months). Here’s another: The Food and Drug Administration (FDA) has now issued guidance that certain clinical trials be conducted virtually.
The agency noted that a combination of factors could significantly hamper clinical trials for a drug. For instance, the supply chain for an experimental treatment may be affected by the outbreak, hampering manufacturing capacity; a study participant may actually become sick with COVID-19; quarantines may be in effect in certain hot zones.
In a situation like that, the FDA says clinical researchers should consider following up with trial participants virtually or via phone, particularly for safety monitoring of patients who may not be able to go to the site where a study was being conducted or have access to an experimental treatment.
This is part of a broader wave of government and health officials urging virtual doctor (not to mention social) visits during this time.
Read on for the day’s news.
Sy Mukherjee
sayak.mukherjee@fortune.com
@the_sy_guy
DIGITAL HEALTH
Hackers capitalize on the coronavirus crisis. When there's a crisis, there's a conman. The COVID-19 outbreak is no different. My colleague David Z. Morris reports the multiple nations have been hit with coronavirus-related phishing scams, which can be particularly effective in a pandemic situation and as people are hunkered down in their homes. This is per research from the cybersecurity firm Nocturnus, which also found that there's been instances of coronavirus-related ransomware that forces users to pay hackers money in order to unlock their computers' hard drives. (Fortune)
INDICATIONS
Illumina partners with IDbyDNA to sequence infectious diseases. Genomic sequencing giant Illumina is teaming up with IDbyDNA to market a platform called "Explify." This particular technology can sniff out thousands of pathogens from environmental samples and, as you might suspect, the partnership was fueled by a desire to expand coronavirus surveillance options. It will also center on stepping up laboratory capacity to test for infectious diseases. (FierceBiotech)
THE BIG PICTURE
How hard will coronavirus hit the economy? Some economists are warning that the economic toll from the coronavirus could get significantly worse in the coming months, including as many as one million lost jobs in March alone. But others are more cautious, predicting that employers won't be eager to slash their workforces if the situation proves more fleeting. Economic indicators certainly aren't great at this point. (Fortune)
What hospitals want from the stimulus bill. As Congress debates yet another bill to assist in the coronavirus fight—this time tailored specifically for the need of hospitals and healthcare workers—the medical community has a wish list. Some of the largest hospital trade groups in the country are requesting a variety of relief measures including a pause on cuts to Medicare reimbursement rates, more protective gear for health workers, child care support for medical staff with children, and more. (ModernHealthcare)
REQUIRED READING
This crucial measure indicates stocks are nearing buy territory, by Shawn Tully
Business is finally starting to reckon with climate change, by Brian O'Keefe
The global crisis in recycling, by Vivienne Walt
Hong Kong dangles incentives for local face mask production, by Eamon Barrett
Sign up for other Fortune newsletters.


fortune--2020-03-18--Stores are designating shopping times for coronavirus-vulnerable seniors

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While many retailers are closing stores completely during the COVID-19 coronavirus outbreak, others don’t have that option. Grocery stores (and retailers like Target and Walmart, which sell groceries alongside other products) are finding ways to balance people’s needs with social distancing protocols. And more and more are setting aside hours where only people who are most vulnerable to the virus are welcome in the store.
The elderly and people with compromised immune systems are most at risk during the ongoing pandemic. Here are the times several major chains have dedicated to those customers. (Of course, check with your local store to confirm it’s following these hours):
Walmart – From March 24 through April 28, Walmart stores will open an hour early every Tuesday for customers aged 60 and older. Pharmacies and vision centers will be open during this time.
Target – First hour of every Wednesday
Whole Foods Market – Customers 60 and older can shop for one hour before the general public is allowed into stores.
Safeway – 7 a.m. to 9 a.m. every Tuesday and Thursday
Dollar General – “Senior shoppers” (though it doesn’t set a specific age) will be given exclusive access to the store in its first hour
Albertsons – The company will reserve every Tuesday and Thursday from 7 a.m. to 9 a.m. for vulnerable shoppers.
Stop & Shop – The grocery chain, with many locations in the Northeast, will open from 6 a.m. to 7:30 a.m. for customers over the age of 60.
The Fresh Market – The chain is reserving its first hour every weekday (8 a.m. to 9 a.m.) for seniors and those most at risk.
Vallarta Supermarkets – Stores in the California chain will be open from 7 a.m. to 8 a.m. for customers 65 and older, pregnant women, and those with disabilities.
Gelson’s Markets – The California chain is open to seniors 65 and older from 7 a.m. until 8 a.m. daily. (IDs required)
More coronavirus coverage from Fortune:
—How to prepare your personal finances for a coronavirus recession
—The coronavirus could upend America’s business relationships with China
—10 questions about the 2020 election during the coronavirus pandemic, answered
—3 months before the coronavirus, a war game showed we weren’t ready
—How hackers are exploiting the coronavirus—and how to protect yourself
—The coronavirus pandemic could mark a huge shift for the fitness industry
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEOs
—WATCH: The race is on to create a coronavirus antiviral drug and vaccine
Subscribe to Fortune’s Outbreak newsletter for a daily roundup of stories on the coronavirus and its impact on global business.


fortune--2020-03-18--The Coronavirus Economy: How my job as a member of the Philadelphia Orchestra changed

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Carol Jantsch holds the principal tuba chair with the Philadelphia Orchestra and was the first—and remains the only—female tuba player in a major symphony orchestra in the United States. After studying at the University of Michigan, Jantsch landed the job in Philadelphia in 2006, two weeks shy of her 21st birthday. In addition to performing with the orchestra, the musician teaches at the Yale School of Music. She also founded Tubular, a brass band playing covers ranging from the Beatles to Beyoncé.
Last week, orchestra members learned they would be on hiatus until April 11, but the most recent CDC guidelines call for a ban on large gatherings for at least the next eight weeks. Jantsch is a salaried employee, so she will be paid for the foreseeable future.
Fortune spoke with Jantsch for a new series, The Coronavirus Economy, to ask about how COVID-19 has affected her employment status and her plans for the future, and to get a sense of how she has been handling this news, both emotionally and financially.
Jantsch: I’ve been with the orchestra for 14 years. Typically, we have rehearsals earlier in the week for the concerts. We change programs every week during the subscription season, so we’ll have three or four rehearsals on Tuesday, Wednesday, and Thursday for concerts Thursday, Friday, Saturday, and sometimes Sunday. That’s the amount of time that we are at the Kimmel Center [performing arts venue] as a unit rehearsing, but it’s expected that you are prepared before that. So you have to do your daily maintenance to make sure you can play and also prepare your parts before you get there, because rehearsals aren’t for learning your parts, they’re for putting all the parts together. You practice at home, or when I lived a block away, I would walk to the Kimmel Center and practice there. You could usually find a space to practice alone. All together there are just shy of 100 people in the orchestra. Rehearsals are two, two-and-a-half hours.
Our subscription season is usually September to May. In the summer, we’re at the Mann Center for part of it, and we do neighborhood concerts for some of it. We do two weeks in Colorado every July and three weeks in upstate New York every August. So we’re on the road about eight weeks a year.
Carol Jantsch holds the principal tuba chair with the Philadelphia Orchestra and remains the only female tuba player in a major symphony orchestra in the United States. Rob Shanahan
[Most recently, the orchestra] was actually performing a Beethoven series—playing all nine Beethoven symphonies in the course of four weeks. That was a huge undertaking. Beethoven died just a few years before the tuba was invented—the tuba was invented in the 1830s and Beethoven died in 1827—so I am already off for this month. Now they’re in the same boat as me. I’m on a bunch of committees, so I’ve still been communicating with my colleagues, and they’re pretty devastated to not be able to play.
My last concert was March 7. We had meetings with management. The orchestra was rehearsing on March 10, 11, and 12 for the Beethoven series. Their last rehearsal was March 12. They had an orchestra meeting after the dress rehearsal for the concert that night, where they learned that everything was canceled—at that point it was through March 23. What they did is really cool, though. They did a live broadcast of the concert. They had prepared the concert fully, so it was a shame not to play it. They performed the concert to an empty hall on Thursday night and broadcast it online. You can still watch it on Facebook Live. I wasn’t there for it, because it was the first week of Beethoven, but they got the first couple of symphonies out there. There’s not going to be any full orchestra performances like that for the rest of the month. Originally everything was canceled through March 23, but then I got a phone call from the Kimmel Center saying they canceled everything through April 11. Because we play in the Kimmel Center, then, we’re off until April 11, which is exactly the date I was supposed to come back to work. When we get back, we’re scheduled to play Strauss, which has a really great tuba part.
I also do an annual event called Tuba PlayIn. It’s a free event; we invite tuba players of all ages and skill levels to come play on Verizon Hall stage with us. We perform, and I make all the arrangements. I turn The Blue Danube waltz and the Game of Thrones theme into tuba ensemble music, and we just play it together at the hall. That’s supposed to be on April 18. I’m hoping it can still happen. It’s hard to say right now where we’ll be. But that’s something I work really hard on every year, and it would be a huge bummer if it didn’t happen. Maybe we can postpone it, but there’s gonna be a lot of other stuff that gets postponed too.
It’s really worrisome, though, for the orchestra, because we’re nonprofit. All performing arts organizations are going to get hit really hard in this time. We rely on ticket sales, but also we rely mostly on philanthropy. And the fact that there are no events…that’s gonna hit us hard. I’m worried about the long-term implications. We’ll probably have to dip into our endowment, which is probably down because the stock market is doing so poorly. And then people are going to donate less because of all that. So we’re just trying to work together to be okay. We don’t even know, are we gonna be back that week in April? Are people going to want to come? It’s hard to say.
I also play in a group called Tubular—it’s two euphoniums, two tubas, and drums, and we also all do vocals. We do all kinds of music. We did the entire Beatles Sgt. Pepper album last fall at [Philadelphia bar and music venue] Johnny Brenda’s. We were going to play a gig at Franky Bradley’s on April 3, but we had to cancel that because my friends in the group are in military bands in Maryland and D.C. and they have a strict no-travel policy—I think their radius is 75 miles from the base until May 11. We’ll do another gig another time, but that was our next gig and we haven’t done anything since our recording sessions in January. I know them from Michigan. It’s a super fun group. We played Led Zeppelin, Lady Gaga, Beyoncé, Queen. Anything I arrange, we play. It’s become a really fun hobby, turning pop music into tuba band music.
It’s hard because musicians live to share their art with people, and to not be able to get people together to do that is pretty devastating. And then, what kinds of things bring people solace? Music. Online, virtual stuff is great, but there’s a different feeling when you’re there in person that you just can’t recreate online.
So hopefully it’s only for this month.
More coronavirus coverage from Fortune:
—How to get a refund on your Broadway tickets after coronavirus shut down
—The oil sector takes its next hit: Coronavirus on offshore rigs
—Some of the most extreme ways companies are combating coronavirus
—How luxury designers in Italy’s fashion heartland are facing coronavirus
—Amazon tells employees to work from home if they can. Warehouse workers can’t
—Why Dollar General thinks coronavirus can help business
—Coronavirus may not be all bad for tech. Consider the “stay at home” stocks
Subscribe to Fortune’s Outbreak newsletter for a daily roundup of stories on the coronavirus outbreak and its impact on global business.


fortune--2020-03-18--Should the government increase surveillance to help fight the coronavirus?

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.
How comfortable would you be with privacy-invasive surveillance if it could help curb the spread of the fast-infecting coronavirus?
Several countries are already tracking people’s movements in hopes of fighting the pandemic. In addition to its heavy-handed quarantines, China leaned on its telecom companies to figure out who may have come into contact with the virus and how to contact them. The South Korean government is publishing patients’ whereabouts using records such as phone GPS, credit card transactions, and surveillance video. Now Israel has invoked emergency spy powers to track citizens suspected to have the coronavirus.
The U.S. lags further behind—and is mulling policies with caution. The government recently assembled top tech companies, such as Google, Facebook, and Amazon, to consider ways data they collect might be used to rein in infections. Could the information many of these tech companies hoard help predict outbreaks, identify at-risk populations, and manage hospital loads?
The brain trust, which included Apple, IBM, and others, weighed options to bolster public health while balancing privacy concerns. Facebook already uses anonymized and aggregated data for “disease prevention maps,” which it supplies to public health organizations. Google said it did not plan to use its anonymized and aggregated datasets to trace human-to-human transmission of pathogens, claiming the information it has could not be adapted to that purpose.
In the aftermath of the 9/11 terrorist attacks, the government passed legislation granting it broader surveillance powers, ostensibly in the interest of protecting citizens. Over time, support eroded.
This is a crisis too. Even Democratic Senator Ron Wyden of Oregon, one of Congress’s biggest privacy hawks, gave his conditional blessing to the increased monitoring. He said putting people’s data to use makes sense as long as everyone involved makes sure “to keep this information safe, to delete information once it’s no longer in use, and to ensure it isn’t used against Americans by law enforcement,” as quoted by the Wall Street Journal.
Sometimes, tradeoffs must be made.
Robert Hackett
Twitter: @rhhackett
Email: robert.hackett@fortune.com
THREATS
Paging Mr. Snowden. Israeli Prime Minister Benjamin Netanyahu has authorized the country's internal security service, Shin Bet, to use cellphone metadata records collected by telecom carriers in an effort to curb the spread of the COVID-19 coronavirus. The idea is to identify people who have come into close contact with known virus carriers and send them text messages urging them to isolate. Privacy advocates worry the government may be overstepping.
In the eye of the beholder. In an effort to distance itself from China, TikTok, the viral video app owned by Bytedance, a Beijing-based tech giant, plans to move all moderation of overseas content outside its home country, the Wall Street Journal reports. In practice, this means people in places like Germany will no longer be monitored by Chinese staff. (The U.S. already had no Chinese moderators, a spokesperson told the Journal.) This is timely, given that a set of rules for TikTok moderators recently leaked to The Intercept included guidance to suppress posts by "ugly" people and to censor political speech. Now that's ugly.
Really, it's nothing. A supposed "cyberattack" that targeted the U.S. Department of Health and Human Services is stirring confusion. Bloomberg questionably labelled the attempted disruption as such. The New York Times described the event as a "crude effort by hackers to test the defenses" of government computers, with some U.S. officials pointing to Iran. Ellen Nakashima at the Washington Post said a source at the Department of Homeland Security told her the incident was a nothingburger, basically. It could have been a failed attempt at a distributed denial of service attack, CyberScoop suggested. Whatever it was, the attack didn't seem all that sophisticated.
Add it to the checklist. An Israeli cybersecurity firm that secures code in software development, Checkmarx, is set to be acquired by San Francisco-based private equity firm Hellman & Friedman in a deal valued at $1.15 billion. The previous owner, New York-based Insight Partners, will retain a minority stake. The deal is the latest in a flurry of private equity deals taking over cybersecurity businesses.
Grab the popcorn.
ACCESS GRANTED
New technologies like high-resolution satellites and A.I.-based image processing will enable Earth-wide surveillance to a degree never before seen. How will this fast-approaching future affect humanity? Vice probes the profound, planetary changes in store for us.
The feeling of epiphanic connection with the planet experienced by astronauts gazing at Earth is known popularly as “the overview effect,” a term coined by author Frank White in his book of the same name. The new geospatial view of Earth, however, may offer something closer to an “overwhelm effect,” as our home world is imaged, valued, and monitored by millions of sensors on thousands of spacecraft orbiting Earth.
FORTUNE RECON
Why e-commerce won’t save retailers from the coronavirus by Phil Wahba
Apple store closures extended to ‘until further notice’ by Don Reisinger
Working remotely causes strain on IT—and challenges work-from-home culture by Kate Jacobson
The user experience of ‘teleworking’ evolves with the times by Clay Chandler
Uber suspends shared rides as coronavirus continues to spread by Chris Morris
Online grocers struggle to meet the surge in demand by Jeremy Kahn
If Bitcoin is a 'safe haven' then why does it tank in times of trouble? by Robert Hackett
ONE MORE THING
If you own a private plane, know that investigative journalists may be hot on your tail. Molly Reden at HuffPost dug into Federal Aviation Administration records until she identified a jet she believes may be—emphasis on maybe—owned by Peter Thiel, early Facebook investor, PayPal cofounder, and Trump befriender. She unraveled the (possible) secret by guessing at the name of a shell company to which the plan is registered. It is named Thorondor after a mighty eagle——nay, the mightiest eagle—in Lord of the Rings mythology.
Whoever owns the jet clearly has good taste.


fortune--2020-03-18--Boeing stock plunges again after coronavirus bailout quest spooks investors

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Boeing Co.’s rout deepened as investors reacted with alarm to news that the planemaker is seeking at least $60 billion in U.S. government aid for itself and suppliers in a race to shore up cash to weather the coronavirus pandemic.
The federal support would encompass “public and private liquidity, including loan guarantees,” Boeing said Tuesday. While the proposal’s details are still being fine-tuned, the bulk of the funding would flow through Boeing to its network of partsmakers, said a person familiar with the matter. Other companies could separately use the guarantees to line up their own financing.
The bailout push won an enthusiastic endorsement earlier from President Donald Trump, who told reporters that “we have to protect Boeing, we have to help Boeing.” His administration is discussing a broad-based stimulus package of as much as $1.2 trillion to blunt the economic impact of the widening crisis, and airlines and hotels are also rushing to line up government financing with the U.S. travel industry besieged.
Boeing’s plea for help underscored the strain on an aviation industry grappling with its deepest crisis in decades. With the pandemic’s duration still unknown, talk is shifting to dire questions such as whether Boeing — until recently a prodigious cash generator and the country’s most valuable industrial company — is too big to fail.
Boeing plunged 19% to $101 at 9:50 a.m. Wednesday in New York amid a broad market slump. At its worst, the stock plummeted to $98, the lowest intraday price since June 2013. Boeing had tumbled 62% this year through Tuesday, the deepest decline on Dow Jones Industrial Average.
“This is the last surviving American builder of jetliners,” said Loren Thompson, chief operating officer at Lexington Institute, a nonprofit think tank that has received contributions from the Chicago-based manufacturer. “The Trump administration will do whatever it needs to protect the company from financial difficulties.”
Travel demand is cratering as consumers follow health warnings to isolate themselves at home. Airlines for America, a trade group, is lobbying for $50 billion in grants and loan guarantees for passenger carriers. A hotel association wants $150 billion in backstop measures.
Twin crises
Boeing is preparing for an extended disruption from the virus that also threatens to spill over into its factories, where some employees have been infected. The timing couldn’t be worse, hitting while the manufacturer is still reeling from last year’s grounding of its best-selling 737 Max jets after two deadly crashes.
The company just drew down a $13.8 billion loan to bolster its reserves. But any government aid will face tough scrutiny on Capitol Hill, where committees have been investigating the Max tragedies, and from victims’ families.
Michael Stumo, whose daughter Samya died in the second of two Max accidents that prompted the flying ban, insisted that any government assistance to Boeing come with strings attached. He called for an overhaul of the system that allows the company’s engineers to certify the safety of its airplanes.
“Public bailout needs to provide public benefit,” Stumo said on Twitter.
No Boeing bailout without aviation safety conditions: end the killer Organization Delegation Authority system which allows Boeing to self certify aircraft safety while FAA pushes paper. That was a cause of MAX crash. Public bailout needs to provide public benefit. https://t.co/NMDP4hlAPT — Michael Stumo (@michael_stumo) March 17, 2020
The cost to protect against a default by Boeing surged to the highest level on record. Credit-default swaps insuring the company’s debt through December jumped to 367 basis points, up from 257 on Friday, according to ICE Data Services. Five-year contracts climbed to 465 after rising as high as 488, a record.
At that rate, the market is effectively pricing in 31% odds that the planemaker would default on its obligations in the next five years, according to data compiled by Bloomberg.
Business pressure
Boeing said the aerospace industry’s long-term outlook is strong, even as the virus outbreak keeps many people at home. Thus the need for aid.
“This will be one of the most important ways for airlines, airports, suppliers and manufacturers to bridge to recovery,” the manufacturer said in a statement. “Funds would support the health of the broader aviation industry, because much of any liquidity support to Boeing will be used for payments to suppliers to maintain the health of the supply chain.”
With Boeing in cash-preservation mode, analysts increasingly expect the company to slash dividend payments — a popular target of the company’s critics on Capitol Hill. The average estimate for the payout fell by more than half, according to data compiled by Bloomberg.
Boeing could burn $11 billion to $12 billion in free crash this year as the virus slows the recovery of the 737 Max program, S&P Global Ratings said Monday. That’s about twice the outflow expected by Wall Street, based on the average of analyst estimates compiled by Bloomberg. S&P lowered Boeing’s credit rating two notches to BBB, or two steps above junk.
The planemaker halted production in January of the Max, its biggest source of cash, while waiting for regulators to lift a global flying ban that reached the one-year mark on March 13.
A contractual clause that allows buyers to cancel airplanes that are delayed more than a year past their delivery date could also hurt Boeing, said analyst Richard Aboulafia of Teal Group.
If the slump is prolonged, some buyers may walk away from the 400 or so newly built Max that Boeing can’t deliver because of the grounding. Boeing would be required to refund any advance payments they’d made on the aircraft, he said.
‘More precarious’
“Boeing is trying to avoid layoffs and protect its fragile supply chain,” Ron Epstein, an analyst at Bank of America Corp., said in a note to clients. “The situation is made more precarious by the 737 Max program, which still awaits regulatory clearance to enter back into service.”
To meet financing needs this year that included a $4.2 billion deal to take over Brazil’s Embraer SA, Boeing had planned to issue term debt or commercial paper — a financing market that has been disrupted in recent days.
Boeing had $6.1 billion in commercial paper borrowings as December 31, and a $9.6 billion revolving credit line agreement, according to Jan. 31 filing with the Securities and Exchange Commission.
“We believe our ability to access external capital resources should be sufficient to satisfy existing short-term and long-term commitments and plans,” Boeing said in the filing. “However, there can be no assurance of the cost or availability of future borrowings under our commercial paper program or in the debt markets.”
More coronavirus coverage from Fortune:
—How to prepare your personal finances for a coronavirus recession
—The coronavirus could upend America’s business relationships to China
—The best Twitters to follow for reliable information on the coronavirus outbreak
—3 months before the coronavirus, a war game showed we weren’t ready
—How mainland China’s closest neighbors have kept coronavirus cases so low
—How A.I. is aiding the coronavirus fight
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: The race is on to create a coronavirus antiviral drug and vaccine
Subscribe to Fortune’s Outbreak newsletter for a daily roundup of stories on the coronavirus outbreak and its impact on global business.


fortune--2020-03-18--10 questions about the 2020 election during the coronavirus pandemic, answered

Markets are bracing for recession, hospitals are banning elective surgeries to prepare more beds for ill patients, and Americans are hoarding toilet paper and frozen vegetables, as they prepare for weeks of self-quarantine. As the growing panic produced by the COVID-19 pandemic sweeps across the U.S., it’s easy to forget that the U.S. is also in the midst of an incredibly consequential presidential election.
But even in the midst of unprecedented chaos, the Democratic primary has trudged on, and eventually, the general election will also begin in earnest. But what does a process that typically entails large crowds, handshakes, and baby kissing look like in the age of social distancing? How do people cast votes at crowded polls when President Donald Trump has asked them to stay six feet apart from each other? A lot of how this will pan out is still unclear, but there are some answers.
Here’s what we know.
An election worker walks inside the poling station during the Florida primary election at South Pointe Elementary School in Miami, on March 17, 2020. Chandan Khanna—AFP via Getty Images
1. Will the primaries be postponed?
Some already have been.
Ohio announced late Monday evening that the state would postpone voting on Tuesday to a later date. Ohio health director Dr. Amy Acton said she was ordering the closure of polling locations in order to “avoid the imminent threat with a high probability of widespread exposure to COVID-19.” It’s unclear when voting will take place, but likely in June.
Georgia, meanwhile, has moved its primary from March 24 to May 19; Kentucky moved its primary from May 19 to June 23; Louisiana moved from April 4 to June 20; and Maryland moved its primary from April 28 to June 2.
So, yes, states are allowed to postpone their primaries into June (June 9 to be exact) and they have done just that. We’ll likely see more postponements as the virus spreads.
What does it all mean? Well, it could mean a very long primary season. One that leads straight into the convention.
Empty envelopes of opened vote-by-mail ballots for the presidential primary are stacked on a table at King County Elections in Renton, Washington on March 10, 2020. Jason Redmond—AFP via Getty Images
2. Can’t voters just mail in ballots?
Here’s the thing, orchestrating a state-wide election is an incredibly difficult task that takes months, if not years, of planning, training, and security tests.
Changing the entire system quickly is unwise (see: Iowa). It’s also tricky because each state has its own rules about how voters can cast their ballots. Some allow for mail-in submissions, others let voters stagger into their polling places over a few days, while others still enforce strict one-day-only voting rules.
Still, we’ll likely see some court challenges in states where there are restrictions on mail-in ballots. In Florida, for example, some voters rights groups are currently in court asking for an extension of vote-by-mail ballots and other accommodations for voters who don’t want to go to polling stations. Some states are also allowing curbside voting, where Americans won’t have to leave their cars to cast a ballot.
We can expect more changes coming: Wyoming announced recently that its April 4 caucus will now all be by mail.
Joe Biden (L) and Bernie Sanders (R) greet each other with a safe elbow bump before the start of the 11th Democratic Party 2020 presidential debate in Washington, DC on March 15, 2020. Mandel Ngan—AFP via Getty Images
3. Can the Democratic party just pick the nominee?
What if the coronavirus reaches worst-case scenario levels and the nation is essentially quarantined? If people are too sick to go to the polls? Could the Democratic National Committee just pick someone?
Well, technically, yes.
The DNC could cancel the rest of the primaries if they wanted to, but there is little to no chance that would ever happen. If it did, pledged delegates would vote for whoever their districts voted for and unpledged delegates and superdelegates would likely be free agents, opting to vote for whomever they’re compelled to vote for at the nominating convention.
2020 Republican National Convention (RNC) signage is displayed inside the Spectrum Center during a media walk-through in Charlotte, North Carolina, U.S., on Tuesday, Nov. 12, 2019. Andrew Harrer—Bloomberg via Getty Images
4. What about the conventions?
Democrats are expected to hold their party’s nominating convention in Wisconsin this June and Republicans will hold theirs in North Carolina in late August.
The conventions involve lots of large crowds, mingling ,and partying: things that don’t mix well with pandemics. As of right now, neither party has canceled its convention (which involve years of planning, millions and millions of dollars and hundreds of jobs, not to mention the huge economic boost to the cities they hold them in).
Democratic National Committee chair Tom Perez said in a recent interview with Axios that he wasn’t even “contemplating” canceling.
The DNC’s current charter requires that delegates be at the convention in person to cast their votes for the nominee, but those rules could be changed quickly by the convention’s Standing Committee on Rules. It could be possible, in an extreme case, to allow for delegates to vote online.
The Republican National Convention, meanwhile, is closely monitoring the situation but has not announced any changes to their August activities.
As of now, conventions will most likely go forward but with downsized events.
The floor of the Fiserv Forum is seen during a media walk through ahead of the Democratic National Convention in Milwaukee, Wisconsin, on January 7, 2020. Eric Baradat—AFP via Getty Images
5. What happens if there’s a contested convention, but the event is canceled?
If neither Vermont Senator Bernie Sanders or former Vice President Joe Biden is able to clinch 1,991 pledged delegates by June and both Democratic candidates stay in the race, it’s likely that Democrats will hold a contested convention. That means that there’s a second round of voting with unpledged superdelegates to help determine the nominee.
If the convention is canceled, it’s likely that these votes will take place online, instead of in person.
A woman wearing mask and protective gloves leaves after cast her vote during the Florida Democratic primary election at Miami-Dade Public Library Little Havana in Miami, Florida, on March 17, 2020. Eva Marie Uzcategui—AFP via Getty Images
6. Could the coronavirus impact voting in the general election?
This would be incredibly difficult. Unlike primary voting, the date of the general election is set by federal law. That means that in order to change the date Congress would have to pass a law and the President would have to sign that law. That law could then be challenged in the courts.
What could change is the way that people vote, which is set on a state level. States could make it easier to vote by mail or allow for curbside voting.
Staffers post cancelation notes on the doors of Huntington Center in Cleveland, Ohio after Democratic presidential candidate Vermont Senator Bernie Sanders canceled a rally for COVID-19 (Coronavirus) concerns on March 10, 2020. Megan Jelinger—AFP via Getty Images
7. How are campaigns changing their plans because of the virus?
Many campaign staffers are working from home and all rallies have been canceled. For now, most events are taking place online. Both Biden and Sanders have held “digital rallies” and “digital town halls.”
On Monday night, Sanders hosted a live-streamed concert with performers like Neil Young.
Campaigns are also encouraging volunteers to stop knocking on doors and to utilize their phone-dialing and texting systems instead.
Joe Biden, sided by Dr. Jill Biden, delivers remarks at the National Constitution Center in Philadelphia, PA on March 10, 2020. Bastiaan Slabbers—NurPhoto via Getty Images
8. Are campaigns earning less money/spending money differently?
While it’s still too early to see how campaigns have changed their spending habits, they’re certainly spending less on events and on travel—both major expenditures. TV and social media ad buys, however, should remain the same.
The lack of fundraising events could adversely impact Joe Biden, who accepts PAC money, and the lack of door-knocking and in-person grassroots fundraising could negatively impact Sanders’ earning potential.
Donald Trump (C) and Treasury Secretary Steven Mnuchin (R), joined by members of the Coronavirus Task Force, field questions about the coronavirus outbreak in the press briefing room at the White House on March 17, 2020 in Washington, DC. Drew Angerer—Getty Images
9. Will we see a debate between Trump and the Democratic nominee?
That will be something that the President and nominee have to work out, but it’s possible that the debate will be in a closed studio without a live audience.
Mike Mastrian, director of the Senate Radio and TV Gallery, disinfects the podium prior to a press briefing at the US Capitol in Washington, DC, March 17, 2020. Saul Loeb—AFP via Getty Images
10. How are candidates staying safe?
Democratic candidates say that they are following the precautions that most Americans are being told by the CDC to follow. They are practicing hand washing, staying six feet away from others when possible, and aren’t shaking hands.
Trump has said that he is being closely monitored by White House doctors and that he has tested negative for the virus.
More must-read stories from Fortune:
—What the world’s biggest economies are doing to fight coronavirus and recession
—Will donors of color invest in white presidential candidates?
—Big business rallies behind Joe Biden
—How swing state economies have performed since the 2016 election
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: What happens to leftover campaign funds once a candidate drops out?
Get up to speed on your morning commute with Fortune’s CEO Daily newsletter.


fortune--2020-03-18--Apple releases new MacBook Air, iPad Pro with LiDAR sensor and trackpad support

Apple has announced new hardware in the shadow of COVID-19. But for the time being, it can only sell them online or in its only open stores in mainland China.
Like it does at its events, Apple called its new iPad Pro the most powerful yet. The device runs on the company’s A12Z Bionic processor and has a new ultrawide camera that can capture photos and 4K video.
The iPad Pro is the first Apple tablet to ship with a LiDAR scanner that can sense depth. Apple said that the scanner can measure the distance between the iPad Pro and objects up to 16 feet away, and envisions the tablet being used in a variety of professional settings, where users need to measure distance and depth.
Most interesting, however, is that Apple’s iOS 13.4 software update adds trackpad support to the iPad. A new Magic Keyboard for iPad Pro gives the tablet a laptop-like feel, but users will also be able to connect an Apple Magic Trackpad to the tablet wirelessly. The peripherals will let users move a circle cursor around the tablet’s software, similar to how arrow cursors work on a laptop.
Apple’s new iPad Pro with Magic Keyboard. Photo courtesy of Apple
Apple said that the feature will work out of the box in the new iPad Pro, and third-party developers won’t need to make any changes to their software to support trackpads.
Apple’s iPad Pro is available for order starting on Wednesday and will come in 11-inch and 12.9-inch versions in either space gray or silver. But for all of its improvements, the iPad Pro is by no means cheap. Pricing starts at $799 for the 11-inch model and $999 for the 12.9-inch version.
A new MacBook Air
Apple also announced a new MacBook Air on Wednesday.
The MacBook Air ships with a $999 starting price—$100 less than the previous model. The machine ships with a new Intel processor that can deliver up to twice the power and speed of the chip in the previous model, has 256GB of storage to start, and features a 13-inch screen.
Most importantly for those Mac users that have suffered through Apple’s butterfly keyboard fiasco over the last few years, Apple said the new MacBook Air has a redesigned keyboard that uses the traditional scissor mechanism used in the vast majority of keyboards. Unlike the butterfly keyboard, which caused keys to stick or not even register, Apple’s scissor keyboard has earned solid reviews from users and critics alike.
Apple’s MacBook Air is available starting on Wednesday.
A Mac Mini update
To round things out, Apple said that its diminutive Mac Mini desktop now has double the storage, with the base model offering 256GB and the higher-end option delivering 512GB of storage. The new Mac Mini is available on Wednesday and starts at $799.
More must-read stories from Fortune:
—Inside Xerox’s audacious quest to buy much bigger rival HP
—How A.I. is aiding the coronavirus fight
—How early GPS gadget maker Garmin mapped out success against big tech
—Dormant PayPal Credit accounts are coming back to hurt credit scores
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: Best earbuds in 2020: Apple AirPods Pro Vs. Sony WF-1000XM3
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.


fortune--2020-03-18--Trump: US, Canada closing border to nonessential travel to stem spread of coronavirus

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The U.S. and Canada have agreed to temporarily close their shared border to nonessential travel, President Donald Trump announced Wednesday as the two nations work to stem the spread of the coronavirus pandemic.
Trump made the announcement on Twitter, saying the decision would not affect the flow of trade between the countries.
“We will be, by mutual consent, temporarily closing our Northern Border with Canada to non-essential traffic,” Trump tweeted.
We will be, by mutual consent, temporarily closing our Northern Border with Canada to non-essential traffic. Trade will not be affected. Details to follow! — Donald J. Trump (@realDonaldTrump) March 18, 2020
Canada and the United States are working out the details of a mutual ban on nonessential travel between the two countries amid the new coronavirus pandemic, a Canadian official said.
The official was not authorized to discuss details amid discussions and ahead of an announcement and spoke to The Associated Press late Tuesday on the condition of anonymity.
Both countries are eager to choke off the spread of the virus but also eager to continue their critical economic relationship. Canada relies on the U.S. for 75% of its exports.
Truck drivers and Canadian snowbirds, who live in the U.S. for part of the year and are returning to Canada, are among those expected to get an exemption. Completely closing the border would cause severe economic damage to both the U.S. and Canada as the two economies are integrated. Much of Canada’s food supply comes from or via the U.S., and and 98% of its oil exports go to the U.S.
About 18% of American exports go to Canada.
Canadian Prime Minister Justin Trudeau said Monday he would close the country’s borders to anyone not a citizen, an American or a permanent resident—and even they have to self-isolate for 14 days on arrival—due to the coronavirus pandemic.
Trudeau said the exemption for Americans, despite the rapid rise of cases in the U.S., was due to “the level of integration of our two economies.”
For most people, the new coronavirus causes only mild or moderate symptoms, such as fever and cough. For some, especially older adults and people with existing health problems, it can cause more severe illness, including pneumonia. The vast majority of people recover from the new virus.
The United States has seen about 6,500 coronavirus cases and more than 110 deaths while Canada has seen about 600 cases and eight deaths.
Canadian Deputy Prime Minister Chrystia Freeland said the border is vital to the daily life to people on both sides.
“Nearly 200,000 people cross that border every day, and that border and that traffic that goes across that border is literally a lifeline for both the Canadians and the Americans on both sides of that border,” Freeland said.
“We get our groceries thanks to truckers who drive back and forth across that border,” she said. “Very urgently needed medical supplies and medicines go back and forth across that border. And essential workers go back and forth across that border every day. So it is a unique relationship for Canada, and it’s important for us in handling our situation on the border to be sure that we act to get things right.”
But many people in Canada criticized the decision to give Americans an exemption. British Columbia Health Minister Adrian Dix said he vehemently disagreed with the American exemption given the surge in cases in neighboring Washington state.
Bruce Heyman, a former U.S. ambassador to Canada, said both countries recognize how many people cross the border daily.
“Border traffic has already slowed and in line with recommendations to stay home and eliminate nonessential movement,” Heyman said. “New rules jointly accepted for our shared border makes sense.”
Robert Bothwell, a professor of Canadian history and international relations at the University of Toronto, noted the government-to-government accord merely ratifies what is already in place.
“Tourism in the age of the coronavirus is a contradiction in terms,” Bothwell said. “And no Canadian in his or her right mind would want to be caught with the virus on the U.S. side of the border, given the predatory U.S. medical pricing system. Actually, the insurance companies have already taken care of the problem. Many of us have received notices that they will not pay for virus treatment south of the border.”
More coronavirus coverage from Fortune:
—How to prepare your personal finances for a coronavirus recession
—The coronavirus could upend America’s business relationships to China
—The best Twitters to follow for reliable information on the coronavirus outbreak
—3 months before the coronavirus, a war game showed we weren’t ready
—How mainland China’s closest neighbors have kept coronavirus cases so low
—How A.I. is aiding the coronavirus fight
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: The race is on to create a coronavirus antiviral drug and vaccine
Subscribe to Fortune’s Outbreak newsletter for a daily roundup of stories on the coronavirus outbreak and its impact on global business.


fortune--2020-03-18--Katy Perry’s ‘Dark Horse’ didn’t copy a Christian rap song, judge rules

A federal judge in Los Angeles handed a major victory to Katy Perry on Tuesday, overturning a jury’s verdict that found the pop superstar and her collaborators copied her 2013 hit “Dark Horse” from a 2009 Christian rap song.
U.S. District Judge Christina A. Snyder said in her decision that the disputed section of the rap song, “Joyful Noise” by rapper Marcus Gray was not distinctive enough to be protected by copyright as the jury found.
“It is undisputed in this case, even viewing the evidence in the light most favorable to plaintiffs, that the signature elements of the eight-note ostinato in ‘Joyful Noise’ is not a particularly unique or rare combination,” Snyder wrote in her decision.
The plaintiffs plan to appeal.
“When the jurors returned a unanimous verdict of infringement, I cautioned my clients that we had only finished Round 11 of a 15-round match and that the next round would take place in the court of appeals,” Gray’s attorney Michael A. Kahn said in an email to the Associated Press, referencing the numerous pre-trial rulings in his client’s favor. “We believe the jury was right and will do our best to restore their verdict on appeal.”
The jury in August had awarded Gray and his co-writers $2.78 million from Perry and her songwriting partners, Dr. Luke, Max Martin and Circuit.
Perry, who testified at trial and jokingly offered to perform the song live when the recording had technical difficulties, had been personally ordered to pay $550,000.
Gray, a native of St. Louis who went by the stage name Flame, first sued Perry in 2014, the year “Dark Horse” spent four weeks at No. 1 on Billboard’s Hot 100.
Perry and her and her co-writers all testified that they had never before heard “Joyful Noise.”
The award had fallen far short of the $20 million the plaintiffs had sought, and is not a huge amount for stars of the caliber of Perry or the hitmaking producer Dr. Luke, but her attorney Christine Lepera called the verdict a “travesty of justice” that would have a chilling effect on creativity.
Lepera did not immediately respond to an email seeking comment on the overturned verdict.
The judgment comes a week after another federal court in California handed a similar victory to Led Zeppelin, ruling that a new trial was not called for in the legal fight over their 1971 classic “Stairway to Heaven,” and that a jury’s ruling in the band’s favor should stand.
More must-read stories from Fortune:
—How Harvey Weinstein’s sentencing could change the entertainment industry
—As coronavirus spreads, is this weekend’s historically low box office Hollywood’s new normal?
—Don Cheadle on Black Monday, Wall Street in the Trump era, and hope about the climate change fight
—How Netflix’s Lost Girls upends the conventions of serial killer movies
—Diao Yinan discusses The Wild Goose Lake, his Chinese motorcycle noir
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fortune--2020-03-18--How one venture capital firm is advising its startup CEOs to cope in this period of uncertainty

You may remember I interviewed Drive Capital co-founder Chris Olsen last year in our series 5 Qs with a Dealmaker. Just a few months ago, Olsen and I were talking about capital efficiency in a world with seemingly unlimited funding.
At the time, he said, “What’s exciting today is that there are more capital-intensive industries that are also now accessible because there are larger pools of money available.”
Today, he’s telling companies that if they were planning to raise money in the next 18 months, “you need to assume that is now off the table.”
Like many venture capital firms around the country, Drive Capital is thinking through how to best advise its portfolio companies on surviving this period of uncertainty and market chaos. Drive sent its CEOs a detailed letter yesterday.
“Calibrating COVID-19’s economic impact relative to other shocks in history is impossible,” the letter notes. “That said, we believe that if the trends of the last several weeks continue, COVID-19 will have an even more severe impact than the crises of 2008, 9/11, and 2000.”
Here are several of the steps outlined in the letter. (Below is an except from the letter):
Stress test your company: If you were planning to raise money in the next 18 months, you need to assume that is now off the table, as Olsen said. The way to correctly stress test your business is to reduce current MRR by 30% while keeping operating expenses constant. If this math suggests you have enough balance sheet to survive 18 months, you have a high probability of surviving this crisis. If the answer is less than 18 months, work with your board and current shareholders NOW to pre-emptively get the financial commitments and plans to RIF established before this crisis deepens.
Pull down all available debt capacity you have NOW: Cash is of the essence, and it will likely be more difficult to come by as the situation evolves.
Pause all hiring plans: Your burn rate aside, now is not the time to be adding people to your team. Now is the time to work to create a sense of normalcy for your existing employees who are working in a world that is very different from where they started the month. Headcount is a part of burn and will need to be managed. There are difficult decisions for everyone ahead and adding anyone to your team will not make these decisions easier.
Do not hesitate: The cost of making bad decisions is higher during a crisis than a growth environment, but you still have to make decisions. Hesitating is the worst thing you can do. Set your expectations that painfully wrong decisions will be made, but know that you will get just as many right. You have to be a war time CEO.
You can watch Olsen break down the letter here.
MAYBE NOT: SoftBank might be having a change of heart. In October, the Japanese tech behemoth agreed to a multibillion-dollar bailout after WeWork was close to running out of cash. According to the terms of the deal, SoftBank had agreed to purchase up to $3 billion in stock from existing WeWork shareholders, including ~$1 billion from ex-CEO Adam Neumann.
Now, according to The Wall Street Journal, SoftBank believes regulatory probes into the business may allow it to back away from the deal it struck last fall to buy the $3 billion worth of WeWork shares.
SoftBank has already invested $1.5 billion as part of a larger $5 billion rescue package it provided to WeWork, and this commitment has not been withdrawn. A SoftBank representative declined to comment to Term Sheet.
Read the full story here.
Polina Marinova
Twitter: @polina_marinova
Email: polina.marinova@fortune.com
VENTURE DEALS
- Oura, a Finland-based sleep improvement platform, raised $28 million in Series B funding. - Investors include Forerunner Ventures, Gradient Ventures and Square.
- Deepgram, a San Francisco, Calif.-based startup focused on speech recognition, raised $12 million in Series A funding. Wing VC led the round, and was joined by investors including Y Combinator, SAP, NVIDIA and Compound.
- Boro, a Chicago-based provider of small, short-term loans to college students and recent graduates, raised $12 million in Series A funding. LexinFintech led the round.
- Fluree, a North Carolina-based provider of a data-first technology stack, raised $4.73 million in seed funding. 4490 Ventures led the round, and was joined by investors including Revolution’s Rise of the Rest Seed Fund.
- Addapptation, an Exeter, N.H.-based startup that wants to build a practical design layer on top of Salesforce and other enterprise tools, raised $1.3 million in seed funding. 2048 Ventures led the round, and was joined by investors including East Coast Angels and The Millworks II Fund.
HEALTH & LIFE SCIENCES DEALS
- Tempus, a Chicago-based technology company advancing precision medicine, raised $100 million in funding at a post-money $5 billion valuation. Investors include Baillie Gifford, Franklin Templeton, New Enterprise Associates, Novo Holding and T. Rowe Price
- Eureka Therapeutics, Inc., an Emeryville, Calif.-based clinical stage biotechnology company developing novel T cell therapies for solid tumors, raised $45 million in Series E funding. Lyell Immunopharma led the round.
- Sight Sciences, Inc., a Menlo Park, Calif.-based medical device company focused on ophthalmology and optometry, raised more than $30 million in Series E funding. D1 Capital Partners led the round.
- E25Bio, a Cambridge, Mass.-based developer of disease testing systems, raised $2 million in funding from Khosla Ventures.
PRIVATE EQUITY DEALS
- Integrated Specialty Coverages, which is backed by Two Sigma's Sightway Capital, acquired Access Partners Insurance Services, a Sacramento, Calif.-based multi-line wholesale broker. Financial terms weren't disclosed.
- McCue Corporation, a portfolio company of Eureka Equity Partners, acquired Product Innovations, LLC d/b/a Banner Stakes, a Dublin, Calif.-based company focused on temporary safety and hazard communication barriers. Financial terms weren't disclosed.
OTHER DEALS
- Fox Corporation (Nasdaq: FOXA, FOX) agreed to acquire Tubi, a San Francisco-based streaming television and movie network, for approximately $440 million in net cash. Financial terms weren't disclosed.


fortune--2020-03-18--Mnuchin to GOP senators: If you don’t act fast on coronavirus, unemployment could hit 20%

Treasury Secretary Steven Mnuchin raised the possibility with Republican senators that U.S. unemployment could rise to 20% without government intervention because of the impact of the coronavirus, according to people familiar with the matter.
Mnuchin discussed the scenario with the lawmakers on Tuesday as he proposed an economic stimulus of $1 trillion or more.
He told the senators that he believes the economic fallout from the coronavirus is potentially worse than the 2008 financial crisis.
Extraordinarily high unemployment, he said, is a possibility if lawmakers don’t swiftly provide financial assistance to wage workers and small- and medium-sized businesses.
“During the meeting with Senate Republicans today, Secretary Mnuchin used several mathematical examples for illustrative purposes, but he never implied this would be the case,” Treasury Department spokeswoman Monica Crowley said.
For many lawmakers, plunging stock prices and an abrupt drop-off of consumer spending during a time of social distancing has crystallized the need for Congress to act quickly and boldly. The U.S. Federal Reserve has already used much of its toolbox to shore up the economy — bringing rates close to zero and announcing crisis-era lending programs — leaving policy makers to ease the extent of the damage with fiscal stimulus.
Dramatic Economic Turn
The unemployment scenario raised by Mnuchin would be a dramatic turn from February, when the U.S. jobless rate fell back to a half-century low of 3.5% as average hourly earnings climbed a steady 3% from a year earlier.
But since then, the coronavirus has continued to spread in the U.S. On Tuesday, there had been more than 6,200 cases in the country and 105 deaths, according to a tally by Johns Hopkins University.
A surge in unemployment of the scope Mnuchin described is greater than what has so far been forecast by bank economists — though economists continue to stress the uncertainty of any prediction at this time. On Tuesday, Wells Fargo & Co. updated its forecast to show the unemployment rate would reach 5.3% in the fourth quarter.
The Trump administration is discussing a stimulus plan that could include direct payments of $1,000 or more to Americans.
Mnuchin pitched $250 billion in checks to be sent at the end of April with a second set of checks totaling $500 billion four weeks later if there’s still a national emergency, according to a person familiar with the matter.
More must-read stories from Fortune:
—How to prepare your personal finances for a coronavirus recession
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—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
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