fortune--2020-10-08--JPMorgan just made a big commitment to underserved communities

This is the web version of CEO Daily. To get it delivered to your inbox, sign up here.
Good morning.
JPMorgan Chase is making a major—read $30 billion over five years—commitment to provide economic opportunity to underserved communities, especially Black and Latinx communities. To be specific, that includes:
$8 billion to make an additional 40,000 mortgage loans for Black and Latinx households;
$4 billion to help 20,000 Black and Latinx households refinance and lower their mortgage payments;
$14 billion in new loans and equity investments to add 100,000 affordable rental units in underserved communities;
$2 billion in loans to 15,000 small businesses in majority Black and Latinx communities.
All of this, of course, is business for the big bank, not charity. But that is the point of stakeholder capitalism, which JPMorgan CEO Jamie Dimon helped advance last year as head of the Business Roundtable. Says Dimon:
“Systemic racism is a tragic part of America’s history. We can do more and do better to break down systems that have propagated racism and widespread economic inequality, especially for Black and Latinx people. It’s long past time that society addresses racial inequities in a more tangible, meaningful way.”
More news below. And check out the work my former colleagues at the Pew Research Center have done surveying 14 nations and showing that global discontent with China has reached historic highs. That’s partly due to its perceived poor response to the pandemic. Only the U.S. received more negative evaluations.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Huawei accusation
The U.K. Parliament's Defence Committee has outright accused Huawei of colluding with Chinese authorities—a step beyond the usual mistrust displayed by Western authorities. Huawei says the claim is groundless; it is certainly true that the committee did not provide any details to back up the assertion. In a new report, the committee also called for greater collaboration between democracies in developing alternatives to Chinese technology. Fortune
Pence v Harris
In last night's vice-presidential debate, challenger Senator Kamala Harris accused VP Mike Pence and the rest of the Trump team of "the greatest failure of any presidential administration" in their handling of the pandemic. Pence said the 210,000 dead will "always be in our hearts" but it was "a great insult to the American people" to tell them to wear masks. Fortune
Iran sanctions
The Trump administration is reportedly preparing to impose fresh sanctions on Iran's financial sector, despite warnings from Europe about the humanitarian consequences. Targeting the Iranian banks that aren't already subject to secondary sanctions would make it harder for the country to import food and medicine. Washington Post
Antitrust record
Poland's competition authority has issued a world-record antitrust fine: congratulations to its lucky recipient, Russia's Gazprom! The $7.6 billion fine is for the construction of the Nord Stream 2 gas pipeline (read all about the Nord Stream 2 controversy here), which is a collaboration between Gazprom and European partners (also fined) Engie, Uniper, Wintershall, OMV and Shell. Poland says the companies structured their partnership in a way that was designed to bypass the need for Polish approval. Politico
AROUND THE WATER COOLER
Climate emergency
The European Parliament has finalized its position on carbon emissions reductions in the bloc, with a vote today for a 60% target. The European Commission is calling for 55%. Now let's see what the EU's 27 member countries have to say now. Reuters
No Davos
Next year's big World Economic Forum shindig will (maybe?) take place in Lucerne, not Davos, and in May, not January. The Swiss summit, at the Burgenstock resort, will have the theme "The Great Reset". WEF spokesman Adrian Monck: "The meeting will take place as long as all conditions are in place to guarantee the health and safety of participants and the host community." France 24
Google and publishers
Google said yesterday that it is set to reach a deal with French publishers that would see the tech giant pay them for their news. Which is just as well, because this morning a French court upheld the French competition authority's decision from earlier this year that Google must negotiate in good faith and pay the publishers fees (we recently explained why in this article.) Euractiv
Hyundai recall
Hyundai has issued a recall for over 25,000 Kona electric vehicles, which need software updates and battery replacements after the discovery of faulty manufacturing processes of the cars' battery cells. The fault could pose a fire risk, said the South Korean manufacturer. Reuters
This edition of CEO Daily was edited by David Meyer.


fortune--2020-10-08--Someone finally outright accused Huawei of collusion with the Chinese state

Here ’ s when your second stimulus check could arrive if Congress passes more economic aid

The U.K. Parliament’s Defence Committee has outright accused Huawei of colluding with Chinese authorities—a step beyond the usual mistrust displayed by Western authorities.
The U.S. has already said the Chinese telecoms-equipment giant maintains access to its products that could enable spying. And the U.K.’s looming ban on Huawei’s participation in its 5G networks was justified by potential security problems—albeit as a result of U.S. sanctions on Huawei, rather than nefarious intent.
U.S. intelligence has also raised concerns about Huawei’s funding—allegedly by Chinese state security. But until Thursday, no Western officials had gone so far as to accuse Huawei of actively colluding with Beijing, as opposed to merely being susceptible to Beijing’s invasive spying laws.
“Concern about Huawei is based on clear evidence of collusion between the company and the Chinese Communist Party apparatus,” said the U.K. Parliament’s Defence Committee in a long-awaited report The Security of 5G, which was published Thursday morning. The report did not provide any actual details of this evidence.
Huawei responded to the committee’s allegation by saying the report was “built on opinion rather than fact” and calling the collusion accusation “groundless.”
The committee made the point while urging the West not to “succumb to ill-informed anti-China hysteria” and to recognize the “mutual benefits” of Chinese involvement in Western economies.
“The U.K., and allies, should ensure that decisions taken around the involvement of Chinese companies are taken in an evidence-based manner, and only when risk is demonstrable should decisions around removal be made,” it said.
The U.K.’s own decision around removal was made in July, when the government said British telecoms operators would have to stop buying new 5G equipment from Huawei by the end of this year and to rip out and replace all their existing Huawei 5G gear by 2027.
On Thursday, Parliament’s Defence Committee said the 2027 target was “sensible” but the government should look into the feasibility of getting rid of all Huawei 5G equipment two years earlier.
Remarkably, it also argued that the British government should have ordered the removal before it did, based not on technical concerns—U.S. sanctions are forcing Huawei to reengineer many of its products, which will likely cause security and reliability problems—but rather because the U.S. and Australia, key intelligence-sharing partners to the U.K., had already issued Huawei bans.
“The Government should have considered the potential damage to key alliances enough of a risk to begin to remove Huawei from the UK’s 5G network before the U.S. sanctions were imposed,” the committee’s report recommended.
“The West must urgently unite to advance a counterweight to China’s tech dominance,” said committee chair Tobias Ellwood, a Conservative parliamentarian, on the report’s release.
“As every aspect of our lives becomes increasingly reliant on access to data movement we must develop a feasible, practical and cost-effective alternative to the cheap, high-tech solutions which can be preyed upon and which come stooped with conditions which ensnare a state into long-term allegiance to China.”


fortune--2020-10-08--In London, a Europe-heavy stock exchange is facing down Brexit

The approach of Brexit has London confronting the loss of its role as Europe’s undisputed stock-trading hub and, with it, billions of euros in daily trading.
More than half the volume in London is in shares of European Union companies, and that’s at risk of migrating to the EU without a breakthrough in negotiations, according to data kept by Cboe Global Markets Inc. The City’s loss of face notwithstanding, the biggest losers would be investors because the more splintered trading will result in worse prices.
“It’s harmful to investors both in the U.K. and the EU not to be able to have best execution in the most liquid market,” Nausicaa Delfas, the top international official at the U.K.’s Financial Conduct Authority, said in an interview.
Companies based in the 27 European Union countries contribute more than half the value of all stocks traded in the U.K. In August, that averaged 7.2 billion euros ($8.5 billion), or about 60% of the 12.5 billion euros of equities that changed hands daily, according to Cboe, whose data covers trading currently handled in the U.K. by CBOE Europe, Aquis Exhange Plc, the London Stock Exchange Group Plc and facilities run by several banks.
The key to maintaining the status quo is a finding — known as “equivalence” — by the EU that U.K. regulations are as robust as the bloc’s; that would allow European traders to buy and sell shares on London markets.
Swiss Lesson
That’s far from a sure thing as the Swiss have learned. Last year, the EU withdrew equivalence from Switzerland, effectively prohibiting the trading of EU-listed securities there. Switzerland retaliated by banning trading in Swiss shares on EU venues. While volume in Zurich increased, trading costs for Swiss mid- and small-cap equities rose by around 20% soon after the EU stopped recognizing SIX Swiss Exchange AG, according to Virtu Financial Inc.
“I’m concerned for the industry as it’s bad for the end investor,” said Alasdair Haynes, chief executive officer of Aquis Exchange Plc, a pan-European equities venue in London that has set up a new Paris platform. “This is a political move that will make markets worse.” He estimates 30% of trading done now in London could move to the bloc.
The U.K. hasn’t yet laid out its policy for whether it will demand U.K. traders to trade U.K. or other shares inside Britain.
Cboe says it’s prepared for any scenario, but “it is not an outcome we had hoped for,” David Howson, president of Cboe Europe, said in a statement. A majority of the company’s customers are connected to Cboe’s Dutch trading platform and are ready to shift, he said.
The LSE declined to comment.
The Association for Financial Markets in Europe, the region’s biggest lobby group for brokers and investors in capital markets, is pressing both sides to reach an agreement.
“EU investors will not be able to access major pools of liquidity for a number of EU shares” in the absence of equivalence, said April Day, managing director and head of equities at AFME. So money managers “may not be able to execute trades at the best available price.”


fortune--2020-10-08--What experts think of robots’ threats and benefits to humanity

Each day, Herman Gomez watches as his team of seven robots makes its rounds through Adventist Health White Memorial Hospital in Los Angeles. Supplied by the robot manufacturer Xenex, these robots look exactly like R2-D2 from Star Wars and disinfect rooms using UV light throughout the day, providing a second level of sanitation that cleans whatever micro-organisms were left behind by the human cleaners that came first.
On this episode of Fortune Brainstorm, a podcast detailing how technology is changing our lives, Gomez––along with several other experts in the field of robotics––speaks with Fortune’s Michal Lev-Ram and Brian O’Keefe about how robots are currently being integrated into society alongside humans.
“You will see [the robots] being deployed all throughout the day, 24 hours a day because we have so many isolation rooms,” says Gomez, who oversees the environmental services department at the hospital. “After all the surgeries have been completed for the day, our [environmental services] professionals go in there to clean the room, and then they also deploy the Xenex UV light disinfection robot to the room to still make sure that everything has been disinfected completely.”
While Gomez focuses on robots’ capacity for good, Fortune senior writer Jeremy Kahn joins the podcast to discuss the potential threats these cleaning robots, which he describes as the “gateway drug of robotics,” could pose to human jobs.
“Some of these robots eliminate jobs, and some of them are designed to eliminate jobs,” Kahn says. “One of the ways that companies who make the cleaning robots justify the cost is that, over time, they cost less than it would cost to have a cleaning company in there every night for years. During the pandemic, there’s been such a demand for cleaning that it hasn’t actually resulted in too many job losses. What’s happened is they’ve just redeployed the cleaners to do those high-touch areas that the robots can’t really do. Instead of having the humans doing the floor cleaning, they have the humans doing the fittings in the bathroom or the handles on the doors and the railings, and they just let the robot do the floors. But in the future, it might be the case that they don’t need as many cleaners, and then those people will lose their jobs.”
At about the half way mark of the podcast, Lev-Ram and O’Keefe bring on Dr. Mariana Matus, CEO and cofounder of Biobot Analytics, to talk about how robots can be designed to do a job humans have no interest in doing themselves in the first place: collecting data from our sewage.
To hear more about what Dr. Matus’ robots do for the communities they work in and to listen to an MIT professor theorize what the future holds in terms of robotic intelligence, listen to the episode above.
Correction, October 8, 2020: A previous version of this article misstated Dr. Mariana Matus’ name.


fortune--2020-10-08--Markets climb as Wall Street grows more content with a possible Biden presidency

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, Bull Sheeters. There’s no debate: it’s a risk-on day as the equities markets chug higher in much of Asia and Europe, following Wednesday’s big gains in the U.S. The markets appear to be clinging to any hopes whatsoever that a stimulus deal, even a partial one, will get done.
Meanwhile, neither side won a knockout blow in last night’s VP debate. The polls continue to point to a Joe Biden victory, and, gasp, Wall Street seems okay with that. With the prospect of a contested election beginning to fade, investors are growing more optimistic about the markets.
Let’s see where investors are putting their money.
Markets update
Asia
The major Asia indexes are mixed with Japan’s Nikkei up nearly 1% in afternoon trading.
are mixed with up nearly in afternoon trading. New Zealand believes it’s succeeded in stamping out the coronavirus from the country. It’s said this before, but this time it’s gone 10 days with zero cases linked to an earlier cluster.
believes it’s succeeded in stamping out the coronavirus from the country. It’s said this before, but this time it’s gone 10 days with linked to an earlier cluster. The flights to nowhere were such a hit that now Singapore will unveil cruise excursions to the same nowhere land. If you want a cruise-to-nowhere ticket, call either Genting Cruise Lines or Royal Caribbean International.
Europe
The European bourses are in the green with Germany’s Dax up 0.6% out of the gates.
are in the green with up out of the gates. Beneath the public sparring in the post-Brexit trade deal talks, there are some signs of progress. The pound sterling has regained ground on renewed optimism, however slight, an agreement can be reached.
talks, there are some signs of progress. The has regained ground on renewed optimism, however slight, an agreement can be reached. Boris Johnson is banking on a home-buying spree to keep Britain’s teetering economy upright. There’s a catch: lending rules would have to be relaxed to levels last seen in the go-go years predating the global financial crisis.
U.S.
U.S. futures point to another positive open, looking to build on yesterday’s gains. Wednesday’s rally of nearly 2% was fueled by optimism that stimulus talks aren’t completely dead. A bailout lifeline for the airlines at least is looking better than it did 24 hours ago.
point to another positive open, looking to build on yesterday’s gains. Wednesday’s rally of nearly was fueled by optimism that stimulus talks aren’t completely dead. A bailout lifeline at least is looking better than it did 24 hours ago. Shares in Eli Lilly closed up 3.3% on Wednesday after the drug giant said it has seen such promising results from its COVID treatment —a kind of antibody cocktail—that it would apply to the FDA for emergency-use authorization .
Eli Lilly closed up on Wednesday after the drug giant said it has seen such promising results from its —a kind of antibody cocktail—that it would apply to the FDA for . Citing ““significant ongoing deficiencies,” regulators fined Citigroup $400 million, ending for now a long running investigation into the lender’s risk-management operations. Shares are down slightly in pre-market trading.
Elsewhere
Gold is up, nudging just below $1,900/ounce .
is up, nudging just below . The dollar is down.
is down. Crude is up slightly, with Brent trading above $42/barrel.
***
Buzzworthy
On stimulus and the markets, economy
So you’re saying, there’s a chance?
UBS chief economist Paul Donavan is unconvinced.
Goldman ain’t buying it either.
Three months out?… nine months out?
Bank on the S&P 500 year-end at 3,600, Goldman reiterates.
All bets are off if there’s a constitutional crisis, however (again Goldman.)
***
Postscript
I just wanted to weigh in on the big news from yesterday. The Nobel Prize in Chemistry went to Emmanuelle Charpentier and Jennifer A. Doudna for their work in developing Crispr-Cas9.
What’s Crispr? In short, it’s a gene-editing tool. Why am I mentioning it here in a newsletter about the markets? Because it’s one of those rare scientific breakthroughs that within a few short years leapt out of the laboratory to spur all kinds of advances in medicine and agriculture, and has spawned a number of promising biotech startups. Crispr is being used to treat blindness and cancer. In the U.S., you can buy a Crispr apple that doesn’t brown. The number of Crispr-inspired innovations are too numerous to list here.
Doudna discussed Crispr’s impact on science at Fortune Brainstorm Health in July. I just love this quote:
“Sometimes there’s a long period of time without a lot of change, and then things accumulate and suddenly there’s literally a revolution that changes everybody’s thinking, that alters the way we understand our world,” Doudna said. “I think we’re in that moment right now.”
Two years ago, as a barely solvent freelance journalist, I traveled to Dusseldorf to meet with Martin Beye, a giant in the world of evolutionary biology. His lab uses the Crispr tool to breed genetically modified honeybees. I watched as biology undergrads bred “transgenic” honeybees. One by one, they injected a gene-manipulation solution into honeybee embryos and, some days later, voila, an otherwise unremarkable gene-edited queen emerged.
Beye’s work, aided greatly by Crispr, was a huge breakthrough in bee biology, and his research continues to be incredibly controversial to beekeepers and even some scientists. That’s why I went to visit him.
I wrote a lengthy feature about it for the Guardian.
Yes, there are days I’d more prefer to talk about bees than bulls and bears.
But never mind that. I just want to send out a hearty Bull Sheet congrats to Charpentier and Doudna. I look forward to seeing which doors your hard work will open up next.
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 read
Blue sweep? "The odds of a Biden victory continue to rise, as do the chances of a blue sweep, and if the recent bid for risk assets is any guide, such an eventuality could prove a decidedly positive event for domestic equities—presumably at the expense of Treasuries," says Ian Lyngen, a bond market analyst with BMO Capital Markets, in an investor note, the New York Times reports.
Some of these stories require a subscription to access. There is a discount offer for our loyal readers if you use this link to sign up. Thank you for supporting our journalism.
Market candy
Quiz time
Which asset tops the best-performer ranking so far in 2020?
A) Nasdaq 100
B) Gold
C) Silver
D) the euro
The answer is C, silver. The precious metal is up 33.8% this year (despite a fairly flat start to Q4), beating even gold. The worst performer, btw, is S&P 500 energy stocks.


fortune--2020-10-08--Where Harris and Pence won and lost in the vice presidential debate

On Wednesday night, Sen. Kamala Harris became only the third woman to ever take part in a vice presidential debate—squaring off against Vice President Mike Pence in an altogether calmer, more constructive spectacle than last week’s contentious presidential debate between Donald Trump and Joe Biden.
It was a chance for the California senator and former prosecutor to make a case, before a national television audience, about why the American people should vote for change after four years of the Trump administration. And while Pence was unwavering in his defense of the administration’s policies and track record (so unwavering, in fact, that a fly temporarily made itself home on the vice president’s head during the debate), it was Harris’s offensive on a range of issues—from the coronavirus pandemic and the economy, to climate change and criminal justice reform—that set the night’s tone.
Here’s what landed, and what didn’t, for both candidates in Salt Lake City on Wednesday night.
Harris hits hard—and early—on Trump’s handling of COVID-19
Harris pulled no punches from the get-go when asked about the administration’s handling of the coronavirus pandemic. “The American people have witnessed what is the greatest failure of any presidential administration in the history of our country,” she said in reply to moderator Susan Page’s first question.
Harris evoked revelations from journalist Bob Woodward’s recent book on the Trump administration, which reports that the President knowingly downplayed the dangers of a virus that has killed more than 200,000 Americans to date. “They knew what was happening, and they didn’t tell you,” she said, adding that the administration “still [doesn’t] have a plan” for dealing with the pandemic. “Well, Joe Biden does.”
Pence was immediately put on the defensive and was left to insist that “from the very first day, President Donald Trump has put the health of Americans first.” The vice president lauded the administration’s efforts to limit travelers from China in the early days of the pandemic and talked up the prospects of a vaccine arriving in short order. But Harris landed early, and effectively, by targeting undoubtedly the administration’s biggest weakness—one that, according to polls, may well cost Trump the election.
Pence strikes back on taxes and environmental regulations—but Harris talks up Biden’s economic policies
After taking a swipe at the President for his recently reported $750 federal income tax bill, Harris took aim at Trump for his 2017 tax act and accompanying economic policies, drawing sharp contrasts with Biden’s economic proposals. Trump’s policies, she said, have only benefited “the top 1%” and exacerbated a budget deficit “that the American people will have to pay for,” while Biden would repeal the Trump tax cuts, pursue public investments in infrastructure, and seek to make college more affordable for American families struggling to pay for higher education.
But Pence saw a window to strike back at the Biden-Harris ticket, claiming they want to “raise taxes” and “bury our economy” under the strain of investments like the Green New Deal, which would “abolish fossil fuels and ban fracking”—touchy subjects in places like Pennsylvania, a swing state with a robust fracking industry. That put Harris on the defensive, with the senator forced to clarify that “Joe Biden will not ban fracking” (to the chagrin of some progressive allies) and maintain that Biden will limit tax increases only to those making more than $400,000 per year.
Pence also took aim at Biden and Harris on the subject of trade, hitting Biden for a previously accommodative stance toward China—one that the former vice president has since walked back to more closely align with Trump’s harder line. Pence also criticized Harris for voting against the USMCA trade deal between the U.S., Mexico, and Canada, saying she had put a “radical agenda ahead of American workers and American jobs.”
Harris countered by slamming Trump for his “weird obsession” with erasing President Obama’s accomplishments—one that she said has harmed the American economy, as well as the nation’s foreign policy and its credibility around the world. But the exchanges saw Pence target one of the few areas where Trump, and Republicans at large, manage to consistently poll ahead of Democrats.
Harris provides “history lesson” on SCOTUS and refuses to be “lectured” on criminal justice
Later in the evening, as the topic of Amy Coney Barrett’s nomination to the Supreme Court came up, Pence noted that numerous Presidents have previously made Supreme Court nominations during an election year—despite the fact that Senate Republicans managed to block President Obama’s nomination of Merrick Garland in 2016.
Harris was clearly prepared and sprang on the opportunity to provide a “history lesson”—noting with relish that President Abraham Lincoln, a favorite of President Trump and other Republicans, had refused to do just that in 1864, opting instead to wait until after the upcoming election. It was a clever example to note, and Harris went on to slam the Trump administration for making dozens of “purely ideological” nominations of “substandard” federal judges—not one of whom, she asserted, is Black.
That led to an exchange on criminal justice reform, a heated social and political topic in the wake of the killings of George Floyd and Breonna Taylor at the hands of law enforcement earlier this year. Harris leaned on her experience in the criminal justice system to call for extensive reform and pointed to Biden campaign proposals to ban police chokeholds, build a national registry of police misconduct, end cash bail, and decriminalize marijuana.
Pence jumped on the chance to expound on the President’s “law and order” stance, describing the notion that “America is systemically racist” and that law enforcement has “an implicit bias” against minorities as “a great insult.” He also criticized Harris for her own role as a criminal prosecutor and claimed that she “didn’t lift a finger” to change things once on Capitol Hill as a senator.
But Harris struck back with equal conviction, insisting to Pence that she would “not be lectured” on prosecuting the law and insisting that “implicit bias does exist” in the criminal justice system. She also criticized the President’s record on race relations, from his comments about immigrants to his equivocating of white supremacists with anti-racist protesters.
It was an exchange that likely wouldn’t have done much to change peoples’ minds on the subjects of racial justice and criminal justice reform, but it showed Harris fighting her corner effectively—even as she’s faced criticisms from some on the left for her record as a prosecutor.


fortune--2020-10-08--Mike Pence, head of the coronavirus task force, struggles to answer questions during debate

Vice President Mike Pence, the head of the White House’s Coronavirus task force, came up short in his ability to account for attending a super spreader event last month, inform the American people of the risks of the virus, and devise a comprehensive plan to end the spread of the virus during Wednesday night’s vice presidential debate.
“The American people have witnessed what is the greatest failure of any presidential administration,” Senator Kamala Harris said, pointing out that more than 210,000 Americans have been killed by the virus, 7.6 million Americans have been infected, and one in five small businesses face imminent closure. “This administration has forfeited their right to reflection based on this.”
Pence responded that the President banned travel from China quickly, which he speculated “bought us valuable time and saved hundreds of thousands of American lives.” The majority of early COVID-19 cases on the East Coast came from Europe, not China.
Of the 210,000 Americans who have perished from the disease, Pence said that they will “always be in our hearts” but that it was a “great insult to the American people” to require them to wear masks and assume that they cannot make their own decisions regarding how they choose to live their lives in the midst of a highly communicable disease.
Of his attendance at a Rose Garden event to celebrate President Donald Trump’s nomination of Amy Coney Barrett to the Supreme Court that is thought to have led to an surge in COVID-19 amongst White House staff including the President himself, Pence said that “many of the people at the event were tested for coronavirus,” before adding that “the difference here is that President Trump and I trust the American people to make decisions in the interest in their health.” He did not answer the question about the soundness of the decision to hold the event.
Many of Pence’s answers to questions on the topic appeared to be talking points instead of responses. When asked about whether or not she would be the recipient of a COVID-19 vaccine, Harris said that if it was approved by medical professionals she would be the first in line, to which Pence responded that her “continuous undermining of confidence in the vaccine is intolerable.”
Pence also argued that Biden didn’t adequately deal with the Swine Flu while he was vice president—an entirely different virus that has no relation to COVID-19. Biden was lucky that it wasn’t as deadly, said Pence. Swine flu is estimated to have killed 12,000 people in the U.S. and a vaccine was developed within six months.


fortune--2020-10-08--Both Pence and Harris completely dodged a question about presidential succession

During Wednesday’s vice presidential debate between Mike Pence and Democratic challenger Kamala Harris, moderator Susan Page asked a question on the mind of many Americans following President Trump’s hospitalization for COVID-19: “Have you had a conversation, or reached an agreement with [Trump or Biden] about safeguards or procedures when it comes to presidential disability?”
In other words: Are they prepared to succeed as President?
Both vice presidential candidates dodged the question entirely.
“Thank you. I would like to go back,” Pence, who was asked first, responded in reference to the previous discussion about the Trump administration’s plans for a COVID-19 vaccine. “The reality is that we’re going to have a vaccine, senator, in record time.”
Page did not press Pence to respond but pointed out that he did not answer when raising the same question to Harris. She, too, ignored the question and instead used it as a segue to deliver her biography, bringing up the day Biden asked her over Zoom to run as his vice president. Again, Page did not press her.
Harris’ decision to dodge the question was almost certainly intentional—Biden would be 78 by the time he assumed office, if elected. That would make him the oldest President in U.S. history.
Trump isn’t far behind at age 74 and, unlike Biden, was diagnosed with COVID-19—a virus with increased mortality rates in older individuals.


fortune--2020-10-08--The one debate question we wished the VP candidates were pressed on

What You Need to Know About the 25th Amendment

Hey folks, Aric here. I covered the vice presidential debate last night for Fortune. I found it to be at once relatively uneventful—save for the fly!—and hugely satisfying to see Kamala Harris, the first Black and Asian running mate on a major party ticket, on the stage. She delivered an inspiring biography at one point, reflecting on the sacrifice her mother made to emigrate to the United States.
Unfortunately, that endearing story came at the cost of a proper answer to one of the more important questions of the evening. From my story last night:
[M]oderator Susan Page asked a question on the mind of many Americans following President Trump’s hospitalization for COVID-19: “Have you had a conversation, or reached an agreement with [Trump or Biden] about safeguards or procedures when it comes to presidential disability?”
In other words: Are they prepared to succeed as President?
Both vice presidential candidates dodged the question entirely.
Harris responded with an admittedly elegant transition to her family background; Pence backtracked to previous discussion about the Trump Administration’s plans for a COVID-19 vaccine. As disappointing as it was to see the question go unanswered, it was a predictable response, I suppose. Neither VP candidate wants to touch on how their party’s presidential nominee will be 78 (Biden) and 74 (Trump) by January’s inauguration. Or how that age range makes them particularly vulnerable to the coronavirus, as Trump knows well by now.
Still, as uncomfortable of a question it is to raise, it’s certainly one worth asking—and answering. We can only hope there is some sort of plan, just in case.
For more debate coverage, check out my colleague Nicole Goodkind’s piece on Pence’s struggles to answer coronavirus-related questions, and Rey Mashayekhi on the winners and losers.
Aric Jenkins
@aricwithan_a
Aric.Jenkins@fortune.com
On point
Feds stop plan to kidnap Michigan’s governor It is being described as a plan to “violently overthrow the government,” and remove Michigan Gov. Gretchen Whitmer to a “secure location” to stand trial for treason. The loose coalition of right-wing militia members were looking to make a bold statement and expand their ranks, according to FBI officials. "Several members talked about murdering 'tyrants' or 'taking' a sitting governor," an FBI agent wrote in the official filing. "The group decided they needed to increase their numbers and encouraged each other to talk to their neighbors and spread their message."
Detroit News
White House may have exposed Gold Star families to coronavirus The White House quietly informed a veterans group that they may have been exposed to coronavirus during a September 27 event honoring fallen veterans. It is the earliest known confirmation of a coronavirus problem within the White House confines. The event came the day after the White House event to celebrate Supreme Court nominee Amy Coney Barrett. Sigh.
The Daily Beast
Come to find out, Queen Victoria had an African goddaughter She was likely born with the name Aina, but by the time she was introduced to 19th century English society, she became known as Sarah Forbes Bonetta. She had been born into a West African royal family; in the aftermath of a local war, she was enslaved as a child in what is present day Benin. She was given to a British naval captain named Forbes as a “diplomatic gift.” The Queen, who became fond of her, paid for her education in both Sierra Leone and Kent, England. Click through for her story, told in photos and painting. As the historian David Olusoga explains,“she became biographic shorthand for the perceived accomplishments of Britain’s civilising mission.”
The Guardian
A new webseries for the anti-racist corporate crowd The Group Chat is the latest offering from the Living Corporate media family of podcasts and web shows, a live, interactive webinar on all things diversity and inclusion. They have some special guests coming up who are beloved by the raceAhead crowd...do not sleep on this show, trust me.
Living Corporate
On Background
Staying safe outdoors while Black Latria Graham is a beautiful writer; the journalist and fifth-generation farmer focuses an extraordinary array of topics, from race, gender and class, to guns, food, and football. In this essay, she follows up on a 2018 piece she wrote about the racist obstacles facing Black people from fully enjoying the outdoors. It inspired an outpouring of interest, and a question she had no answer for. “They ask what they can do to protect themselves in case they wind up in a hostile environment,” she says. Now, she knows what to say.
Outside
The devil in the advocate Maya Rupert holds nothing back in this essay on the painful folly of playing “devil’s advocate” when it comes to something as important as race. Particularly now. Discussions about race are already necessary, but now, in a time of heightened white supremacy sentiment, there is “a dangerous tendency for white people to engage in these discussions with people of color by summoning the devil himself and treating racism as a political disagreement around which two opposing viewpoints can reasonably form.” What you’re asking when you play devil’s advocate is for a person of color to justify to you their own value, safety and status. It’s an act of cruelty, she says. “There is no way to productively ask a person to participate in an argument that questions their equality as an epistemological experiment,” she says. And yet, we still try.
Slate
A Japanese town that is filled with life-sized dolls The scarecrow looked so much like her father, recently passed, that neighbors spoke to it with reverence. It was then that Japanese artist Tsukimi Ayano began to see an opportunity to replace the dwindling population of her rural village with life-sized human tributes of friends and neighbors. Now, Nagoro has more dolls than human inhabitants, working in fields, waiting for the bus, teaching in a now abandoned school. “When I make dolls of dead people I think about them when they were alive and healthy. The dolls are like my children.” The effect is both haunting and beautiful, as this six-minute documentary shows. Enjoy.
National Geographic
Today's mood board
"A supporting device for stringed musical instruments, for example, guitars, banjos, mandolins and the like, is disclosed. The supporting device is constructed and arranged for supporting the musical instrument on the player to permit total freedom of the player's hands to play the instrument in a completely new way, thus allowing the player to create new techniques and sounds previously unknown to any player. The device, when in its operational position, has a plate which rests upon the player's leg leaving both hands free to explore the musical instrument as never before. Because the musical instrument is arranged perpendicular to the player's body, the player has maximum visibility of the instrument's entire playing surface."
— Patent number US4656917A. Inventor, Edward L. Van Halen


fortune--2020-10-08--Last night’s debate ignored some critical health care issues

Good afternoon, readers.
Well that was… a week. Hours after this newsletter reached your inboxes last Thursday, we found out that President Donald Trump and First Lady Melania Trump had tested positive for COVID-19. The President was hospitalized at Walter Reed (and subsequently released); a slew of other White House officials have tested positive since then; Vice President Mike Pence and Sen. Kamala Harris sparred in a debate last night; and that’s just the tip of the iceberg. More on all of that below.
But I want to focus on the vice presidential debate. It was a far more civil (or at least far less chaotic) affair than the bizarre, difficult-to-follow showdown between Trump and Democratic nominee Joe Biden the week before. Unfortunately, as is the case with many modern-day political debates, style and political talking points often overtook substantive policy conversations—and health care was no exception.
There was plenty of sparring over the Trump administration’s COVID-19 response and what a Biden administration may do differently (national mask mandates, a renewed emphasis on producing protective equipment, funding to make sure a potential vaccine can be administered at scale—all of which Pence claimed the Trump administration has already made a priority).
There were the usual scuffles over the Affordable Care Act, which forced Pence to thread the needle between the administration’s efforts to dismantle the entire law and the President’s promise to preserve protections for everyone with pre-existing conditions (the latter would likely not be possible were the former to happen barring rapid Congressional action).
These are critical topics and a predictable dialogue as COVID rages on, especially on the issue of pre-existing conditions. But there are plenty of other important health care issues which never saw the light of day.
For instance: What are we doing about other diseases which are projected to kill millions upon millions in the coming years and decades, such as Alzheimer’s and dementia-related disorders? There are some treatments working their way down the line in that field, but it’s an open question whether or not they will be effective. Given that Alzheimer’s is the 6th leading cause of death in America, killing more than 121,000 people every year, it may have been worth broaching how the federal government can enhance existing research.
Here’s another one: Nutritional inequality caused by food deserts. We often hear about America’s obesity, and child obesity, problem but tend to gloss over its sources. The reality is that there’s a very real problem in low-income neighborhoods in accessing healthy foods at affordable prices. You may have to turn to a bodega and get some cold cuts because there’s simply nowhere else to go, and that’s a recipe for bad food habits which can have long-term effects on one’s health. What can we do to fix that?
The list goes on. Environmental policy isn’t just about cleaning up the climate at large or creating or losing jobs, as was largely the focus of last night’s debate, but also an issue that disproportionately affects people who may have to live near industrial plants; the way that clinical trials are conducted discriminates against women and minorities, meaning that good science may not be serving as much of the public as it can be.
These are just some of the issues that might have come up in a truly substantive conversation around health care. Maybe some day they will.
Read on for the day’s news, and see you next week.
Sy Mukherjee
sayak.mukherjee@fortune.com
@the_sy_guy
DIGITAL HEALTH
Amwell survey: Telehealth adoption will increase after the pandemic. A new survey from telemedicine giant Amwell finds that doctors and consumers alike believe virtual care is here to stay well after the worst of COVID is in the rearview. "Telehealth usage is up considerably in 2020, with 22% of consumers and 80% of physicians having a virtual visit this year, up from 8% and 22%, respectively, in 2019," according to the report. Read the full findings here.
Lyft, Epic team up on medical transportation. Lyft, much like its rival Uber, was already in the medical transportation game. But Lyft is now widening its footprint in the arena via a partnership with Epic, which oversees electronic health records for hundreds of millions of patients. This collaboration would let a health care provider that uses the Epic software to automatically schedule a Lyft-provided ride (for those who qualify) to a medical appointment using Epic's patient record instead of having to use a separate tool, streamlining the process. (FierceHealthcare)
INDICATIONS
Could antibody drugs be the key? As I mentioned above, President Trump was hospitalized for COVID-19 last weekend. It helps to be the President of the United States—Trump was able to receive a multi-drug cocktail, including one from Regeneron that just a handful of people had received compassionate use authorization for. Leaving that aside, let's look at the science. Regeneron's drug is a combination of monoclonal antibodies, and they seem, at least according to the data we have so far, to be pretty effective in keeping those who are mildly sick out of the emergency room or hospital. In fact, just days after Trump's enthusiastic promotion of the Regeneron drug (that's another issue which we'll explore in greater depth in the coming days), pharma giant Eli Lilly said it was confident enough in its own antibody cocktail to apply for an FDA emergency authorization use. These are synthetic antibodies which can prevent a virus from actually infecting cells, and thus lower the "viral load" a patient faces, increasing their chances of staying out of the hospital. For those who are already sick and hospitalized? That's a different matter. (Fortune)
THE BIG PICTURE
Private health insurance premiums continue to spike. Status quo bias is a strange thing. People are hesitant to make a change even if they know they're getting a raw deal. But it can also be, in a weird sense, rational when it comes to something as fundamental as health insurance. Most Americans would not want to just up and lose their employer-provided private health insurance because it's just a scary and uncertain prospect (and who could blame them?). But the deal keeps getting worse, according to a new analysis by the nonpartisan Kaiser Family Foundation. "Annual premiums for employer-sponsored family health coverage reached $21,342 this year, up 4% from last year, with workers on average paying $5,588 toward the cost of their coverage," according to the report. "The average deductible among covered workers in a plan with a general annual deductible is $1,644 for single coverage." This reflects a decades-long trend in rising premiums and employers increasingly shifting out-of-pocket costs to workers in the form of high-deductible health plans, among other factors. (KFF)
REQUIRED READING
Where Harris and Pence won and lost in the debate, by Rey Mashayekhi
Google rebrands its productivity tools as more people work from home, by Danielle Abril
What it's like to open a new restaurant during a pandemic, by Rachel King


fortune--2020-10-08--IBM CEO will be on the hunt for acquisitions and new businesses after spinning off services unit

IBM shook up Wall Street on Thursday with a plan to spin off its information technology services unit as a separate company. Investors loved the idea, which could take until the end of 2021 to complete. IBM’s stock price, which had previously lost 7% in 2020, gained 6% on Thursday.
After last year’s purchase of Red Hat for $34 billion, IBM CEO Arvind Krishna is zeroing in on the opportunity to provide software tools for companies using cloud services. The old IT services unit, which still brings in almost $20 billion of revenue a year, isn’t a good fit, as Krishna explained in the following interview with Fortune.
This interview has been condensed and edited for clarity.
Fortune: Once the split is done, the main part of IBM will be much smaller than it was years ago. But can you start going into new businesses and doing some acquisitions to bulk up again?
Krishna: Can we go into new areas? I would say yes. As long as they’re aligned with hybrid cloud and A.I.
One example I’ll tell you right away that we’re investing in organically—I don’t think through M&A unless you give me a name of something interesting—is quantum computing. It’s probably beyond the view of most investors, but it has a lot of optionality. I think it’s a market worth hundreds of billions but it will probably take five years to play out.
I also think there’s so many elements inside of how A.I. will be applied to automate, for example, all kinds of property (transactions) from planes to loans and so forth. We’re just at the beginning of that market.
Can we do M&A, or acquisitions, to bolster our technology platforms? An absolute yes, no qualifications. We’re open for business. As we find things that are appropriate, we will go ahead and keep doing that. And part of the reasons of creating two companies, is it creates the space to be able to do more of that than we might have been able to do before.
Why is there no longer synergy between those parts of IBM and the IT services business? Or why does it no longer makes sense to keep the infrastructure services within IBM anymore?
We all acknowledge that the world of technology moves quite rapidly. What was of incredible value 20 years ago, still has value, but may not have value in terms of everything else. So when the world was looking at data centers, clients and servers, and adopting the Internet, I think managed infrastructure services had huge amounts of value because people were struggling with that heterogeneity and that complexity.
As we’re going toward cloud, and as applications become more and more infrastructure agnostic, people are making application decisions separate from the target destination. If that’s the case, then infrastructure modernization is a separate buying decision from the applications and the architectural platform decisions. That implies that these are better separate them together.
You know, maybe over a beer some day, we can debate what belongs inside a firm and what belongs outside a firm. I’m not an economist. I’m an outright engineer, but I think (Ronald Coase) said the boundaries of a firm should be determined by where there’s more friction going out than in. And I think that’s the criteria. You can always find some synergy. But is it better unlocked separately or better together? That’s always the question that, as a leader like me, you’re always thinking about.
Would this spin-out have been possible prior to your acquisition of Red Hat?
I think doing Red Hat and the confidence we have now gained for our hybrid-cloud platform is a big part of it. Prior to that, I’m not sure it would have made sense. Because you’ve got a different company, the company I wouldn’t tell you that we could have stated our maniacal focus of hybrid cloud only—now we can.
Where do you see the “NewCo” services company growing? It seems like you’re getting rid of the business that’s not going to be growing, which is good for IBM.
So today, that part of the business would be third in line for massive capital investment inside IBM. Number one will go to hybrid cloud, but number two would probably go into as elements of application services—[NewCo] will be third. Now that they won’t compete, they will be first. I think we’d all agree that makes a difference.
Two, the margin profiles of both the companies are quite different. So they can afford to do deals. Or they can do deals that actually [work] for them that we might not do today.
Three, when I look at partnerships, there are many people that will agree to partner with NewCo who today might be a little bit reluctant, given that they might compete with other parts of existing IBM. So those three, I think unlock a lot a lot of growth.
Where do you see Watson fitting in? Will the NewCo still use Watson as an A.I platform as it does today?
To be clear about where technology intellectual property, R&D, and the product ownership sits, that will be at IBM. However, that said, now, I have to create incentives just like I would with any other partner. So for Watson, it’s now up to us to convince NewCo that’s the best platform on which to do A.I.
So there’s a possibility that they could use a different A.I. platform other than Watson?
Well, until the spinout, we are one company and they will use no other. But look, they will be their own public company. We will have not control over them, let me be clear.


fortune--2020-10-08--How venture capital can increase diversity where it matters most

I am a first-generation Mexican-American fund manager for Act One Ventures, based in Los Angeles, and I’ve raised two venture funds over the past five years. I do not come from wealth or privilege, which historically have been the driving forces behind the venture capital world. Now, as an up-and-coming investor, I want to put diversity at the forefront and address systemic inequality in venture.
The killing of George Floyd in May, and the events that have captivated America and the world ever since, have added a barrel of gasoline to the raging fire I have always felt inside to see members of underrepresented communities succeed in VC and tech. That’s why, over the course of the summer since George’s death at the hands of police, I worked tirelessly to create The Diversity Term Sheet Rider for Representation at the Cap Table. This rider is a call to action that opens up opportunities for Black people and other underrepresented groups in the deal-making process.
The cap table, which breaks down a company’s equity capitalization, is where startups show the world who makes up their ownership. For the companies that go on to scale to enormous heights, those who are allocated on the cap table are in line to create generational wealth for themselves and their families.
Historically, there are two walls that have held back Black people and other underrepresented groups from advancements in VC and tech: money and access. The Diversity Rider initiative is about access: We can lower that barrier now, simply by adopting the Diversity Rider into our term sheets. The rider calls for firms to make commercial best efforts to include as a co-investor in the financing at least one Black person or member of another underrepresented group, including, but not limited to LatinX, women and LGBTQ+ diverse check writers (DCWs). Thus far, 22 firms have committed to this rider, including Greycroft Partners, First Round Capital, Maveron, SVB Capital, Harlem Capital Partners and Fifth Wall, among others.
There are several immediate positive effects that will come from this rider for all DCWs who have no prior wealth or access.
First, being co-invested at early stages of a startups lifespan with funds that are some of the best in the business will give DCWs access to the kinds of deals they need to be in. That will help them build a track record and give them a better shot at gathering outside capital in the future.
Second, the Diversity Rider will disrupt the inertia of quick deal-making that has kept the VC world so exclusive. Inserting the rider language into each term sheet influences the conversation in a way that will introduce many more DCWs to the industry; investors will have a strong incentive to reach out to new check writers rather than falling back on the people they already know.
Third, having diversity on the cap table will empower all startups even further by enabling them to access the different sets of networks, experiences, and connections that come from individuals who are diverse. When you are invested in a startup, you will pay attention to its trajectory for years to come and not just over a cup of (virtual) coffee. If you’ve struggled to find and invest in diverse founders, you can still make sure all your deals are diverse when you bring someone in on the check writing side.
Fourth, we will be publicly making a strong statement to all diverse members of the tech and VC communities that we are ready to do more together as an industry, rather than each of us on our own. With that will come trust, and with trust will come access to diverse deals like never before.
I firmly believe that over time the best founders who care deeply about diversity will expect the lead investors in their next round to demonstrate that kind of commitment as well. The Diversity Rider gets that done through a thoughtful approach that helps to unlock access and wealth creation. And not only is it the right thing to do, it’s good for a business’s bottom line.
So here’s our call to action: As the Diversity Rider movement continues to gain momentum, we are encouraging investors from underrepresented groups to join the database for co-investment opportunities. We’re also urging venture funds to commit to using the rider as a standard part of their term sheets.
Change starts with action, and as someone who has helped fund nearly 30 startups, I am living proof that diversity and inclusion work in venture capital.
Alejandro Guerrero is a founder and principal of Act One Ventures.


fortune--2020-10-08--Trump’s path to 270 narrows as Wisconsin becomes more important than ever

President Donald Trump’s once-comfortable advantage in the pivotal region of Wisconsin around the blue-collar hub of Green Bay has dwindled. In suburban Milwaukee, long a Republican-dominated area, it has thinned as well.
And his supporters are far from confident he can find thousands of new voters in the state’s sparsely populated rural areas to make up for the setbacks.
Trump’s path to victory in Wisconsin, a state he won narrowly in 2016, has become increasingly complicated, and so has his path to the 270 electoral votes needed for his reelection.
“It’s challenging. There are far more states in play in 2020 than there were in 2016,” said Whit Ayers, a veteran Republican pollster. “And they include states Trump won by a significant margin like Arizona, Iowa, Ohio and Georgia.”
Few states are as important to the president’s prospects as Wisconsin, which he carried by less than 23,000 votes out of nearly 3 million cast in 2016 and which had not voted for a Republican for president in more than a generation.
But even Trump’s supporters concede the hill is steep given the declines they are seeing. “Can Republicans and Trump offset that? That’s the big question, and I don’t have a strong answer,” said Jim Miller, the Republican chairman of Wisconsin’s 7th Congressional District, which covers the state’s northernmost 26 counties.
A similar narrative is playing out in other Midwestern states, and in Pennsylvania, with local officials sounding alarms about Trump’s prospects. He must make up significant ground in these states in the campaign’s final four weeks to replicate his 2016 upset and defeat Democrat Joe Biden.
Trump is stressing his nomination of Judge Amy Coney Barrett to the Supreme Court and his call for law and order in response to demonstrations over racial injustice, which aides say are winning Wisconsin issues.
“I think that we are not necessarily losing those voters. I think that those voters are currently undecided,” especially in the Milwaukee area, said Nick Trainer, the Trump campaign’s director of battleground strategy.
Trump had planned to campaign last Saturday in Green Bay, but his positive coronavirus test forced him to cancel, punctuating his struggles in this region of the state where he beat Clinton by 18 percentage points, Wisconsin voting records show.
Trump’s once narrow edge in that region collapsed in a Marquette University poll published Wednesday. GOP legislative surveys noted by strategists are also prompting worries that there’s little time to rebuild the margins they need to win the state a second time.
“He’s winning the Green Bay market, but not by enough to help him statewide,” said Scott Jensen, a Republican former Wisconsin Assembly speaker who is advising in several competitive Statehouse races.
The obstacle is similar to Trump’s in Ohio, where he won by 8 percentage points but where public surveys show the race close.
“You can’t win a state by 8 and then 30 days out be struggling in places you dominated,” said Scott Borgemenke, a onetime top adviser to Republican former Ohio Gov. Bob Taft.
As Biden’s campaign on Tuesday announced stepped-up Ohio advertising, Trump was reducing his Ohio advertising, according to the ad tracking firm Kantar/CMAG.
The trend is similar in Wisconsin, where Trump slashed his advertising by 75% over the past month and was being swamped by Biden’s spending, $2.3 million to less than $173,000 as of last week, according to Kantar/CMAG.
Trump also needs to vastly improve in Milwaukee’s suburbs, Jensen said.
The president last campaigned in Milwaukee in January, the night Democrats debated in Des Moines, Iowa, ahead of the presidential caucuses. Trump visited blue-collar Kenosha south of Milwaukee in August after the shooting of a Black man by white police officers, though he held no political events.
Trump’s campaign says the president’s son Eric will headline events in Menomonie Falls, northwest of Milwaukee and in Milton, near blue-collar Janesville in south-central Wisconsin on Monday.
Still, Trump’s suburban absence has underscored his Wisconsin dilemma, one that shadows him in Pennsylvania: Stay away from the state’s population centers or show up and risk alienating suburban voters.
It’s sparked some unlikely campaign travel advice for Trump from Wisconsin Republican Rep. John Nygren.
“Not to be disrespectful to him, but, for him, he may be better off not going to the suburbs,” said Nygren, from Marinette in far northeastern Wisconsin. “Because if he’s not in the news, maybe it’s not a reminder of concerns that people have.”
Jensen said the president’s combative persona has cost him.
“It’s all a matter of style. That traditional GOP base of college-educated professionals can’t stand the president’s style,” said Jensen, who has conducted focus groups in key Milwaukee area legislative districts.
It’s a scenario also playing out in Pennsylvania, where Trump won by a smaller percentage than in Wisconsin.
And in Pennsylvania Trump is facing a more dire decline in suburbs where Republicans held sway until 2016, such as Chester County, and have lost ground since, said Republican former U.S. Rep. Ryan Costello, who represented Chester County until last year.
Trump has seemed to heed Nygren’s advice, campaigning since August in Oshkosh, a hub of the southern Fox Valley, and in September outside Wausau, the media market reaching furthest into northern Wisconsin. Vice President Mike Pence has followed suit, campaigning in Wausau, in LaCrosse on the western border and in Eau Claire in the northwest.
But Trump would have to attract several thousand first-time voters in the sparsely populated rural north, where in several counties he received more than 60% of the vote, to compensate for the declines in more populous parts of the state.
“It’s going to be a challenge,” Mike Bub, GOP chairman in tiny Taylor County, said with a shrug. Trump received 70% of the vote in the county of 20,000 west of Wausau. Taylor posted Trump’s second-highest 2016 margin in Wisconsin.
What’s more, Marquette’s September poll shows Biden, not Trump, receiving more support from first-time voters.
“Can you squeeze enough votes out of there to make the difference?” Jensen said. “Probably not.”


fortune--2020-10-08--What analysts predict could happen to the stock market if no stimulus deal is reached

Our mission to help you navigate the new normal is fueled by subscribers. To enjoy unlimited access to our journalism, subscribe today.
Wall Street has been waiting with bated breath for another stimulus package as many on Main Street continue to suffer. But amid a dizzying stream of tweets, comments, and talks this week, a comprehensive deal before the election is looking complicated.
Over the past few days, stimulus talks have ping ponged around after President Trump asked to halt negotiations on Tuesday. By Thursday morning, President Trump said, “I shut down talks two days ago because they weren’t working out. Now they are starting to work out. We’re starting to have some very productive talks,” he said in an interview on Fox Business.
Those discussions may not be quite as productive as the president claims, however. While talks have restarted between Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin about a piecemeal deal focused on airline aid, Speaker Pelosi said at a press event on Thursday that she is “very open to having a standalone bill for the airlines or part of a bigger bill, but there is no standalone bill without a bigger bill.”
Amid the back and forth, analysts are trying to parse what a deal or no deal might mean for investors. According to Dan Ives, managing director of equity research and analyst at Wedbush Securities, a failed deal could translate to a 5% hit to the markets. On the flipside, he predicts ink on a stimulus deal would be “an incremental catalyst that could be worth another 5% of upside to the market over the coming months,” he told Fortune via email.
Talks were called off full stop by President Trump on Tuesday when he tweeted he had “instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill”. Since then, the president has said he wishes to pass standalone bills, targeting direct payments, and airline and small business aid.
“The Street could see some volatility as this game of high stakes poker takes place on the Hill over the coming weeks,” Wedbush’s Ives says.
And that’s certainly what some market observers are seeing, as the S&P 500 rose 1.7% on Wednesday after closing down 1.4% on Tuesday.
Monday: markets rise on stimulus optimism
Tuesday: markets drop on stimulus pessimism
Wednesday: markets rise on stimulus optimism — Sven Henrich (@NorthmanTrader) October 7, 2020
Versions of a new deal have been targeted in the $1.5 trillion to $2.2 trillion range, less than House Democrats originally proposed back in May at $3.4 trillion.
“Despite the president coming back to the negotiating table Wednesday morning, prospects for the speedy passage of a stimulus bill have weakened significantly,” analysts at LPL Financial wrote in a note Wednesday, while LPL’s Jeff Buchbinder wrote Thursday the “odds are against it.” The analysts continued “the impact on sentiment from failure to pass a bill is likely larger than the direct impact on gross domestic product, but both will take a toll on families and businesses,” although they argue “no matter who wins the election, we’re likely to get a stimulus bill of similar size.”
Mark Haefele, chief investment officer at UBS Global Wealth Management, reached a similar conclusion. “Even if a pre-election deal cannot be reached, Biden’s widening lead in the election polls is making it likelier that more substantial stimulus can eventually be agreed on,” he wrote in a note Tuesday.
For the time being, investors will need to keep their eyes glued to Capitol Hill. Concludes Ives: “It’s a jittery stock market needing some good news out of the Beltway.”


fortune--2020-10-08--Coinbase sees 5% of employees depart in wake of politics controversy

The cryptocurrency giant Coinbase has been in a media firestorm since its outspoken CEO Brian Armstrong published a blog post two weeks ago exhorting employees to refrain from politics in the workplace. The post, which appears to have been touched off by an employee walkout over the company’s stance on Black Lives Matter, also invited workers to take an exit package if they disagreed with Armstrong’s position.
On Thursday, Armstrong published a follow-up post that clarified his position, and which disclosed the number of employees who decided to depart.
The new post states that about 60 employees have accepted the exit package, which provided paid severance of four to six months. That figure amounts to about 5% of the company’s workforce, says Armstrong, who added that the final number could be slightly higher in light of ongoing negotiations with some workers.
Armstrong also stated that, contrary to fears of some Coinbase employees, the departures did not include a disproportionate number of people of color.
“It was reassuring to see that people from under-represented groups at Coinbase have not taken the exit package in numbers disproportionate to the overall population,” said the blog post.
Armstrong’s latest missive comes two weeks after his original blog post provided fodder for an ongoing culture war in Silicon Valley that has pitted those who say that companies must do more to promote social justice against those who say such discussions have become a distraction from companies’ core missions.
Armstrong’s original post declared that politics had become a “distraction” at Coinbase—a position that is perhaps ironic given how the post has produced a torrent of media coverage, and criticism from other executives, including Twitter and Square CEO Jack Dorsey.
Follow-up reports to the original blog post by Wired, The Block and other publications recounted how a Black Lives Matter protest in August provided an impetus for Armstrong to issue the new directive about avoiding politics—a directive that many, including Fortune writers Robert Hackett and David Morris, have suggested is impractical.
More must-read finance coverage from Fortune:


fortune--2020-10-08--Dollar General takes aim at more affluent shoppers with a new chain called ‘popshelf’

Dollar General is taking a new tack to win shoppers: Go after those with more dollars to spend.
The discount retailer said on Thursday it was opening the first two stores in its new ‘popshelf’ chain in the coming weeks near Nashville, and will open a total of 30 in the first fiscal year. The idea behind the chain: selling non-essential items like home décor and party items, while catering to a clientele that might balk at shopping at a Dollar General, the fast growing deep discount chain that now has 16,300 stores across the U.S.
The company said ‘popshelf’ would be targeted at households with income as high as $125,000, well above the $50,000 mark that is typical of the Dollar General customer. That’s not to say Dollar General is refashioning itself as a strip mall version of Neiman Marcus: 95% of items will be priced for $5 or less, so not that different from a Dollar General.
What will be different will be the products, which will be more discretionary, like beauty products, items for the home, Christmas decorations, supplies for crafts and even some food items for parties, such as charcuterie plates. And Dollar General says ‘popshelf’ will offer many limited-time items to foster the ‘treasure hunt’ ethos that has served chains like T.J. Maxx so well and spurred repeat visits by shoppers. At 9,000 square feet, the ‘popshelf’ stores will be slightly bigger than a typical Dollar General.
Dollar General is launching a new ‘popshelf’ chain aimed at more affluent customers.
Dollar General, now a larger retailer than Macy’s by sales, has been one of the biggest winners during the pandemic, with shoppers drawn to its low prices, essentials like toilet paper and cleaning products, its improved food assortment compared to just a few years ago, and small stores close to home, historically in rural areas but increasingly near cities in recent years. Last quarter, sales rose 24.4% to $8.7 billion.
Yet one of its big priorities has been to attract more middle class shoppers without losing its core lower income shoppers. As Fortune detailed in a feature last year, that has included remodeled stores, more beauty products, an overhaul of store brands and items like Starbucks and Lego products and more fresh food, including fruit and meat in some stores.
But it’s a delicate balance to reach for those new customers without alienating or confusing the low income shopper that is Dollar General’s bread and butter, hence the ‘popshelf’ idea. Dollar General has found it could cast its net wider by created a distinct brand from its namesake stores, even with items are are still inexpensive.
The moment is all the more propitious given the weakness of rivals like Party City and the large drugstore chains. The move could also help Dollar General compete more directly with Dollar Tree, which sells all items for $1 and has a large assortment of party supplies and inexpensive food for parties. Dollar Tree’s growth has slowed in recent years.
“We are excited to introduce popshelf from a position of strength,” Dollar General CEO Todd Vasos said in a press release. He added that ‘popshelf’
would “resonate with new customers”—and ideally garner the chain more customers with more dollars at their disposal.


fortune--2020-10-08--No more gimmicks: How to actually get more young people voting

Most young people don’t vote.
Sixty-four percent of people under 30 stayed home rather than voting in the 2018 midterms. A majority (54%) of those under 30 sat out the 2016 presidential election. That means that young adults, who have an enormous stake in public policy related to climate change, housing, policing, student loans, and the national debt, are not leveraging their voting power over policymakers on these important issues.
But it doesn’t have to be that way.
There is nothing civically wrong with people under 30. They aren’t apathetic; as many as 40% of adults under 30 marched for racial justice this summer, and marching in the streets requires more investment than simply filling out a ballot. Studies show that young Americans feel they have the power to participate and make change. So if they aren’t actually disengaged, why don’t they vote?
The explanation is pretty simple: Voting is a civic practice that we need to learn. We need to learn how to register to vote, and how to fill out and cast a ballot. We need to learn to distinguish the different offices on the ballot and the candidates running for them. Moreover, we have to take the time and make the effort to learn all of this on our own, without any external rewards.
It can take time to develop the habits and informational background that make voting easier, which helps explain why older people vote more often. (Of those over age 60, 70% voted in 2016.) As adults, being residentially stable and socially connected to our local community helps us understand the value of voting and subsidizes the informational costs of learning how and for whom to vote. Many people under 30 don’t have those advantages, and they tend to move around a lot. As they settle down, today’s young people will begin to vote at higher rates.
But nothing in voting behavior is fixed. With some effort we can increase the likelihood that today’s youth, who have so much at stake, have the voice they deserve to have. Civically engaged people of all ages can work to facilitate young people’s political participation.
Parents can have one of the biggest effects on youth turnout by modeling voting behavior, teaching kids why it’s important, and showing them how to do it.
Education may also help young adults develop those values and skills, and here, institutions can make a difference. High schools and colleges have a special responsibility to help their students engage with their civic and political communities. State social studies requirements vary widely, and many high school students graduate without taking a civics class. State and local school boards can change that if they are pressured by voters.
Universities across the country are recognizing their responsibility to foster engaged citizenship. More than 600 colleges and universities (including the University of San Diego, where I teach political science), have joined the nonpartisan All In Challenge to encourage institutional commitments to increasing student voter turnout. Students themselves are an active and critical part of this process. My own students, like student leaders all across the country, are leading the movement to take civic education more seriously.
But families and civic institutions can only do so much when policy makes it hard for young people to register and vote. Unlike most other advanced democracies, in the U.S., we make voters take the initiative to register themselves, imposing a special burden on those who move around a lot and who are just learning the system. In contrast, most countries in the democratic world make it the responsibility of the government to keep track of eligible voters and to make sure voting rolls stay clean and up to date.
Fortunately, in recent years, 17 states have moved toward automatic voter registration, where the state takes the responsibility for registering and keeping track of voters who interact with state government (usually through the motor vehicle agency). This might seem strange—but it is actually more efficient for both citizens and governments, and seems to increase voter turnout.
In the U.S., our state laws are still uneven—some are on the road to making it easier to vote, while others go out of their way to make it difficult. Uniform national policy would really help here—and Congress could require federal agencies to facilitate automatic voter registration in every state. Lowering the voting age to 16 could also help young people who don’t attend college develop civic habits while they are still in high school.
We may yet see record-high voter turnout from younger Americans this year. But to solidify those gains, citizens of all ages should pressure schools and governments at all levels to make voting more accessible to the next generation.
Casey Dominguez is professor of political science and international relations at the University of San Diego.


fortune--2020-10-08--Why Square went on a $50 million Bitcoin buying spree

Our mission to help you navigate the new normal is fueled by subscribers. To enjoy unlimited access to our journalism, subscribe today.
The fintech giant Square announced on Thursday morning that it bought 4,709 Bitcoins for the price of $50 million, noting that the purchase amounted to 1% of the company’s total assets.
The announcement offered few details about how it purchased the Bitcoins or its motivation for doing so, beyond stating that cryptocurrency is a form of “economic empowerment and provides a way for the world to participate in a global monetary system.”
Such language is consistent with Square CEO Jack Dorsey’s recent advocacy for digital currencies like Bitcoin, which are controlled by no central authority, and which create a tamper-proof record of transactions.
Further clues to Square’s motivation, however, can be discerned in a white paper the company published quietly this month. In a section of the white paper titled “Accounting,” Square notes that the $50 million in Bitcoin will likely be classified as “Other non-current assets.”
The upshot of this classification is that Square will not be using the Bitcoin as part of its operations (the company has a lively trade letting customers buy Bitcoin through its Cash App) but treating it as a long term investment.
Square is the second publicly traded company to make such a bet, following a $250 million Bitcoin purchase by MicroStrategy, a Virginia-based software intelligence firm. In both cases, the purchases amount to a long-term bullish bet on Bitcoin.
The Square white paper also contains other interesting nuggets of information about how the company acquired the Bitcoin and where it will store it. The paper notes it bought the 4,709 Bitcoins over a 24 hour period using a so-called “over-the-counter” (OTC) broker, which specialize in large, discreet transactions. Square doesn’t specify which OTC service it used, but points to a list of brokers it’s used in the past that cites Circle, ItBit, Genesis and Cumberland.
As for storing the Bitcoin, the white paper notes Square uses “cold storage”—a way to protect digital currency from hackers by storing it offline. Square says it is relying on its own cold storage technology, as opposed to third part custody providers like Coinbase or Anchorage.
Square’s $50 million longterm investment comes as its day-to-day Bitcoin business has been booming. When it first offered Bitcoin to Cash App customers in 2018, the service was small and money-losing. But, as its Q2 financial reports show, Square’s Bitcoin operations—which involve sourcing Bitcoin from third party providers—are now profitable and growing fast:
Square did not immediately respond to a request for further details about the Bitcoin purchase announcement.
More must-read finance coverage from Fortune:


fortune--2020-10-08--How MessageBird became a tricorn

How MessageBird became a tricorn

This is the web version of Term Sheet, a daily newsletter on the biggest deals and dealmakers. Sign up to get it delivered free to your inbox.
These names have been the center of the conversation in pandemic investing: Zoom and Shopify.
More recently, another name has also made it into the pandemic vocabulary: Twilio. The email-marketing and customer-service company was valued at about $15 billion a year ago. Now, it’s worth $46 billion as investors bet that droves of businesses will turn to technology to communicate with customers.
That thinking has now taken MessageBird, a Dutch competitor of Twilio, to unicorn status. On Thursday, the company revealed that it had raised $200 million in funding led by Spark Capital—pushing its valuation to $3 billion.
“Our perspective is this area [of customer engagement] is so large and important that the company is well-positioned to have a critical role, no matter what it looks like,” says Spark Capital Partner Will Reed, who led the investment in MessageBird. “Twilio has executed extremely well in the U.S. market. What got us so excited is the strength of MessageBird for the rest of the world.”
Spark Capital has led mega rounds before (a $200 million in Niantic among them), but this is the firm’s largest first check to a company. Even though Reed has been tracking the company for years, it was an especially competitive deal as “the growth investing landscape is hot, and this category is hot,” he says.
Read more.
Lucinda Shen
Twitter: @shenlucinda
Email: lucinda.shen@fortune.com
VENTURE DEALS
- Instacart, a San Francisco-based grocery delivery company, raised $200 million in funding. Valiant Peregrine Fund and D1 Capital Partners led the round. The funding values the firm at over $17.7 billion.
- Redaptive, a San Francisco-based company focused on utility efficiency, raised $156.5 million in funding. CarVal Investors led the round and was joined by investors including CBRE, Engie New Ventures, Evergy Ventures and Linse Capital.
- Avail Medsystems, a Palo Alto, Calif.-based company focused on telemedicine for the procedure room, raised $100 million in Series B funding led by D1 Capital Partners and was joined by investors including 8VC.
- Neocis, a Miami-based maker of a robotics device for assisting dental implant surgery, raised $72 million in Series D funding. DFJ Growth led the round and was joined by investors including Vivo Capital, Mithril Capital Management, Norwest Venture Partners, Section 32, and Fred Moll.
- TigerConnect, a Santa Monica, Calif.-based healthcare collaboration company, raised $45 million in Series D funding. HealthQuest Capital led the round and was joined by investors including New Leaf Ventures, Montreux Growth Partners, Norwest Venture Partners, Invus and Industry Ventures.
- Observe Inc., a San Mateo, Calif.-based maker of an application and infrastructure monitoring company, raised $35 million in Series A and debt funding. Sutter Hill Ventures led the round and was joined by investors including Michael Dell, Frank Slootman and Scott Dietzen.
- Mmhmm, a San Francisco-based startup for video presentations founded by former Evernote CEO Phil Libin raised $31 million in funding. Sequoia Capital led the round.
- Point Pickup Technologies, a Greenwich, Conn.-based last-mile delivery company, raised $30 million in funding. BBH Capital Partners led the round.
- Grid, a New York-based company for training A.I. models, raised $18.6 million in Series A funding. Index Ventures led the round and was joined by investors including Bain Capital Ventures and Firstminute.
- Winningtemp, a Swedish employee engagement startup, raised €15.1 million in Series B funding. Frog Capital and Bonnier Ventures led the round.
- Joko, a French cashback app, raised €10 million ($12 million) in Series A funding. Partech and Axeleo led the round.
- Dispo, a Los Angeles-based disposable camera app and social network, raised $4 million in seed funding. Alexis Ohanian’s Seven Seven Six led the round and was joined by investors including Unshackled Ventures, Shrug Capital, and Weekend Fund.
- Shipa, Corp, a Santa Clara, Calif.-based maker of an application management framework, raised $3.8 million in seed funding. Engineering Capital and Jump Capital led the round.
- Gitpod, a Kiel, Germany-based open source developer platform, raised $3 million in seed funding. Investors included Crane Venture Partners, Speedinvest, and Vertex Ventures US.
- Exer Labs, a Denver, Colo.-based fitness startup with a motion coaching apps, raised $2 million in seed funding. Investors include GGV, Jerry Yang's AME Cloud Ventures, Morado Ventures, Range VC, Service Provider Capital, Shatter Fund, Mike and Albert Lee (MyFitnessPal co-founders), Signia Venture Partners, and David Ko (former Zynga COO).
PRIVATE EQUITY
- Altacrest Capital acquired a controlling interest in Big Dot of Happiness, a Menomonie, Wis.-based online seller of designer party supplies and lifestyle collections. Financial terms weren't disclosed.
- Copley Equity Partners completed an investment to recapitalize, and facilitate the merger of, Aethon Aerial Solutions and Flight Evolved, two aerial inspection companies. Financial terms weren't disclosed.
- H.I.G. Capital acquired Hart & Cooley, a Grand Rapids, Mich.-based manufacturer of HVAC and air distribution products. Financial terms weren't disclosed.
- Sole Source Capital acquired Dallas Plastics, a Mesquite, Texas-based manufacturer of blown polyethylene film with printing and embossing for the medical, food, and industrial end markets. Financial terms weren't disclosed.
- Vector Capital agreed to acquire MarkLogic Corporation, a provider of enterprise data management solutions. Financial terms weren't disclosed.
- Brook & Whittle, a portfolio company of Snow Phipps Group, agreed to acquire Innovative Labeling Solutions and Wizard Labels, two labelling companies. Financial terms weren't disclosed.
- Mercer Global Advisors, backed by Oak Hill Capital and Genstar Capital, acquired Personal Financial Advisors, a Covington, La.-based investment management firm. Financial terms weren't disclosed.
- Veeam, backed by Insight Partners, acquired Kasten, a Los Altos, Calif.-based backup and recovery company. Financial terms weren't disclosed.
Breakups and bankruptcies
- Ruby Tuesday, the American restaurant chain backed by NRD Capital, filed for Chapter 11 bankruptcy protection.
EXITS
- Onex acquired majority ownership of OneDigital, an advisory firm focused on delivering health, retirement/wealth and HR solutions for employers, from New Mountain Capital. Financial terms weren't disclosed.
- Pritzker Private Capital agreed to acquire Highline Aftermarket Holdings, a distributor of automotive aftermarket products that is majority owned by The Sterling Group and Warren Distribution. Financial terms weren't disclosed.
OTHERS
- IBM (NYSE: IBM) plans to spin off its managed infrastructure services business.
- Rite Aid agreed to acquire Bartell Drugs, a Seattle-based pharmacy chain, for $95 million.
IPOs
- Lufax, the Chinese fintech lender, filed for an $100 million IPO. Ping An Group backs the firm. Read more.
- Leslie’s, Inc. a U.S. pool and spa care company, filed to raise $100 million in an IPO. L Catterton and GIC back the firm. Read more.
F+FS
- Greyrock Capital Group closed GCG Investors V with $280 million of committed capital.
PEOPLE
- Magma Partners named Claire Díaz-Ortiz as a partner to focus on investments in South America.


fortune--2020-10-08--MessageBird becomes a unicorn thrice over

Customer service is the five-syllables nightmare just about everyone has dealt with—especially during the pandemic. At a time when phone lines are ringing off the hooks, customers are using just about every social media platform out there to get to a company, whether through texting, email, Instagram, or WeChat.
Spark Capital is betting that the behavior will continue—and that it’s a nightmare not only for customers, but also for the companies themselves.
The venture capital shop that cut its teeth with an early bet on Twitter in 2008 before following up with investments in Mirror, Plaid, and Slack is leading a $200 million round in MessageBird, a Dutch company focused on bringing customer messages from the deluge of channels (text, Instagram, phone, Telegram, WeChat, etc) into a single place for agents to address—and automating responses that don’t require human touch.
The Series C round has catapulted the company into unicorn status thrice over. The most recent round of funding values MessageBird at about $3 billion, the company announced Wednesday.
It’s a bet that has precedent in public markets. Companies focused on taking businesses online have boomed as customers avoid in-store dining and shopping. An oft-cited example of the trend is Shopify, the Canadian company that helps shops create online stores that have gone bonkers amid the pandemic. Investors have also bet big that companies are looking specifically at ways to communicate online with their customers as well: Twilio, a company that covers email marketing campaigns and customer service via channels including text messages that’s comparable to MessageBird, was valued at about $15 billion a year ago. Now, the company is worth $46 billion as businesses like Zoom and Peloton are using the company to reach out to customers in the pandemic.
“Our perspective is this area [of customer engagement] is so large and important that the company is well-positioned to have a critical role, no matter what it looks like,” says Spark Capital Partner Will Reed, who led the investment in MessageBird. “Twilio has executed extremely well in the U.S. market. What got us so excited is the strength of MessageBird for the rest of the world.”
While MessageBird is not disclosing exact figures, CEO Robert Vis says the company is not currently profitable (though it had been previously) and expects losses in the low, single-millions for this year. It is growing steadily, and is on track for revenue of over $300 million this year. Geographically, the company’s strengths lay in Latin America, Europe, and Southeast Asia—and its customers reflect this reach. It services Lufthansa Airlines, Heinehen, Hugo Boss, HelloFresh, Uber, and Deliveroo.
Hhere’s how MessageBird works: Say the wrong item is sent to a customer. They decide to address the issue via Whatsapp. Instead of assigning an agent to constantly monitor the chat app, companies are able to feed that information directly to customer service agents, forming a queue alongside tickets from other communication platforms such as texts or phone calls. The idea, says Reed, is to meet customers where they want. And say a customer simply wants to find their tracking number: MessageBird seeks to do that too, automatically, without a customer service agent.
But the space is not without competition—or in this case, mergers and acquisitions. Sinch recently agreed to acquire ACL Mobile for about $70 million. Which means M&A could be in the clouds for MessageBird too.
“We’re seeing a larger trend around consolidation,” says Vis. “Chief Investment officers are getting tired of having software for everything.”
Subscription models are particularly popular at the moment. After all, who can argue with the stability of a recurring revenue model? But here, also, is where MessageBird’s model gets interesting. Like Twilio, clients pay based on consumption—or the “number of customers you talk to each month.” For Twilio, while the pandemic has led to an overall increase in revenue, it’s also created shifts in its customer base as ridesharing and travel flatlined in the heat of the crisis. Earnings waned from those sectors, while demand from others including healthcare and e-commerce grew, the company revealed in its second quarter earnings.
While MessageBird says it has not experienced a surge in revenue yet, a phenomenon its CEO attributes to its enterprise-focused nature, it does expect to see a boost in coming months. And while Vis is still unsure of exact timing of an initial public offering, he says he plans to be IPO ready by June.
Other investors in the round included Bonnier, Glynn Capital, LGT Lightstone, Longbow, Mousse Partners and New View Capital. Existing investors Accel, Atomico, and Y Combinator also joined.