fortune--2020-12-08--Inside the cottage industry trying to revive Aunt Jemima and other brands with racist roots

Our mission to make business better is fueled by readers like you. To enjoy unlimited access to our journalism, subscribe today.
This summer the Black Lives Matter movement and the fight for racial justice spilled over into the most unlikely of places—the supermarket aisle.
Quaker Oats, a PepsiCo subsidiary, acknowledged that the origins of its Aunt Jemima brand, with overt ties to American slavery, “are based on racial stereotypes” and said it would change its name and logo. Mars echoed that promise with its Uncle Ben’s rice line, declaring that the company stood “in solidarity with the Black community.” Dreyer’s, the parent company of Eskimo Pie ice cream bars, said it recognized that the term Eskimo was derogatory and would rebrand in its commitment to “being a part of the solution on racial equality.”
The companies, aware for decades of the racist history of the names and images of certain brands, had tried in the past to update them. Quaker removed the kerchief from the Aunt Jemima figure in 1989, for example, and in 2007, Mars “promoted” Uncle Ben from butler to executive. But during the 2020 summer of racial reckoning in the U.S., the companies decided the value of these famous brands no longer outweighed the risk to their broader reputations.
Activists who had pushed for the changes celebrated—but so did those operating within an obscure corner of the trademark world. The fact that the companies were dropping these iconic brand names meant that someone else could eventually obtain and use them instead. After the food giants made their announcements, the U.S. Patent and Trademark Office (USPTO) received three trademark applications apiece for Aunt Jemima and Eskimo Pie and one for Uncle Ben’s, with the applicants indicating they wanted to use the marks on food items.
“Trademark abandonment is a new kind of industry. It’s a new kind of gold rush,” says Jeff Kaplan, whose company Retrobrands filed applications for all three marks. His operation acquires trademarks for brands that companies have let lapse—Chipwich and Victrola are part of his portfolio—and either licenses the names or manufactures the revamped products himself.
But giving a second life to brands rooted in racist stereotypes—ones that big companies have deemed too problematic to maintain—is a vastly different proposition from reviving those that capitalize on innocent nostalgia. Kaplan feels that brands like Aunt Jemima have been sufficiently updated and still have big markets, which include Black customers who he says agree that the brands are no longer derogatory.
Sonia Katyal, a professor at UC-Berkeley School of Law who specializes in the intersection of intellectual property and civil rights, says that obtaining the trademarks will be an uphill battle for the likes of Kaplan. And that’s just the legal hurdle. There’s also the social cost of resurrecting brands with painful histories, she says.
“Big companies are feeling the public pressure,” she says, “but these smaller individuals don’t seem to care so much.”
The business of reviving abandoned brands relies on trademark law’s use-it-or-lose-it structure. An owner of a trademark must actively use the name in order to maintain it. “You don’t want people to be able to sit on trademarks and then sue everybody,” explains Josh Gerben, an attorney specializing in trademark law.
Obtaining an abandoned trademark, however, is not a simple process. Unless a company files to surrender a trademark with the USPTO, applicants have to prove that the mark is no longer in use. And companies do have strategies for holding onto their old brand names. Coca-Cola, for example, said in October that it would stop producing Tab soda. But months before the public announcement, the beverage giant filed an application with the USPTO to use the Tab brand on clothing—a move that gives it continued ownership of the mark.
For companies like PepsiCo, printing T-shirts and ball caps with the Aunt Jemima logo does not provide much of a solution. “If you’re saying a name is racist, are you going to still sell that merchandise and continue to profit from it?” Gerben asks.
Mars has skirted the issue with Uncle Ben’s by renaming the brand Ben’s Original. Experts say it’s unlikely the USPTO would allow for another rice line that includes the name Ben because it would lead to confusion for consumers in the marketplace. “It doesn’t really feel like a significant change,” Gerben says, “but from a trademark standpoint, it’s genius.” Kaplan concedes that the new name has killed his chances, and in October he withdrew his application for Uncle Ben’s.
PepsiCo has yet to announce an alternative for Aunt Jemima but says that once it does, it will continue using the old brand name on the back of its packaging—a decision that it says will let the company hold “on to the trademark, which in turn enables us to appropriately preserve the history.” Gerben says that legally that could be enough for PepsiCo to maintain the mark, but that the decision signals the company is not serious about its commitment to truly abandoning the brand. “From a business standpoint, that’s a really hard place to get to,” he says.
Kaplan believes his strongest shot is with Eskimo Pie. Parent company Dreyer’s announced in October it had renamed the ice cream sandwiches Edy’s Pie, and Kaplan says the public announcement will make it hard for the company to fight him on it. (Dreyer’s declined to comment for this article.)
Kaplan has experience in the ice cream sandwich business through Chipwich. Nestlé abandoned the brand in favor of Toll House and surrendered the brand name after fighting Kaplan on it for a few months, he says. Kaplan obtained the Chipwich mark and sold it to an investment company. “I was astounded that they stopped making Chipwich,” he says, adding that he believes Eskimo Pie will be even bigger.
If consumers find the name offensive, Kaplan says they have the option to vote with their wallets and simply not buy the product. “There’s going to be people who are going to protest, and that’s your right to do that. That’s America,” he says. “But I think it just got a little bit too much out of hand.”
A 2017 Supreme Court decision is at the crux of why brands built on racist stereotypes can still survive in the marketplace at all. Until then, the Lanham Act prevented people from registering marks that were scandalous, deceptive, immoral, or disparaging.
But in 2010, an Asian-American rock band led by Simon Tam called the Slants was banned from registering its trademark by the USPTO, which declared that the name was offensive. “Tam wanted to basically recode this slur,” says UC-Berkeley’s Katyal.
Tam filed a legal challenge under the First Amendment, arguing that part of the Lanham Act was unconstitutional because it violated an individual’s right to freedom of speech. Tam won the case, which went all the way up to the Supreme Court, and that provision of the Lanham Act was overturned.
Tam was quoted as saying that it was a win for all marginalized groups. But at the same time, a group of Native American activists was using the Lanham Act to argue that the Washington Redskins mark should be canceled because it’s disparaging. The decision in the Tam case meant that the group had to withdraw its litigation against the Washington football team, which was winding its way through the court of appeals.
“One of the big tragedies of that case is that in recoding the name the Slants,” Katyal says, “it recoded this provision of the Lanham Act as a civil rights issue, when in reality a win for Simon Tam meant that it was a loss for Native Americans.”
Katyal says that the decision led to a flood of disparaging marks being registered. “The results of that 2017 decision is that other people could still register these really offensive brands,” she says.
In July, the Washington football team agreed to give up the Redskins brand—not because of this “virtually worldwide movement against the name,” says Katyal, but because of economic pressure from sponsors. Since then, at least one application has been filed with the USPTO for the mark.


fortune--2020-12-08--Bipartisan stimulus deal in jeopardy as McConnell refuses to back package

Stimulus update : Everything to know about the bipartisan $ 300 unemployment benefit plan

For the latest information on the ongoing stimulus negotiations, please check out our coverage here
Almost a week after Democratic congressional leaders climbed down from their demand for a multi-trillion dollar stimulus package, Senate Majority Leader Mitch McConnell continued to tout his own plan, endangering prospects for a compromise.
McConnell’s top priority—federal limits on Covid-19 related lawsuits against businesses—has emerged as the key potential deal-breaker. Republicans have balked at the six-month moratorium proposed in a bipartisan stimulus package, saying it’s too limited, and talks have stalled.
McConnell’s continued use of rhetoric that pre-dates the shift by House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer on the overall dollar amount of aid underscored the risk of no further Covid-19 help by year-end.
“Drop the all-or nothing tactics,” McConnell said of Democrats on the Senate floor on Monday. He again called on Schumer to allow a vote on a targeted bill that provides extended unemployment insurance, small-business aid and funding for vaccine distribution.
Senators from both sides of the aisle concluded that the prospects for a $908 billion compromise that Republican and Democratic negotiators are hashing out will come down to McConnell’s decision. Several GOP members have endorsed or been open to the plan, and top White House economic adviser Larry Kudlow said President Donald Trump would likely sign it. McConnell is engaging the negotiators even though he hasn’t budged.
“I’m optimistic we’re going to get somewhere,” McConnell told reporters Monday. “But I have no report at the moment about how.”
Two Roadblocks
The Republican and Democratic negotiators continued to butt heads over aid for states and localities as well as the coronavirus liability protection for businesses.
“Those are coupled together,” said GOP Senator John Cornyn of Texas, who couldn’t predict whether the relief package will be enacted. “There’s either going to be none for both of those, or both of those that are going to be provided for. My hope is we’ll do both.”
Republicans have blasted state assistance as a bailout for mainly Democratic areas, while Democrats have refused to give employers a shield from lawsuits over poor protection against the spread of Covid-19.
Time is running ever shorter on getting a deal, which Senator John Thune, the No. 2 Republican in that chamber, said Monday would be attached to either a stopgap federal spending bill or omnibus appropriations legislation that funds the government into 2021.
The House will vote on a continuing resolution Wednesday to keep the federal government running for an additional week, before the existing stopgap runs out Friday night. McConnell said the Senate would approve that “whenever we get it” from the House.
Spending Bill
Negotiators have also been running into hurdles on the omnibus spending bill, including over money the Trump administration wants assigned for border wall construction. Dozens of other policy fights have sprung up, such as House Democratic moves to protect the sage grouse bird and and provide money for police anti-racism training.
Senate Appropriations Committee Chairman Richard Shelby, an Alabama Republican, said he talked with Pelosi Monday about that bill and told her “there are a lot of things in your bill that we are not going to take.”
Shelby also said, “this week is pivotal.”
Speaking about the Covid-19 relief proposal, McConnell said it’s getting “down to the wire.“
Schumer blamed his GOP counterpart for stalling the compromise effort. He and Pelosi publicly endorsed the $908 billion plan last Wednesday, after having made a new pitch to McConnell two days before. They previously sought a $2.4 trillion bill.
“We want the leader to sit down and negotiate so we can come up with a bipartisan proposal that can pass the House and the Senate,” Schumer said on the Senate floor. He highlighted that some economists are warning of a double-dip recession if Congress fails to pass a deal.
Members of the bipartisan team working on a compromise retained their hope that success is still possible.
Democratic Senator Jeanne Shaheen of New Hampshire said she was “hopeful.” She concluded, “It depends on what Mitch McConnell wants to do.”
Republican Senator Mitt Romney worried about an increased number of negotiators potentially bogging things down. But he said “we haven’t been told that there’s a drop dead date. We’re going to keep working until it’s done.”
“A lot of text has been written,” said GOP Senator Bill Cassidy of Louisiana. The group is “still working through it.”


fortune--2020-12-08--China drugmaker fact-checks claim that its leading COVID vaccine is 97% effective

Our mission to make business better is fueled by readers like you. To enjoy unlimited access to our journalism, subscribe today.
On Tuesday, Sinovac, one of China’s leading vaccine makers, said it needs more time to determine the effectiveness of its COVID-19 vaccine, refuting earlier claims from its partner in Indonesia that its vaccine proved 97% effective in ongoing Phase III clinical trials.
Bio Farma, the state-owned vaccine maker and Sinovac’s partner in Indonesia, reported that Sinovac’s COVID-19 candidate is up to 97% effective in Phase III clinical trials. “Our clinical trial team found, within one month, that the interim data shows up to 97% for its efficacy,” Iwan Setiawan, a spokesman for Bio Farma, said on Tuesday.
But Sinovac clarified to Bloomberg that the 97% figure does not refer to the vaccine’s efficacy, saying it instead represented the vaccine’s seroconversion rate. The seroconversion rate detects whether the vaccine produces COVID-19 antibodies—meaning the vaccine triggered antibodies in 97% of trial volunteers who received it—but doesn’t necessarily prove that the vaccine protects against COVID-19. Sinovac did not immediately return Fortune’s request for comment.
Ninety-seven percent efficacy would be the best clinical trial data reported from any vaccine maker thus far: U.S.-based firms Pfizer and Moderna reported efficacy rates of 94% and 95%, respectively, in Phase III trials in the U.S.
Subscribe to Eastworld for weekly insight on what’s dominating business in Asia, delivered free to your inbox.
But Bio Farma drew its conclusion about Sinovac’s efficacy from a smaller pool of participants, some 1,600, and in a shorter time frame.
Pfizer, which codeveloped its candidate with Germany’s BioNTech, reported in November that it drew its 94% efficacy figure from a 43,000-participant Phase III trial that began in July. Moderna’s Phase III trial also started that month and included 30,000 volunteers.
A spokesperson for Bio Farma said on Tuesday that full results from Sinovac’s Phase III trial are expected to arrive in January 2021.
Sinovac’s Phase III trial results have been highly anticipated because its vaccine does not require the expensive cold-chain networks that are needed for Pfizer’s and Moderna’s candidates, making it a more viable option for lower- and middle-income countries with fewer resources. Such a vaccine is key to bringing the pandemic to a swift end since it can be more widely distributed than doses with finicky storage requirements.
On Monday, Indonesian President Joko Widodo said that Indonesia received 1.2 million doses of Sinovac’s vaccine candidate, called CoronaVac, in preparation for potentially distributing the vaccine in Indonesia early next year. Indonesia is also set to receive another 1.8 million CoronaVac doses in January along with raw material supplies for Bio Farma to produce 45 million more doses of the candidate.
On Monday, Sinovac received a $515 million investment from Beijing drugmaker Sino Biopharm. Sinovac said the new stream of funding would help the company double its manufacturing capacity to produce over 600 million doses of CoronaVac per year.
Authorities in Brazil, Turkey, and Chile have also approved Sinovac’s Phase III clinical trials. In Brazil, Sinovac’s Phase III trial has reached an advanced stage; it started in July and includes 13,000 individuals. Observers believe that the company may release interim results on the trials in coming days.


fortune--2020-12-08--Good news: the COVID vaccine is here! The not so good: markets are unimpressed

This is the web version of Bull Sheet, a no-nonsense daily newsletter on what’s happening in the markets. Sign up to get it delivered free to your inbox.
Good morning. It’s V Day in Britain: The first national rollout of a clinically tested COVID-19 vaccine is underway. The markets’ reaction? A big fat yawn.
Pfizer, one of the makers of the vaccine, is flat in pre-market trading. Elsewhere, the bourses in Europe and Asia are mostly lower, as are U.S. futures.
Let’s check in on what’s happening.
Markets update
Asia
The major Asia indexes are a touch lower in afternoon trading with Japan’s Nikkei down 0.3% .
are a touch lower in afternoon trading with Japan’s down . Investors are bullish on Asian assets going into the final weeks of 2020. According to Bloomberg, the MSCI Asia Pacific Index hit record territory last week, and bonds are nearing multi-year highs as well.
going into the final weeks of 2020. According to Bloomberg, the hit record territory last week, and bonds are nearing multi-year highs as well. On Monday, the U.S. House of Representatives passed a bill that would give Hong Kong residents special refugee status to live and work in the United States as tensions between Beijing and Hong Kong becomes a larger geopolitical issue. Meanwhile, more U.S. sanctions loom for Chinese officials.
Europe
Brexit jitters are weighing on the European bourses again this morning. The Stoxx Europe 600 is down 0.2% hours into the trading session.
again this morning. The is down hours into the trading session. Earlier this morning, a 90-year-old woman in the English city of Coventry got the first Pfizer-BioNTech COVID vaccine shot in the U.K., a rollout that will be watched the world over. It’s hardly a shot in the arm for the markets. The pound sterling is down and the FTSE is flat.
in the U.K., a rollout that will be watched the world over. It’s hardly a shot in the arm for the markets. The is down and the is flat. COVID, schm-OVID. 2020 has been a banner year for Europe’s tech startup scene with the total venture investment poised to reach $41 billion by year’s end.
U.S.
U.S. futures are lower after the Dow and S&P 500 kicked off the week in the red; the Nasdaq nudged higher on Monday.
are lower after the Dow and S&P 500 kicked off the week in the red; the nudged higher on Monday. Uber Technologies fell 1.9% yesterday after it announced it had sold its self-driving car unit to Aurora Innovation, effectively getting out of the business. It did, however, take an investment in the company, valuing Aurora at $10 billion .
yesterday after it announced it had sold its unit to Aurora Innovation, effectively getting out of the business. It did, however, take an investment in the company, valuing Aurora at . Water—specifically, California water— is the newest trade-able asset. The precious commodity made its Wall Street debut on Monday, allowing investors to bet on the ups and downs of this life-giving essence. Can clean air futures be that far behind?
Elsewhere
Gold is up, trading near $1,870/ounce .
is up, trading near . The dollar is flat.
is flat. Crude is down, with Brent futures trading around $48/barrel .
is down, with futures trading around . Bitcoin is down, trading around $19,100.
***
The almighty consumer
Would you rather live in a country with high sovereign debt, but low household debt? Or, the other way around—a place of low national debt, but highly indebted households?
From the 1980s until about a decade ago, household debt in the U.S. hit a crazy extreme. Just as the housing bubble was reaching its peak, U.S. household debt was reaching 130% of disposable income. The bubble popped, and Americans grew more thrifty.
Something similar has happened in the aftermath of COVID: household debt has fallen precipitously as today’s chart, courtesy of Morgan Stanley, shows.
“One unique feature of the current recession,” writes Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management, “is that rather than consumers tapping their credit cards, they have paid down debt, especially relative to disposable income and net worth. In fact, current readings are the lowest since the late 1980s and nearly 50 percentage points lower than during the worst points of the Global Financial Crisis.”
“This suggests that a vaccine rollout could easily unleash pent up demand for consumer services,” she continues.
That would bode well for some of the more beaten-down investment sectors in the year ahead. Those would include travel and leisure, plus energy and finance as people book travel, dine out and begin to move around again.
This explains much of the thinking around why value stocks (banks and energy, in particular) are booming in recent weeks.
To borrow a term from the worlds of VC and private equity, American households have plenty of dry powder as we head into 2021.
***
Have a nice day, everyone. I’ll see you here tomorrow.
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
As always, you can write to bullsheet@fortune.com or reply to this email with suggestions and feedback.
Today's reads
The i-word. From gold bugs to crypto bulls, investors have been keenly watching for signs of inflation. While prices are no doubt likely to rise next year as the global economy reopens further, any inflation effect is likely to be short-lived. A mirage is how economists are describing it.
Business owners, beware. The Paycheck Protection Program expires in the coming weeks unless Congress acts to save it. There's another doozy in the details, Fortune's Geoff Colvin reports. "The IRS effectively canceled the tax break that made PPP loans so valuable to small businesses," Colvin writes, creating a potential tax headache in the year ahead.
Some of these stories require a subscription to access. There is a discount offer for our loyal readers if you use this link to sign up. Thank you for supporting our journalism.
Market candy
562%
Never heard of Adani Green Energy? Neither has the equities analyst community, apparently. The Indian energy high-flyer is up 565% year-to-date, landing it in the MSCI India Index. And yet, not one analyst has initiated coverage of Adani, Bloomberg reports.


fortune--2020-12-08--Towards a capitalism that better serves society

This is the web version of CEO Daily. To get it delivered to your inbox, sign up here.
Good morning.
In December 2016, Fortune and our then-sister publication, Time, took 100 CEOs from the world’s largest companies to Rome, to deliberate on things the private sector could do to address global social problems. The event culminated in an inspiring meeting with Pope Francis in the Clementine Hall of the Vatican. It turned out to be a seminal moment, not only for Fortune, but for the development of stakeholder capitalism. Many of the companies participating have since doubled down on their commitment to a capitalism that better serves society.
Today marks another important step in that journey, with the formation of The Council for Inclusive Capital with the Vatican, a partnership that includes business leaders committed to building “a fairer, more inclusive, and sustainable economic foundation for the world.” The group was founded by Lynn Forester de Rothschild, who attended the 2016 meeting and has worked steadily since to make the Council a reality. In a letter to His Holiness Pope Francis, she argued that “there were sincere, powerful leaders in finance and in business who really believed the system needed reform.” What was missing, she felt, was not the desire to act, but “the poetry, the moral base.”
She suggested a partnership, and after lengthy discussions (the Vatican is the ultimate in long-term-focused organizations), the Council was created. Its goal: “The Holy Father asks that capitalism be in service of planet and people,” Rothschild says.
Leading the effort are the “Guardians,” who include CEOs Ajay Banga of Mastercard (who talks about his commitment to stakeholder capitalism in the new issue of Fortune magazine,) Oliver Bäte of Allianz, Carmine Di Sibio of EY, Roger Ferguson of TIAA, Kenneth Frazier of Merck, Marcie Frost of CalPERS, Alex Gorsky of Johnson & Johnson, Al Kelly of Visa, Bernard Looney of BP, Ronald O’Hanley of State Street and Brian Moynihan of Bank of America.
Moynihan told me yesterday he joined the effort because it will create a moral framework for stakeholder capitalism and help ground business “in Judeo-Christian values and ethics.” Companies that participate are asked to publicly commit to specific actions that back up the group’s principles. You can see commitments made to date here. (Fortune is a media partner of the Council.)
And speaking of planet and people, Ellen McGirt and I had a fascinating conversation with Chevron CEO Mike Wirth about the future of his company and his industry in a world increasingly striving toward “Net-Zero” carbon emissions. You can hear what he had to say on our podcast, Leadership Next, available on Apple and Spotify.
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Vaccine milestone
The West's first COVID-19 vaccine jab has been administered in Coventry, England, after the U.K. became the first western country to authorize a coronavirus vaccine. The recipient was one Margaret Keenan, who turns 91 next week. Millions of people will be vaccinated in the U.K. this month alone, starting with the over-80s and some frontline health and care workers. Fortune
Hong Kong
The U.S. House of Representatives passed a bill that will effectively let Hong Kong residents claim special refugee status in the States. It still needs to go past the Senate and President Trump's desk, but there's bipartisan consensus behind the bill. Fortune
Uber and out
Uber is no longer directly participating in the developing-self-driving-cars game, after it sold that division to Aurora Innovation and took a 26% stake in the startup. Aurora will now be a stronger competitor to Alphabet's Waymo, which still leads the pack. Uber CEO Dara Khosrowshahi will joint Aurora's board, as will another as-yet-unnamed Uber representative. Fortune
Stimulus deal
The bipartisan, $908 billion U.S. stimulus deal, which includes $180 billion for a $300 weekly enhanced unemployment benefit, is making progress but could soon hit a wall. House Speaker Nancy Pelosi has backed it, despite it being less than half the package she had been after, and it's gaining traction among fiscally conservative Republicans. But Mitch McConnell still needs to sign off on it, and he's not looking enthusiastic. Fortune
AROUND THE WATER COOLER
Rashida Jones
Phil Griffin is stepping down as MSNBC president after a quarter-century at the channel, and his replacement is current SVP Rashida Jones (not the actress, obviously.) Jones will become the most prominent black woman in the U.S. cable news industry. NBC News
Davos moved
Europe is not a safe place to be right now, so Davos won't be taking place in Davos next year—or in Lucerne, which the organizers had been considering. Instead, the World Economic Forum is moving to Singapore, marking the second time in two decades that it's been held outside Switzerland (the first was after 9/11, when it took place in New York.) And it will happen in May rather than January. Fortune
Goldman in China
Goldman Sachs is deepening its investment in China by entirely buying out its securities joint venture with domestic brokerage Gao Hua. Thus, Goldman Sachs Gao Hua Securities Co. will become Goldman Sachs (China) Securities Co. It's the first global bank to take such a step. Wall Street Journal
Tesla vs snakes
Tesla's German Gigafactory construction, which has a lot of political backing but only conditional planning approval, has hit another snag—environmentalists say the required forest clearance could endanger hibernating smooth snakes, so a court has told the car firm to stop felling trees for now. The court will now consider submissions by Tesla and the Brandenburg state environmental authority. Reuters
This edition of CEO Daily was edited by David Meyer.


fortune--2020-12-08--Who gets first dibs on a COVID-19 vaccine? The U.K.’s historic rollout today reveals who gets preced

Who gets first dibs on a COVID-19 vaccine? The U.K.’s historic rollout today reveals who gets precedent

A 90-year-old grandmother from the central English city of Coventry on Tuesday became the first person in the world to receive a clinically tested and approved COVID-19 vaccine, part of a historic mass immunization rollout that’s being watched around the world.
Margaret Keenan’s injection marks the start of the world’s first national vaccination program, after the United Kingdom became the first country to approve a COVID-19 jab last week. The program will be closely watched not just by Britons anxious to return to normal but also by public health officials around the world who have to tackle a scale and speed issue without precedent in modern medicine.
Keenan, who received the first dose of the Pfizer and BioNTech vaccine Tuesday morning from her National Health Service nurse May Parsons at her local hospital, said receiving the vaccine ahead of her 91st birthday was an enormous “privilege” that would allow her to see friends and family in the new year, after isolating on her own for much of the year. She will receive the second dose in 21 days.
British Prime Minister Boris Johnson called it “a shot in the arm for the entire nation,” before warning the public they still cannot let their guard down. As is the case across much of Europe, Britain has exacted tough rules restricting movement and limiting the operating hours of pubs and restaurants as the economy faces recession and the labor market is in tatters.
The rollout news failed to move the markets, however, on Tuesday. The benchmark FTSE and pound sterling are trading lower in morning trade as investors remained spooked about post-Brexit talks, the country’s other existential crisis.
Who will receive the first jabs?
The U.K., a country of over 66 million people, has secured 80,000 doses of the Pfizer vaccine in its first round, which is being transported from a manufacturing hub in Belgium. Because the vaccine requires two doses, that will mean only 40,000 people will receive the jab.
The U.K. has ordered 40 million doses of the Pfizer vaccine in total. On Tuesday, the NHS said those doses will go first to patients over 80 who are either in a hospital as an outpatient or being discharged after a hospital stay.
Care home staff and residents are next on the list for the vaccine, and some care home staff have been invited to book appointments to receive the vaccine.
There have already been some changes to the vaccine rollout plan. Although the U.K. government had said patients in care homes would receive the vaccine first, logistical hurdles involving splitting up doses of the vaccine have already complicated how it will be administered outside hospitals. As of Tuesday, nearly 68,000 people in Britain have died from COVID-19, one of the highest mortality rates in the developed world.
This vaccine is also particularly complicated to distribute, because it must be kept at deep-freeze temperatures. Although Pfizer now says it can be kept for a number of days in normal refrigeration, there is a hard limit on how long a dose will last under such conditions. This means that any transport of the vaccine, especially to local distribution points, must be carefully planned.
Who will receive it next?
The U.K. will take a tiered approach to rolling out the vaccine—starting with the older people, health care workers, care home workers, and those who are at a greater risk.
After this first stage, the vaccine will be given to people over 80, plus frontline medical and health care workers. It will then go to 75s and over, followed by 70s and over, and those who are deemed medically vulnerable. By the time the vaccine has been administered to everyone 50 and over—the ninth stage—about a quarter of the population will have been covered, and 90% to 99% of those most vulnerable to the virus, according to the U.K. government’s joint committee on vaccination and immunization.
The hubs for administering the vaccine will also expand as more people are vaccinated, the government says. As of now, hospital “hubs” across the U.K. will distribute the vaccine. That will expand to local care homes and general care practices, and what are expected to be the opening of huge vaccination centers at local football stadiums and conference centers.
The vaccine will also be administered solely through the country’s National Health Service. It won’t be possible to buy doses privately, so nobody, for love or money, can push ahead in line.
Will there be enough?
The scale of the vaccine rollout will be unlike anything seen before. Every person in the U.K., 16 and over, is expected to be vaccinated—a process that is expected to take at least most of 2021.
That equates to about 50 million people, equal—if two doses are needed—to 100 million doses. In addition to the 40 million doses of the Pfizer-BioNTech vaccine, the U.K. government has secured doses for seven different vaccines, including 100 million doses of the homegrown AstraZeneca/University of Oxford vaccine alone.
But access to the vaccine globally is undoubtedly weighted heavily toward some countries. In November, Nature reported that the member states of the EU, plus five other rich countries—the U.K., the U.S., Canada, Australia, and Japan—had secured over half the potential doses of vaccines. Canada alone has secured about nine doses per person.
Will the vaccine be mandatory?
No—the vaccine will be optional, just like all other vaccines in the country. However, the NHS seems to have already begun a public health campaign to assure people that the vaccine is safe and that they should take it.
Last month, it was reported that the NHS was looking to get “very sensible” celebrities and influencers to promote the vaccine’s safety, as well as public facing doctors and health professionals. (Politicians are not a possibility—but the Royal Family reportedly is.)
And Keenan herself, suddenly an international name after receiving the jab this morning, also did her part to encourage people to trust the vaccine, while thanking her doctors and her nurse.
“I can’t thank May and the NHS staff enough who have looked after me tremendously, and my advice to anyone offered the vaccine is to take it—if I can have it at 90 then you can have it too!”


fortune--2020-12-08--JD Health shares jump 60% after becoming Hong Kong’s largest IPO of 2020

Our mission to make business better is fueled by readers like you. To enjoy unlimited access to our journalism, subscribe today.
Shares of JD Health, the health care unit of Chinese e-commerce giant JD.com, surged in the company’s debut on the Hong Kong stock exchange on Tuesday to close at HK$114 or $14.71, roughly 60% above list price.
Before trading began, JD Health had raised $3.5 billion at a valuation of $28.5 billion, making it Hong Kong’s largest initial public offering of the year.
The Beijing-based subsidiary of JD.com is the latest in a string of major Chinese tech players opting to list in Hong Kong instead of the U.S., as Washington edges closer to cracking down on Chinese companies listed on U.S. exchanges. JD Health’s parent,JD.com, debuted in a secondary listing in Hong Kong in June that raised $3.9 billion. Observers viewed JD.com’s Hong Kong listing as a hedge against potential new U.S. regulations targeting Chinese companies.
Other Chinese companies like gaming giant NetEase and fast food operator Yum China also pursued secondary listings in Hong Kong this year, following primary listings in the U.S. Now, amid the windfall of new Chinese listings, Hong Kong’s stock exchange is set to raise more funds in 2020 than it has in any year in the past decade. In late November, new listings in Hong Kong had already raised $39.2 billion, and the new listings from JD Health and China’s Evergrande Property Services have since added over $5 billion to that total. For comparison, newly listed companies raised $40.4 billion on Hong Kong’s exchange in 2019 and a record $57.5 billion in 2010.
JD Health’s successful market debut is also proof that there’s still plenty of investor interest in Chinese tech stocks, even after Chinese fintech giant Ant Group suspended plans to debut in Hong Kong in November.
Ant Group, backed by Chinese tech giant Alibaba, planned to raise $35 billion at a valuation of roughly $310 billion in the world’s largest-ever IPO. Chinese regulators, however, scuttled Ant Group’s IPO plans after they determined that Ant Group would fail to meet proposed anti-monopoly rules.
After Beijing announced the proposed regulations, which are intended to limit the “monopolistic power” of tech platforms by imposing more limits on tactics like user data collection, investors sold off $280 billion worth of Chinese tech stocks in a two-day period.
Since then, the tech stocks have partially recovered, and JD Health’s successful Hong Kong debut indicates that investors are confident the digital health company can withstand new potential regulations.
JD Health CEO Xin Lijun told Bloomberg that no one company can establish a monopoly in online health care given the industry’s fragmented nature and tight state controls around medical services. Those factors may insulate the sector from the new regulation aimed at Chinese tech giants.
JD.com first entered the health care sector in 2013, selling pharmaceutical products online. In 2016, JD.com created a stand-alone JD Pharmacy platform. A year later, JD.com got into the wholesale medicine procurement business for pharmacies and hospitals and launched online health care services. In 2019, JD.com spun these efforts off into the JD Health subsidiary.
In 2020, the pandemic forced millions of customers online, accelerating the digitization of health care services and making JD Health even more appealing to investors. Online health care plugs long-standing holes in China’s health care system, where resources are concentrated at large hospitals in major cities.
JD Health says its user base grew to 72 million people this year, up 30% from 2019. In the first half of 2020, JD Health earned $1.3 billion in revenue, a 76% increase from the same period in the previous year.


fortune--2020-12-08--U.S. House passes bill giving Hong Kong residents special refugee status

Our mission to make business better is fueled by readers like you. To enjoy unlimited access to our journalism, subscribe today.
The U.S. House of Representatives on Monday passed a bill to let residents of Hong Kong live and work in the U.S. through a form of humanitarian relief that’s reserved for people from regions struck by war, natural disaster, or other dire circumstances.
The bill aims “to protect Hong Kongers facing persecution under the Chinese government’s tightening grip” by allowing Hong Kong residents who have been “targeted for exercising their democratic freedoms” to seek refuge in the U.S., according to a Monday press release from Rep. Tom Malinowski (D–N.J.), one of the bill’s sponsors.
The act would allow Hong Kong residents who are already in the U.S. and who fear political persecution in Hong Kong to remain in the country. It would also expedite refugee applications from Hong Kong residents and exclude them from the U.S. government’s annual cap on refugee admissions, which the Trump administration cut to an all-time low earlier this year.
Malinowski and Rep. Adam Kinzinger (R–Ill.) introduced the legislation, titled the Hong Kong People’s Freedom and Choice Act, which must gain Senate approval and President Donald Trump’s signature before becoming law.
The legislation—sponsored by Democratic and Republican representatives and moved by consensus through the House—highlights the growing bipartisan unity in Washington on issues related to Hong Kong and Beijing.
The bill grants Hong Kong residents Temporary Protected Status, a special U.S. immigration designation given to people from regions that are deemed unsafe.
There are currently 10 countries on the TPS list: El Salvador, Haiti, Honduras, Nepal, Nicaragua, Somalia, Sudan, South Sudan, Syria, and Yemen. The Trump administration last year declined to extend TPS to people from Venezuela, while a coalition of mostly Democrats proposed a bill to do so.
Hong Kong would be the wealthiest region by far to receive a TPS designation, with a gross domestic product per capita of roughly $49,000, more than 10 times that of El Salvador, currently the country with the highest GDP per capita on the TPS list, according to World Bank data.
The bill’s passage through the House is one in a series of U.S. government actions to counter Beijing’s perceived incursions on Hong Kong, a special administrative region of China with separate judicial, legal, and financial structures to the mainland and its own constitution, which guarantees it a “high degree of autonomy” from China’s central government.
The U.S., the U.K., and other countries criticized Beijing’s implementation of a sweeping national security law for Hong Kong in June as evidence of Beijing encroaching on Hong Kong’s autonomy and civil liberties. Experts see the law as a possible threat to Hong Kong’s status as a freewheeling financial hub.
Last week, U.S. Secretary of State Mike Pompeo placed visa restrictions on some Chinese officials and shut down five U.S.-China cultural exchange programs, calling them “propaganda tools” of China’s government.
And on Monday, Pompeo announced sanctions on 14 Chinese legislators over their involvement in the controversial national security law.
The Chinese government hasn’t yet publicly commented on the bill’s passage in the House, but in the past, Beijing has consistently denounced U.S. actions on Hong Kong as interference in China’s internal affairs. “China urges the U.S. side to immediately stop meddling in Hong Kong affairs,” Chinese foreign ministry spokesperson Hua Chunying, speaking about the U.S. sanctions on Chinese officials, said in a Monday press conference.
Since the national security law came into effect, several prominent pro-democracy activists in Hong Kong have received prison sentences, and opposition lawmakers have been expelled from the city’s legislature.
In response to the national security law, the U.K., which governed Hong Kong as a British colony until 1997, announced a pathway to British citizenship for some Hong Kong residents, and Germany and Canada have granted asylum to people from Hong Kong in recent months.


fortune--2020-12-08--2020 was a banner year for European tech investment. Not even a pandemic could slow it down

Venture capital investment in Europe is poised to reach record levels this year despite the COVID-19 pandemic.
That’s the conclusion of an annual survey of the state of Europe’s technology market from Atomico, the venture capital firm started by billionaire Niklas Zennström, a cofounder of Skype.
The total venture investment in European technology startups is poised to reach $41 billion by year’s end, which would be a slight increase on the $38.6 billion invested last year, the report finds. But given that the total investment round grew despite COVID-19, “we feel like it’s a real demonstration of the strengths of the underlying foundations of the ecosystem,” says Tom Wehmeier, an Atomico partner who helped compile the report.
Still that amount is far behind the $141 billion that venture capital funds have poured into U.S. technology startups so far this year, or the $74 billion that has gone to Asian tech companies.
The report notes that Europe continues to punch below its weight when it comes to its global share of venture capital investing, accounting for just 13% of all VC investments globally even though the region accounts for a quarter of global gross domestic product. The U.S. accounts for half of all global venture investing, well above its 26% contribution to global GDP.
But in at least one respect, Europe is ahead: At the very early stages and at small funding sizes, Europe does very well. It accounts for 40% of all funding rounds globally below $5 million, according to Atomico’s analysis.
Pandemic? No problem
The coronavirus pandemic didn’t dent European venture firms’ ability to continue to raise money. They raised new funds at a pace slightly ahead of 2019, which was itself a record-breaking year with more than $16.5 billion poured into European-based VC firms. In the first half of 2020, $7.8 billion was invested in these funds, compared with $7.5 billion in the first six months of 2019, according to Atomico’s report.
And European technology remains attractive to investors from outside the region, particularly those based in the U.S. The number of U.S. institutional investors participating in at least one European-based venture capital fund has grown 36% to more than 550 since 2016, Atomico reported. Meanwhile, almost a quarter of European startups raising venture rounds have at least one investor from either the U.S. or Asia.
With increased competition, valuations for European tech startups have continued to increase. The top quarter of European startups now achieve early stage valuations of above $22 million, according to Atomico, a 38% increase from 2019. “There is still a pretty remarkable difference between valuations here compared to the U.S., and that has contributed to U.S. investors’ interest in Europe,” Wehmeier says.
The fact that Europe has managed to produce more blockbuster exits—companies that either sell out to an acquirer, or list shares on the public markets—helps feed this dynamic too, since it makes it possible for venture capitalists to justify higher valuations in earlier investment rounds, he says.
Biggest players
Europe now has two tech companies that have gone public in the past two years, Spotify and payments company Adyen, that are worth around $50 billion. It also has two private technology companies, the financial technology company Klarna, and the robotic process automation company UiPath, that are worth more than $10 billion.
It also has a company, Hopin, the virtual conference software startup whose fortunes have soared during the pandemic. It became the first European startup to achieve “unicorn status”—a startup company worth more than $1 billion—within a year of its founding. The company raised a $125 million second, or Series B, venture capital round in November that valued the startup at $2.1 billion.
The chances of creating a unicorn in Europe are about the same as those in the U.S., Atomico’s analysis found: About one in 100 startups makes it to that lofty status. The big difference between the U.S. and Europe is actually what happens in terms of acquisitions.
While the rap on European founders has often been that they sell out too early, preventing the region from ever building tech giants to rival those found in the U.S., Wehmeier says that Atomico’s analysis points to the opposite problem: European founders are more often stuck nursing companies along that will never be huge, independent successes. U.S. startups have a 50% greater chance of being acquired at almost every stage of their life span, he says. “This enables a fail fast culture,” he says, and that means the founders, employees—and capital—are freed up faster to potentially reinvest in another startup.
It also doesn’t hurt that the U.S. continues to have much more robust public markets for technology investment. Although Europe has actually hosted more technology IPOs than the U.S. every year since 2016, the valuations achieved in these public offerings run far behind those in the U.S. The top five U.S. tech IPOs in the past year were worth more than 3.6 times what the top five European tech IPOs were worth, and that number grows to a fourfold gap when looking at the top 10 tech IPOs, Wehmeier says.
Snowflake, the eight-year-old cloud-based data warehousing company that went public in September, achieved a valuation of $70.3 billion on its first day of trading, an amount greater than the combined value of the entire top 10 most successful European tech IPOs of 2020. (The most valuable 2020 tech IPO in Europe was that of data management firm Allegro, which achieved an $18.9 billion valuation at the close of its first day of trading.)


fortune--2020-12-08--World Economic Forum moves 2021 annual meeting from Davos to Singapore to escape COVID-19

Our mission to make business better is fueled by readers like you. To enjoy unlimited access to our journalism, subscribe today.
The World Economic Forum will hold its annual meeting in Singapore in 2021, marking only the second time in two decades that the global gathering of business and political elites will have convened outside the Swiss ski town of Davos.
“The change in location reflects the forum’s priority of safeguarding the health and safety of participants and the host community,” the WEF said in a statement.
The WEF’s annual meeting is so closely associated with the Swiss town that hosts it that the gathering is also known simply as “Davos” for short. The last time the meeting was held outside Davos was in 2002, when it relocated to New York City—partly out of solidarity for the 9/11 terrorist attacks and partly because security costs had skyrocketed to millions of dollars in their wake.
Subscribe to Eastworld for weekly insight on what’s dominating business in Asia, delivered free to your inbox.
Next year’s annual WEF meeting will take place in May, rather than its usual time slot in late January. The WEF made the decision to postpone the summit in June. Then in October, the WEF opted to relocate to Lucerne, a Swiss city with a more temperate climate.
The decision to relocate the meeting to an entirely different continent demonstrates unease with the level of COVID-19 infections across Europe, even as vaccine rollouts appear on the horizon. On Friday, Switzerland reported over 4,000 new cases of COVID-19, while Singapore reported three.
Public health experts held up Singapore’s tactics in tackling the disease as exemplary when the COVID-19 pandemic spread at the start of the year. The city managed to keep local infections to a minimum without shutting down the economy.
However, a business conference held in Singapore in late January captured global media attention after a British attendee returned to Europe and infected several other people during his journey. The conference was dubbed a “superspreader event.”
The Singapore government also overlooked a massive outbreak in the cramped dormitories that house the city’s migrant workers earlier this year, leading to a sudden surge in infection. Between the end of March and mid-April, Singapore’s daily caseload rocketed from 35 to a peak of 1,426—pushing the city into a strict lockdown phase.
The city-state is now tentatively emerging from shutdown and seeking to reboot its tourism and events industry. A recent plan to open a “travel bubble” with Hong Kong, allowing passengers to travel between the two cities without undergoing quarantine, was scrapped after Hong Kong entered a “fourth wave” of COVID-19 transmission.
But Singapore does operate several “green lane” arrangements with countries including China, South Korea, and Indonesia. Green lanes allow corporate and diplomatic travelers to undergo testing in lieu of quarantine on arrival.
When the WEF annual meeting convenes in May next year, Singapore will have accrued months of experience in managing pandemic-era travel, likely while maintaining low infection rates.
But it’s worth noting the Singapore meeting won’t be the first “Davos” event of the year. In January, during the week when the annual meeting ordinarily convenes, the WEF is hosting a virtual summit called The Davos Agenda. The online forum will see the usual crowd of politicians and business leaders exchange views on how to drive the post-pandemic economy.
Then in April, the WEF will host the Global Technology Governance Summit in Tokyo, in person. It seems global leaders feel they can achieve only so much without rubbing shoulders.


fortune--2020-12-08--Big companies join Vatican-affiliated council pledging inclusive capitalism

Big Business is finding religion.
The CEOs of Bank of America, BP, Johnson & Johnson, Salesforce, and several other Fortune 500 companies are joining the Council for Inclusive Capitalism With the Vatican, a new business organization affiliated with the Catholic Church and operating under “the moral guidance of Pope Francis.” Fortune is a media partner to the council, which also includes policymakers and the general secretary of the International Trade Union Confederation, and which launched on Tuesday.
“An economic system that is fair, trustworthy, and capable of addressing the most profound challenges facing humanity and our planet is urgently needed,” Pope Francis said in a press release, adding that the companies and business leaders on the council “have taken up the challenge by seeking ways to make capitalism become a more inclusive instrument for integral human well-being.”
The council, which says its goal is “to build a fairer, more inclusive, and sustainable economic foundation for the world,” is the latest effort by Big Business to rethink capitalism and its effects on stakeholders, not just shareholders. “The dialogue has changed dramatically around these types of things,” Bank of America CEO Brian Moynihan, one of the council’s “Guardian” leaders, tells Fortune.
“Capitalism is here to do the right thing, if it’s managed appropriately,” he adds. “We’re getting people to say, ‘This is not only the right thing to do, it’s morally the right thing to do and the human right thing to do.’”
The 28 companies and organizations that have joined the Council have made specific pledges to enact its four guiding principles: equality of opportunity for all people; equitable outcomes; fairness across generations; and fairness to those in society whose circumstances prevent them from full participation in the economy. Bank of America, for example, has pledged to disclose the greenhouse gas emissions it finances by 2023, and within the same time frame to hire and provide skills training to 10,000 people from low- and moderate-income neighborhoods. (Those commitments predate the council’s launch, but Moynihan says they are “informed by what inclusiveness means here as well as…from other groups we work with.”)
“Doing this is not simply a market imperative. It’s not simply chasing the ESG dollar,” Lynn Forester de Rothschild, founder of the council and managing partner of Inclusive Capital Partners, told Fortune in a separate interview Monday. “The capital markets are such a powerful force, that we need to remember that our actions, who we are and what we are, are based on morality and ethics. And so the Holy Father really asks us to put profits in service of planet and people.”
The council developed out of a global forum at the Vatican in 2016, organized by Fortune and Time, and a convocation of business leaders there to meet with Pope Francis.
“Our great challenge is to respond to global levels of injustice by promoting a local and even personal sense of responsibility so that no one is excluded from participating in society,” the Pope told attendees at that meeting. “I encourage you to…seek ever more creative ways to transform our institutions and economic structures so that they may be able to respond to the needs of our day and be in service of the human person, especially those marginalized and discarded.”
Four years later, de Rothschild acknowledges that the council’s current and prospective members still have a lot of work ahead. “At next year’s meeting, we will measure, we will self-report on how we have done toward our commitments,” she says.
She acknowledges that some companies “might decide they don’t want to try, and they might rotate off” the council, but she’s also keeping the faith. “What we’ve already established among ourselves is the Christian idea of redemption,” she says. “We’re going to fail. But that’s no reason for not trying.”


fortune--2020-12-08--Biden’s picks for health team hint at how administration will handle COVID-19

President-elect Joe Biden’s choices for his health care team point to a stronger federal role in the nation’s COVID-19 strategy, restoration of a guiding stress on science and an emphasis on equitable distribution of vaccines and treatments.
With Monday’s announcement of California Attorney General Xavier Becerra as his health secretary and a half dozen other key appointments, Biden aims to leave behind the personality dramas that sometimes flourished under President Donald Trump. He hopes to return the federal response to a more methodical approach, seeking results by applying scientific knowledge in what he says will be a transparent and disciplined manner.
“We are still going to have a federal, state and local partnership,” commented Dr. Georges Benjamin, executive director of the nonprofit American Public Health Association. “I just think there is going to be better guidance from the federal government and they are going to work more collaboratively with the states.”
Subscribe to The Capsule , a weekly brief monitoring advances in health care and biopharma, delivered free to your inbox.
In a sense, what Biden has is not quite yet a team, but a collection of players drafted for key positions. Some have already been working together as members of Biden’s coronavirus advisory board. Others will have to suit up quickly.
By announcing most of the key positions in one package, Biden is signaling that he expects his appointees to work together, and not as lords of their own bureaucratic fiefdoms.
“These are not turf-conscious people,” said Drew Altman, CEO of the nonpartisan Kaiser Family Foundation, a clearinghouse for health care information and analysis. But “it’s up to the (Biden) administration to make it an effective team.”
A Washington saying, sometimes attributed to the late President Ronald Reagan, holds that “personnel is policy.” Here’s what Biden’s health care picks say about the policies his administration is likely to follow:
The selection of Becerra as health secretary and businessman Jeff Zients as White House coronavirus coordinator point to a more assertive federal coronavirus role.
Under Trump, states were sometimes left to figure things out themselves, as when the White House initially called on states to test all nursing home residents without providing an infrastructure, only to have to rectify that omission later.
Zients has made a name for himself rescuing government programs that went off course, such as the “Obamacare” HealthCare.gov website. Becerra has experience managing California’s attorney general’s office, which is bigger than some state governments.
Former Health and Human Services Secretary Kathleen Sebelius knows both men from her service in the Obama administration and says she does not see them working at cross purposes.
A Secretary Becerra “can’t get up every morning and think only COVID,” she said. He’ll “work on COVID and coordinate the assets of the FDA, CDC and NIH, but he’ll have lots of other things to do.” Meanwhile “Zients will be the railroad engineer making sure the trains run on time.”
States are ready for the feds to take on a more assertive role, she said. “Governors — Republicans and Democrats — are eager to finally have a federal partner,” she said. “They have felt not only on their own, but unclear about what was coming out of the White House.”
Biden’s selection of infectious disease expert Dr. Rochelle Walensky to head the Centers for Disease Control and Prevention, the elevation of Dr. Anthony Fauci to medical adviser, and the return of Dr. Vivek Murthy as surgeon general are being read in the medical community as a restoration of the traditionally important role of science in public health emergencies.
“It means that the response plan will be grounded in health science,” said Dr. Nadine Gracia, executive vice president of the Trust for America’s Health, a nonprofit that works to promote public health.
Under Trump, “those of us who practice in medicine today have been dismayed,” said Dr. Wendy Armstrong, an infectious disease specialist at Emory University medical school. “The individuals with the greatest expertise have not had the voice many of us wish they would have had. … This to me signals that the government is ready to put expertise in place that can guide its plan.”
Walensky, a widely recognized HIV/AIDS expert, got her coronavirus experience first hand as chief of infectious diseases at Massachusetts General Hospital in Boston during the first wave this spring.
“She was a real leader when it came to COVID,” said Dr. Rajesh Gandhi, an infectious disease physician at Mass General. “She organized infection control policies within the hospital, she organized treatment studies, she was organizing testing and leading testing.”
Even more than the nomination of a Latino politician for health secretary, Biden’s selection of Yale University’s Dr. Marcella Nunez-Smith is being read as a sign that his administration will work for equitable distribution of vaccines and treatments among racial and ethnic minorities, who have suffered a disproportionately high toll of COVID-19 deaths.
That challenge faces widespread skepticism among minorities that the health care system has their best interests in mind.
Early indications are that the vaccines are highly effective, said Altman of the Kaiser Foundation. But polling indicates a strong undertow of doubts, especially among African Americans.
“While states will be able to make the final decisions on who gets the vaccine, there has to be guidance around those decisions so that they are fair and equitable across the country,” Altman said. “You don’t want to have the kind of variations that people will look and say, ‘This just wasn’t fair.’ ”


fortune--2020-12-08--The 20 most important personal finance laws to live by

Our mission to make business better is fueled by readers like you. To enjoy unlimited access to our journalism, subscribe today.
You could be the second coming of Warren Buffett as an investor but it won’t matter if you can’t save money and get your personal finances in order first. Saving money will always be more important than investing. As the saying goes, you have to crawl before you can walk. As a professional investor and money manager I constantly get questions from friends and clients about what they should be doing better. Here, I’ve distilled it down to 20 rules:
1. Avoid credit card debt like the plague
The first rule of personal finance is to never carry a credit card balance. Credit card borrowing rates are egregiously high and paying those rates is an easy way to negatively compound your net worth. If you carry credit card debt for a prolonged period of time, you’re not ready to invest your money in the markets.
2. Building credit is important
Likely the biggest expense over your lifetime will be interest costs on your mortgage, car loans and student loans. Having a solid credit score can save you tens or even hundreds of thousands of dollars by lowering your borrowing costs.
3. Income is not the same as savings
There is a huge difference between making a lot of money and becoming wealthy because your net worth is more important than how much money you make. Having a high income does not automatically make you rich; having a low income does not automatically make you poor. All that matters is how much of your income you set aside, not how much you spend.
4. Saving is more important than investing
Pay yourself first is such simple advice, but so few people do this. The best investment decision you can make is setting a high savings rate because it gives you a huge margin of safety in life. You have no control over the level of interest rates, stock market performance or the timing of recessions and bear markets but you can control your savings rate.
5. Live below your means, not within your means
Living within or above your means is how you end up going from paycheck to paycheck without every truly building wealth. The only way to get ahead is by living below your means and setting aside a portion of your income for the future.
6. If you want to understand your priorities look at where you spend money each month
You have to understand your spending habits if you ever wish to gain control of your finances. The goal is to spend money on things that are important to you but cut back everywhere else. And if you pay yourself first you don’t have to worry about budgeting, you just spend whatever’s leftover on the things that truly matter to you.
7. Automate everything
The best way to save more, avoid late fees, and make your life easier is to automate as much of your financial life as possible. The goal is to make the big decisions up front so you don’t need to waste so much time and energy tending to your finances.
8. Get the big purchases right
I know I shouldn’t be so judgmental but whenever I see $50-$70k SUVs on the road or enormous McMansions the first thing that pops into my head is, “I wonder how much they have saved for retirement?” Personal finance experts love to debate the minutiae of lattes but the most important purchases in terms of keeping your finances in order will be the big ones—housing and transportation. Overextending yourself on these two purchases can be a killer because they represent fixed costs and come with more ancillary expenses than most people realize.
9. Build up your liquid savings account
Your monthly budget should take into account the fact that there are infrequent, yet predictable expenses you’ll need to take care of on occasion. Weddings, vacations, car repairs and health scares never occur on a set schedule but you can plan on paying for these events by setting aside small amounts of money each month to better prepare yourself when life inevitably gets in the way.
10. Cover your insurable needs
My friend and colleague Jonathan Novy likes to remind me that people buy insurance because there will be a financial impact on their business or family if they were to die or become disabled. The idea is to measure that impact in dollars, and if possible, insure against it.
11. Always get the match
I can’t tell you how many times I’ve talked to people who aren’t saving enough in their 401(k) plan to get the employer match. That’s like turning down a portion of your paycheck each payday. At a minimum you should always save enough to get the match so you’re not leaving free money on the table.
12. Save a little more each year
The trick to saving more money over time is to increase your savings rates every time you get a raise so you’ll never even notice you had more money to begin with. And the sooner you begin setting money aside, the less you end up realizing it never made it to your checking account to be spent in the first place.
13. Choose your friends, neighborhood and spouse wisely
Trying to keep up with spendthrift friends or neighbors is a never-ending game with no true winners. Find people to spend your life with who have similar money views as you and it will save you a lot of unnecessary stress, envy and wasteful spending.
14. Talk about money more often
It takes all of 5 minutes before I hear about politics in almost any conversation these days, but somehow money is still a taboo subject. Talk to your spouse about money. Ask others for help. Don’t allow financial problems to linger and get worse. Money is a topic that impacts almost every aspect of your life in some way. It’s too important to ignore and sweep under the rug.
15. Material purchases won’t make you happier in the long run
Buying stuff won’t make you happier or wealthier because true wealth is all of the stuff you don’t waste money on. Experiences give you a better bang for your buck and time spent with the people you love is one of the best investments you can make.
16. Read a book or 10
There are countless personal finance books out there. This stuff should be taught in every high school and college, but it isn’t. No one is going to care more about your money decisions than you. Invest some money, time, and energy into yourself. It’s the best investment you can make.
17. Know where you stand
Everyone should have a back-of-the-envelope idea of their true net worth. That means adding up all of your assets and subtracting any debts. This way you can set some general expectations about savings rates, market returns and portfolio growth to give yourself some goalposts in the future.
18. Taxes matter
Take advantage of as many tax breaks as you can and always understand your personal tax situation. The biggest lay-ups in this category include taking advantage of as many tax-deferred savings vehicles as humanly possible and keeping your trading to a minimum when investing in taxable accounts to avoid paying higher short term capital gains taxes.
19. Make more money
Saving and/or cutting back is a great way to get ahead, but it’s an incomplete strategy if you’re not trying to earn more by enhancing your career. Too many people are stuck in the mindset that there’s nothing they can do to get a better job, take on more responsibilities or earn higher pay. That’s nonsense. You must learn how to sell yourself, improve your skills and negotiate a higher income over time.
20. Don’t think about retirement, but financial independence
The goal shouldn’t be about making it to a certain age so you can ride off into the sunset, but rather getting to the point where you don’t have to worry about money anymore. Retirement is a concept that is still evolving and no one knows how they’ll feel once they reach that age. Becoming financially independent allows you to make decisions about how you spend your time on your own terms.
This is an excerpt from Carlson’s new book Everything You Need to Know About Saving For Retirement.
Ben Carlson is the director of institutional asset management at Ritholtz Wealth Management. He may own securities or assets discussed in this piece.


fortune--2020-12-09--TSA is bracing for more Americans to push ahead with holiday travel plans despite CDC warnings

Americans are expected to continue with their travel plans for the Christmas holiday with more than a million air passengers per day anticipated for several days during the holiday period, David Pekoske, administrator of the Transportation Security Administration, said during an aviation event Tuesday.
Americans plan to travel despite Center for Disease Control advice to stay at home and celebrate with the people they live with.
Anthony Fauci, the U.S. government’s top infectious-disease expert, said that the Christmas holiday season could pose greater risks than Thanksgiving when it comes to spreading the coronavirus, and urged Americans to double down on measures such as wearing masks, avoiding crowds and social distancing.
Despite Pekoske’s forecast, passenger traffic has fallen steadily since Thanksgiving as the country faces a surge in new infections. In the past seven days through Monday, airlines carried only 33.5% of passengers compared to the equivalent week in 2019, or an average of about 725,000 a day. The passenger numbers are the lowest seven-day average since late September, according to TSA data.


fortune--2020-12-09--Pandemic-fueled day trading is overwhelming online brokers—and the traders are fuming

The trouble began about nine miles northwest of the New York Stock Exchange, in a squat, unremarkable building.
There, inside a critical data node in the U.S. financial system, a crucial piece of hardware failed. Like a downed electrical line in some faraway corner of the power grid, that breakdown effectively turned the lights out for a swath of investors across the nation. Irate traders woke up to discover they’d been locked out of their accounts at one of the nation’s leading electronic brokers, Interactive Brokers Group.
Monday’s events—from the failure across the Hudson River, in a windswept stretch of New Jersey, to Interactive Brokers’ desperate race to identify and fix the problem—underscores the new and growing strains that trading systems are experiencing as individuals jump into the markets as never before.
The changes wrought by the COVID-19 pandemic have fueled a surge of retail trading, which now comprises 20% of U.S. stock orders—an increase of 5 percentage points in the $42 trillion market in just a year, according to Bloomberg Intelligence research.
Interactive Brokers and rivals including Charles Schwab and Morgan Stanley’s E*Trade have set records this year for customer accounts and activity as day traders, many of them stuck at home with few distractions, have ridden the more than 60% surge since March’s lows. But that has brought greater focus on how the companies operate and serve their growing legions of customers.
“As retail brokerages become a more significant aspect of this business, the quality of a retail broker’s tech becomes more important,” said Larry Tabb, an analyst at Bloomberg Intelligence. “When they’re down, they frustrate a wider array of traders, who have very little patience when they want to trade.”
When problems occur, the feedback is swift. Websites such as Downdetector.com allow any brokerage customer to report problems with their trading platform and chart how many are reported. Customers also broadcast their frustration—and, in some cases, plans to switch brokerages—on their Twitter or Facebook feeds.
As if to emphasize the new environment for 42-year-old Interactive Brokers, customers bombarded it with complaints Monday on Twitter and threatened to close their accounts.
“The system was specifically designed to minimize the likelihood of the kind of technology failure that we experienced,” said CEO Milan Galik, who apologized for the disruption in a note to clients. “It did not work as expected today.”
While the outage was far from the first for a retail brokerage, the fallout was more widespread because of this year’s successes. Interactive Brokers had more than 1 million accounts at the end of November, a 52% increase from a year earlier, and hit a record 1.8 million daily average trades in the third quarter, more than double the same period in 2019.
Steve Sanders, the firm’s executive vice president of marketing and product development, said Tuesday that all systems were “back to normal.”
Monday’s issue was caused by a hardware malfunction in a Secaucus, New Jersey-based data center called Equinix NY5, according to a person familiar with the matter. Part of a nondescript campus of warehouses that are home to the plumbing of the modern financial system—as well as servers for social media, telecoms and streaming companies—the site is the unglamorous side of today’s stock trading.
It’s the true backbone of Wall Street and, like any technology, is vulnerable to the occasional breakdown. Stock exchanges, for example, experience similar issues, though backups and the fact that there are more than a dozen bourses usually prevents any market disruption.
But for non-professionals who’ve come to expect instantaneous trades from their computers or phones, outages are a shock, and a potentially expensive one.
“Talk about infuriating,” said user Dale O. Hays, who was unable to access Interactive Brokers’ trading systems at about 11 a.m. New York time on Monday. Hays said the system didn’t restart until around 3 p.m., and even then it went down again three more times.
“They seem to have the mentality of not being proactive, not communicating the true status—as noted by their various emails, claims and ‘status boxes’—and letting their clients blow in the wind,” he said.
Interactive Brokers isn’t alone in facing new, and newly irate, customers. Robinhood Markets, the app-based broker that has perhaps benefited more than anyone else from 2020’s retail surge, has been criticized for its lack of assistance when things go wrong.
“We’ve been seeing outages from Robinhood to TD Ameritrade to Schwab,” Tabb said. “They lose clients when this happens. Clients get upset, and if problems persist they go somewhere else.”


fortune--2020-12-09--Only 10% of people in poor countries will get a coronavirus vaccine next year

Our mission to make business better is fueled by readers like you. To enjoy unlimited access to our journalism, subscribe today.
For people in the U.S., Europe, and much of East Asia, a coronavirus vaccine is starting to seem right around the corner. But in 67 developing or poor countries from Mongolia to Mozambique, only one out of every 10 people will be vaccinated by the end of 2021, according to a new analysis.
The finding, detailed Tuesday by the People’s Vaccine Alliance, a coalition including Oxfam and Amnesty International that advocates for equitable and low-cost vaccine access, highlights the disparities between richer and less well-off countries. It also shows that a large part of the world will likely be grappling with COVID for some time to come, even after wealthy countries get it under control.
The 67 low or lower-middle-income countries, according to PVA, will have access to a vaccine only through COVAX, a project that aims to pool resources from many countries to broaden vaccine access. So far, COVAX has secured 700 million vaccine doses from the developers of leading vaccine candidates—but those doses will be shared across 3.6 billion citizens of COVAX’s 92 lower- and middle-income recipient countries.
COVAX also includes some middle-income countries, such as Vietnam and Brazil, which are negotiating independently for additional vaccine supplies. But for the poorest countries, that means a two-dose vaccination sequence has been secured for only 10% of residents.
In addition to ongoing illness and death in those countries, that could have worldwide economic impacts if it hampers travel or trade.
“This pandemic is a global problem that requires a global solution,” said Lois Chingandu, director of Frontline AIDS, a People’s Vaccine Alliance member. “The global economy will continue to suffer so long as much of the world does not have access to a vaccine.”
The People’s Vaccine Alliance cites two factors in the shortfall: what it calls “hoarding” of the vaccine by wealthy nations, and limits on vaccine production because of intellectual-property controls.
“Rich countries have enough doses to vaccinate everyone nearly three times over, whilst poor countries don’t even have enough to reach health workers and people at risk,” says Dr. Mohga Kamal-Yanni of the PVA.
That’s because early in the vaccine race, many rich countries reserved supplies from multiple vaccine candidates. Now a large number of separate vaccine programs have shown promise in large-scale trials, potentially leaving those countries with more earmarked doses than they need.
According to Nicholas Lusiani of Oxfam, “very early” discussions are taking place about how to redistribute those extra doses. “But the logistical, not to mention political, challenges make this not the most ideal solution.”
Instead, Lusiani says, the answer is “a proven public health measure of mass, low-cost production by a small army of producers worldwide.”
To make that possible, the People’s Vaccine Alliance is calling on all pharmaceutical makers working on COVID-19 vaccines to share their technology and intellectual property through the World Health Organization. India and South Africa recently went a step further, calling on the World Trade Organization to exempt COVID-19 vaccines from intellectual-property protections so that more companies could manufacture the vaccine, potentially improving access worldwide.
In a statement, Pfizer did not address the technology-sharing call. Instead, it emphasized that it has developed the “capability to distribute the vaccine globally upon approval or authorization.”
Moderna did not reply to a request for comment about the new analysis.
“Quite frankly, right now, there’s too much of a gap between the rhetoric and the reality [to] deliver on a fair and equitable result for people around the world,” says Dr. Mike Ryan, executive director of the World Health Organization’s Health Emergencies program. “We have the architectural drawings for this moonshot, but we still don’t have the financing to make that happen.”
The United States has declined to help with that financing. The Trump administration announced in September that the U.S. would not contribute to COVAX. Today, the federal government announced further measures to reserve COVID vaccine supplies for Americans before assistance goes to other countries.
By contrast, the EU has committed €100 million to the COVAX effort. EU member states have also contributed to COVAX individually, including an additional €100 million commitment from France.
“No one should be blocked from getting a lifesaving vaccine because of the country they live in or the amount of money in their pocket,” said Anna Marriott, Oxfam’s health policy manager. “But unless something changes dramatically, billions of people around the world will not receive a safe and effective vaccine for COVID-19 for years to come.”


fortune--2020-12-08--Photos: First COVID-19 vaccines begin in U.K.

Our mission to make business better is fueled by readers like you. To enjoy unlimited access to our journalism, subscribe today.
The COVID cavalry is coming. And we’re about to see how strong it is. The U.K. has already given Pfizer and partner BioNTech’s coronavirus vaccine a green light, and the first doses were given today. Margaret Keenan was the first person to receive a COVID vaccine.
A critical meeting among Food and Drug Administration (FDA) advisers on Dec. 10 could lead to emergency authorization in the United States in short order, and certain high-risk Americans could begin receiving COVID vaccines within weeks.
Margaret Keenan, 90, returns to her ward at University Hospital in Coventry after becoming the first person in the U.K. to receive the COVID-19 vaccine, on Dec. 8, 2020. Jacob King—PA Wire/Bloomberg/Getty Images
A nurse prepares to administer the Pfizer/BioNTech COVID-19 vaccine to care home worker Pillay Jagambrun, 61, at Croydon University Hospital in London. Dan Charity—Pool/Getty Images
Grace Thomson receives the COVID-19 vaccine from Paula McMahon at the Louisa Jordan Hospital in Glasgow. Jeff J Mitchell—Pool/Getty Images
Prime Minister Boris Johnson watches as nurse Rebecca Cathersides administers the Pfizer/BioNTech COVID-19 vaccine to Lyn Wheeler at Guy’s Hospital in London. FRANK AUGSTEIN—POOL/AFP via Getty Images
Lorna Lucas, 81, reacts as she receives the first of two Pfizer/BioNTech COVID-19 vaccine shots at Guy’s Hospital in London on Dec. 8, 2020. VICTORIA JONES—POOL/AFP/Getty Images
Staff at Southmead Hospital in Bristol receive delivery of the Pfizer/BioNTech COVID-19 vaccine and store the vials safely. Graeme Robertson—Pool/Getty Images
A vial of the Pfizer/BioNTech COVID-19 vaccine ready for administration at Guy’s Hospital in London. Victoria Jones—Pool/Getty Images
A vaccinator poses for a photograph in a booth at Cardiff and Vale Therapy Centre in Cardiff, Wales. NHS staff, those over 80 years old, and care home residents will be among the first to receive the Pfizer/BioNTech vaccine. Matthew Horwood—Getty Images


fortune--2020-12-08--Why Elon Musk moved to Texas—and what he really thinks of California

Elon Musk has moved to Texas to focus on two big priorities for his companies: SpaceX’s new Starship vehicle and Tesla Inc.’s new Gigafactory, currently under construction in Austin.
There also are potentially enormous tax implications for Musk, who recently became the world’s second-wealthiest person. Texas has no personal income tax, while California imposes the highest personal income levies in the nation on its richest residents.
“I have moved to Texas,” Musk said Tuesday, speaking in a live interview with the Wall Street Journal. Musk did not specify where or say if he has purchased property.
Musk, 49, has lived in the Los Angeles area, where SpaceX is headquartered, for two decades. Tesla is headquartered in Palo Alto, California, and the electric-car maker’s flagship auto plant is across the San Francisco Bay in Fremont.
Musk criticized California in the interview, saying it had become complacent with its status as an economic giant and less attractive to him.
“If a team has been winning for too long they do tend to get a little complacent, a little entitled and then they don’t win the championship anymore,” he said. “California’s been winning for a long time. And I think they’re taking them for granted a little bit.”
Musk moved his personal foundation to Austin from California, Bloomberg reported Monday.
‘Outsized Influence’
The Bay Area, which is headquarters for some of the world’s biggest tech companies including Apple Inc. and Google parent Alphabet Inc., has been upended by the pandemic. Many tech employees have been required to work from home and that has spurred some to relocate.
Social media giants such as Facebook Inc. also have faced criticism for allegedly thwarting competition.
“Silicon Valley, or the Bay Area, has too much influence on the world, in my opinion,” said Musk. “The Bay Area has outsized influence on the world.”
SpaceX tests rocket engines in McGregor, Texas, west of Waco, and is building its massive new Starship spacecraft in Boca Chica, Texas, south of Brownsville near the Mexican border. Tesla is expanding its global operations with a new factory in Shanghai that opened last year and another being built in Berlin.
Musk, who has always been highly mobile, frequently shuttles between California, Austin and Boca Chica on his private Gulfstream G650 jet, along with frequent international trips to Berlin and China.
As Tesla’s stock has soared this year, Musk’s personal wealth has ballooned to more than $155 billion, making him the second richest person in the world after Amazon.com Inc.’s Jeff Bezos. The company’s shares rose 1.3% to close Tuesday at $649.88.
Debt Retirement
Musk’s long relationship with California soured this spring during the first wave of the coronavirus. When Alameda County shutdown orders stopped production at Tesla’s plant in Fremont, Musk defied local health officials by closing late and reopening early, blasting the rules as “fascist” on an earnings call.
He briefly sued the county and threatened to move Tesla’s headquarters to Texas or Nevada. Musk disclosed on Twitter that he had Covid-19 himself last month.
But Musk’s relationship with California is likely to endure, and thousands of his employees work in the Golden State. He has five teenage sons with his ex-wife Justine Musk, and the two have joint custody.
Tesla announced plans earlier Tuesday to raise $5 billion in additional capital, which Musk said will go toward retiring debt and building up the company’s growing cash reserves — which he seemed to downplay.
“Debt retirement and to have a bit more of a war chest,” said Musk. “At the end of the day what is money? Money’s an entry in a database.”
Read more: Tesla Raising Up to $5 Billion in Third Offering This Year
Tesla almost tripled its cash and cash equivalents to $14.5 billion as of Sept. 30, up from $5.3 billion a year earlier. Its total debt — excluding vehicle and energy-product financing — came to $8 billion in the third quarter, unchanged from a year ago.(Updates with additional Musk comments from 10th paragraph.)
–With assistance from Justin Bachman.


fortune--2020-12-08--Cybersecurity firm FireEye  discloses that it was hacked, sending its shares spiraling

The cybersecurity firm FireEye said it had been hacked and that the attackers stole tools the company uses to test the defenses of its customers’ computer networks to find potential vulnerabilities. The company’s shares fell as much as 9.8% on the news.
The attackers were a “nation with top-tier offensive capabilities,” said CEO Kevin Mandia. He didn’t identify the country suspected to be behind the attack, but a person familiar with the incident said investigators believe hackers closely aligned with the Russian government were behind it.
The hackers “tailored their world-class capabilities specifically to target and attack FireEye,” Mandia said in a company blog on Tuesday. “They are highly trained in operational security and executed with discipline and focus.”
The tools taken, known as “red team tools” in the security community, mimic the behavior of hackers and enable FireEye to provide “diagnostic security services” to customers, Mandia said. He said the company had so far seen no evidence that anyone had used the tools in a cyber-attack.
The company’s shares dropped to as low as $14.00 in extended trading after closing at $15.52 in New York. The stock has declined 6.1% this year.
FireEye, based in Milpitas, California, was founded in 2004 and is highly regarded in the cybersecurity community. It is considered one of the companies with enough threat intelligence and expertise to routinely and reliably attribute attacks to high-profile hackers, including the governments of Russia, China, Iran and North Korea.
“The FireEye breach is an extraordinarily significant attack because of the nature of the target,” said Mike Chapple, teaching professor of IT, analytics and operations at the University of Notre Dame’s Mendoza College of Business, in written remarks. “As one of the world’s go-to cybersecurity firms, FireEye has a ringside seat for some of the most sophisticated breaches carried out worldwide. From that vantage point, they’re able to amass one of the world’s most complete selection of cyberwarfare tools for use in their own defensive work.”
The hack was discovered in recent weeks by FireEye when it found a suspicious login that had surpassed the two-factor authentication requirement on their virtual private network, according to the company. The attackers carried out the hack from two dozen IP addresses based in the U.S., none of which have been detected as part of a cyber-attack before — the type of sophisticated tactics that led FireEye to believe a foreign intelligence service was behind the incident.
“Consistent with a nation-state cyber-espionage effort, the attacker primarily sought information related to certain government customers,” Mandia wrote. He added that, while the hackers accessed “some of our internal systems,” they didn’t appear to steal customer data.
FireEye is investigating the attack with the FBI and Microsoft Corp. The company is also publishing information that can help neutralize the tools that were stolen.
Matt Gorham, assistant director of FBI’s Cyber Division, said preliminary indications “show an actor with a high level of sophistication consistent with a nation state.”
The case has similarities to a breach of the National Security Agency, when hackers stole U.S. cyberweapons and a mysterious group known as the “Shadow Brokers” published them online starting in 2016.
“This incident demonstrates why the security industry must work together to defend against and respond to threats posed by well-funded adversaries using novel and sophisticated attack techniques,” Microsoft said in a statement, which also commended FireEye for disclosing the breach.


fortune--2020-12-08--Was Bob Dylan’s sale of his massive music catalog a tax maneuver?

For a number of reasons, late 2020 may be the absolute optimal moment to sell a top-tier music catalog, and Bob Dylan’s catalog is arguably on a tier of its own near the very top. Universal Music Group announced on Dec. 7 that it had bought Dylan’s catalog of some 600 songs; while UMG didn’t disclose the price, speculation in the industry hovers around $300 million.
The deal’s value to Dylan depends on how the proceeds get taxed. A gigantic windfall like his would normally be taxed as a capital gain at a rate of 20% under current law. But President-elect Biden has proposed taxing capital gains as ordinary income for taxpayers with income over $400,000. The top ordinary income rate is now 37%, and Biden has proposed raising it to 39.6%. If the Democrat candidates win both senatorial elections in Georgia, giving the party a Senate majority, significant changes to tax law become a plausible scenario.
Such changes rarely happen quickly, but changes to tax law have sometimes been retroactive to the beginning of the year in which they’re enacted. The Skadden Arps Slate Meagher & Flom law firm is warning clients: “The potential elimination of the capital gains rate preference, along with the anticipation of a likely corporate rate increase, could also serve as potential catalysts for taxpayers to close M&A deals this year if they anticipate that these proposals could be enacted in the first year of a Biden presidency, with the possibility of a retroactive effective date of January 1, 2021.”
Bottom line: The tax on a deal like Dylan’s could almost double if it doesn’t get done by New Year’s Eve. “I have a number of clients who were trying to do deals before the first of the year because they had fear of the new administration pushing its tax agenda,” says Josh Escovedo, a lawyer whose specialties at the Weintraub Tobin law firm include copyright and trademark issues. “It’s quite possible” that those considerations could have influenced Dylan’s deal, he notes.
Dylan had another excellent reason for selling now: The past few years have been boom times for music catalogs. Just days before Dylan sold his catalog, former Fleetwood Mac singer Stevie Nicks reportedly sold an 80% interest in her catalog to a publishing and talent management firm called Primary Wave in a deal that valued the catalog at $100 million; the Wall Street Journal initially reported the transaction. Investors with little music industry experience, including Morgan Stanley and Google Ventures, have been moving into the field. Hipgnosis Songs, founded by former talent manager Merck Mercuriadis, has raised and spent over $1 billion on catalogs over the past 29 months.
The explanation for all this activity, in one word: Spotify. “It’s a disrupter,” says Escovedo. “Spotify has brought about a more quantifiable and predictable model for the industry, so companies can bring in the suits and figure out the value of [artists’] income streams.”
Those income streams can last a long time, another attraction for investors. “Dylan’s copyrights on his work before 1978 expire 95 years after publication,” says Dotan Oliar, a professor at the University of Virginia Law School who focuses on intellectual property. So the earliest songs in Dylan’s catalog, from 1962 (“Blowin’ in the Wind,” for example), could produce income until 2057. Copyrights on songs written on or after Jan. 1, 1978, Oliar says, “will expire 70 years after his death.” Dylan, 79, seems to be in excellent health, but even he can’t actually remain forever young, so let’s say he’s around until age 95. His post-1977 songs could then produce income until 2106.
Popular music is a fickle, volatile business, but it would be hard to name any company making a longer-term investment than the one Universal Music Group just made.


fortune--2020-12-08--How China has used the pandemic to pull ahead on trade, by the numbers

The coronavirus pandemic continues to be a hugely disruptive force in the global economy. As COVID-19 cases surge in the U.S., parts of the country have reintroduced lockdown measures, and last week’s disappointing jobs report has raised fears of another possible recession—amplifying calls for Congress to take action on economic stimulus.
But while the virus continues to hamper the economies of both the U.S. and Europe, China has managed to parlay the pandemic into a stronger global trade position. On Monday, it emerged that China’s trade surplus soared past $75 billion in November—a new record that speaks to the country’s recovery from the pandemic, and the extent to which other countries are relying on Chinese goods.
Chinese exports last month were 21% higher than in November 2019, and exports to the U.S. were up 46% despite a trade war that has resulted in tariffs on hundreds of billions of dollars in Chinese goods. China’s global trade surplus through the first 11 months of the year also surged 21% to $460 billion, among the highest figures on record.
On the one hand, China’s economy is in the midst of an impressive recovery from an outbreak that struck it before the rest of the world, with third-quarter GDP growth coming in at nearly 5%. But the trade surplus also speaks to the impact of lockdowns on Western economies, which are producing and exporting less as a result—and relying more on foreign imports.
The U.S.’s own global trade deficit stood at more than $63 billion in October, the Commerce Department said last week, and on a year-to-date basis was up 9.5% from the previous year. America’s trade deficit with China also continues to swell despite the Chinese now importing more American goods than before. Still, China’s purchases of U.S. products remain well below targets set by the “Phase 1” trade agreement between the two sides earlier this year, while the U.S. is importing more Chinese goods.
Though China’s current, record-setting levels of exports are expected to moderate as the global economy emerges from the pandemic in 2021, this year has seen the world’s second-largest economy strengthen its position from a global trade perspective. Despite the Trump administration’s efforts to redress the balance of trade in the U.S.’s favor, China will end 2020 in a better place than its rival—having apparently overcome a virus that continues to plague the West’s economy.