fortune--2020-09-22--President Trump’s ‘patriotic education’ commission can’t actually tell schools what to teach

President Donald Trump’s controversial move to create a “patriotic education” commission late last week drew criticism, with critics accusing the Trump administration of whitewashing U.S. history. The commission, along with a National Endowment for the Humanities grant to develop a “pro-American curriculum,” is intended to rebuff the teaching of critical race theory, which Trump labeled “a Marxist doctrine holding that America is a wicked and racist nation.”
The “1776 Commission” reflects Republican dissatisfaction with a growing emphasis on race and civil rights education in American schools. Trump in particular took aim at the New York Times’ ongoing 1619 Project—which details slavery’s impact on America’s founding and subsequent growth, and has been incorporated in a number of school curriculums across the country—saying it “rewrites American history to teach our children that we were founded on the principle of oppression, not freedom.” This isn’t the first time the President has taken aim at the project; earlier this month, Trump threatened to cut federal funding to California schools for using the project in public school curriculums.
Still, in terms of directing schools to incorporate his “pro-American curriculum,” the federal government has no authority over what schools can and cannot teach.
School curriculums are primarily under the jurisdiction of states. They establish, set, and regulate curriculums and provide guidance on teaching methods and instructional materials, like textbooks. The federal government, meanwhile, deals more with access to education and safeguarding the constitutional rights of teachers and students. An example of this is the Equal Protection Clause of the 14th Amendment, which applies to schooling in terms of providing equal access to all children regardless of race, ethnicity, gender, religion, or disability.
“The federal government does not set curricula,” 1619 Project creator Nikole Hannah-Jones told CNN on Sunday. “Clearly Trump sees this as a tool in the arsenal of the culture war. It’s not as if our children need to be saved from a history that overplays the role of slavery.”
A lack of national education policy has actually prompted calls for the federal government to take a more active role in K–12 education. The federal government contributes just 8% of an estimated $1.15 trillion in national education funding, according to the U.S. Department of Education.
Some see Trump’s latest rhetoric as less an expression of genuine concern over education policy, and more as a way to embolden supporters ahead of a contentious presidential election.
“There’s nothing particularly new about this latest shot across the bow in the United States’ divisive culture war, apart from the President using his bully pulpit to make it,” argued Washington Post columnist Ishaan Tharoor. “Trump can’t exactly rewrite textbooks and curriculums, which are the province of the states and local districts. But it’s yet another dynamite charge to stoke a nativist base.”
With the election just six weeks away, Trump may very well see “patriotic education” as a ploy to energize his base. Currently, he trails Democratic challenger Joe Biden by nearly seven points in FiveThirtyEight’s national poll tracker. But in terms of tangible change to American education policy, the 1776 Commission will likely remain a largely political gesture.


fortune--2020-09-22--How would Instagram co-founder Kevin Systrom redesign TikTok as CEO?

When Bill Gates thinks we ’ ll have a COVID-19 vaccine—and why that won ’ t be the end of @ @

This is the web version of Business By Design, a weekly newsletter exploring design’s transformative influence on industry and enterprise. Sign up to get it delivered free to your inbox.
Curiouser and curiouser. That’s the only way to describe the trans-Pacific food fight over TikTok, the insanely popular, Chinese-owned short video app.
The saga has taken new twists and turns this week. President Trump, after vowing to ban TikTok on privacy and national security grounds, appeared to offer his blessing to a deal brokered by his Treasury Secretary to sell a stake in the company to a coalition of American investors led by Oracle Corp. and Walmart. But TikTok’s parent company, Beijing-based ByteDance, and Oracle have said different things about who’d own how much of the company, and how its data and technology would be managed.
Trump now says he won’t approve any deal that doesn’t leave Americans with majority ownership and control—a prospect Beijing has said it can’t abide. As I write, it’s not clear the deal is real.
For designers, though, possibly the most intriguing aspect of the Tik Tok tug-of-war is the report, first floated in the New York Times, that the leading candidate for CEO of the restructured entity is Instagram co-founder Kevin Systrom.
Phillip Faraone—Getty Images for The Wall Street Journal and WSJ. Magazine
Systrom and Stanford classmate Mike Krieger launched Instagram in 2010. Two years later, Facebook paid $1 billion to acquire the photo-sharing app which, at the time, had 13 employees and no revenue.
That price turned out to be a bargain. Systrom stayed on as CEO on the understanding that Instagram would retain operational independence. Over the next six years, monthly users surged to more than a billion, and the platform emerged as a key component of Facebook’s social media dominance. In crucial market segments—including younger users and key influencers in technology and media—Instagram proved a more popular platform than Facebook itself.
But Systrom and Krieger abruptly resigned from Instagram in September 2018. It has been widely reported that they clashed with Facebook CEO Mark Zuckerberg over Instagram’s autonomy and Facebook’s growth strategies. One source of tension was that Facebook seemed to be diverting users away from Instagram to its main app where it could charge more for advertisements. Organizational issues also rankled, as Zuckerberg began to delegate oversight of Instagram to Facebook loyalists, creating a new layer of management between himself and the Instagram co-founders.
And the two founders had fundamentally different ideas about design. Since college, Systrom has been a photo buff and an aesthete, not just a tech wizard. He says he drew inspiration for Instagram’s design ethos from the radical simplicity of a Holga camera. And yet, as Wired reported, while Systrom was on paternity leave in August 2018, Facebook forced Instagram to install a location-tracking service, the kind of intrusive feature Systrom disdained, and added a “hamburger button” Instagram developers considered a hallmark of lazy design.
Just as Systrom and Krieger departed Instagram, TikTok became available in the U.S. It now claims more than 100 million U.S. users, has been downloaded globally more than 2 billion times, and emerged as one of Facebook’s biggest competitors.
It’s far from clear that Systrom, now 36 and with an estimated net worth of $1.8 billion, will see much upside to assuming the reins of a company at the center of political controversy and ultimately beholden to a Chinese founder, an American enterprise software giant, and a sprawling global supermarket chain. But it is interesting to contemplate his design decisions should he accept the challenge.
TikTok, as Wired pointed out last year, is a “brilliant design nightmare”—an endless scroll of 15-second videos that seem to play at random, with hard-to-read fonts, and a jumble of non-intuitive icons. As London-based design expert Cennyd Bowles told the magazine, TikTok “just contravenes everything I’ve been taught and everything I practiced in my design career to date.” Moreover, any developers contend that TikTok, even if it doesn’t pose a serious threat to national security, collects far more data from users in a far more invasive way than Facebook.
Would Systrom be able to steer the app out of political controversy, address critics’ privacy concerns, and keep its shareholders happy, all while preserving the quirkiness that users seem to love? If he takes the job, it will be a fascinating high-wire act.
More design news below!
Clay Chandler
clay.chandler@fortune.com
NEWS BY DESIGN
Museums on trial
An African artist who attempted to remove art works from several museums across France is going to trial this month. Mwazulu Diyabanza lifted several African artifacts from French museums, in protest of France’s colonial legacy. In 2018, France said it would return 26 artworks taken from Benin, marking a sea change in the state’s attitude towards colonial looting. But the 26 pieces still remain in France.
Rubric
Hungarian architecture professor and inventor of the eponymous Rubik’s Cube, Erno Rubik, has published a book on the popular puzzle. The book—part memoir, part philosophical treatise—is deliberately as disorienting as the cube itself. Why, 46 years after its creation, is the enigmatic cube still so engaging?
New Bauhaus
The European Commission has called for a “new European Bauhaus” movement to complement the EU’s Green New Deal. The new movement—so far conceptual—intends to bring together interdisciplinary thinkers and makers from across Europe’s borders to devise a sustainable growth path that also looks good.
Airship
Airbus has unveiled designs for a new fleet of zero-emission planes that it says could be in service by 2035. The ZEROe concept craft are fueled by hydrogen and—at their max—can apparently carry 200 passengers up to 2,000 miles.
Design standards
The British Housing Secretary has tasked Nicholas Boys Smith with leading a new design body to consult local districts on city planning. Boys Smith is founder of Create Streets—a consultancy that advocates for building affordable homes as terraced housing rather than tower blocks. The new design body is the latest step in the U.K. government’s move, initiated last month, to decentralize planning permission and embed “beauty, design and quality” into the system.
Badlands
Norwegian architecture firm Snøhetta has won the contract to build the Theodore Roosevelt Presidential Library in North Dakota, following a competition hosted by the library's funding partners. The low-lying, undulating design mimics the gentle slopes of the Badlands in the Theodore Roosevelt National Park. It will be the 14th Presidential Library.
EVENTS BY DESIGN
September
Design Matters in Copenhagen is going ahead September 23-24 with tickets available to view a livestream of the event.
October
Dubai had, perhaps, the misfortune of hosting the World Expo this year. Originally scheduled to open in October and run until April next year, the Dubai Expo 2020 has been delayed until October next year instead. World Expos come but once every five years, so perhaps waiting one more year is okay.
Italy’s materia independent design festival will return to showcasing young Italian designers October 2, taking the exhibition online via Instagram and Facebook.
November
Dubai’s inaugural architecture festival, d3 Architecture Festival, will run November 11-13 on the sidelines of Dubai Design Week. The event will focus on sustainability—an existential issue for the desert city.
QUOTED BY DESIGN
“It’s 100% our fault. No one should say otherwise. Now the next step is fixing it.”
Twitter users noted an apparent bias in the platform’s cropping algorithm over the weekend. In a number of experiments run by users, the algorithm, which determines what part of an image to show in a thumbnail, appeared to select white faces rather than Black ones. The finding sparked a lively debate about A.I. bias. Twitter’s chief design officer, Dantley Davis, stepped in to say that the algorithm was tested for bias before being deployed but, evidently, more work was needed.
This week’s edition of BxD was curated by Eamon Barrett. Email him tips and ideas at eamon.barrett@fortune.com


fortune--2020-09-22--Feds’ ‘stablecoin’ letter may boost crypto ambitions of Facebook, Square

The federal agency that oversees banks issued a letter on Monday that gives financial institutions a green light to hold reserves to support so-called stablecoins—digital currencies similar to Bitcoin that are backed on a one-to-one basis by real-world money.
While stablecoins have existed for years, their popularity has soared in recent months both in cryptocurrency circles and among businesses that have embraced them as an efficient way to settle international transactions.
In its letter, the Office of the Comptroller of the Currency (OCC) stated that U.S. banks can lawfully hold the fiat currency reserves of companies that issue stablecoins, provided those firms comply with federal banking laws.
According to Jeremy Allaire, the CEO of cryptocurrency firm Circle—which has issued a stablecoin called USDC alongside crypto giant Coinbase—the letter will provide legal cover for tech and finance companies that are experimenting with stablecoins.
Allaire pointed in particular to Facebook, which is backing a consortium called Libra that plans to issue a global digital currency that will be backed by U.S. dollars or by a basket of major currencies. Allaire also suggested that companies like Square, whose CEO has expressed strong support for cryptocurrency, are likely to make stablecoins part of their operations in 2021.
A spokesperson for Libra declined to comment on the OCC news. Square did not immediately reply to a request for comment.
The OCC letter is not transformative in that some U.S. banks already hold stablecoin reserves. These include U.S. Bancorp, which holds more than $2 billion of reserves that back the USDC stablecoin.
Allaire, though, says the letter will provide assurance to other banks—some of whom remain skittish about cryptocurrency ventures. He says that as stablecoin use expands and more companies seek to issue their own stablecoins, the presence of additional banks will be essential.
In its letter, the OCC qualified its support for stablecoins by noting that it applied only to ventures that comply with regulations such as know-your-customer laws, and which permit regular audits of their reserves. This would seem to exclude exotic stablecoins like Dai that are supported in part by algorithms, as well as Tether. The latter is the most popular stablecoin project, but it has been dogged by complaints about its lack of transparency.
The OCC’s pronouncement on stablecoins comes two months after the regulator opened the door for banks to store cryptocurrencies like Bitcoin on their customers’ behalf.
More must-read finance coverage from Fortune:


fortune--2020-09-22--How AB Inbev is trying to change the world

This is the web version of CEO Daily. To get it delivered to your inbox, sign up here.
Good morning.
I spotlighted the Change the World list yesterday, but I will do so again today, because it is a welcome antidote to the cynicism that pervades today’s discussions today about the state of business. The list focuses on companies that are doing good even as they are doing well, and it’s inspiring to read.
Number 22 on this year’s list is AB InBev, the world’s largest brewer, whose CEO Carlos Brito is this week’s guest on our podcast Leadership Next (Apple/Spotify). I asked him about the Smart Barley program, which Fortune editors highlighted in the list. It’s a triple-play that provides a better standard of living for AB InBev’s farmers, less of an impact on natural resources, and increased reliability of supply—and profits—for AB InBev.
“You are doing a good thing for the communities where we operate, but also something that is good for the environment, authentic to our business, and it makes sense. The program has supported 20,000 farmers around the world in things like crop management, weather information, and seed variety.
“We are very different as a business than, for example, a smart phone manufacturer. A smart phone is manufactured in two or three countries in Asia and sold in 200 countries around the world…We brew 95% of what we sell locally. Our supply chain is local. We get the water locally. We buy from local farmers. We brew the beer locally. We sell to consumers locally. And we hire our colleagues locally. So we are very connected to communities.”
Brito’s comments reminded me of a theme from Rick Wartzman’s very good book, The End of Loyalty. What we now call “stakeholder capitalism” once existed in many U.S. communities that had strong companies based in them—think Kodak in Rochester, GM in Detroit, or Coca-Cola in Atlanta. But as supply chains went global, community ties frayed. The AB InBev program shows how important it can be to reestablish those connections. Said Brito:
“Many of those farmers, we elevated them from subsistence to commercial farmers, so they can send their kids to school and stuff, because now they have more money and a better life. And we also support their communities. We have a global footprint, but we act locally.”
It’s a good lesson for other companies that pay less attention to the well-being of global suppliers. Other news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Small-business support
Federal Reserve Chair Jay Powell will tell Congress today that "direct fiscal support" (as opposed to Fed loans) is needed for small and medium-sized businesses that are struggling during the pandemic. The Fed already has a $600 billion fund for medium-sized businesses, but strict terms mean it has barely been used. Powell: "Many borrowers will benefit from these programs, as will the overall economy, but for others, a loan that could be difficult to repay might not be the answer. In these cases, direct fiscal support may be needed." Financial Times
Whither Quibi?
Jeffrey Katzenberg's Quibi (it’s a video-streaming platform) is struggling to sign up subscribers and is now exploring its options, including a potential sale. Quibi apparently has enough cash to see it through the coming months, and in a statement it said Katzenberg and CEO Meg Whitman "are committed to continuing to build the business in the way that gives the greatest experience for customers, greatest value for shareholders and greatest opportunity for employees." Wall Street Journal
Chinese labor
China is expanding its hugely controversial "training center" program from Xinjiang into Tibet. There are quotas for the mass transfer of rural workers within Tibet and into other parts of China; first, the workers are reeducated in military-style centers that, in the Xinjiang context, have been criticized by international human-rights groups for alleged coercion. Just in the first seven months of this year, 15% of Tibet's population has been through such training. Reuters
WFH redux
Work from home! No, get back to the office! Umm, work from home again, please—that's roughly the trajectory of the British government's messaging in recent months, culminating in a U-turn announced today. Michael Gove, a senior member of Boris Johnson's Conservative government, said this morning that the government was reluctantly making a "shift in emphasis" and asking people to work from home again where possible, in order to combat skyrocketing COVID-19 figures. There's also a new 10 p.m. closing time for restaurants, pubs and bars. Guardian
AROUND THE WATER COOLER
Antisocial HSBC
HSBC, whose shares are skidding following leaks about its processing of suspicious transactions, has told its staff to stop posting on the company's social media accounts "to avoid negative reactions and comments across our channels and content." Fortune
Pandemic challenges
New research from LinkedIn shows more than two-thirds of European C-level executives have found the COVID-19 pandemic to be their biggest-ever professional challenge. Nearly a third had to make employees redundant, 42% had to ask staff to take a pay cut, and in the U.K., 62% of leaders had to furlough staff. The biggest challenge for 72% of the surveyed executives was not having all the answers—and just over half doubted their own ability to lead at times. LinkedIn
Aerosol guidelines
The U.S. Centers for Disease Control and Prevention last week fell into line with the emerging scientific consensus that the novel coronavirus is spread not only through droplets but also through tiny "aerosol" particles that travel a lot further. But yesterday, it unexpectedly removed its new guidelines on the matter, apparently because it is still working on its new recommendations about airborne transmission of the virus. NPR
Canadian oil
Alberta, home to Canada's lucrative oil sands, is struggling with a contracting economy and high unemployment. It's a classic "resource curse" and some, such as Calgary Mayor Naheed Nenshi, are desperately calling for Alberta to diversify its economy and embrace clean energy. But as Fortune's Katherine Dunn (a Calgary native) explains in this quite personal piece, the sustainability discussion is being hampered by political polarization. Fortune
This edition of CEO Daily was edited by David Meyer.


fortune--2020-09-22--Morgan Stanley analyst warns tech selloff could still have further to go

The tech-led selloff in U.S. equities is likely only halfway done, according to the Morgan Stanley strategist whose warning last month about the top-heavy market now appears prescient.
Down 13% from its Sept. 2 high, the Nasdaq 100 has tumbled below its 50-day average and is underperforming the S&P 500 for the first time in a year. Yet deeper losses may be ahead because the selloff has yet to clear out the positive sentiment that bubbled up in the past few months during its historic rally, according to Mike Wilson, the bank’s chief U.S. equity strategist.
The tech-heavy gauge is at risk of falling to its 200-day average, according to the strategist. That level, which sits near 9,528, would be a 12% drop from current levels and a 23% decline from its all-time high of 12,421 reached earlier this month.
“This is what happens when stocks get so extended — corrections can be much bigger when remaining in an uptrend,” Wilson wrote in a note to clients.
The Nasdaq 100 extended a three-week rout, falling as much as 2.4% as of 1:40 p.m. in New York. The biggest ETF tracking the index lost money as the fastest rate since 2000 on Friday, while large speculators boosted the net bearish positions in Nasdaq futures to a 12-year high.
But to Wilson, excessive bullishness toward tech stocks has yet to be completely washed out. Just consider: Despite the worst drawdown in months, open interest on bullish call options remained elevated for tech giants such as Apple Inc. and Facebook Inc. A flurry of software companies soared in their recent trading debuts, with Snowflake Inc. more than doubling on its first day.
More importantly, hedge funds have stayed “decidedly” long tech and growth stocks, Wilson said, citing the firm’s prime brokerage data. While the conviction partly reflects the outsize returns from internet and software companies, it also highlights the danger should sentiment start to sour, he said. Despite this month’s retreat, the Nasdaq 100 is up 24% for the year, compared with a gain of less than 1% for the S&P 500.
Many of those funds “are letting it ride,” Wilson wrote. “That may come into play and provide some fuel for this correction to go a little further than most are expecting.”


fortune--2020-09-22--‘No water, no beer, right?’ AB InBev CEO Carlos Brito on keeping a brewing giant focused on sustaina

‘No water, no beer, right?’ AB InBev CEO Carlos Brito on keeping a brewing giant focused on sustainability

Carlos Brito runs the world’s biggest brewer, a truly global company that brought in nearly $54 billion in revenue last year. But the CEO of AB InBev says that his company’s success depends on being nimble enough to respond quickly to the needs of farmers, brewers, and customers at the local level.
“We brew 95% of what we sell locally,” Brito says on the latest episode of Fortune’s Leadership Next podcast. “We get the water locally, we buy from local farmers…We sell to consumers locally, and we hire our colleagues locally.”
It’s a counterintuitive sentiment to hear from an executive whose company sells more than 500 brands (including Budweiser, Stella Artois, and Corona) and operates in more than 50 countries. But that local focus has helped AB InBev earn strong marks for social responsibility.
Earlier this week, the company earned a spot for the second year in a row on Fortune’s Change the World list, which features companies that leverage the profit motive to tackle urgent social problems. In the opening minutes of the episode, Fortune editor-in-chief Clifton Leaf describes AB InBev’s “SmartBarley” program, under which the company shares weather and crop data from state-of-the-art satellite and drone technology with smallholder farmers, helping the people who grow the crucial beermaking ingredient protect their crops.
In conversation with Fortune’s Alan Murray, Brito describes programs like SmartBarley as reflecting both a commitment to the communities where it operates and a broader commitment to sustainability: “It’s all about helping our communities where we serve, where we operate, thrive and be more balanced, and have a sound environment and better water quality.”
Brito also touts AB InBev’s progress toward some broader environmental benchmarks. The company now gets 60% of its electricity from renewable sources, Brito says—up from almost zero three years ago. The company is aiming for 100% by 2025. More than half of AB InBev’s packaging is now made from majority-recycled content, he adds.
Asked by Murray about the tradeoffs between socially responsible business decisions and profitability, Brito frames the company’s sustainability agenda as enlightened self-interest. “No water, no beer, right? So it’s that simple,” he says. “I have to take care of my farmers, because if there’s no barley, there’s no beer. So I mean, that’s the best thing for me.”
Speaking of sustainability, the Brazilian-born CEO, who has led AB InBev since 2008, also waves off a question from Murray about whether he might retire. He stresses that the company values longevity all through its leadership ranks. “We value people that stay with us for the long term,” he replies. That kind of staff have an ownership mentality, he continues: “When you make decisions, you’re thinking about the short and the long term, as opposed to just the next two years.”
To hear more about Brito’s leadership (and by the way, he goes by “Brito,” not “Carlos”), and about how AB InBev found inventive ways to help local bars navigate the COVID-19 pandemic, listen to the episode of Leadership Next below.


fortune--2020-09-22--Already down 13%, Big Tech stocks have plenty more room to fall, analysts say

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. The risk-off mood is growing after yesterday’s big drops on the Dow and S&P. The bad news: analysts think there’s still further room to fall—particularly with tech stocks.
Let’s spin the globe and take a look at what’s driving markets.
Markets update
Asia
The major Asia indexes are mostly lower in afternoon trading, with Japan’s Nikkei the best of the bunch, up 0.2% .
are mostly lower in afternoon trading, with the best of the bunch, up . The TikTok saga gets more incoherent by the day. The latest: President Trump said yesterday he’s having second thoughts about the Oracle ByteDance tie-up, and may rescind his tentative blessing. As any TikTok fan will tell you, the best skits are usually blessedly short and involve a lot of engaging characters. This one is anything but that.
saga gets more incoherent by the day. The latest: said yesterday he’s having about the Oracle ByteDance tie-up, and may rescind his tentative blessing. As any TikTok fan will tell you, the best skits are usually blessedly short and involve a lot of engaging characters. This one is anything but that. India is beginning to diverge from neighboring economies as the coronavirus situation worsens there. Cases topped 5.4 million yesterday.
Europe
The European bourses are the outlier this morning. They were up, led by Europe Stoxx 600 , at the open after massive drops on Monday.
are the outlier this morning. They were up, led by , at the open after massive drops on Monday. The British pound fell precipitously this morning as the U.K. government told the public to work from home if possible. That’s a full reversal from its position last month when it was trying to encourage workers to go back to the office to jumpstart the moribund economy.
fell precipitously this morning as the U.K. government told the public to if possible. That’s a full reversal from its position last month when it was trying to encourage workers to go back to the office to jumpstart the moribund economy. ECB president Christine Lagarde told the markets the central bank could throw more stimulus at the crisis this autumn to keep the eurozone on the road to recovery.
U.S.
U.S. futures point to another weak open. That’s after the Dow fell 1.8% yesterday following comments from Fed Chair Jerome Powell that the U.S. economic recovery will be anything but speedy. (He speaks three times before Congress this week).
point to another weak open. That’s after the fell yesterday following comments from that the will be anything but speedy. (He speaks three times before Congress this week). Another cloud hanging over the market s is the lack of a new stimulus deal. A likely Supreme Court fight would all but kill off that possibility.
s is the lack of a new stimulus deal. A likely would all but kill off that possibility. Following yesterday’s plunge, analysts are now recalibrating their forecasts. There are now calls that the S&P 500 could drop a few more percent, to below 3,200 and even test 3,100 .
could drop a few more percent, to below and even test . Worse, the Nasdaq 100 could go full correction, and fall 20% from its early September high, says Morgan Stanley. It’s already off 13% since Sept. 2.
Elsewhere
Gold is down, trading around $1,900/ounce .
is down, trading around . The dollar is up again as equities falter.
is up again as equities falter. Crude is flat, with Brent trading around $41.50/barrel.
***
On dogs, investing and Europe
When I’m out walking the dog, I try not to think about the markets. But I often do.
I’m not alone, apparently.
André Kostolany, the 20th Century stock market whiz, had a great metaphor for the markets that dog owners might appreciate. As I wrote in this month’s issue of Fortune:
The Hungarian-born economist and stock picker famously observed that the relationship between the stock market and the economy is akin to a dog out for a walk with its owner.
The master, holding the leash, and usually behind the dog, is like the economy, he explained. The dog, darting ahead, is the stock market. Kostolany’s point: We should give the stock market credit for anticipating the future.
Take last month’s stock market rally. (Yes, that rally was only a month ago, in August). Even as U.S. equities were soaring then, something more important was happening that got far less attention: investors were pulling their money out of U.S. stocks, and not just because Big Tech valuations were overheating. (More on that below).
Where were they putting their cash? Increasingly, into European equities. Note: that’s continental European equities; investors have long soured on U.K. stocks. (Wouldn’t touch them with a barge pole, I can almost hear my British friends saying).
Using Goldman Sachs data, I put together this chart. You can see the volatile fund flows on one side of the Atlantic.
In five of the past seven weeks, investors have pulled money out of U.S. equities as the red line shows. Over the same period, investors steadily bought up European equities, as the blue line shows.
In the past week, there was a big swing back into U.S. equities, but it’s too early to say if that’s the start of a trend reversal or just further sign of volatility in this asset class. In any event, before the most recent week, investors had cumulatively pulled a combined $17.7 billion out of U.S. stocks and put over $1.5 billion into European stocks.
The trend that’s been emerging is one where European stocks are looking more attractive to investors.
I spoke to Holger Schmieding, chief economist at Berenberg Bank, about why that may be. He laid out a compelling long-view argument that basically says: good ol’ Kostolany was right. The markets are telling us something we may have missed about the European economy—that investors see it as a compelling growth play.
Here’s the full argument. Let me know if you buy it.
***
Have a nice day, everyone. I’ll see you here tomorrow.
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
As always, you can write to bullsheet@fortune.com or reply to this email with suggestions and feedback.
Today's reads
Pandemic survival: hedge fund edition. Since May, Bridgewater Associates has taken the unusual route of setting up a trading floor war room in a pine forest not far from company HQ in Westport, Conn. Fortune's Jen Wieczner heads into the woods with them to learn about some of the unique challenges the team faces, and just how long they'll stay out there.
Gold rush. The price of the shiny yellow metal has been in the doldrums for a good portion of the past month, dipping below $1,900 at one point yesterday, before recovering. But zoom out over the past five years, and gold has been delivering killer returns. Demand for gold-backed exchange-traded funds is but one reason for that. Gold ETFs have been soaring even as mining capacity has fallen like a rock. Fortune's crack graphics team breaks out the dynamics behind one of the great bull runs of 2020.
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Market candy
Change the World
Yes, there are plenty of companies trying to do just that. Yesterday, Fortune published its sixth annual Change the World list in which we identity over 50 companies from around the world that are putting their smarts and talent to work to tackle society’s unmet needs. The world-changers are innovating on breakthroughs like “green” steel, they're campaigning to close America’s racial wealth gap, and toiling in the labs for a COVID-19 cure. Check out their inspiring work here.


fortune--2020-09-22--HSBC under social media blackout after leaked suspicious activity reports

HSBC Holdings Plc told its staff to stop posting on all the bank’s social media accounts over fears of “negative reactions” to the revelations in leaked suspicious activity reports.
In a memo to employees on Monday, Tricia Weener, head of marketing for HSBC’s global commercial and investment banking arms, said the London-based company would not post until at least 11 a.m. U.K. time Tuesday.
“Given the current news coverage, a decision has been taken to pause all HSBC proactive social media posts with immediate effect (except for customer responses in banking services), to avoid negative reactions and comments across our channels and content,” wrote Weener.
Shares in HSBC fell 2.7% to HK$28.50 in Hong Kong as of 10:45 a.m. local time, after reaching the lowest since 1995 Monday.
HSBC is one of about 90 banks named in the leaked documents from the U.S. Department of Treasury’s Financial Crimes Enforcement Network, which showed about $2 trillion in transactions between 1999 and 2017 that were flagged by financial institutions’ internal compliance officers as possible money laundering or other criminal activity.
In HSBC’s case, the documents say it processed million of dollars in transactions for a Chinese Ponzi scheme, leaving victims of the scam unable to recoup losses. “Starting in 2012, HSBC embarked on a multiyear journey to overhaul its ability to combat financial crime across more than 60 jurisdictions. HSBC is a much safer institution than it was in 2012,” the bank said in response to the stories by BuzzFeed News and the International Consortium of Investigative Journalists.
The bank operates dozens of social media accounts across the world, providing information on its services to customers in all the major countries where it operates. HSBC revealed through its official WeChat account in June that its most senior Asia-based executive signed a petition backing a new national security law for Hong Kong, drawing criticism from Western politicians.
A spokeswoman for HSBC in London declined to comment.


fortune--2020-09-22--Tim Cook says Apple’s WFH model will prompt long-lasting changes

Apple Inc. Chief Executive Officer Tim Cook said he’s been impressed by employees’ ability to operate remotely and predicted that some new work habits will remain after the pandemic.
During an interview at The Atlantic Festival on Monday, Cook said Apple created products including new Apple Watches and iPads that are launching on time this year, despite the need for most employees to work away from the office due to COVID-19.
Cook said he doesn’t believe Apple will “return to the way we were because we’ve found that there are some things that actually work really well virtually.”
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The comments contrast with the views of other executives, such as Netflix Inc.’s Reed Hastings, who recently called remote work “a pure negative,” and Jamie Dimon of JPMorgan Chase & Co., who warned of lasting damage if workers don’t get back to the office soon.
Cook said 10% to 15% of Apple employees have gone back to the office and he hopes the majority of staff can return to the company’s new campus in Silicon Valley sometime next year.
The CEO said he goes into the office at different points during the week and he noted that remote work is “not like being together physically.” Working in the office sparks creativity such as during impromptu meetings, he added.
The Apple executive also said the company focuses on policy and not politics when asked about his discussions with U.S. President Donald Trump.
Cook was also asked how long he foresees running the Cupertino, California-technology giant. “We’ll see,” he said. “At some point, of course, we all do something different.”


fortune--2020-09-23--One pandemic, two recoveries: New Yorkers are three times more likely to be jobless than Nebraskans

The world ’ s biggest hedge fund is working from tents in the forest during the COVID pandemic

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It’s going to take a long time to get out of this economic mess, but we’re making progress: Since the end of April, the economy has added more than 10 million jobs and the unemployment rate has fallen from its peak of 14.7% to 8.4%.
But that national recovery is unequal. Employment in some states is back to pre-pandemic levels, while others are at mass joblessness levels surpassing the 2007-09 Great Recession.
When the pandemic hit, the jobless rate in Nebraska soared from 4% in March to 8.7% in April. But the state’s nearly fully reopened economy has helped push the jobless rate back to 4% as of August.
The picture in New York, the epicenter of the pandemic in the spring, is far less rosy. It saw its jobless rate climb from 4.1% in March to a staggering 15.3% by April. It has since improved to 12.5% in August—a figure that is still above the U.S. peak of 8.9% jobless rate during the Great Recession era.
How can a New Yorker be three times more likely to be jobless than a Nebraskan?
States like Nebraska that are more rural and haven’t been as hard hit by the pandemic have almost fully reopened. Earlier this month Nebraska allowed outdoor gatherings to reopen at 100%, including sports stadiums and fairgrounds. And places like bars and tattoo parlors were reopened weeks ago.
Northeast states like New Jersey, New York, and Connecticut were hit hard by the virus in the spring and are reopening businesses at much slower rates. Case in point: Indoor dinning in New York City doesn’t start back until September 30, and that’s only at 25% capacity. That cautious approach explains why New York’s jobless rate remains so high.
While New York leads the nation at 33,092 lives lost to the pandemic, its case load and deaths are plummeting, according to Johns Hopkins University data. Only .9% of COVID-19 tests in New York are coming back positive compared to over 50% at one point in April. Nebraska has far fewer COVID-19 deaths (452), however, its positive rate is 12.6%—which is above the 10% threshold that adds incoming travelers to New York’s 14-day quarantine.
And joblessness in New York is also elevated by its large leisure and hospitality concentration. That sector was smashed by the pandemic, and has yet to rebound. Leisure and hospitality jobs in New York City alone are still down 48%. And that’s also why joblessness is still so high in tourism heavy California (11.4%), Hawaii (12.5%), and Nevada (13.2%).
While Florida also has a massive tourism industry, its jobless rate is only 7.4% in August which can be chalked up to a more aggressive reopening plan than states like Nevada or New York.


fortune--2020-09-22--My cancer might be back—and I wonder if unnecessary radiation caused it in the first place

I was a 23-year-old investment banker, working ludicrous hours in New York and training for marathons on the side, when cancer first entered my life. In the three decades since, the disease has been perhaps not a constant companion, but certainly a ride-along. I did not always hear it; it was not always speaking loudly. But it was back there somewhere.
And now that there is a possibility that my cancer has returned, questions about some of the decisions my doctors and I made in those early days have resurfaced.
Was my radiation really necessary? Could we have more thoroughly discussed the poor base of research related to my type of cancer, and would knowing more about the uncertainties and potential long-term complications have made a difference in my choices?
Is the way we treated my cancer back then the reason I’m still here 30 years later, or is it the cause of the new nodules discovered in my neck? Both?
On a daily basis in the U.S., unnecessary medical tests, treatments, and surgeries actively harm patients at astounding rates. Physicians fail to adequately inform subjects about the downstream risk of procedures. The pharmaceutical and biomedical industries influence doctors’ decision-making, actively bias major product research, pay key players to grease the skids for expanded sales, and ignore or obscure the harm some of their medicines and devices can do.
Patients, many of them vulnerable and afraid, are suggestible in the extreme—and the COVID-19 pandemic has only underscored that truth. By the time they realize that one ill-fated decision may lead to more and more medical intervention and costs, it’s often too late.
This is by no means a full picture of the health care industry, but it may be the piece that is the least well understood. In my case, I likely would have come to many of these conclusions on my own—hard-won knowledge from 30 years spent living with a disease.
But I will never have to test that theory, because I have already seen it all firsthand. From the other side of the gurney.
Not long after I began my work as an emergency department physician, a few years after my own diagnosis, the ER director singled me out as the department’s “top income generator on a per-hour basis,” a designation that I was not aware existed. He said he wanted to know my secret.
My secret: I was inexperienced and afraid of missing something, so I was ordering too many tests and likely hospitalizing too many patients. But my boss wasn’t complaining.
As a health care consumer in America, you are far more likely to be steered toward needless tests and procedures than away from them. Such unnecessary testing and surgeries add up to more than $200 billion in extra spending per year, according to the Institute of Medicine. At least 30,000 deaths in the U.S. each year are linked to mistakes and injuries caused by superfluous medical procedures. In a 2017 survey, doctors from the American Medical Association said that nearly a quarter of all the tests they performed were unnecessary, along with more than 20% of the prescriptions they wrote and every 10th surgery.
I neither knew nor thought about any of this when I was diagnosed at the age of 23; I wanted help. The tumor on the roof of my mouth had grown, gradually but persistently, until it was the size of a golf ball. After initial care back home in Texas, doctors at Memorial Sloan Kettering Cancer Center ran more tests that confirmed their suspicion: I had a rare form of salivary gland cancer, and the tumor itself was sitting atop a large artery. It was delicate and dangerous, and it would take two surgeries to get it all.
Dr. Carolyn Barber in 1987. Courtesy of Carolyn Barber, MD
What followed led me to my current life path. Inspired by the care and support I received, I left banking, eventually entered the Johns Hopkins University School of Medicine, and completed a residency at Stanford University Medical Center. I have spent the past 25 years caring for patients in the emergency departments of several teaching hospitals, an absolute privilege and a meaningful way for me to give back.
But there was another component to my case back then: With little discussion beforehand, I underwent radiation therapy as a complementary treatment to my surgeries. My radiation oncologist briefed me on a few of the potential short-term effects of such treatments. The long-term risks? Not so much.
Some of the complications from those treatments have changed my daily life forever. Significantly, a procedure to close a small hole on the roof of my mouth by using a skin flap failed immediately, very likely because of the prior radiation. The hole became much larger, and it now affects my speech to the point that I am often misunderstood, especially on the phone. I experience chronic sinusitis and headaches with fairly frequent acute infections.
Radiation may have been the right call at the time; we didn’t have a lot to go on, as my diagnosis was unusual. But the complications were severe, and some were not discussed. We are more aware now of the risks associated with many treatments—and, for some, the stunningly low rates of effectiveness. But such treatments continue to be pushed, and they make money—for medical companies, device makers, drug manufacturers, and, sometimes, doctors.
If you’re an average adult, you likely know someone who has had a cardiac stent implanted to fight coronary disease. In the U.S., we place such stents in an estimated 100,000 patients each year who have stable heart disease, at a cost of roughly $30,000 per procedure, though prices vary considerably. High-quality scientific studies show that stents in stable patients neither save more lives nor reduce the odds of a heart attack any more effectively than simply taking heart medicine and making lifestyle changes. But they are profitable.
Spinal fusion? It’s a $40 billion annual industry, the most popular elective surgery in the U.S. It also seldom works: Multiple studies show it to be no more effective than nonoperative treatment (such as physical therapy) in patients with chronic low back pain. And, discectomies, wildly popular procedures for those with herniated discs, have repeatedly been proved no more effective over the long term than having no surgery at all. Perhaps more concerning, the rate of complications from these back surgeries runs as high as 18% to 20%.
Overaggressive, unnecessary treatment can lead to patient harm, reoperations, longer stays, more studies, more tests, and more imaging, all at a high cost to the patient. Meanwhile, the money rolls in for three significant players: hospitals, Big Pharma, and medical device manufacturers.
Often, when patients find themselves steered toward a particular line of treatment—a certain medication, say, or a procedure calling for a specific brand of device—their doctors make these recommendations based on studies that appear to support the plan. In truth, these studies may well have been bought and paid for by the product’s manufacturer.
Our medical literature is often fraught with bias in favor of certain products, because the drug and medical device companies sponsor so much of the research. Their methods often lack rigor. A large study by the preeminent research review organization Cochrane concluded that industry-sponsored research was three times as likely as nonprofit-funded work to recommend the sponsor’s own drug.
Biased data can become scientific fact. It can also take a long time to undo. A 10-year survey of research articles published in The New England Journal of Medicine (NEJM) showed that 40% of established medical practices were later found to be invalid. By the time the medical community realizes a drug doesn’t work, Big Pharma has made its money and moved on to promoting the next one.
Do you take a statin, like Lipitor or Crestor, despite being an otherwise healthy person? The statin industry is remarkably lucrative in the U.S. on the premise that statins can help prevent a first heart attack, in addition to their uses for those who already have coronary heart disease. But tests of their effectiveness and need have come to wildly differing conclusions.
A meta-analysis involving 65,000 patients concluded that statins do not offer a mortality benefit to people without heart disease who use it as preventative medicine. The drugs have been credibly linked to an increased risk of diabetes, memory loss, and muscle weakness. Yet they continue to be prescribed and taken by some 35 million Americans.
How does this happen? The pharmaceutical industry has two primary pathways: paying for and thus controlling the results of research, and mass marketing to physicians via gifts, free drug samples, grants, paid speaking engagements, and more.
They’re not subtle. One company, Medtronic, sponsored 13 different studies that supported the use of its drug, Infuse, to improve outcomes for various back surgeries. None of the 13 trials reported any complications. But an independent article reported “frequent and occasionally catastrophic complications” associated with the drug’s use in spinal fusion surgeries. Why the discrepancy? Well, Medtronic had paid the authors of its studies $210 million for “consulting, royalty, and other miscellaneous arrangements” over a 14-year period and steered the content written by its paid experts, according to the Senate Finance Committee.
Well-meaning physicians can make inappropriate decisions for their patients based on such manipulated research. The concept of evidence-based medicine, for so long a hallmark of trustworthiness, has been deeply corrupted by drug and device manufacturers whose deep pockets can sway the results and the reporting.
From the time a doctor is a medical student, industry marketers cater lunches, bring gifts, offer free gatherings at expensive restaurants under the guise of “medical training,” and fund national conferences. As physicians gain seniority, they may be hired for industry speaking engagements worth thousands of dollars, or paid six figures to sit on a company’s board. A physician may even be given stock options or receive patent royalties from an invention.
Spending money works. A ProPublica 2019 analysis of 50 popular medications across all specialties found that doctors who received payments from Big Pharma wrote 58% more prescriptions of a drug, on average, than physicians without these ties. Novartis recently settled for $678 million a fraud lawsuit in which it was accused of paying kickbacks to physicians to prescribe its drugs.
The National Comprehensive Cancer Network’s 2019 guidelines encourage cancer patients to participate in some of the 300,000 clinical trials being conducted globally. But their oncologists may be in conflict, since some of them are paid “finder’s fees” and bonus payments for patient recruitment, totaling tens of thousands of dollars, from the drug manufacturers themselves. A JAMA study, meanwhile, found that among 71 cancer drugs approved for solid tumors, median survival increased by only 2.1 more months than with existing medicines. Imagine the poor survival odds for many patients in untested clinical trials.
Recently, a screening ultrasound revealed two suspicious nodules in my neck, leading to worry that my cancer might have returned after 30 years. I consulted a respected outside oncologist, who suggested a complete neck dissection, potential new radiation, and a chest CT scan to look for metastases—yet he agreed that none of it would improve survival chances. My own doctors advocated for watchful waiting, which is where I’m headed.
This possible recurrence may have something to do with the radiation treatment I received in 1987; it may not. Regardless, I didn’t know any better at the time. Doesn’t that describe a majority of us in most critical medical situations?
That has to change. Our hospitals and medical specialty organizations can help reduce overtesting by uncoupling physician pay and test ordering. They can move away from the fee-for-service model and toward value-based care. They can seek medical tort reform to reduce the don’t-get-sued pressure physicians feel to advocate for more tests or procedures.
I second several of the recommendations made by Dr. Marcia Angell, a former editor-in-chief of the NEJM: Industry should not be allowed to sponsor its own clinical trials. Big Pharma should not be funding physicians’ medical educations or sponsoring national symposia. And direct-to-consumer sales pitches by industry should be eliminated to reduce patients’ demands for drugs and testing.
We also need a plan to finance medical education. Being $200,000 in debt can be a powerful inducement to say yes when Big Pharma and the medical device industry come calling.
Finally, as physicians, we need to do the lion’s share of the work. We need to read primarily non-industry-funded research and more openly discuss risks versus benefits of nonessential treatment. Sometimes, we need to be willing to draw upon our experience and recommend doing nothing. If collectively we can cut unnecessary services by half, the Institute of Medicine estimates health care expenditures will drop by $105 billion every year.
I’m extremely grateful for medicine, for my care, and for being alive. I have worked with and among many wonderful physicians, and I can attest that their jobs are difficult and challenging. Many pharmaceutical and medical device companies have made significant advances in health care. But we must do better.
And sometimes we do. My two personal oncology physicians were the ones who advised a conservative strategy of monitoring those nodules in my neck, which could prove to be benign. They believe the risk of surgically removing them, with all of the potential complications, far outweighs the benefit. I’m ever appreciative of their reflection, care, and honesty. I believe they deeply honor the aphorism: First, do no harm.
Carolyn Barber earned her BA from Princeton University, did her medical training at Johns Hopkins University School of Medicine, and completed her residency at Stanford University Medical Center. An emergency department physician for 25 years, she is also cofounder of a homeless work program, Wheels of Change, and a nationally published author. This article is adapted from her new book, Runaway Medicine: What You Don’t Know May Kill You, which was recently Amazon’s top-ranked bestseller in health care administration.


fortune--2020-09-22--Climate action: Fear hasn’t motivated people, so let’s get them excited

Greta Thunberg, Al Gore, AOC, and others have ambitiously attempted to educate and inspire the U.S. (and the world) to act on the climate crisis. Their impactful work has not yet been enough, as we continue to hurtle towards unprecedented disaster.
It is impossible to imagine that the reality of climate change is still in question by many in this country and abroad. Those who haven’t been convinced by science, to me, are lost causes. We are past the point of trying to convince people that climate change is real, past the point of educating people about how much of a threat it is, past the point of switching out our plastic straws for reusable ones, and past the point of celebrities making videos asking for concrete change (whatever that means).
The Black Lives Matter movement, in my opinion, has been, and continues to be, a successful mobilization effort with concrete results, especially when compared to the climate movement. It has already led to policy change (albeit marginal). We are not even close to being done. I hope to see significant policy and budgetary changes inspired by the BLM movement, especially post-November. However, the small steps that have been taken so rapidly are starting to turn the knob that opens the door to a more just future in the U.S. and around the world.
This movement was born out of anger. Fear and anger are incredible tools for mobilization. George Floyd screamed out for his mother, and mothers around the world joined the fight. Anger was the perfect tool for the Women’s March on Washington D.C., the March for Our Lives, and now BLM. It is not the right tool for the climate crisis. It makes no sense to get angry at the climate. The climate needs a different publicist.
The climate crisis has been marketed using images of rising oceans, starving polar bears, disastrous weather events, turtles with straws in their noses, walruses unintentionally committing suicide, and millions of people becoming climate refugees. Those images may be powerful, but it has become too easy for the person viewing those images to think that all those things are all happening so far away from me. That they won’t affect me personally. That they are not my personal problem. I am safe, so we can let other people deal with the climate. If it’s not affecting me physically or emotionally, I can’t get angry and I won’t be scared. Fear is the wrong motivator.
What makes ‘trickle-up campaigns succeed
The most successful trickle-up campaigns of the last decade have been inspired not by fear, or anger, but by excitement. They have been fueled by people wanting to be a part of something ambitious, and even a little bit dangerous. The thousands of TikTokers reserving tickets to Trump’s Tulsa rally led to a massively successful empty arena. The ALS Ice Bucket Challenge was completed millions of times, raised millions of dollars, and spread awareness about a disease that most people had never even heard of. Giving Tuesday, on Facebook and beyond, has ballooned into a philanthropic bonanza and is now the biggest thing since Cyber Monday. The global participation in these campaigns was driven by an underlying need to participate in something fun, something unique, something exciting. How do we use what we learned from these successes to build momentum for the climate movement?
Unlike those in power today, the change-making world must look to the experts. There are three industries that specialize in building excitement around the world: music, sports, and fashion. They have inspired billions of fans to pay trillions of dollars to attend experiences where they will participate, passively and actively, in thousands of different ways. We must look at the ways musicians craft album campaigns, engaging their fans through audio, video, social media actions, interactive experiences, live events, and more. We must look at athletes and sports stadiums that foster an unmatched competitive energy. We must look to the fashion industry and its way of developing an air of exclusivity—and yet still motivating crowds to bang down doors with their wallets.
All of these industries have one thing in common: incentive. Incentives allow the excitement to bubble and build to a point of explosion. To create excitement for the climate movement, we must create actionable incentives: incentives to use reusable items, incentives to vote green, incentives to shop locally, incentives to mobilize communities both digital and physical, incentives to simply choose one action over another.
Billie Eilish and Shawn Mendes set examples for their fans through low-carbon touring and incentivizing sustainable consumption through partnerships with H&M Conscious and Flow Water, respectively. Allbirds has built a fashionable B Corp that ties carbon neutrality and sustainability to the core of its business, incentivizing customers to participate beyond their shoe purchase. Though now postponed, the Tokyo 2020 Olympics was developed with sustainability in mind, and aimed to make the games 100% carbon neutral, setting a new standard for what fans demand from their sporting events. Elon Musk built Tesla into something cool, exclusive, and clean. When you own a Tesla, you are part of a club that everyone wants to join. A club that is climate-aware and becomes climate responsible. These are inspirations for a new kind of movement-building for individuals and civil society.
When we trickle up, we combine small, individual actions to create waves of corporate and political change. Public corporations like Apple, Amazon, and others have made commitments to climate neutrality, but we can’t hope and pray that other companies will follow in their footsteps. New federal policies will help us to move in the right direction and force companies to clean up their acts, but it is the local and state governments that have the ability to move quickly and spend in sustainable places. It is admittedly incredibly difficult to get people excited about corporations or government. But that is the task: creating excitement by incentivizing individual action, incentivizing mobilization to change corporate action, and incentivizing a unified voice for political action.
Maybe one day we will become angry or scared enough to act on climate, but today is not that day. In the meantime, let’s try getting excited.
Adam Met is the executive director of Sustainable Partners, an interdisciplinary nonprofit that creates engagement around sustainability through media, research, and incentive-based initiatives. He is also a member of the six-time-certified Platinum band AJR and host of the new podcast, Planet Reimagined.


fortune--2020-09-22--Sizzler joins the list of chains declaring Chapter 11 due to COVID

All sizzle, no steak?
That appears to be the case for Sizzler USA, which filed for bankruptcy Monday in California, joining the growing list of companies that have succumbed to financial struggles caused by the pandemic. Restaurants in particular have been under severe pressure given varying state mandates restricting or limiting indoor dining, and the recent finding that restaurant dining sharply increases COVID spread. California Pizza Kitchen also recently filed for bankruptcy.
In a statement, Sizzler said that “the filing is a direct result of the financial impact the COVID-19 pandemic has had on the casual dining sector, particularly long-term indoor dining closures and landlords’ refusal to provide necessary rent abatement.”
Indeed, many retail establishments from Gap to other restaurant chains have been negotiating with landlords to try and renegotiate or delay rent payments as the pandemic lingers on.
Sizzler was originally founded in 1958 by Del and Helen Johnson as the Sizzler Family Steak House, in Culver City, Calif. The idea was to bring a fancy steak dinner to the masses at an affordable price (which was, back then, $0.99).
But according to Restaurant Business, the chain had been in decline in recent years: “Its unit count declined 6.9% last year, according to data from Restaurant Business sister company Technomic, and the number of locations it operates now is 15 fewer than it operated at the end of 2019,” the publication reported.
However the Chapter 11 filing will only affect the company’s 14 company-owned locations, not its franchises or international locations which make up the majority of its locations.
This is not the company’s first trip through Chapter 11. The Wall Street Journal reported that in 1996 the chain previously filed for bankruptcy, closing 136 restaurants as it exited markets in the East such as Baltimore, Philadelphia, and Florida.
At the time the Journal wrote that “many of the stores have slipped as the steak-and-salad buffets launched about five years ago have fallen out of favor. The chain will recast its remaining restaurants in a new ‘American Grill’ format that will offer more of a sit-down dining experience.”


fortune--2020-09-22--As the bull market turns 6 months old, markets are testing a key level

Investors have had a rough go of it to start off September. First there was a big tech selloff to kick off the month, and markets en masse have since faltered amid worries over stalling stimulus and a quickly approaching election. Now, as the bull market officially turned six months old Monday, things may be on a rockier path.
This bull market is officially 6 months old today (126 trading days) and it is no longer the best start to a new bull market ever.
Previous best 2 starts at 6 months ('82 and '09) did see continued gains fwiw. pic.twitter.com/BDcZeeQKS2 — Ryan Detrick, CMT (@RyanDetrick) September 21, 2020
According to LPL Financial’s Ryan Detrick, the current bull market no longer boasts the strongest start in history—although previous best starts (in 1982 and 2009) did see continued gains in the months following (see chart).
As of Monday’s close, the S&P 500 had fallen over 8% since peaking on Sept. 2, and it has posted three consecutive weeks of declines for the first time this year, before managing to rebound roughly 1% to close on Tuesday.
But according to analysts at Morgan Stanley, the selloff, particularly in tech stocks, may have further to go despite its roughly 13% drop so far this month. That’s because the tech-heavy Nasdaq 100 could teeter around its 200-day average, Morgan Stanley’s chief U.S. equity strategist Mike Wilson writes, which would spell another double-digit tumble from current levels.
To boot, strategists like Detrick have cautioned that historically, September and October in an election year have been a bit rockier than the summer months. And while “selling thus far in September has been largely concentrated in the technology and large-cap growth corners of the market, Monday saw decliners on the NYSE outnumber advancers by 7:1, the worst since late June,” analysts at LPL wrote Tuesday.
That doesn’t mean that, long term, investors will shun stocks (especially favored tech names) through year’s end, however. LPL’s Jeff Buchbinder recently told Fortune, “This recovery has exceeded our expectations; the earnings rebound has exceeded our expectations; and we think stocks including tech should end the year higher than where it is right now.”
But this week has been a test of the resiliency of the market, as Charles Schwab’s vice president of trading and derivatives Randy Frederick notes the S&P 500 index must hold above the 3,222 point level to stave off a technical correction, which would be the first since June.
After breaking the 50-day SMA on Friday (9/18), the $SPX tested (but closed above) 3,222 yesterday. A close below, would put it into correction territory (-10% from the last high of 3,580 on 9/2) for the first time since late-June. Will it hold today?https://t.co/maIeV4Rfa2 pic.twitter.com/sm4iJYsT9L — Randy Frederick (@RandyAFrederick) September 22, 2020
Yet on Tuesday stocks managed to fight off that level comfortably, with the S&P 500 closing up just over 1%.


fortune--2020-09-22--Ruth Bader Ginsburg’s passing feels like millions of women have lost their bubbie

My buba (more commonly pronounced “bubbie,” the Yiddish word some Jews use for grandmother) was an amazing cook. Every holiday, and every week on Thursdays, Sonia Taitelbaum Letchman would wake up at 4 a.m. and prepare a feast for our large Jewish Costa Rican family.
Hand-folded, hand-filled kreplaj; tubs full of ground cod, spiced and boiled into the most delicious gefilte fish; arroz con pollo made from whole chickens. Well into her eighties, her body beaten down by age and tragedy, she mixed and shaped and chopped—with an axe, mind you—every single morsel of food that she made for us. When she died unexpectedly in 2004, she left us a fridge full.
In the decade and a half since her death I’ve tried to recreate her cooking, attempting to recall the steps and tips and tricks I witnessed in my youth. I’m a good cook, but my food never tastes quite the same as hers, and I don’t know what I’m missing—because she didn’t leave behind a single recipe.
“Where are buba Sonia’s recipes?” I asked my mom a few years ago. “How come nobody seems to have them?”
Feinzaig’s grandmother (buba) Sonia Taitelbaum Letchman. Courtesy of Leslie Feinzaig
“I think she didn’t write them out because she wasn’t good at writing. You know she never finished school, right?” With these words, my mother gave me a new, more adult understanding of my buba: a woman who, because of where and when she was born, lived a profoundly limited life.
I thought a lot about buba Sonia this weekend because it was Rosh Hashanah, a time when my own little family gets a taste of my decidedly modern attempts at traditional Jewish cooking. I also thought about my buba because I was processing the death of Ruth Bader Ginsburg, who, for all her larger-than-life accomplishments, was also a beloved bubbie.
Ruth Bader Ginsburg and Sonia Taitelbaum Letchman were Jewish women of modest descent born a decade and a continent apart.
Ginsburg was born in 1933 in America, where her family had emigrated decades earlier from Poland and Russia. Her mother completed high school and encouraged Ginsburg to be independent and scholarly. Ginsburg would go on to not only graduate high school, but also get her bachelor’s at Cornell and attend law school at Harvard and Columbia. She would meet a supportive husband, Marty, who loved her for her brain, supported her career, and cooked for their family.
My buba was likely born in 1920 or 1921 (we don’t know for sure because the Nazis destroyed her birth documents) in a tiny town in Poland. Her parents pulled her out of elementary school and moved her half a world away to escape the Russian pogroms and the growing anti-Semitic threat. They arranged for her to be married to a man who was her first cousin, and 15 years her senior, when she was only 13. Some of her siblings stayed behind in Poland, eventually to be killed in the Nazi concentration camps.
My buba’s lived experience helped shape me into the girl who wrote her college dissertation on the gender pay gap, arguing for equal parental leave for dads and moms, almost 20 years before any major employer implemented any such thing. It shaped me into the woman who took a 25-person Facebook group, with little money and no clout, and against all odds turned it into a 20,000-strong national community for women and nonbinary founders and business leaders. It molded me into the wife and mother who lives life on her terms, who is an equal partner in marriage, who gets to be ambitious and nurturing, strong and vulnerable, all at the same time.
Ginsburg’s exemplary leadership allowed me to be this woman. A woman whose career and family are equally important, each strengthening the other. A woman who spends her life building sustainable change, however slow. A woman whose life is full of substance, not hype, who builds bridges, not burns them.
At a time when we obsess with youth and quick success, Ginsburg never exactly “peaked” in her long career. She just kept growing, giving, delivering. She produced some of her best work well into her eighties. I can only hope to be so lucky.
Feinzaig and her newborn daughter Sonia Ruth. Courtesy of Leslie Feinzaig
Millions of women across America and the world are grieving Ginsburg’s passing like their own bubbie had died. It feels deeply personal—not just because she was an icon and a Supreme Court justice, but because her death kicks up more dust in an already difficult year. It feels personal because Ginsburg made it possible for women of my generation to be who we are and where we are today. And it feels tragic because it puts our livelihoods, our protections under the law, and our slow but not inconsiderable progress at risk of setback.
My buba’s story shaped who I am. Ginsburg’s story made who I am possible. It is my wish to honor their memories, and that is why I named my daughter after these two great women: Sonia Ruth. A little giant like both of her namesakes. A woman who can one day conquer the world because of them.
Leslie Feinzaig is founder and CEO of the Female Founders Alliance.


fortune--2020-09-22--Amazon offers $500 ‘Prime Bike,’ encroaching on Peloton’s niche

Amazon launched a “Prime Bike” on Tuesday, a bid to compete with an array of at-home exercise bikes that have become popular in the pandemic, such as those offered by Peloton Interactive.
The new EX-Prime Smart Connect Bike is available on the e-commerce giant’s website for $500, a steep discount to Peloton machines that cost well over $1,000. The Prime bike is only available to Amazon Prime subscribers and was developed through a partnership with Echelon Fitness. The machine comes with a free 30-day Echelon membership trial, which includes live exercise classes.
Shares of Peloton fell as much as 6.7% on Tuesday, but recovered to be down about 2% in afternoon New York trading.
Amazon often releases new hardware as a way to get its technology into consumers’ homes. The company sometimes uses a scatter-shot strategy, pushing out many different gadgets to see what works, including microwaves and clocks.
This is not the first time Echelon has entered into a partnership to distribute its bikes. It also had a deal with Walmart Inc. for a similar model at $500. This is why KeyBanc Capital Markets analyst Edward Yruma isn’t too worried for Peloton.
“Other than a few cosmetic changes, the $500 bike is almost identical to Echelon’s $500 bike at Walmart.com, which has been available at Walmart.com since March and hasn’t had any noticeable impact to Peloton’s growth,” Yruma wrote in a note to investors.


fortune--2020-09-22--Sexual misconduct allegations are playing out just like they did in 2016—even after the #MeToo movem

Sexual misconduct allegations are playing out just like they did in 2016—even after the #MeToo movement

Last week, Amy Dorris joined a list of at least 25 women to have accused President Donald Trump of sexual misconduct.
Speaking to the Guardian, Dorris, a former model, recalled how Trump forced himself on her outside the bathroom of his luxury box at the 1997 U.S. Open tennis tournament in New York. Some 23 years later, Dorris said she was finally going public with the allegation to set an example for her twin daughters. The Guardian said it was able to corroborate her account with several people in whom she had confided about the alleged incident.
As they have in every instance in which the President has been accused of such misconduct, lawyers for Trump vehemently denied the accusations. They cast doubts over Dorris’s story, asking why she would have continued to spend time around Trump—at the U.S. Open and at a memorial for the then-recently slain fashion designer Gianni Versace—in the wake of the alleged incident. (Dorris was visiting New York with her boyfriend at the time, a friend of Trump’s.)
It is a strategy that evokes the advice of “deny, deny, deny,” that Trump’s onetime mentor, the late attorney Roy Cohn, is said to have given him in his younger days—counsel that he has deployed time and time again, through the myriad scandals that have plagued his presidency. And it is a tactic that appears to have worked in delegitimizing the more than two dozen allegations of sexual misconduct levied against the President, from admittedly walking in on undressed beauty pageant contestants to allegedly raping the writer E. Jean Carroll in a department store dressing room.
Because while Dorris’s allegations briefly managed to make headlines around the world, they were quickly relegated to an afterthought—even before the death of Supreme Court Justice Ruth Bader Ginsburg on Friday put Dorris firmly on the back burner as far as the news cycle was concerned. A mere six weeks before the 2020 presidential election, an allegation of sexual assault against the sitting President of the United States has barely registered in the national consciousness.
Trump, as his detractors would note, has shattered no shortage of norms during his time in office, from government ethics standards to questioning the legitimacy of the very election in which he now stands. But perhaps no set of standards have been cast aside so ruthlessly as those around elected officials accused of sexual misconduct—the kind of behavior that, through the decades, has cost scores of politicians their positions in public life.
To many observers, the pivotal moment that solidified Trump’s ability to insulate himself from the myriad accusations against him was the release of the Access Hollywood tape in October 2016, one month before that fall’s presidential election. The revelation of Trump boasting, in exceptionally lewd terms, about his ability to sexually impose himself on women sent his campaign scrambling and prompted calls from some in his own party for Trump to withdraw from the race. As the feminist writer Jill Filipovic noted last week, the behavior that Trump boasted about engaging in on the tape starkly corroborates the grabbing, groping, and forced sexual contact that numerous women, including Dorris, have accused him of.
But Trump didn’t withdraw. As he has throughout the course of his political career, he doubled down and struck back at his opponents with equal if not greater fury. Two days after the release of the Access Hollywood tape, he showed up to the second debate with his Democratic opponent, Hillary Clinton, accompanied by Paula Jones, Kathleen Willey, and Juanita Broaddrick—women who have all accused Clinton’s husband, former President Bill Clinton, of sexual assault or harassment.
That maneuver undoubtedly put Hillary Clinton in an awkward position, and she was never able to make Trump’s alleged misconduct the hot-button campaign issue it arguably warranted becoming. Despite all of the allegations against him and the vulgar spectacle captured on the Access Hollywood tape, Trump was able to overcome it all: He won the election, and in the process beat Clinton among the white women demographic that made up 41% of the electorate, according to Pew Research Center.
Even as society faced a massive public reckoning with sexual assault and misconduct in the wake of the #MeToo movement—one that cost plenty of other public officials their jobs—the Trump camp held its line. Sarah Huckabee Sanders was explicit about it in October 2017, when the former White House press secretary was asked whether it was “the official White House position” that all of the President’s roughly two dozen accusers were lying. “Yeah, we’ve been clear on that from the beginning,” she replied.
In 2020, it appears a somewhat similar dynamic to 2016 is playing out. There are no shortage of issues on which former Vice President Joe Biden’s campaign is willing to scrutinize the President in the harshest possible terms, from his handling of the coronavirus pandemic to his abrasive tone on the race-related issues that have shaken up American society this year. But on the subject of allegations like Dorris’s, Biden has remained silent.
Like Hillary Clinton in 2016, Biden has his own baggage in this regard: the allegations levied against him by Tara Reade, who claims Biden sexually assaulted her in 1993, when she worked as a staffer in his Senate office. While Reade’s account has been beset by inconsistencies and credibility issues, it’s also one of several allegations by women who have accused the former vice president of no less than inappropriate physical contact.
While some would deny equivalencies between the allegations against Biden and the numerous women who have accused President Trump of sexual misconduct, the fact remains that Biden has proved reluctant to hit Trump with attacks related to his alleged past mistreatment of women. The Biden campaign has not commented on Dorris’s allegations, and neither campaigns returned requests for comment.
In turn, the President—perhaps wary of his own track record in that regard and a prolific denier of sexual assault accusers in his own right—has been more inclined to criticize Biden as a conduit for the “radical left” and question his cognitive capabilities than to broach the allegations against Biden.
And so, at a pivotal stage in the lead-up to one of the most consequential presidential elections of our time, allegations like Dorris’s are allowed to flicker in and out of the public consciousness with barely any acknowledgement. In an era when the issue of sexual assault is supposed to be confronted and destigmatized more than ever in society, it instead lingers over the 2020 election unspoken and unrecognized—effectively off the ballot.


fortune--2020-09-22--Facebook users in Illinois can now apply for a privacy payout of up to $400

Residents of Illinois who posted a picture of themselves to Facebook—or were “tagged” in a photo by someone else—can now apply to receive a payout in a class action settlement.
The settlement, which will see Facebook users in the state receive from $200 to $400, is notable for its size—Facebook agreed to pay $650 million—and because it represents a rare occasion of a tech company compensating its users for a privacy violation.
Those wishing to apply for a payment can do so on this website.
While such violations have become all too familiar in recent years, the ensuing lawsuits have typically seen the settlement money shared among lawyers and third-party groups, rather than users.
In the Facebook case, only Illinois residents are eligible to collect because the state has a unique law that requires companies to obtain permission before using customers’ biometric data—including photographs. Similar lawsuits are underway against Google and photo services like Shutterfly.
In order to qualify for the Facebook payout, users must have lived in Illinois for at least 183 days after June 7, 2011. According to the legal notice, spending time traveling outside the state during this period is not a disqualification.
In order to collect, Illinois Facebook users must file a claim by November. A court is slated to sign off in the settlement in early January, which will see claimants receive a check shortly after, provided there is not an appeal.
The settlement also requires Facebook to turn off its facial recognition feature in the state and to delete the “face templates” of those who haven’t used Facebook in the past three years.
While class action settlements are common, fewer than 10% of eligible consumers typically file to receive their money. You can find a list of other open class actions, involving companies like Apple and Kotex, here.


fortune--2020-09-22--Researchers find a ‘druggable pocket’ in coronavirus that could lead to new antivirals

Researchers in England say they have made a breakthrough finding that could help defeat the novel coronavirus. Other experts are cautious—they warn potential drug development could take a long time—but say it’s at least a step toward a better understanding of the virus.
As now-familiar images of SARS-CoV-2 show, the virus’s surface is covered with spikes. These so-called spike proteins are able to bind to the surfaces of human cells, leading to infection.
After producing these spike proteins in a test tube, researchers from the University of Bristol took a very close look using a recently developed imaging technique called cryo–electron microscopy, with cloud-based processes, building a 3D structure that they could then examine.
A 3D model of the coronavirus’s spike protein, produced by the Bristol University team.
The structure contained a surprise: pockets containing molecules of an essential fatty acid called linoleic acid (LA), which we absorb via food, and which we need to stay healthy.
Though our bodies don’t make it, they need LA to keep cell membranes fluid, so our lungs can take in oxygen, and to produce substances such as prostaglandin that protect against inflammation in the cardiovascular system.
COVID-19’s symptoms include widespread inflammation and respiratory distress. And studies have shown that people suffering from the disease have lower LA levels than normal. That suggests the virus is scavenging for LA molecules, using them to spread, and harming us in the process.
“We were truly puzzled by our discovery and its implications,” said Imre Berger, who co-led the study, in a statement. “So here we have LA, a molecule which is at the center of those functions that go haywire in COVID-19 patients, with terrible consequences. And the virus that is causing all this chaos, according to our data, grabs and holds on to exactly this molecule—basically disarming much of the body’s defenses.”
📢 A major discovery in the fight against #COVID19 📢
Our scientists @MaxPlanckBris have identified a new drug target in the structure of the virus that could be used to stop it infecting human cells – a potential ‘game changer’ in defeating the pandemic https://t.co/P9Lr6qenOS pic.twitter.com/XgwOuYfO3G — Bristol University 🎓 (@BristolUni) September 22, 2020
With the link between SARS-CoV-2 and LA now having been discovered, the Bristol team hopes it may be possible to turn the virus against itself. The idea is that new small-molecule antiviral drugs could fill these “druggable pockets” so that, once the coronavirus has first entered a patient’s body, it becomes a non-infectious dud that cannot spread.
In an interview with Fortune, Berger said there were two possible clinical routes that could now be taken.
In the shorter term, Berger said, LA could become part of a cocktail of drugs alongside other drugs such as Gilead’s remdesivir, which inhibits another protein in the virus and which has been shown to shorten hospital recovery times for some patients.
LA is nontoxic, and most drugs being considered for coronavirus treatment have side effects, so it is possible that the addition of LA could make it possible to “reduce the amount of other drugs [in the cocktail] to achieve the same beneficial effect,” he said.
In the longer term, Berger suggested, it might be possible to find a molecule that is “even better than LA in closing the spike protein”; the spike protein’s “druggable pockets” seem tailor-made for LA, but that does not mean they cannot take in something else.
This would mean the creation of a new drug for treating COVID-19.
Designer drugs
Stephen Evans, professor of pharmacoepidemiology at the London School of Hygiene & Tropical Medicine, said in a statement released through the Science Media Centre that people shouldn’t expect the Bristol discovery to yield new drugs anytime soon, if at all.
But it could prove useful if other measures fail to tackle the coronavirus successfully, he said.
“The cost of any new drugs is likely to be very high and take quite a long time to develop, possibly a longer timescale than for vaccines because it would probably not build as easily onto existing drugs as the vaccines have built on existing vaccines,” Evans said. “If COVID-19 becomes a disease that is not able to be eradicated or brought under control by vaccination and other protective measures, this may offer hope for that longer-term future.”
Regarding the Bristol team’s mention of some relevance with remdesivir, Evans noted that remdesivir still hasn’t shown “really strong reductions in mortality.”
“This is a pandemic, and we don’t have anything at the moment that really works,” Berger said. “We hope and pray the vaccines will work out, but there are no guarantees that any of these vaccines will work. [With HIV] after 30 years of research we do not have a vaccine, but what works is a cocktail of antiviral drugs.”
As for whether the Bristol University paper might lead to the creation of a new stand-alone treatment for COVID-19, the researchers pointed out that a similar discovery of a fatty acid in the cold-causing rhinovirus led to the creation of an antiviral (pleconaril) that proved moderately useful in trials and was licensed for use in emergency cases, though side effects stopped it from being used more widely.
“The linoleic acid–binding pocket in SARS-CoV-2 will make an attractive target for possible designer drugs, lead candidates for which already exist from screens for rhinovirus,” said Michael Skinner, a reader in virology at Imperial College London, in the Science Media Centre release responding to the Bristol paper.
“Drug development and testing is likely to take some time and might have limited effect, or might need to be taken shortly after infection,” said Skinner. “Unless the drugs are already well known and tested, there will also be a need to test well for possible side effects.”
Nonetheless, Skinner and other commentators noted that the Bristol group had a good reputation and had used robust techniques to back up their discovery.