fortune--2020-05-11--Exclusive: Dem introduces new stimulus plan so states don’t ‘have to choose between secure elections

Exclusive: Dem introduces new stimulus plan so states don’t ‘have to choose between secure elections and Medicaid’

Democrats in Congress are hoping to rectify what they call an error in the $2 trillion COVID-19 aid package that makes essential election funding inaccessible to some states and a headache to procure for others.
The race to the presidential elections are well underway, and states now have less than six months to completely revamp long-used voting processes and systems to protect their citizens in the wake of an unprecedented and deadly global pandemic. But things like vote-by-mail initiatives and personal protective equipment for poll workers are expensive, and these costs come alongside rapidly falling local revenues due to the COVID-19 shutdown.
Congress stepped in to help by including $400 million for election security funding for states in the March CARES act. But the money didn’t come for free: In order to receive the additional funding, states have to match 20%. Some officials say the match rate is onerous, if not impossible, to meet.
Today, Congressman Joe Neguse (D-CO) will introduce the Secure Our Elections Act, which retroactively removes the 20% match requirement. He hopes this will be added to the next stimulus bill, which house Democrats are currently finalizing their version of.
“States shouldn’t have to choose between cutting Medicaid or other important social safety net programs and preserving the security of their state elections,” said Neguse in an exclusive interview with Fortune. “That’s unconscionable, and Congress should remove that obstacle.”
State budgets are strapped in the wake of the coronavirus pandemic. Some states face difficulties scrounging up the millions of dollars required to match the funding. Others require legislative approval to make the match—a problem considering that more than half of state legislatures have already adjourned for the year.
“Every state has a different budget process and a different legislative calendar and cycle dictated by their constitutions,” said Neguse. “To put $400 million of election security funds at risk because of the inability of some states to be able to develop the 20% in matching funds to access the federal grant is a problem that does not need to actually occur, and it’s one that we could easily prevent for a very small cost and doing that makes a lot of common sense.”
State leaders are struggling to find the money they need and are being forced to cut essential funding in other areas of their budgets in order to scrape their match together.
“As it currently stands, my office needs to find a $1.33 million match in order to draw down our federal funds and these critical dollars are just vital to be able to be able to deal with the COVID-19 pandemic. The state of Colorado is going to have to drastically slash our budget and we’ll be forced to take money out of our own budget away from programs to put it towards the match” said Colorado secretary of state Jena Griswold. “In other states some legislatures aren’t in session either, and some states will have a really hard time drawing down funds because of how their offices are funded when we’re seeing just massive slashes to state budgets.”
Ricky Hatch, a representative for the National Association of Counties and clerk auditor in Weber County, Utah, previously told Fortune that his state will likely only claim half of the election security funds made available because of the matching requirement. “The governor’s office came to us and said, ‘We just don’t think we can ask the legislature for that 20% match,’” he said.
Previous grants offered to states through the Help America Vote Act, signed into law by George W. Bush, had match rates of just 5%. Neguse expressed confusion about why this particular match was much higher, given that private companies receiving stimulus funding had no match rate.
Still, critics argue that the federal government is being quite generous in extending 80% of funding to states.
“A 20% match is low. Federal programs typically have 50% match rates,” said Chris Edwards, director of tax policy studies at the Cato Institute. “Elections are extremely important, and state leaders themselves know that and will fund them and take care of that, I don’t think the federal government has to push them to.” A few million dollars, he argued, is not a large amount of money for states like California which have $150 billion budgets.
California is currently facing a $54.3 billion budget deficit, largely due to COVID-19 business closures, according to Governor Gavin Newsom. In a press conference this week, he said the state had to brace for Depression-era revenue.
“Two trillion dollars were just pushed into the economy, and if the federal government is able to give that out to some of the biggest businesses who arguably have great lines of credit and money in the bank then they should be able to support the most important thing in our nation and that’s our democracy and freedom to vote,” Griswold said.
Secretaries of state are calling for more election funding. A recent report by the Brennan Center for Justice found that in five states—Ohio, Michigan, Pennsylvania, Georgia, and Missouri—the current funding will amount to an average of just 20% of required costs for necessary election changes, but Neguse said his bill is an immediate stopgap measure that won’t cost the Federal government any additional money.
“The reality is that elections systems around the country are dramatically underfunded,” Griswold said. “They are not as prepared are they could be to be able to execute elections during a healthcare crisis, and we need to invest in that. Americans need to exercise their fundamental rights even during a healthcare crisis, and they should never have to choose between their health and casting a ballot.”
Neguse said he has spoken to both Democratic and Republican colleagues about his bill, and he’s optimistic that it will be included in the next stimulus package.
“This is a homeland security issue. This is ensuring safety in our elections by investing the necessary resources into technology and the corresponding needs of our secretaries of states across the country,” he said. “This is a common sense statutory fix that will ensure our elections are safer.”
More politics coverage from Fortune:
—Saving lives vs. saving the economy is a false tradeoff, economists say
—Trump’s demand that China pay coronavirus reparations evokes an ugly history
—McConnell focuses Senate on conservative judge appointments rather than coronavirus
—Real unemployment rate soars past 24.9%—and the U.S. has now lost 33.5 million jobs
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: Fortune’s top 10 heroes of the coronavirus pandemic
Subscribe to How To Reopen, Fortune’s weekly newsletter on what it takes to reboot business in the midst of a pandemic.


fortune--2020-05-11--Melinda Gates won’t let us miss this opportunity to transform childcare

Say Amazon actually buys AMC Theatres .
What would that be like ?

Good morning, Broadsheet readers! Women’s unemployment is higher than men’s, White House staffers test positive for coronavirus, and Melinda Gates is making sure we don’t miss the opportunity to transform American caregiving. Have a productive Monday.
– Melinda’s mission. As the Bill & Melinda Gates Foundation works overtime on its coronavirus response, Melinda Gates is simultaneously turning her attention to a related issue: the crisis in caregiving that threatens to set women back in the workforce.
I talked to Gates last week about that crisis—she recently wrote an op-ed about the problem—and a few other topics, like her $1 billion commitment to gender equality. As the world transforms because of the coronavirus pandemic, do the details of that commitment change?
Unsurprisingly, Gates says her commitment “stays exactly the same.” But there are a few issues on her agenda that the pandemic has made her view as even more urgent; namely, getting more women into political leadership.
Women like New Zealand Prime Minister Jacinda Ardern and German Chancellor Angela Merkel, Gates says, have been leading effectively through this crisis because “they understand” what’s at stake. “They’ve lived the barriers,” she told me.
Gates hopes that the leaders who “get it” will be the ones calling the shots as she and other advocates work to turn this crisis into lasting change. “If we don’t see it now, we’re never going to see it,” Gates says of the necessity of U.S. paid family leave. She compares this moment to another; after World War II, American leaders put their muscle behind lasting global institutions like NATO, but disbanded “war nurseries” that had been set up to care for children while women worked.
“If there had been more women at those tables, we would have kept them open. We would have built a more robust childcare system,” she says. That’s what Gates’ work right now is about: making sure we don’t miss another opportunity.
Read the rest of our Q+A here.
Emma Hinchliffe
emma.hinchliffe@fortune.com
@_emmahinchliffe
ALSO IN THE HEADLINES
- Record unemployment. The April jobs report, released Friday, revealed that women accounted for 55% of jobs lost during the month and now make up 49% of the American workforce, after briefly outnumbering men on payrolls last year. Women's unemployment rate is 16.2% compared to men's 13.5%. NPR
- #IRunWithMaud. Wanda Cooper Jones, mother of Ahmaud Arbery, who was killed by two white men while jogging in his Brunswick, Georgia neighborhood, tells journalist Yamiche Alcindor that without national attention, her son's death would have been covered up. PBS Newshour
- Testing the administration. White House staffers tested positive for the coronavirus this weekend, including Ivanka Trump's personal assistant and Katie Miller, press secretary for Vice President Mike Pence and wife of Stephen Miller. Ivanka's assistant has been working remotely for several weeks. CNN
IN CASE YOU MISSED IT
- Memo over. James Damore, the former Google engineer who in 2017 wrote a memo arguing that women are innately less suited for technical work than men, quietly ended his lawsuit against the company. He had alleged that Google, which fired him, allowed discrimination against conservative white men. Bloomberg
- The Maine event. Women in Maine have the country's highest rate of political participation; 77% are registered to vote and 65% turn out on Election Day. Many of those women are particularly energized right now against Republican Sen. Susan Collins. Politico
- Tiger Queen. Lisa Nishimura is the Netflix executive who greenlit one of the most popular shows of quarantine, Tiger King. The streaming service's vice president of independent film and documentary is still hearing pitches and says she has enough documentaries in the pipeline to last a while. Wall Street Journal
- Year of MacKenzie. For months, Wired journalist Louise Matsakis has been getting emails from people asking her to buy them a Porsche or contribute £2 million to building an underground bunker. The reason? Google pulled her contact information from an article as the featured result if you search "MacKenzie Bezos phone number." Wired
ON MY RADAR
Alexandria Ocasio-Cortez pays virtual visits to fans in their Animal Crossing islands ABC News
Forget pancakes. Pay mothers New York Times
Gerber's new baby Magnolia is the first adopted spokesbaby in the company's history CNN
Victorian mothers hid themselves in their babies' photos The Atlantic
PARTING WORDS
"I feel very lucky to be sharing Mother’s Day with my children and grandchildren. I pray for the day that we can all be together again soon, without wearing masks."
-Matilda Cuomo, mother of Andrew and Chris Cuomo


fortune--2020-05-11--How to gingerly reopen society

How to gingerly reopen society

This is the web version of Data Sheet, Fortune’s daily newsletter on the top tech news. To get it delivered daily to your in-box, sign up here.
It occurs to me suddenly, the way something hiding in plain sight abruptly presents itself, that the most important concept for the coming weeks and months will be prudent risk.
The first two months of the post-Wuhan phase of the pandemic have been a mad scramble to understand what the hell was going on. We joked about everyone becoming an epidemiologist. But we really were trying to absorb the learnings of infectious disease experts to know how to keep our families, our employees, and ourselves safe. We grasped the concepts about social distancing. We hungrily read about how long the novel coronavirus survives on various surfaces. We memorized the symptoms of a disease that didn’t exist at Thanksgiving.
Now we’re starting to appreciate how little we know, experts and presidents alike. We still can’t comprehend why some areas are more affected than others. We aren’t sure what therapies will work. We have no idea when a vaccine will become available at scale. We don’t even know this thing’s mortality rate.
Instead we plunge ahead, gingerly reopening society, understanding that even trusted experts—let alone a president who won’t wear a mask—can’t tell us all the answers. In other words, we take prudent risks. It’s okay to play golf, but not to touch the ball-washing station. Curbside pickup at stores is fine, but don’t walk inside—even though it’s acceptable to visit Target and Home Depot. Eventually restaurants in coastal cities will reopen with restricted capacity. Maybe schools will do this too. And dormitories.
These decisions will be based on science, yes. But only the probabilistic kind. They are predicated on the notion that infections and deaths will continue, but at a level of risk we can tolerate. It’s the same argument anti-lockdowners made from the beginning about cars: We know they’re dangerous, but we drive them anyway.
Silicon Valley understands risk better than most places. Venture capitalists make a living risking other people’s money, often expecting only one in ten of their bets to work. Software makers in the connected era understand that if a product sucks before lunch, they can improve it before dinner. Uber figured out it could risk flouting the law and build a multi-billion-dollar business anyway.
Prudent risk-taking rules the day. At least, let’s hope it is prudent.
Adam Lashinsky
@adamlashinsky
adam.lashinsky@fortune.com
This edition of Data Sheet was curated by Aaron Pressman.
NEWSWORTHY
Make him an offer he can't refuse. Struggling movie-theater chain AMC may be rescued by a tech titan. Amazon has held talks about acquiring AMC, which must service $5 billion of debt despite the closure of most of its 1,000 locations. It brings to mind the famous Captain Kirk quote from Star Trek V, "What does God need with a starship?" What does Amazon need with a failing movie chain? The better to control Hollywood and boost its original video fare, perhaps.
Cloudy with a chance of emailballs. Ever get swept into a reply-all storm? When some well-meaning but misguided individual replies to everyone on company-wide email and then others reply to that reply and sometimes the email server gets overwhelmed? Microsoft finally is adding an automated feature to Office 365 and Exchange to block the storms.
People don't come to see the tigers. Apple stores in Idaho, South Carolina, Alabama, and Alaska will reopen this week, with “additional safety procedures" such as requiring face masks, social distancing, and temperature checks, the company says.
A perfect processor. The Trump administration is exploring whether it can use subsidies to lure major chipmakers like Intel, Samsung, and Taiwan Semiconductor to build new cutting-edge factories in the United States, the Wall Street Journal reports. Such a move would reduce the world's reliance on factories in Asia used by Apple, Qualcomm, AMD and many others.
I've tried, but I can't. Before all those factories go online, maybe some additional security checks will be in order. Dutch researcher Björn Ruytenberg on Sunday demonstrated a method to bypass all security protection on a Windows laptop via the Thunderbolt port. "Intel created a fortress around this," cryptography professor Tanja Lange tells Wired. "Björn has gotten through all their barriers."
What's in a name. The eBay of used cars, Vroom, filed plans to go public in the next few months. (Well, maybe eBay Motors is the eBay of used cars, but you get the idea.)
FOOD FOR THOUGHT
University of Washington researcher Maddie Smith is about to embark on a great adventure on the German icebreaker Polarstern. She'll spend months drifting around the North Pole studying ice sheets. In an interview with Geekwire, she explains the mission's goal.
Arctic sea ice demands our attention now because the Arctic climate is changing more rapidly than anywhere else in the globe, and we have the most uncertainty in how it will change in the future. So, it has an outsized impact on our predictions and decisions related to global warming. Although our climate models already have sophisticated representations of the sea ice, the Arctic is shifting to a new regime that may necessitate an update. There are always things that can be improved. I can’t imagine not being a part of the effort to understand and reverse climate change. This is the most interesting and exciting way I can picture doing that.
IN CASE YOU MISSED IT
Why the stock market is up, even though all the economic data is down By Anne Sraders
The Coronavirus Economy: How an elementary school teacher teaches P.E. online By Michal Lev-Ram
Disney’s biggest financial problem has nothing to do with the coronavirus By Shawn Tully
Why a bankruptcy filing doesn’t necessarily mean your favorite store is going away By Phil Wahba
Affirm’s Max Levchin, co-founder of PayPal, on the future of money after coronavirus By Jeff John Roberts
The Trump administration wants U.S. supply chain to leave China—but U.S. companies want to stay By Eamon Barrett
(Some of these stories require a subscription to access. There is a 50% discount for our loyal readers if you use this link to sign up. Thank you for supporting our journalism.)
BEFORE YOU GO
Enough with the cute videos. Let's shift our pandemic diversions to the written word. Josh Glenn over at HiLoBrow has compiled a list of 250 of the best adventure novels written in the 20th century, with a bonus prequel listing of the 25 greatest adventure novels of the 19th century. Many are out of copyright and available online as free ebooks. I'm planning to start with Zane Grey's 1912 Western, Riders of the Purple Sage. How about you?
Aaron Pressman
@ampressman
aaron.pressman@fortune.com


fortune--2020-05-11--The coronavirus cleaning boom is coming

The coronavirus cleaning boom is coming

“Bats get into people’s attics. Raccoons get into people’s attics. And we go in and sanitize that. So my thought process was, ‘What if we just took that…and we were able to do something for COVID-19?’”
So that’s just what Jim Sinkuc did. After researching EPA-approved cleaning chemicals, the owner of Advanced Pest Control Solutions, based in Brookfield, Ohio, turned the fogging machines he normally uses to disinfect after an animal infestation into weapons against the coronavirus pandemic.
“I piloted it through my existing customer base, and everyone was really appreciative of it,” he says. “It gave them peace of mind.”
Sinkuc says the desire to help in a crisis was his main motivation for pivoting from killing six-legged bugs to the microscopic kind. But there’s no denying it’s also transforming his business. He’s noticed a surge of interest in the service based on word of mouth alone, and he anticipates he’s going to be “pretty busy” as lockdowns begin to ease through May. Before the pandemic, he says, Advanced Pest Control Solutions had just four employees in addition to himself. He’s since doubled his staff, hiring four new workers to operate the disinfecting foggers.
Sinkuc’s pivot—and the resulting growth—are a microcosm of a much larger wave. After mandated lockdowns of shared spaces are eased, businesses from restaurants to office buildings to airlines will be going above and beyond to show customers that they’re keeping workers and guests as safe as possible.
Experts say that will mean a big surge in spending for cleaning equipment and staff—the cleaning boom is coming. According to Tim Mulrooney, a commercial services equities analyst for William Blair, that will be a fundamental change for the industry.
“Commercial cleaning is a mature industry. It grows in line with GDP,” says Mulrooney. “[But] after the coronavirus, I think you have a secular tailwind to commercial cleaning. Everyone from governments to corporates to individuals have a heightened focus on hygiene. And when you have a heightened focus, you have more dollars spent.”
How to clean up a virus
According to the Centers for Disease Control, the coronavirus mainly spreads through the air, riding on droplets coughed or breathed out by people carrying the virus. Businesses will have to make a variety of accommodations to combat that risk, such as spacing workers farther apart and erecting barriers in open offices.
But the virus can also persist on surfaces and then infect someone when it’s carried to their eyes or mouth.
“Fortunately, this virus is easy to kill on surfaces,” says Joe Allen, an assistant professor at Harvard’s T.H. Chan School of Public Health and coauthor of the recent book Healthy Buildings. “EPA-registered disinfectants will work. The trickier part is around the frequency of cleaning. If you clean once a day in a highly trafficked area, that’s not enough.” High-touch areas like doorknobs and light switches will need particular attention, Allen says.
Maryland Cleaning & Abatement Corp. employees perform a preventive fogging and damp wipe treatment at an office building on March 21, 2020, in Hunt Valley, Md. Rob Carr—Getty Images
That means more labor for cleaning crews.
“We’re asking more of our janitorial partners,” says Anna Squires Levine, North American general manager for shared workspace firm Industrious. Industrious has some spaces still open for essential businesses and is actively planning for the post-lockdown future. Coworking firm WeWork is also increasing the frequency of cleaning and disinfecting, and both companies say that those changes will be in place indefinitely.
Not all of that increased labor will fall on conventional janitorial services, though: Many businesses are adding entirely new elements to their sanitation approach, including the kind of aggressive disinfection offered by Advanced Pest Control Solutions.
Servpro, a franchised cleaning business focused on disaster and hazardous materials cleanup, is seeing unprecedented demand for routine deep-cleaning to supplement janitorial services. According to COO John Sooker, that includes new or expanded agreements to regularly disinfect dozens of U.S. military bases and the facilities of a major U.S. aerospace firm.
Sooker describes the goal of these and other heightened measures as instilling “facility confidence” in both workers and customers, who will be looking at the world with a largely new set of concerns.
“As you’re walking into either a food service space, hospitality, health care, retail—anything,” says Sooker, visitors will ask: “What’s inside that building? Is there something there that could negatively affect my health?”
Clean growth
New technologies are also being deployed to instill that confidence. One in particular seems poised to become a symbol of post-lockdown public life: the electrostatic sprayer. The device, which looks a bit like a plastic gun, was prominently featured in a commercial touting Delta Air Lines’ expanded cleaning efforts. Electrostatic spraying is also the first bullet point in Southwest Airlines’ new cleaning plans.
The sprayers give molecules of disinfectant a positive electrostatic charge before they’re sprayed onto surfaces. That both attracts the molecules to surfaces, and repels them from one another, creating an even coating and pushing disinfectant into recessed areas.
“If I’m spraying a desk, it’ll go underneath the desk,” says Chris Gurreri, cofounder of Victory Innovations, the leading manufacturer of portable electrostatic sprayers. “We estimate it’s 60% to 70% faster than using a spray bottle and wiping.”
It’s also faster than lower-tech decontaminating foggers, which often require waiting several hours for particles to settle before a space can be used.
“Our business has gone crazy since the outbreak started,” says Gurreri. “We’ve been adding capacity every month, and our product is sold out into August.”
Gurreri says interest has come not just from hospitals, hotels, and airlines looking to improve their cleaning and disinfection protocols, but from businesses who want to have the sprayers on hand for routine use. He’s heard from restaurants considering spraying down tables after every patron, and even automobile retailers who want to be able to disinfect cars before buyers pick them up.
According to Allen, a less visible but just as necessary change will be how the air is cleaned—particularly in large buildings.
“We chronically underventilate nearly every indoor environment we’re in, largely in an effort to conserve energy,” he says.
Recirculating air keeps down the cost of cooling and heating it, but also concentrates indoor pollutants—potentially including coronavirus-laden droplets. Allen says leaving more windows open to bring in fresh air will be a solution for some buildings, while others will have to increase filtration in HVAC systems.
The new normal
Companies and experts anticipate that heightened cleaning standards will be in place for the long haul. “I think there’s no question that a permanent shift is coming,” says Allen.
That could have profound benefits for Americans’ health, even after COVID-19 is under control. The same chemicals and procedures used to slow the spread of the coronavirus also meet CDC guidelines for controlling influenza, which kills as many as 61,000 Americans a year, despite the availability of a vaccine.
Fresher, cleaner air will come with an energy cost, but it could also increase office health and productivity.
“Decades of science show that when we bring in more fresh air, we have fewer sick days, less disease transmission, and better cognitive function,” says Allen.
But it won’t be enough to just improve the actual cleaning: Businesses will have to demonstrate those improvements to customers and workers. That’s why Allen also expects more demand for third-party certification of the cleanliness of facilities, citing those provided by Fitwel and the Well Building Standard. Sooker says Servpro is planning, for the first time, to offer its customers window stickers to highlight that they’re using the company’s services.
“People want to trust that something has been done in their building,” says Sooker. “I know I have a cleaning service that comes in and makes everything look clean visually. But what are you doing for the things we can’t see?”
According to Mulrooney at William Blair, that element of anxiety will likely help benefits of the cleaning boom accrue to recognizable cleaning brands including Servpro, ABM Industries, and ServiceMaster Clean. Larger operations also tend to have more sophisticated cleaning protocols and better supply chains, helping them secure needed supplies and tools as demand ramps up. Those factors could drive consolidation of what has long been a fragmented industry with low barriers to entry.
“Going with a large, well-known brand is what facility managers are going to be looking for,” says Mulrooney. “Those companies are much better positioned as we enter the next phase of commercial cleaning.”
Dive into stories from Fortune’s print edition:
—The trillion-dollar question: How far will GDP fall?
—How each industry is fueling the U.S. unemployment rate in one chart
—What we can learn from China’s color-coded apps for tracking the coronavirus
—The retailers that are smartest about tech will finish on top after the coronavirus is contained
—Big Pharma has the chance to come to the world’s rescue
—More surveillance and less privacy will be the new normal in a pandemic era
—WATCH: Why banks were ready for the financial impact of the coronavirus
Subscribe to How to Reopen, Fortune’s weekly newsletter on what it takes to reboot business in the midst of a pandemic.


fortune--2020-05-11--Introducing ‘How to Reopen,’ our series on business in a post-pandemic world

Restaurants in Louisiana. Salons in Georgia. Retailers in Alabama. Gyms in Arkansas. Churches in Idaho.
Municipalities and organizations across the United States are beginning to imagine what returning to “normal” might look like in the wake of the novel coronavirus pandemic. For most, there are still more questions than answers about how any of this might—or should—work.
What can the world learn from the Chinese cities attempting this first? What cleaning procedures are necessary to keep employees and customers safe? Is lifting shelter-in-place orders even the best move for the economy? How can we consume art safely?
This month, Fortune launched a new series, called “How To Reopen,” that digs into what business leaders are doing to help companies large and small—not to mention the cities they inhabit—survive the economic fallout from COVID-19. CEOs have already called this the most difficult economic challenge they’ve faced, a once-in-a-generation event. Rebounding from it will be just as complicated. Fortune aims to bear witness to as much of it as we can.
Oh, and one more thing: In addition to a steady stream of reportage, we’ve also launched a weekly newsletter to deliver these tales right to your inbox. We’ll send the first edition on Sunday, May 17. Sign up now to make sure you’re on the list.
More coronavirus coverage from Fortune:
—The Rebuild Program: A project helping small businesses reopen amid a pandemic
—LOOK: What life looks like in Europe as the continent starts to reopen
—LISTEN: How Marc Benioff is helping out during the coronavirus pandemic
—WATCH: Fortune’s top 10 heroes of the coronavirus pandemic


fortune--2020-05-12--A look at the tech troubles plaguing the stimulus check and PPP small business loan portals

Governor Andrew Cuomo is relying on the advice of CEOs and billionaires to reopen New York

It will come as no surprise to anyone who’s tried to log in to the IRS’s “Get My Payment” website to check on the status of their stimulus check, or any business that’s applied for the Small Business Administration’s Paycheck Protection Program: the federal government could use a software update.
Many users who have accessed, or tried to access, the government-run portals designed to facilitate these programs—some of the hallmark initiatives of the $2.2 trillion coronavirus aid package, known as the CARES Act—have encountered an array of tech-related difficulties. These challenges have shone a light on the technology deployed by the government—and prompted some to ask why glitches, crashes, and outdated turn-of-the-century interfaces are the order of the day.
The “Get My Payment” portal, for example, is supposed to allow Americans to track the status of their federal stimulus payment and enter their direct deposit information to receive their payment quicker. But users, especially in the wake of the portal’s initial rollout last month, found logging into the site easier said than done—only for some to realize that they just needed to enter their street address in all capital letters to be let in.
The SBA’s PPP portal, meanwhile, has also been hit by issues, with backlogs and technical challenges hindering small businesses and lenders alike. E-Tran, the system used by the SBA to electronically process loan application, utilizes a relatively archaic interface and functionality that has been overwhelmed by an unprecedented deluge of applications—leading the head of the American Bankers Association to raise such issues at “the highest levels” of the government. (Representatives for the Treasury Department, the IRS, and the SBA did not return requests for comment.)
At a time when scores of private sector fintech firms are transforming virtually every facet of financial services, the question is why the public sector is lagging so far behind in its own tech-enabled platforms—and why there isn’t more collaboration between the two sectors to build a more efficient, functional experience.
“You would think there would an approach [by the government] that would say, ‘We can’t have 1995-style websites,’” notes Yuval Brisker, co-founder and CEO of digital payment startup Mezu. “It’s a question of technology not just being a private undertaking, but a public undertaking as well… As long as the government doesn’t see [technology] as an essential connection to its constituents, then there’s no real impetus to improve systems that were established in the 1990s and 2000s.”
Brisker says the current situation presents an opportunity for closer collaboration between the government and fintech firms deploying state-of-the-art technology to move money around. With the likes of PayPal and Square now able to disburse PPP loans, he thinks there’s no reason why there can’t be more public-private partnerships enabling the government to leverage the private sector’s technical nous.
“We’re not a huge company, but we’ve built an incredibly powerful platform—and when you think of the [larger] tech companies, they can do almost anything,” according to Brisker. “I believe the tech world has the ability to address some of these issues of connecting the government to its populace.”
For those who have seen the way government programs like PPP function up-close, reform is much easier said than done. Rho Business Banking, a digital commercial banking platform that launched last year, has been connecting its small business clients with PPP lenders—and in the estimation of Everett Cook, Rho’s co-founder and CEO, “the challenge comes down to the way that these systems are built” at the federal level.
Cook points to a heavy reliance on contractors who aren’t incentivized to continually improve the software they’ve designed for the government’s disposal. “Good software companies are constantly iterating and improving; you don’t just ship a product and say you’re done,” he says. “The ongoing process of improvement and iteration is something the government doesn’t do.”
Instead, the SBA’s E-Tran portal “buckled” under PPP application volumes far beyond what the system is typically accustomed to, according to Cook. While the SBA’s total loan volume over its entire 2019 fiscal year eclipsed $28 billion, the PPP’s initial round saw the government process nearly $350 billion in a matter of weeks.
“Had they invested in better products and technology led by the private sector, not only would it have performed better when put to the test, but it would have ultimately saved the government and the private sector a lot of time and money,” Cook says.
Rather than relying on contractors to do a one-and-done job on the technology it deploys, Cook believes the government would be better off relying on public-private partnerships that would see private sector tech firms develop and continually improve the systems used by the government.
“The challenge of a one-off [government] contract is that, once you’ve won it, there’s little incentive to get better and better—and software is all about getting better and better,” he notes. “The right [government] program would create profit incentives to encourage private companies to work toward the best [technological] solution on an ongoing basis.”
Bryan Routledge, an associate professor of finance at Carnegie Mellon University’s Tepper School of Business, gives the government the benefit of the doubt in noting the “extraordinary” measures it’s been forced to roll out in relatively short order.
But whether it’s the challenge of replacing “legacy” systems that have been in use for years or an unwillingness to embrace newer technologies, like blockchain, that could conceivably help it function more efficiently, Routledge acknowledges a sentiment that “government cycles are just slower” in their ability to embrace, adopt, and roll out change.
“They certainly aren’t hiring two-or-three person coding shops that are mainlining coffee and putting out beautiful websites,” he adds.
More must-read tech coverage from Fortune:
—Remote work, online grocery shopping, cord cutting: What coronavirus trends will stick
—No buses, no problem. Some cities provide subsidized Uber rides amid pandemic
—How to choose a video chat app? Grade it on privacy
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: Zoom’s ups and downs since the coronavirus crisis


fortune--2020-05-12--Governor Andrew Cuomo is relying on the advice of CEOs and billionaires to reopen New York

Here are all the COVID-19 symptoms you knew about—and some you didn ’ t

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As portions of the United States begin to reopen non-essential businesses and attractions, New York, the global epicenter of the COVID-19 pandemic, will remain closed to all but some manufacturing and construction endeavors in rural areas of the state. When and how the state will finally reopen, says Democratic Governor Andrew Cuomo, will be decided largely based on hitting certain numerical goals. All of his decisions, he often repeats, are “science-based, all data-based.”
But the governor is also relying on the advice of 116 business leaders and advocates, which he has assembled into the New York Forward Re-opening Advisory Board.
Cuomo has not been shy about leaning on business and tech leaders to aid in his response to the virus. Billionaire and former New York City Mayor Michael Bloomberg will fund a $10 million coronavirus tracking program. This week Cuomo announced partnerships with Bill Gates and Google CEO Eric Schmidt to “reimagine” the economy by “revolutionizing” online education, telehealth, and broadband access. Schmidt will lead a 15-person committee to do just that.
The advisory board is made up mostly of those from the business sector, including 40 CEOs: Albert Bourla of Pfizer, Ajay Banga of MasterCard, Danny Meyer of Union Square Hospitality Group, and John McAvoy of Con Edison, to name just a few. Former Secretaries to the Governor Steve Cohen and Bill Mulrow (now the general counsel of MacAndrews & Forbes Incorporated and a senior advisor at Blackstone, respectively) are set to lead the group.
The board also includes labor leaders including the presidents of top unions, the heads of Cornell University, New York University, the SUNY and CUNY systems, and the leaders of charitable organizations like The Andrew W. Mellon Foundation and United Way.
But critics still say that Cuomo’s reliance on business leaders takes on plutocratic characteristics and that he is giving millionaires and billionaires substantial free reign in shaping the future of New York State. While small businesses have been hit hardest during this pandemic, with an estimated 7.5 million at risk of permanently shutting their doors, only one independent restaurant owner, Tren’ness Woods-Black of Sylvia’s Restaurant in Harlem appears on the list.
“Cuomo is trying to take out the troubling democracy play-acting and go straight to rule by billionaires. Monday Gates. Tuesday Schmidt,” wrote Zephyr Teachout, a progressive Fordham University law professor who ran against Cuomo for governor in 2014. “Next up, Bezos to re-imagine the future of the economy, and Zuckerberg to re-imagine news. Friday maybe Blackrock just runs everything.”
New York State United Teachers President Andy Pallotta also released a statement noting his concerns. “Let’s recognize educators as the experts they are by including them in these discussions about improving our public education system for every student,” he wrote.
Jasmine Gripper, executive director of the public education advocacy organization Alliance for Quality Education expressed fears that partnering with billionaires could lead to more privatization.
“Governor Cuomo’s collaboration with the Gates Foundation for online education could be a threat to public schools as we know them,” she wrote in a statement. “Both the Gates Foundation and Andrew Cuomo have a history of pushing privatization and agendas that have the potential to destroy public schools. This collaboration raises a red flag and real questions about what shape our “reimagined” public schools will take post-pandemic, and whether they will be recognizable as public schools at all.”
While the governor’s office has touted the members of the advisory board, his office has been quiet about the role these members will play in shaping the future of the state. The Governor’s office did not respond to multiple requests for comment.
The board, said Cuomo in a release, will “help guide this process and ensure businesses are following the necessary guidelines to preserve public health as we work towards a new normal.” The group is expected to deliver recommendations and guidelines by May 15, when the first round of reopening in New York state begins.
Here’s who makes up the advisory board
Enterprise
Ajay Banga, CEO, MasterCard
Kathy Behrens, president, Social Responsibility & Player Programs, National Basketball Association
Albert Bourla, CEO, Pfizer
Tory Burch, executive chair, Tory Burch LLC
Henry Cisneros, Siebert, Brandford, Shank & Co.
Steven M. Cohen, former secretary to the Governor
Stacey Cunningham, president, NYSE
Sonya Del Peral, Nine Pin Ciderworks
Mylan Denerstein, Gibson, Dunn & Crutcher
James Dolan, CEO, Madison Square Garden
Stacey Duncan, executive director, The Agency
Leecia Eve, vice president of state government affairs, Verizon
Bill Ford, CEO, General Atlantic LLC
Jane Fraser, president, Citigroup
Adena Friedman, president and CEO, NASDAQ
Jonathan Gray, president and COO, Blackstone Group
Horacio Gutierrez, general counsel, Spotify
Sabrina HoSang Jordan, CEO, Caribbean Food Delights, Inc.
Jeremy Jacobs Jr, co-CEO, Delaware North
René Jones, chair and CEO, M&T Bank
Michel Khalaf, president and CEO, MetLife
Jon Ledecky, co-owner, New York Islanders
Kewsong Lee , co-CEO, Carlyle Group
Randy Levine, president, New York Yankees
Mayra Linares-Garcia, VP of public affairs and communications, Liberty Coca-Cola Beverages
Melanie Littlejohn, chair, board of directors, CenterState CEO
Cheryl McKissack Daniel, president & CEO, McKissack & McKissack
Elizabeth Moore, general Counsel, Con Edison
Wes Moore, CEO, Robin Hood
William J. Mulrow, former secretary to the Governor
John McAvoy, chairman, president & CEO, Con Edison
Danny Meyer, CEO, Union Square Hospitality Group
Kim Pegula, president and CEO, Pegula Sports and Entertainment
Charles Phillips, chair, Infor
Scott Rechler, CEO and chairman, RXR Realty
Lisa Rosenblum, vice chair, Altice
Jane Rosenthal, co-founder & CEO, Tribeca Enterprises
Bill Rudin, Rudin Management Company
Kevin Ryan, co-founder, MongoDB
Rob Sands, chairman, Constellation Brands
Leonard Schleifer, CEO, Regeneron Pharmaceuticals
Josh Silverman, CEO, Etsy
Rob Speyer, president and CEO, Tishman Speyer
Elizabeth Velez, CEO Velez Organization & chair, NY Building Congress
Ken Sunshine, president, Sunshine Sachs
Steve Swartz, president and CEO, Hearst; co-chair, Partnership for NYC
Chandrika Tandon, chair, Tandon Capital Associates
Elinor Tatum, publisher and EIC, New York Amsterdam News
John Waldron, president and COO, Goldman Sachs
Nicole Wegman, senior vice president, Wegmans
Anthony Welters, executive chairman, BlackIvy Group, LLC
Jeff Wilpon, COO, NY Mets
Tren’ness Woods-Black, Sylvia’s Restaurant
Education
Bill Berkley, chair, NYU
Elizabeth Bradley, president, Vassar College
Dr. Katherine Conway-Turner, president, SUNY Buffalo State College
Shirley Ann Jackson, president, Rensselaer Polytechnic Institute
Mary Beth Labate, president, Commission on Independent Colleges and Universities
Joanie Mahoney, COO, SUNY ESF
Carl McCall, Former Chair, SUNY Board of Trustees; Former NYS Comptroller
Father Joseph McShane, president, Fordham University
Dr. Belinda S. Miles, president, SUNY Westchester Community College
Orinthia T. Montague, president, Tompkins Cortland Community College
Martha Pollack, president, Cornell University
Ty Stone, president, Jefferson County Community College
Bill Thompson, chairman, CUNY
Merryl Tisch, chairman, SUNY
Dennis Walcott, former NYC School Chancellor
Kristine M. Young, president, Orange County Community College
Nonprofits
Alicia Fernandez Dicks, president and CEO, Community Foundation of Oneida and Herkimer
Elizabeth Alexander, president, The Andrew W. Mellon Foundation
Maria Imperial, CEO, YWCA White Plains & Central Westchester
Gerrard P. Bushell, former president and CEO, the Dormitory Authority of the State of New York (DASNY)
Michele Johnson, president of YWCAs NYS
Brenda McDuffie, president and CEO, Buffalo Urban League
Marc Morial, president and CEO, National Urban League
Frankie Miranda, president and CEO, Hispanic Federation
Ana Oliveira, president and CEO, The New York Women’s Foundation
Clotilde Perez-Bode Dedecker, president and CEO, Community Foundation for Greater Buffalo
Linda Brown-Robinson, president, Syracuse Onondaga NAACP
Steven Rubenstein, chairman, Association for a Better New York
Theresa Sanders, president, Urban League of Long Island
Jaime Saunders, CEO, United Way of Greater Rochester
Diane Serratore, executive director, Help From People to People
Fanny Villarreal, executive director, YWCA Syracuse Onondaga County
Darren Walker, president, Ford Foundation
Jo-Ann Yoo, executive director, Asian American Federation
Sheena Wright, president and CEO, United Way of New York City
Labor
Vincent Alvarez, president, NYC Central Labor Council
Kyle Bragg, president, SEIU 32BJ
James Cahill, president, NYS Building and Construction Trades
Mario Cilento, president, NYS AFL-CIO
George Gresham, president, 1199SEIU
Pat Kane, executive director, New York State Nurses Association
Gary LaBarbera, president, Building and Construction Trades Council of Greater New York
Peter Ward, president, NY Hotel & Motel Trades Council, AFL-CIO
Business advocacy groups


fortune--2020-05-12--Mastercard CEO Ajay Banga is a passionate advocate of stakeholder capitalism

This is the web version of CEO Daily. To get it delivered to your inbox, sign up here.
Good morning.
This week’s episode of Leadership Next features Mastercard CEO Ajay Banga, who is one of the most articulate and passionate advocates of stakeholder capitalism I’ve met. You can get the full podcast here, but a few excerpts:
On COVID-19:
“We were all unprepared for this kind of circumstance. Whether that unpreparedness came from a lack of planning or a failure of imagination or hubris or a combination of all of those, it has led to a clear demonstration to everyone of how interconnected our world is, and how small it is, and how what affects one impacts everybody.”
On the acceleration of digital transformation:
“What COVID-19 has done is it has made people seem more comfortable with digital technologies across the spectrum of their own proclivities prior to going into the crisis. Their willingness to embrace digital is beginning to get a second impetus. …With 5G-enabled devices, and a crisis that has enabled people’s minds to embrace the idea, that’s a pretty perfect storm for an accelerator on digitization.”
On his commitment to stakeholder capitalism:
“I’m just a believer in capitalism. It’s the best system. Done well, done responsibly, it is an outstanding system.”
News below.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Musky defiance
Elon Musk has announced that Tesla's Californian factory is defying county authorities and reopening. The CEO says he will be on the production line with his workers. "If anyone is arrested, I ask that it only be me," he tweeted. Alameda County officials are urging the plant to maintain only "minimum basic operations" and say they hope Tesla will comply "without further enforcement measures." Fortune
No renegotiation
The "phase one" trade deal between the U.S. and China—the one whose targets will be missed big-time—is not up for renegotiation, according to President Trump. "I'm not interested. We signed a deal," he said, following Chinese state media reports that Beijing wants the agreement rejigged so as to make it more favorable to the Chinese side. Reuters
Retirement funds
The Trump administration is moving to ensure that the Thrift Savings Plan, a federal employee retirement fund, cannot invest money in Chinese equities as planned. Around $4.5 billion in Chinese stocks are at stake. “Departing from the Board’s established index for the International Stock Investment Fund (I Fund) to track one that maintains Chinese equities is risky and unjustified," wrote national security adviser Robert O’Brien and National Economic Council Chair Larry Kudlow in a letter to U.S. Labor Secretary Eugene Scalia. Fox Business
Aramco profits
Saudi Aramco suffered a 25% year-on-year profit drop in Q1, due to lower crude oil prices. It will still pay a $18.75 billion dividend for the quarter, per the pledge it made to investors at its recent IPO. Aramco CEO Amin Nasser: "The Covid-19 crisis is unlike anything the world has experienced in recent history and we are adapting to a highly complex and rapidly changing business environment." CNBC
AROUND THE WATER COOLER
Testing times
After experiencing throat pain, Fortune's Naomi Xu Elegant—who lives in Hong Kong—took a home test to see if she had coronavirus. She didn't, but describes the process in this piece; it was a saliva test, which is far less invasive than swab tests and far less risky for the health professionals who have to administer the latter. Fortune
German layoffs
In Germany, where the government is running hefty subsidy schemes to support businesses and keep people furloughed with pay, 18% of companies nonetheless laid off workers last month, or did not renew their contracts. Unemployment rose by over 370,000 in April. Layoffs were particularly pronounced in the automotive sector. Bloomberg
Lockdown-lifting skepticism
Confusion over the British government's lockdown-easing plan means only 44% of Britons support the plan, and 43% are opposed. Interestingly, people in the U.K. are far more likely than those in Sweden or Germany to say they want the government to limit the spread of COVID-19 even if it means a recession or depression. Politico
Putin woes
The coronavirus crisis is not being kind to Russia's President Putin. Coming alongside the collapse in the oil price—Russia needs a price of $42/barrel for a balanced budget—the pandemic response is quickly draining Russia's coffers. That cash was supposed to go to stimulus measures that would shore up Putin's dwindling popularity. Financial Times
This edition of CEO Daily was edited by David Meyer.


fortune--2020-05-12--How Mastercard’s CEO is working toward financial inclusion during the pandemic

On the newest episode of Leadership Next, Fortune CEO Alan Murray is joined by Ajay Banga, the CEO of Mastercard. The two chief executives talk about the pandemic, digitization, stakeholder capitalism, and more.
Murray introduces Banga as one of the best examples he’s seen of the new brand of CEO that sincerely wants to focus their companies’ abilities on addressing society’s deepest problems. And Banga’s passion is financial inclusion, around which Mastercard has launched approximately 1,500 projects under his leadership.
With his eye on that issue, Banga said that the digitization he believes is being accelerated by the coronavirus crisis will need to be implemented carefully to not further stratify society.
“I believe that digitization is a mechanism to deliver inclusive growth,” he said, “but digitization is also the vehicle for those who are left out to feel even further left out.”
Banga went on to say that for people who do not have government-issued identification, bank accounts, and a host of other accesses and documentations, increased digitization—in the form of cashless store policies, 5G access, and more—can make life worse.
“While digitization enables inclusion, it can also raise the barrier,” he said.
In an intermission, Fortune senior editor Ellen McGirt speaks with Kate Moore, the head of thematic strategy at BlackRock. Moore noted that another way the coronavirus crisis could raise the barrier to inclusion is in the return to work. Or in the case of many workers, the continuation of unemployment while more privileged, educated people return to work.
But Banga maintains that with a people-first mindset and a responsible implementation of technology, that digitization will be a good thing. And Moore said she is still excited about many companies—particularly in technology—during the pandemic, due to their flexibility and willingness to adapt to the moment and to what people need right now.
Looking inward to his own company, Banga is putting people first during the crisis. The executive team has promised there will be no COVID-19-related layoffs and is honoring its commitment to hire new-graduate recruits.
Around the 17:30 mark, Murray asked Banga his advice for balancing looking out for employees and looking out for the company.
“The first thing you have to do is look after your people,” Banga answered. “That is all part of thinking through inclusion. Inclusion is a fancy word for human decency.”


fortune--2020-05-12--Here are all the COVID-19 symptoms you knew about—and some you didn’t

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As the pandemic spreads around the world, doctors are beginning to scope the coronavirus’s damage. Seen initially as a cause of viral pneumonia during the chaos of an explosion of cases in China, it’s now emerging as an enigmatic pathogen capable of harming the body in a myriad of unexpected, and sometimes lethal, ways. Clinical manifestations range from common cold-like symptoms and bronchitis to more severe disease such as pneumonia, severe acute respiratory distress syndrome, multi-organ failure and even death. The illness may occur as a direct result of viral infection, as well as the body’s response to it. Here’s a snapshot of some of the symptoms Covid-19 causes, including some you might not have heard about.
Blood — fever and inflammation may disrupt blood vessels, rendering blood cells more prone to clumping while interfering with the body’s ability to dissolve clots. That may trigger a clotting cascade that can lead to blood-vessel blockages in tissues and organs throughout the body. Life-threatening clots in the arteries of the lung, known as pulmonary emboli, may occur even after symptoms of the infection have resolved. Damaged blood vessels may become leaky and prone to bleeding. In children, inflammation of veins and arteries triggered by excessive immune activation may cause an illness similar to Kawasaki disease, an inflammatory disorder.
Brain — dysfunction in the lining of blood vessels and associated bleeding and clotting disorders may cause strokes and bleeding in the brain. Patients may also experience headache, dizziness, confusion, impaired consciousness, poor motor control, delirium and hallucinations.
Eyes — red, puffy eyes, sometimes referred to as pink eye, may result from infection in the conjunctiva, the tissue that lines the inside of the eyelids and covers the white part of the eye.
Gastrointestinal tract — infection of cells lining the digestive tract may cause diarrhea, nausea, vomiting and abdominal pain. Blood-vessel blockages caused by abnormal clotting have been found to damage the bowel, requiring emergency surgery and resection.
Hands — prickling or burning sensation in the hands and limbs may indicate Guillain-Barré syndrome, a rare nervous-system disorder that may be triggered by aberrant immune responses to viral infection. Other symptoms of the syndrome include poor coordination, muscle weakness and temporary paralysis.
Heart — cardiac injury, sometimes leading to irregular heartbeat, heart failure, and cardiac arrest, may occur as a result of excess strain, inflammation of the heart muscle and coronary artery, blood clots, and overwhelming multi-organ illness. Infection, fever, and inflammation in people with existing heart-vessel blockages may cause their fatty plaques to break off, blocking or stopping blood flow in organs and tissues.
Limbs — obstructions in large blood vessels may cause insufficient flow, or acute ischemia, in the limbs. Severe vascular complications can be lethal. At least one reported cases resulted in lower limb amputation.
Liver — liver dysfunction may occur as a direct result of the viral infection, or more likely because of immune-mediated, systemic inflammation and circulatory blockages cutting blood flow to the organ.
Lungs — the virus targets the epithelial cells that line and protect the respiratory tract as well as the walls of the tiny grape-like air sacs, or alveoli, through which gas exchange occurs to oxygenate the blood. Damage to alveoli and inflammation in the lungs can cause pneumonia, characterized by chest pain and shortness of breath. In severe cases, the lack of oxygen can trigger acute respiratory distress syndrome, leading to multi-organ-system failure.
Kidneys — acute kidney injury may result from clots and impaired blood supply, or as a direct result of infection.
Nose and tongue — while the virus can cause the sneezing and runny nose typical of a common cold, it can also disrupt the olfactory system, causing an abrupt full or partial loss of the sense of smell known as anosmia. Taste may also become distorted in a condition known as dyguesia.
Skin — hive-like rashes, small red dots and purplish discolorations on the legs and abdomen are part of a complex category of so-called paraviral dermatoses that may result from the body’s immune response to the virus or from benign, superficial blood-vessel damage beneath the skin.
Toes — purple rashes that resemble chickenpox, measles or chilblains may appear on the feet, especially of children and younger adults.
More coronavirus coverage from Fortune:
—The Rebuild Program: A project to help small businesses reopen amid a pandemic
—What France’s “patient zero” doctor wants you to know about COVID-19
—McConnell focuses Senate on conservative judge appointments rather than coronavirus
—Photo essay: What life looks like in Europe as the continent starts to reopen
—Trump’s demand that China pay coronavirus reparations evokes an ugly history
—To reopen safely, the private and public sectors need to ramp up collaboration
—Uber’s food delivery helps cushion the blow of COVID-19 on rides business
—PODCAST: How Marc Benioff is helping out during the coronavirus pandemic
—WATCH: Fortune’s top 10 heroes of the coronavirus pandemic
Subscribe to How To Reopen, Fortune’s weekly newsletter on what it takes to reboot business in the midst of a pandemic


fortune--2020-05-12--Goldman Sachs thinks a big correction is coming. So far, investors aren’t buying it

This is the web version of the Bull Sheet, Fortune’s no-BS daily newsletter on the markets. Sign up to receive it in your inbox here.
Good morning. Equities are trading sideways as mixed data on the recovery gives investors pause. Goldman Sachs, meanwhile, thinks we’re headed for a correction.
Let’s check in on the action.
Markets update
Asia
The major indices are in the red . Japan’s Nikkei is down 0.1% .
. Japan’s is down . “No V-shaped rebound” for China . That’s the prognosis of one analyst after disappointing PPI numbers showing China’s factories are suffering from weak domestic and international demand.
. That’s the prognosis of one analyst after showing China’s factories are suffering from weak domestic and international demand. Saudi Aramco, the world’s most profitable company, reported a Q1 profit of $16.7 billion this morning, that’s a 25% y-o-y drop. Even with rock-bottom oil prices it’s committed to pay out $18.75 billion in dividends for Q1.
Europe
European bourses opened slightly lower, before climbing in the first hour of trade. London and Milan were leading the way.
bourses opened slightly lower, before climbing in the first hour of trade. and were leading the way. The fight over state aid for airlines could get ugly. Budget flyer Ryanair is suing to stop the French government bailing out Air France-KLM .
could get ugly. Budget flyer is suing to stop the French government bailing out . “Could it be peak oil? Possibly. Possibly. I would not write that off.” That’s BP CEO Bernard Looney who is still unsure whether demand for crude will ever return to pre-pandemic levels.
U.S.
The Dow , S&P 500 and Nasdaq futures are pointing to a negative open but are gaining some ground.
, and futures are pointing to a negative open but are gaining some ground. The Nasdaq extended gains into a second week on Monday, pushing the index above 2% YTD .
extended gains into a second week on Monday, pushing the index above . Long expected, today the Fed begins buying corporate debt—including eligible ETFs—from investors. What will it buy? U.S. investment-grade corporate bonds as well as U.S. high-yield corporate bonds.
Elsewhere
Gold and the dollar were up early, but once investors jumped back into equities the two fell.
and the were up early, but once investors jumped back into equities the two fell. Crude is higher. WTI and Brent are climbing again today after Saudi Arabia yesterday announced it would cut production by a further 1 million barrels per day.
The FOMO rally
The Nasdaq rally stands at six straight days. But you have to look at the S&P 500 to best understand these markets. Yesterday, the benchmark closed up a whisker, 0.02% higher. Inside that pipsqueak of a fraction reveals a world of investors’ hopes and fears.
Healthcare and IT took off yesterday while utilities, financials and energy sunk. Again. Bloomberg’s Jonathan Ferro captured the disconnect in this Tweet just after the market closed.
The S&P is so weighted to the big 5 tech stocks—everyone together now: Apple, Amazon, Alphabet, Facebook and Microsoft—that the Fab 5 are enough to keep the index above water even on days when the other components sink. The rally in the S&P is as much about a rally in Big Tech as any other factor. The Fed too plays a big role in this bull run.
The S&P 500 is up 31% since its March 23 bottom. Goldman Sachs, for one, is unconvinced the rally is sustainable. With mutual funds underperforming, investors are piling into the big names in the index, it says. “The ‘fear of missing out’ best describes the thought process,” Goldman’s David Kostin writes in the report, according to Bloomberg.
Goldman thinks a correction is in the cards. (The markets fell shortly after the Goldman report came out, but recovered in late trading yesterday). It believes the S&P could sink to 2,400—nearly a 20% drop from yesterday’s close—before rebounding to 3,000 later in the year.
That would be one heck of a “W-shaped” markets rebound. Hold on to your hat.
***
Have a nice day everyone. I’ll see you here tomorrow.
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
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Today's reads
WFH is working. Work-from-home has proven so successful for Nationwide that the privately held insurer will make it a permanent feature for employees after the pandemic passes. CEO Kirt Walker participated in a revealing Q&A with Fortune's Lee Clifford explaining how the company made the transition on the fly—and now it's not looking back.
The big short. We've seen some weird things in the markets recently. One of them is the army of retail investors using their zero-cost trading platforms—think Robinhood and E*Trade—to short the markets. It hasn't gone so well, says Derek Horstmeyer, an associate professor of finance at the George Mason University School of Business. "Many retail investors are losing money hand over fist in volatile and opaque markets they don’t fully understand," he writes, with some eye-popping data to back up his assertions.
In which I start talking about economic growth... and end up at happiness. Fortune's Devin Hance interviewed me for the Fortune Explains video series. The assignment: How far will GDP fall?, the trillion dollar question. I enjoyed our Q&A. The video was mercifully edited down to a few minutes. Take a look.
(Some of these stories require a subscription to access. To enjoy unlimited access, subscribe today. Thank you for supporting our journalism.)
Market candy
2800+
International Holdings Co. PJSC is killing it this year. Last year too. It's up more than 2800% over the past year, after climbing an additional 9.2% yesterday on its home exchange in in Abu Dhabi, making it the best performing stock of the year. Beyond its off-the-charts performance, market observers are puzzled by what's the big deal about International Holdings.


fortune--2020-05-12--‘Exactly what we expected:’ Scientists make sense of new COVID-19 cases in countries that had virus

‘Exactly what we expected:’ Scientists make sense of new COVID-19 cases in countries that had virus contained

South Korea and China are rushing to contain new coronavirus outbreaks.
In China, the northeastern city of Shulan in Jilin Province is now in a ‘wartime battle’ against COVID-19, after a local cluster infected 12 people. The outbreak is traced to a laundry service worker at a local public security bureau, who didn’t have a recent history of travel or exposure to other known carriers, Chinese media reports. The city of Wuhan, the epicenter of the COVID-19 pandemic, also reported a cluster of six new confirmed cases on Monday, prompting authorities to lockdown the housing compound where the outbreak occurred.
In South Korea, a spike of 69 coronavirus cases over the weekend has prompted authorities to shut down all bars and restaurants in the capital of Seoul. At least 54 of the cases are tied to a man who patronized several bars and nightclubs in the city the previous weekend, according to South Korean authorities.
South Korea and China are considered coronavirus success stories, with each bringing new case tallies down to an average of a handful per day following bigger, initial outbreaks earlier this year. This made news of the new outbreaks especially devastating—to anxious citizens in each country and to a wider, global audience desperate for how-tos in taming the pathogen.
On Chinese social media, users have said they are ‘starting to panic‘ again because of the situation in Shulan. In South Korea, a wave of backlash has ensued against the country’s LGBT community, which is being discriminated against for its perceived role in instigating the new outbreak. The man suspected of spreading the virus did so while visiting several LGBT bars in Seoul.
For epidemiologists, however, the new outbreaks are not necessarily cause for broader concern or finger pointing. In fact, they consider new infections inevitable byproducts of a necessary opening-up process that will likely come in fits and starts.
“[New localized outbreaks] are exactly what we were expecting” when countries began to relax strict quarantine measures, says Ben Cowling, an epidemiologist at the University of Hong Kong. “The important thing is staying very alert to the possibility of infections and outbreaks and being ready to bring in public health measures if necessary.”
Lockdown, surveil, test
Both South Korea and China have responded aggressively to the fresh outbreaks.
In China, the city of Shulan has imposed a lockown on its roughly 700,000 residents since Monday. Non-essential businesses are closed, schools are shuttered, and public transportation and trains in and out of the city have stopped running. For city residents, only one person per household will be allowed to leave home each day for necessary purchases like groceries.
Before the recent outbreak, Shulan and surrounding areas had recorded only a handful of cases since January. The city closed down to a large extent in early February before resuming economic activities at the end of the month, according to the city government’s website.
In response to the new Wuhan infections, the city is reportedly planning to test all 11 million residents of the city within the next ten days. With the ambitious testing program, local officials seem especially eager to stamp out any potential outbreak in the city. Observers in China and abroad have widely criticized the city government for its initial response to the pandemic in December and January, and faulted Wuhan authorities for letting the virus get out of control.
Korean authorities, in addition to closing bars and nightclubs in Seoul, have embarked on an extensive contact-tracing and testing initiative to find people who might have contracted COVID-19 from Patient Zero of the new outbreak. As of Monday, Korean officials had tracked down and tested 4,000 people known to have visited one of the bars or clubs in question and are trying to contact 3,000 others who may have also gone to one of the establishments.
These measures speak to why both countries had earlier success containing larger outbreaks. South Korea managed to flatten its curve in just over a month, from mid February to late March, with a massive surveillance, contact-tracing, and testing campaign to identify suspected virus carriers. China had success in limiting the spread of COVID-19 in February by locking down large swaths of the country and isolating infected people away from their families.
The wider public should focus less on the occurrence of such second waves—they are bound to happen as public quarantine measures ease—but rather pay attention to how authorities act in response, says Cowling.
“We’ve learned that it’s possible to control local outbreaks,” he says. “The key element of that is very good surveillance and very good testing, so that we can pick up cases and outbreaks at an early stage, and stop them from developing into larger numbers of infections.”
China and South Korea have easy access to tracking technologies and testing supplies. Countries like the U.S., which reported over 18,000 new cases on Monday, may have more difficulty in preventing smaller outbreaks from spiraling into larger ones as the country eases quarantine restrictions because they’ve failed to ramp up testing and tracing to adequate levels, according to Cowling.
“The U.S. may have to relax some of their public health measures before [health officials would] like,” says Cowling. Ideally, relaxing quarantine measures would only happen once a country reaches high levels of testing and low daily case counts. However, the U.S. will probably have “difficulty achieving that” anytime soon, Cowling says, yet it’s eager to resume business as usual because of the dire economic fallout of shelter-in-place orders.
The new normal
In a Sunday address to South Korea about the new cases, President Moon Jae-in told citizens to keep up their guard, but he also sought quell fears of a larger second outbreak.
“We have now transitioned to a new normal in which safety precautions against the virus and daily lives can be simultaneously maintained,” he said.
Moon was referring act of balancing reopening economies with maintaining public health, a feat places like South Korea, China, Taiwan, and Hong Kong are trying to pull off after initially bringing new daily case counts down to near zero.
The new outbreaks and subsequent containment measures in China and South Korea speak to what Gabriel Leung, Cowling’s Hong Kong University colleague who advises the World Health Organization on infectious diseases, called the ‘suppress and lift’ strategy in New York Times op-ed in April.
“The restrictions must be lifted and reapplied, and lifted and reapplied, as long as it takes for the population at large to build up enough immunity to the virus,” he wrote.
When this ‘lift and suppress’ cycle ends is an open question, but Leung says more than half of the world’s population must become immune to COVID-19 in order to prevent resurgences of the disease. That can happen one of two ways: with a vaccine or if over 50% of all people get infected with the virus, recover, and develop immunity.
Let’s hope a vaccine arrives first.


fortune--2020-05-12--Wuhan will test all 11 million of its residents for coronavirus in 10-day span

Wuhan has ordered officials to test its entire population of 11 million people after the central Chinese city where the coronavirus pandemic began reported new infections for the first time since its lockdown was lifted.
All districts in the city have been told to submit a plan laying out how they will prepare to conduct testing of everyone under their purview within 10 days, according to a document from Wuhan’s anti-virus department cited in Chinese state media reports. The plans should prioritize the testing of vulnerable groups and areas like residential compounds, the document is cited as saying.
Six locally transmitted cases, reported on May 10 and 11, were found in people already under quarantine classed as being asymptomatic before testing positive, according to the local government. All six cases emerged from a single residential compound in Wuhan and were the first new infections found in the city since its lockdown was lifted on April 8.
The ambitious plan to test everyone in Wuhan reflects China’s anxiety over a resurgence of the virus, which it managed to stamp out through draconian restrictions that locked down hundreds of millions of people at its peak in February. Wuhan was sealed off from Jan. 23 until April 8 in a months-long ordeal that saw scores die as the local health system became overwhelmed.
Even as its people cautiously return to normal life, Wuhan remains in the global spotlight with U.S. President Donald Trump’s administration claiming that the virus somehow emerged from a laboratory run by the Wuhan Institute of Virology. China has denied any link and the laboratory’s director said that no staff have been infected, which he said disproves the theory.
Although the new cases in Wuhan are few and appear under control, they serve as a reminder of the risk China faces as it tries to reopen an economy that has seen its worst contraction since 1992.
“Seven provinces reported new infections over the past 14 days, and clustered cases were continuing to increase,” Mi Feng, spokesman for the National Health Commission, said on Monday. China reported only one confirmed case on Tuesday, with no new infections in Wuhan.
Fears of resurgence in other parts of China were highlighted on Sunday when the northeastern city of Shulan, which borders North Korea, was partially locked down after 11 new infections were discovered. Many cities in China still don’t allow cinemas and bars to operate, and heavy restrictions against social gatherings remain in place. Face masks are required on public transport and to enter stores and public facilities.


fortune--2020-05-12--China starts exempting some foreign business executives from its coronavirus travel ban

China is allowing executives from some foreign companies to enter the country despite a coronavirus travel ban as it seeks to restart the economy, according to people familiar with the matter.
The Ministry of Commerce told some key foreign companies they can apply for exemptions to the entry ban if they want to get executives back into China, the people said, asking not to be identified because the matter hasn’t been made public. They would still serve a mandatory quarantine, one of the people said.
The move is the latest sign that China, which has banned almost all foreigners from entering since late March, is taking steps to reopen its borders for business. China has had some success in containing the outbreak, which first emerged in the central city of Wuhan, and businesses such as Shanghai Disneyland reopened on Monday, with health checks and social-distancing measures.
China’s commerce and foreign ministries didn’t immediately respond to queries.
After first-quarter gross domestic product had its worst slump since the 1970s, officials are focusing on normalizing the economy. Rising unemployment and a collapse in global demand mean the risk of a second quarter of contraction persists.
China and South Korea agreed to simplify entry for essential business travelers from the start of May. The “fast-track” arrangement allows South Korean businesspeople to travel to 10 Chinese provinces and cities after their visas are approved. Health-screenings and quarantine procedures remain in place, though the length of quarantine in China is up to two days, compared with the standard 14 days. Chinese travelers to South Korea need to apply for quarantine exemptions and pass health tests.
The goal of the agreement is to expedite entry for people urgently needed for the resumption of essential work and production, while keeping supply chains between the two countries stable and unimpeded, China Foreign Ministry Spokesman Geng Shuang said at a news briefing on April 30. China would like to establish fast-track agreements with other countries, he said, without elaborating.
Some German companies are awaiting feedback after applying for exemptions, one of the people said. One person who got in was Volkswagen AG’s executive vice president for research and development, Thomas Muller, who entered China from Germany recently, according to Volkswagen.
There are still some uncertainties about the fast-track process and logistical complications. Foreign travelers would need to show they aren’t infected before making their trips, which would include getting tested at approved centers, some of the people said. There are restrictions within China too, with some provinces and cities requiring quarantine for people who have traveled from places designated as more at risk to the virus.
There are potholes along the path to recovery though. The city of Shulan in northeast China’s Jilin province is under lockdown after an increase in coronavirus cases over the weekend, while new infections have emerged in Wuhan for the first time in over a month. In total, China has reported 82,919 confirmed cases and 4,633 deaths from the virus.


fortune--2020-05-12--Democrats set to take next steps toward nominating the 2020 presidential candidate virtually

Democrats are making new moves toward a virtual presidential nominating convention this August, with party officials preparing to grant convention organizers in Milwaukee the authority to design an event that won’t require delegates to attend in person amid the coronavirus pandemic.
A top party official discussed the plans ahead of Tuesday’s virtual meeting of the Democratic National Committee’s Rules and Bylaws Committee. The official spoke on condition of anonymity to discuss moves that still require approval by the committee and the DNC’s 447 members.
The influential Rules & Bylaws panel will start the process with a resolution that grants “maximum flexibility” to the convention organizing committee to set up a gathering that “guarantees every delegate can accomplish their official business without putting their own health at risk.” That will include finalizing convention dates — which now are set only as “the week of Aug. 17” — and determining “format, voting mechanisms, structure and other logistical aspects of the convention.”
The expected action underscores how deeply COVID-19 has upended the 2020 presidential election, potentially forcing one or both major parties to dramatically alter their conventions in ways that not even the Civil War required in 1864. And it raises the possibility even further that Joe Biden will be nominated as his party’s standard-bearer without the traditional roll call vote from thousands of delegates across 57 U.S. state and territories.
The resolution also would allow two of the most high-profile convention committees — the Rules Committee and the Credentials Committee — to conduct business without having to have their final reports approved by the full convention, a maneuver that could minimize some floor fight.
All convention delegates still will get to vote on the party platform.
DNC members will vote on the resolution by mail ballot. If it gets final approval, the resolution effectively would prevent national party officials from having to convene again ahead of the convention to approve any atypical convention protocols.
Party Chairman Tom Perez had previously announced a delay of the convention, pushing it back from July 13-16 to mid-August, the week before Republicans are set to gather in Charlotte, North Carolina. Republican National Committee Chairwoman Ronna McDaniel has left open the possibility of changes in the GOP convention, as well, though President Donald Trump has made clear his eagerness for the 2020 campaign to return to normal even as the coronavirus spreads.
The committee is also expected to approve waivers for states that have postponed presidential primaries beyond the deadline of June 9. Many states postponed their primaries because of the pandemic. Five states delayed them until after the deadline spelled out in party rules. Kentucky and New York postponed their primaries until June 23, while Delaware and New Jersey are scheduled to vote July 7, and Louisiana is scheduled to hold its primary July 11.
Without the waivers, the states could lose half their delegates to the party’s national convention.
Biden is already the party’s presumptive nominee, now that he is the only candidate still running. With all the postponements, he has had to wait to compile the delegates necessary to win on the first convention ballot. Biden is now likely to clear that threshold in June.
The Democrats’ latest moves come as the Biden campaign continues negotiations with representatives from the campaign of Bernie Sanders, Biden’s last remaining rival, on various details about the party’s rules and platform. The two camps already have hammered out a deal on how to allocate delegates, so Sanders doesn’t lose delegates he’d earned before dropping out.
The candidates’ representatives are hammering out policy agreements as they try to avoid the kind of bitter platform fight that could splinter the Democratic general election coalition, as happened four years ago when some of Sanders’ supporters never fully coalesced behind nominee Hillary Clinton.


fortune--2020-05-13--Simon & Schuster CEO Carolyn Reidy dies at 71, company says

Supreme Court appears likely to reject Trump ’ s claim he ’ s immune from criminal investigation

Simon & Schuster CEO Carolyn Reidy, who presided over her company with steady force and a passion for books during a time of frequent and traumatic change, died Tuesday morning at age 71.
Her death, from a heart attack, was announced by Dennis Eulau, the company’s chief operating officer and chief financial officer.
“Carolyn was both an exemplary leader and a supremely talented and visionary publishing executive,” Eulau said in a statement about Reidy, who joined Simon & Schuster in 1992 and had served as CEO since 2008. “As a publisher and a leader, Carolyn pushed us to stretch to do just that little bit more; to do our best and then some for our authors, in whose service she came to work each day with an unbridled and infectious enthusiasm and great humor.”
Simon & Schuster is one of the so-called “Big Five” New York based publishers, with authors including Stephen King, Doris Kearns Goodwin and Bob Woodward, who in an email to The Associated Press called her “One of the great publishers and book people of all time” and praised her as “both tough and generous.” On Twitter, novelist Jennifer Weiner noted that she had worked with Reidy for her whole career.
“She was a trailblazer and a role model and a champion for me and so many other women,” Weiner wrote of Reidy, who at the time of her death was the only woman running one of the Big Five publishers. “Most of all, she was a smart and passionate reader.”
Reidy was known for her warm and candid manner, for sending handwritten letters to authors and for her alertness to the bottom line. She confronted many crises and upheavals at Simon & Schuster, whether the rise of e-books, the financial crash of 2008 that happened within months of her becoming CEO or the current coronavirus pandemic. Earlier this year, ViacomCBS CEO Bob Bakish said the publisher was up for sale, telling an investor conference, “Simon & Schuster is not a core asset. It’s not video based.”
In 2017, she was named the industry’s Person of the Year by the trade publication Publisher Weekly, which cited her leadership “through the Great Recession, publishing’s digital disruption, and a slow-growth sales environment all while keeping Simon & Schuster a commercial and critical success.”
A native of Washington, D.C. who was raised in Silver Spring, Maryland, she was an undergraduate at Middlebury College, and received a master’s degree and a doctorate in English from Indiana University. Reidy had worked in publishing for much of her adult life, starting in 1974 in the subsidiary rights division of Random House. Before coming to Simon & Schuster, she was president and publisher of Avon Books.
Reidy’s death comes three months after the passing of one of Simon & Schuster’s most celebrated editors, Alice Mayhew, and less than four months after the death of longtime Simon & Schuster author Mary Higgins Clark. Reidy is survived by by her husband, Stephen K. Reidy:; siblings David Kroll, Kathleen Todd and Ruth Tolles, and many nieces, nephews and grandnieces and grandnephews.
In a statement Tuesday, Stephen King remembered meeting with Reidy in 2009. E-books were just taking off and retailers were responding by slashing the price of hardcover releases, including King’s latest novel at the time, “Under the Dome.”
“All at once a book that listed at $35 was selling for ten bucks, less than the price of a trade paperback. Carolyn invited me into her office, gave me tea, and explained, very patiently, what was going on, what it had to do with e-books, and gave me a very prescient overview of where the book business was going,” King said.
“She was clear and concise. She was also sure that the Kindle and other devices did not mean the death of books as we knew them, and she was right. She was right about a lot of things, and guided the company through some extremely stormy waters. She will be missed.”


fortune--2020-05-13--Supreme Court appears likely to reject Trump’s claim he’s immune from criminal investigation

Review : How great are Apple ’ s new keyboards ?

The Supreme Court on Tuesday appeared likely to reject President Donald Trump’s claim that he is immune from criminal investigation while in office. But the court seemed less clear about exactly how to handle subpoenas from Congress and the Manhattan district attorney for Trump’s tax, bank and financial records.
The court’s major clash over presidential accountability could affect the 2020 presidential campaign, especially if a high court ruling leads to the release of personal financial information before Election Day.
The justices heard arguments in two cases by telephone Tuesday that stretched into the early afternoon. The court, which includes six justices age 65 or older, has been meeting by phone because of the coronavirus pandemic.
There was no apparent consensus about whether to ratify lower court rulings that the subpoenas to Trump’s accountant and banks are valid and should be enforced. The justices will meet by phone before the end of the week to take a preliminary vote on how those cases should come out, and decisions are expected by early summer.
On the same day Trump’s lawyers were telling the court that the subpoenas would be a distraction that no president can afford, Trump found the time to weigh in on a long string of unrelated issues on Twitter, about Elon Musk reopening Tesla’s California plant in defiance of local authorities, the credit he deserves for governors’ strong approval ratings for their handling of the virus outbreak, the anger Asian Americans feel “at what China has done to our Country,” oil prices, interest rates, his likely opponent in the November election and his critics.
The justices sounded particularly concerned in arguments over congressional subpoenas about whether a ruling validating the subpoenas would open the door to harassing future presidents.
“In your view, there is really no protection against the use of congressional subpoenas for the purpose of preventing the harassment of a president,” Justice Samuel Alito said to Douglas Letter, the lawyer for the House of Representatives.
Justice Stephen Breyer said he worried about a “future Sen. McCarthy,” a reference to the Communist-baiting Wisconsin senator from the 1950s, with subpoena power against a future president.
But in the case involving Manhattan District Attorney Cyrus Vance Jr.’s subpoena for Trump’s taxes, the justices showed little interest in the broadest argument made by Jay Sekulow, Trump’s lawyer, that a president can’t be investigated while he holds office.
Trump had said he would make his tax returns public but hasn’t done so, unlike every other president in recent history.
“President Trump is the first one to refuse to do that,” Justice Ruth Bader Ginsburg said early in the arguments.
The cases resemble earlier disputes over presidents’ assertions that they were too consumed with the job of running the country to worry about lawsuits and investigations. In 1974, the justices acted unanimously in requiring President Richard Nixon to turn over White House tapes to the Watergate special prosecutor. In 1997, another unanimous court allowed a sexual harassment lawsuit to go forward against President Bill Clinton.
In those cases, three Nixon appointees and two Clinton appointees, respectively, voted against the president who chose them for the high court. The current court has two Trump appointees, Justices Neil Gorsuch and Brett Kavanaugh.
Trump’s lawyers drew on law review articles Kavanaugh wrote to buttress their arguments that the president needs to be protected from investigations.
The justice, though, seemed more interested in how to balance the competing interests at play. “And the question then boils down to, how can we both protect the House’s interest in obtaining information it needs to legislate but also protect the presidency?” Kavanaugh asked.
Appellate courts in Washington and New York have ruled that the documents should be turned over, but those rulings have been put on hold pending a final court ruling. The appellate decisions brushed aside the president’s broad arguments, focusing on the fact that the subpoenas were addressed to third parties asking for records of Trump’s business and financial dealings as a private citizen, not as president.
House committees want records from Deutsche Bank and Capital One, as well as the Mazars USA accounting firm. Mazars also is the recipient of a subpoena from Vance.
Two congressional committees subpoenaed the bank documents as part of their investigations into Trump and his businesses. Deutsche Bank has been one of the few banks willing to lend to Trump after a series of corporate bankruptcies and defaults starting in the early 1990s.
Vance and the House Oversight and Reform Committee sought records from Mazars concerning Trump and his businesses based on payments that Trump’s then-personal lawyer, Michael Cohen, arranged during the 2016 presidential race to keep two women from airing their claims of extramarital affairs with Trump.
Trump sued to block the subpoenas. He is being represented by personal lawyers at the Supreme Court, and the Justice Department is supporting the high-court appeal.


fortune--2020-05-12--‘Fed go brrr’: Federal Reserve meme strikes chord with Bitcoin believers

The Federal Reserve, normally a staid institution, became a viral meme this March after it printed $2.3 trillion to help the COVID-battered economy. The meme, known as “Money Printer go Brrr” or simply “Fed go Brrr,” shows central bankers cranking out an infinite supply of dollars and even has a dedicated website.
The meme has resonated with the many people who wonder just much money it is viable for the Fed to print. But it has gained special resonance with one sub-culture in particular: longtime Bitcoin believers who see the Fed’s latest intervention as further proof that monetary policy has spun out of control.
Among them is Erik Voorhees, a Denver-based cryptocurrency entrepreneur who has advocated for Bitcoin for nearly a decade.
“I approach it from the basic economic concept that printing money doesn’t create wealth. Printing money is an illusion of wealth,” says Voorhees. “In 10 or 20 years, this won’t be viewed favorably. It will be viewed as mass hysteria.”
Voorhees, a staunch libertarian who keeps his wealth in “crypto, gold and real estate,” is especially wary of sovereign debt, which he claims has piled up in quantities far beyond governments’ ability to honor it. And while he concedes the Fed’s intervention in financial markets in 2008 helped stave off a crisis, Voorhess believes the central bank made a critical error in failing to unwind its balance sheet once the crisis had past. The government, in his view, has simply printed too much money—and that “Fed go brrr,” is not just funny, but dangerous.
Governments printing too much money raises the specter of the 1930s and hyperinflation in Weimar Germany, which produced iconic photos of workers carrying their wages home in wheelbarrows. Those images have mostly faded from popular imagination, but not for Voorhees and other Bitcoin advocates who have long feared today’s finance ministers and central banks could trigger a repeat of that era.
This suspicious of profligate governments is even baked into the code of Bitcoin itself. When the digital currency went live in early 2009, the first block of its transaction record, known as the blockchain, quoted a newspaper headline about the UK government bailing out banks. And this week, another milestone block on the Bitcoin blockchain cited a New York Times‘ story about the Fed’s unprecedented $2.3 trillion cash infusion.
#Bitcoin block 629999 coinbase message contains "NYTimes 09/Apr/2020 With $2.3T Injection, Fed's Plan Far Exceeds 2008 Rescue".
"Money printer go brrr" meme is officially immortalized on the blockchain.@_TaxMeIfYouCan_ pic.twitter.com/ngdGnbdmpG — Jan Neduchal (@neduchaljan) May 11, 2020
Jesse Powell, the CEO of cryptocurrency exchange Kraken, is another skeptic of U.S. monetary and fiscal policy. He believes that government’s recent cash infusions only strengthens the case for Bitcoin, which—unlike the Fed’s money printer—has a finite supply.
“I think it is validating for Bitcoin,” said Powell. “Seeing the government print trillions of dollars and maybe needing to print trillions more ought to be disconcerting people.”
Powell adds, however, that the U.S. doesn’t face imminent risk of hyperinflation, in part because the greenback is used in so many parts of the world. But he believes the value of U.S. dollars is eroding and that this trend will accelerate due to the inability of most Americans to save.
Both Powell and Voorhees, along with the vocal chorus of acolytes known as “crypto Twitter,” see Bitcoin as a store of value that can’t be debased. Their evangelism has only increased in the last month as the cryptocurrency has posted better year-to-date results than gold.
There is a sense of smug prescience among many in the cryptocurrency community, and not only because of the Fed’s response to the COVID crisis. Several leading crypto figures sounded early alarms on social media about the pandemic itself—leading the New York Times to describe them, and other Silicon Valley prepper types, as “vindicated.”
Meanwhile, crypto exchanges like Kraken and Coinbase, buoyed by a surge in trading revenue, are in the enviable position of going on a hiring spree even as much of the economy reels.
“We hired another 100 people in the last three weeks, many of them household members of existing staff. Priority went to those affected by COVID,” said Powell.
But while Bitcoin believers may be thriving, it’s unclear if their libertarian-centered worldview can rescue the U.S. economy, or offer solutions for the millions of Americans struggling to obtain food and medicine during the crisis. The federal government may fall short in many respects but the reality, for most people and businesses, is that it’s the only institution big enough to address the problems of the pandemic.
Voorhees, however, is adamant that he and other private citizens can provide more help than the government. He says he is using his wealth to help food and medical charities in Denver—an approach he believes is more efficient than giving tax dollars to people in Washington, DC to distribute. Meanwhile, he feels Bitcoin will only grow stronger.
“The Federal Reserve is our best marketing brochure. The printing of dollars is good for Bitcoin over the long term, but not something I want to cheer for as it’ll cause so much misery .”
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