fortune--2020-11-25--Biden has ambitious executive order options, if he’s bold enough to sign them

Our mission to make business better is fueled by readers like you. To enjoy unlimited access to our journalism, subscribe today.
President-elect Joe Biden can’t depend on the Democrats winning the majority in the Senate come January. A victory in both of Georgia’s two runoff elections isn’t implausible, especially considering Biden flipped the state blue for the first time in 28 years, but it’s far from guaranteed in a historically conservative region.
Talk of late has centered on how Biden can potentially govern with a Republican-controlled Senate. With President Trump finally authorizing a formal transition process, the Biden camp is preparing to sign a string of executive orders that won’t require legislation.
Some of those orders will reverse orders that Trump signed during his presidency: Biden will rejoin the Paris climate accord and the World Health Organization; he’ll repeal the travel ban from Muslim-majority countries and reinstate the Deferred Action for Childhood Arrivals (DACA) program allowing “dreamers”—those brought to the U.S. illegally as children—to remain in the country.
But with the country still in the grips of a deadly pandemic and a destabilized economy, some Democrats are pushing Biden to unleash the fullest extent of his executive powers. Biden, after all, has drawn parallels of his task ahead to former President Franklin D. Roosevelt—who instituted sweeping, never-before-seen, federal authority to combat the Great Depression. And while it’s possible Biden won’t have the votes for such ambitious legislation, he could operate in a similar vein with executive actions. Roosevelt signed a record 3,728 executive orders during his presidency, a number of which created dozens of federal agencies as part of the New Deal.
Should the Democrats fail to take the Senate, two big questions of at least the first two years of Biden’s presidency will be over his willingness to wield such executive power—and the legality of doing so. With that said, here are some potential executive actions that some liberals have called for, but might face resistance from the courts or even Biden himself.
Canceling student debt
Earlier this month, Senate minority leader Chuck Schumer of New York gave an interview with journalist Anand Giridharadas on the hope for—that’s right—an “FDR-style first 100 days.” On the topic of student debt, which now exceeds more than $1.7 trillion in the U.S., Schumer said something striking:
“I have a proposal with Elizabeth Warren that the first $50,000 of debt be vanquished, and we believe that Joe Biden can do that with the pen as opposed to legislation,” Schumer said. Warren herself reiterated the point in a op-ed published in the Washington Post the following week, calling it “the single most effective executive action available to provide massive consumer-driver stimulus.”
The senators argue that broad language in the Higher Education Act of 1965 gives the education secretary, appointed by the executive branch, the power to “compromise, waive or release” federal student loan debts. Some legal experts have endorsed this line of thinking.
But others have disagreed, saying such a sweeping action would surely face legal challenges. And conservatives now hold a 6-3 majority in the Supreme Court should it ever decide to hear such a case.
Beyond the potential legality of canceling student debt, it’s not even clear if Biden want to sign such an executive order. Earlier this year, Biden said the federal government should forgive $10,000 in student debt for all Americans—but with that action taken through Congress, not executive order.
Following the Schumer interview, Biden was asked if he would take executive action to cancel student debt. He declined to answer and has never publicly expressed support for a $50,000 forgiveness plan.
Asked about student debt, @JoeBiden declines to say whether he would take executive action to cancel student loan debt.
He points to HEROES Act passed by the House–which he said forgives $10K per borrower –and says "it should be done immediately." — Michael Stratford (@mstratford) November 16, 2020
Relaxing the ban on marijuana
Cannabis was a big winner this past election day, with residents of Arizona, Montana, New Jersey and South Dakota voting to legalize its recreational use. That brings the number of states allowing adults to consume marijuana recreationally up to 15, but it remains illegal on the federal level.
Ironically, Biden, whose 1994 crime bill increased penalties for drug-related crimes, now supports decriminalizing marijuana. “Wipe out the record so you can actually say, in honesty, ‘Have you ever been arrested for anything?’” Biden said in a televised town hall ahead of the election. “You can say ‘no’ because we’re going to pass a law saying there is no background you have to reveal relative to the use of marijuana.”
If the Democrats don’t win back control of the Senate, however, any marijuana legislation is likely dead in the water. There are some executive actions Biden could take to push cannabis towards legality, but it’ll be a question of how far Biden wants to go considering he still opposes outright federal legalization.
What’s seems more likely is Biden using the president’s authority to lessen the punishment for using cannabis. As the American Prospect notes, “The president could issue executive orders in narrow instances to relax the consequences of marijuana use, such as removing prohibitions against federal employees using recreational or medical marijuana. A 1986 Reagan-era executive order allowed federal agencies to fire employees for illegal drug use.”
Taking on Wall Street
The federal government’s regulatory agencies hold significant power over the financial industry, thanks in part to 2010’s landmark Dodd-Frank Act. Biden’s recently announced transition teams include a number of proponents for stricter Wall Street regulation, suggesting the incoming administration will bring back stronger oversight over the finance industry following years of deregulation under Trump.
The question is how far a Biden administration is willing to go. His transition chief is Ted Kaufman, a former Democratic Senator from Delaware and longtime advisor of Biden who sought to break up the big banks a decade ago. He will now play a major role in selecting appointees to oversee the Consumer Financial Protection Bureau and the Securities and Exchange Commission.
Graham Steele, a former aide to Sen. Sherrod Brown (D-Ohio), the ranking Democrat on the Senate Banking Committee, has argued that the Fed has the power under either the Dodd-Frank Act or the Federal Deposit Insurance Act to break up the country’s largest banks, such as Citigroup, JP Morgan Chase, and Goldman Sachs.
Such a measure would be extreme, however, and Biden has never publicly endorsed attacking the banks to that extent. Still, it’s clear his administration plans to get aggressive with Wall Street, it’s just a matter of how far he’s willing to enforce the law.


fortune--2020-11-25--Is this the laptop bubble?

Is this the laptop bubble?

iPhone ’ s new ‘ orange dot ’ feature warns you when an app is listening

Across the digital landscape, the pandemic has sped up the big moves towards e-commerce, cord-cutting, and remote work.
But one tech trend has completely reversed. While personal computer sales had been drifting downwards since its peak in 2011, this year could mark one of the sharpest increases since Steve Jobs and Steve Wozniak were working out of their garage. People are even buying printers again!
We heard from Apple about its record Mac sales last month. Last night, both Dell Technologies and HP also reported their most recent quarterly results and the news was all about personal computer sales.
Delve into Dell’s sales and you see that overall revenue rose 3%, but its PC unit was up 8%. Inside of PC sales, consumer sales were up 14%. Consumer sales online were up 47%. And Chromebook sales more than doubled. The results were better than analysts expected and Dell’s stock, already up 37% this year, rose another 1% in pre-market trading this morning.
“I don’t think you can get by having [one] PC for everyone in the home now,” Dell COO Jeff Clarke commented to analysts Tuesday. “You have two parents likely working from home, you have multiple children working from home, it’s a multi-PC environment in the home today and I don’t think that largely changes.”
At HP, the company’s fiscal fourth quarter revenue shrank by 1% overall, but sales to consumers rose 24% for PCs and 21% for printers. The company’s “premium” consumer segment, which includes items like its gorgeous blue metal Dragonfly laptop, rose 29%. Chromebook sales (tell me if you’ve heard this one before) more than doubled. HP’s stock, up only 6% this year so far, gained another 6% in premarket trading Wednesday.
“PCs have become essential [as what] people needed for working, for learning, for gaming, for entertaining, for communicating,” HP CEO Enrique Lores noted. “And the trend that we see is for every person to have their own PC, and this is really driving significant demand.”
Analyst Amit Daryanani from Evercore joked about the strong results: “Congratulations on a nice print quite literally from you guys.”
The question is whether the PC trend has staying power. Wall Street seems convinced it’s a permanent change, but I’m more skeptical. There’s strong pent-up demand for travel, for getting off Zoom, for going back to the office and to school among the pandemic-weary public. Buying yet another laptop in 2021? I don’t think so.
Aaron Pressman
@ampressman
aaron.pressman@fortune.com
NEWSWORTHY
Checkout cha-cha-cha. Amid the wave of tech IPOs expected in coming weeks, payments standout Stripe is still looking to raise more money from the private market. Valued at $36 billion in April, Stripe is looking for new funds at a valuation of $70 billion to $100 billion, Bloomberg reports. Meanwhile, Russian e-commerce company Ozon raised almost $1 billion going public on the Nasdaq on Tuesday and its shares jumped 34% in the first day of trading.
A piece of the action. The gig economy got a boost from California voters and now the Securities and Exchange Commission wants to help, too. The agency proposed a new rule on Tuesday to allow still-private gig companies like Talkspace and DoorDash to pay their independent contractors in part with stock. As much as 15% of a gig worker's total comp, up to $75,000 over three years, could be in stock, the SEC said.
Clean up on tweetstorm aisle four. Social media companies continue trying to address the flood of election misinformation. Facebook had to temporarily boost the rankings of mainstream news organizations like The New York Times in its news feed algorithm to get users a more accurate picture of the election. And YouTube suspended right-wing cable outlet One America News Network for spreading false info about COVID-19.
Footloose and EV free. We have discussed the electric car efforts of star car designer Henrik Fisker a couple of times here. This week, Fisker unveiled a new concept for leasing his forthcoming Ocean EV SUV. Buyers may be able to lease the Ocean for $3,000 upfront and $379 a month and give it back at anytime. "A lot of young people don't want to borrow $40-50,000 to buy a car, and they want to be able to give their car back after a year or two if they don't want or need it anymore," Fisker told Business Insider. By the way, Tesla's rising stock price has made Elon Musk the world's second-richest person, behind only Jeff Bezos now.
Undo. I had it a bit backwards in Monday's new items. Former Oracle exec Jeff Epstein and former Goldman Sachs banker Brad Koenig started SPAC Apex Technology and Tianyi Jiang is the CEO and founder of its merger target, cloud helper firm AvePoint.
FOOD FOR THOUGHT
As artificial intelligence apps fueled by machine learning make their way deeper into the economy, Financial Times columnist Gillian Tett is sounding the alarm. She's calling for more oversight of A.I. in the financial sector.
We cannot hand all the creation and control of AI-enabled finance to geeks with tunnel vision; instead, the people crafting strategy must have a holistic view of their societal impact. But for this to happen, there needs to be a fourth development: politicians and the wider public must pay attention to what is under way, instead of outsourcing it to technical experts.
This will not be easy, given that AI is hard to understand. But the 2000s showed what can happen when geeks with tunnel vision go mad in finance and politicians ignore them. We cannot allow this again. If you thought the 2008 financial crisis was bad, just imagine one that moves faster and goes farther because it is enabled by AI. That should scare us into a policy debate right now.
IN CASE YOU MISSED IT
What Blizzard learned by making a hit video game from home By David Z. Morris
JD Health IPO could raise up to $4 billion in one of the year’s biggest listings By Naomi Xu Elegant
Europe—and Big Tech—will give Biden a headache from Day One By David Meyer
Better conversations: The 7 essential elements of meaningful communication By Fred Dust
Small cap stocks are having their best month ever By Lee Clifford
You’re not crazy—you really hunger for social contact, scientists say By Katherine Dunn
(Some of these stories require a subscription to access. Thank you for supporting our journalism.)
BEFORE YOU GO
Hopefully, its discovery won't trigger the arrival of hostile high-tech aliens, but there's a giant silver monolith in Utah's red-rock desert. A copter flight of the Utah Department of Public Safety looking for bighorn sheep came across the strange item last week.
No one knows who embedded the 12-foot-tall metal sculpture into the desert rocks. It's a mystery to ponder over the turkey and stuffing tomorrow. There will be no Data Sheet on Friday, so see you back here on Monday.


fortune--2020-11-25--Gift Guide: What to give those near and dear, even when we’re apart

The 2020 holiday season is going to be a little different, to say the least. We won’t be traveling. We won’t be hosting cocktail parties or soirees. And many of us won’t be able to visit our loved ones. But what we can still do is give a special gift, and let those near and dear to us know we’re thinking about them.
Photograph by Jarren Vink; Styling by Alex Silva
The Homebody
More than ever, ’tis the season to get cozy.
Clockwise from top left:
Our Place The Always Pan The pan that took Instagram by storm. Sauté, steam, sear, or sizzle; $145.
Poketo Jazz up a picnic or dinnertime at home with these designer bamboo plates in a variety of bold designs; $48 for four.
Group Partner Faces Planter Whimsy up a houseplant. Designed in Brooklyn and made in Portugal. ;$65.
Sabah Shearling Babas Turkish-made slippers for warming winter toes; $205.
Our Place Drinking Glasses; $50 for four.
Vellabox A subscription that sources hand-poured candles from across the country; starts at $10 per month.
Photograph by Jarren Vink; Styling by Alex Silva
The Foodie
Explore a world of new tastes.
Clockwise from top left:
East Fork Pottery “The Mug” Handmade in Asheville, N.C.; $38.
Trade Coffee Pair coffee lovers with beans from the country’s top roasters; $60 for three bags.
Winc A wine subscription based on a personal flavor profile; from $60.
Snowe Wineglasses; $60 for four. Marble cheese board; $75.
Russ & Daughters American Caviar Gift Set Three 50-gram tins of the finest domestic caviar, complete with crème fraîche and blinis. Decadent; $345.
Photograph by Jarren Vink; Styling by Alex Silva
The Creator
For an aspiring YouTuber, podcaster, or music producer.
Clockwise from top left:
Fender Player Mustang An updated mid-century classic; $599.
Teenage Engineering OP-1 A synthesizer, sampler, and sequencer from Sweden; $1,299.
Apple iPhone 12 Stream to the world with 5G cellular and improved
cameras; from $799.
Neewer Ring Light; $25.
Fujifilm X-S10 Incredible film simulation modes make this camera a vlogger’s dream; $1,500 with 18mm–60mm kit lens.
RØDE PodMic; $99.
RØDECaster Pro A self-contained podcast studio; $599.
Apple iPad Air Blazing fast performance makes it ideal for the creator on the go; from $599.
Apple Magic Keyboard for iPad Air; $299
Photograph by Jarren Vink; Styling by Alex Silva
The Audiophile
Turn off your mind, relax, and float downstream.
Clockwise from top left:
Pro-Ject VT-E Vertical Turntable With an Ortofon OM5e cartridge, this turntable isn’t just stylish but sounds great too; $400.
Nebula by Anker Solar Projector With built-in Android TV and Chromecast; $599.
McIntosh MA252 Integrated Amplifier There’s nothing quite like the vintage sound of vacuum tubes; handmade in Binghamton, N.Y. ; $3,500.
Focal Stellia headphones French audio firm Focal’s flagship closed-back headphones utilize a beryllium dome driver to reproduce beautiful treble and articulate bass. Like honey being dripped in your ear; $2,990.
Photograph by Jarren Vink; Styling by Alex Silva
The Driver
Gifts to inspire the next Carroll Shelby or Lewis Hamilton.
Clockwise from top left:
AMMO Hoseless Car Wash Kit Keep the salt off this winter when you really don’t want to run the hose; $150.
Autodromo Intereuropa A hand-wound watch with a dial inspired by the gauges of vintage Italian race cars; $1,250.
Ettinger Key Ring Because your car deserves better than the free key chain from your last oil change; $100.
CXC Simulations The most advanced racing simulators for the home; from $57,000.
Lego Technic Lamborghini Sián Features Lamborghini’s iconic scissor doors, a faithful V-12 engine, and eight-speed gearbox; $380.
A version of this story appears in the December 2020/January 2021 issue of Fortune with the headline, “Holiday Gift Guide.”


fortune--2020-11-25--‘Open yet sovereign’: Europe proposes a new data regime to boost its digital economy

The European Union has proposed new rules to allow companies access to public and personal data, an effort to compete with U.S. and Asian giants and encourage innovation in areas like climate change and health.
The rules proposed by the European Commission, the bloc’s executive body, would grant businesses and research organizations access to data normally blocked off due to privacy, commercial confidentiality, or intellectual property rights. It will also make it easier for people to donate their data for non-commercial research.
The bloc’s tough data protection rules, called the General Data Protection Regulation or GDPR, would still apply, and companies and public agencies would need to implement technical solutions to ensure privacy is respected. Personal data, for instance, would need to be anonymized before companies were granted access.
“With the ever-growing role of industrial data in our economy, Europe needs an open yet sovereign single market for data,” said Internal Market Commissioner Thierry Breton, adding the regulation would “help Europe become the world’s number one data continent.”
The EU hopes that by giving companies access to more data, it will support businesses to build new services and products but also help researchers tackle societal challenges.
Under the proposal unveiled Wednesday, companies won’t be required to have their headquarters in Europe or forced to keep data in the region, but they would have to appoint local representatives to handle participation in the program.
Companies would also have to implement legal or technical measures to avoid having to comply with abusive or unlawful requests for data held in Europe from third country authorities, EU officials said. Both the U.S. and China impose rules on their companies that can require them to hand over data even if it’s stored abroad.
Any requests for data access to be considered lawful would have to be protected by an international agreement or respect European principles, including that the purpose for access is well-specified, an EU official said. Companies could also impose double encryption as a protective measure, the official said.


fortune--2020-11-25--Meet the new second most powerful woman in Congress

This is the web version of The Broadsheet, a daily newsletter for and about the world’s most powerful women. Sign up to get it delivered free to your inbox.
Good morning, Broadsheet readers! Women lead in the Grammys’ rock categories, Meghan Markle writes a moving essay about miscarriage, and Rep. Katherine Clark will be the second most powerful woman in Congress. The Broadsheet will be off on Thursday and Friday for Thanksgiving—have a wonderful holiday if you’re celebrating. We’ll see you back here on Monday.
– Full house. For years, the Democratic caucus has been led by House Speaker Nancy Pelosi. But Pelosi has always been the lone woman at the top in Congress.
Next term, Pelosi will be joined by Rep. Katherine Clark, the Massachusetts congresswoman. Democrats elected Clark to the role of assistant speaker last week in a race against Rhode Island Rep. David Cicilline.
The role doesn’t determine who is next in line for the speakership, but Clark’s ascension to the No. 4 position in the House of Representatives is notable nonetheless. Clark is only the second woman, after Pelosi, to ever serve in House leadership and will be the second most powerful woman in Congress. She will play an important role in setting the House Democrats’ agenda—during a two-year stretch that could be Pelosi’s last in the speakership (in 2018, Pelosi promised some members of her party that she would only seek two more terms in the top job).
In an interview with Fortune, Clark reflected on reaching gender parity in House leadership and setting goals for the Democrats this session. “We represent 51% of our population. It’s long past time that we give up the idea that ‘one woman is enough,'” she said of joining Pelosi at the top.
Clark, who was first elected to Congress in a 2013 special election, has long been a passionate advocate for accessible childcare and says that supporting both childcare workers and parents who need affordable care for their kids will be one of her top priorities come January.
Read the rest of her interview here.
Emma Hinchliffe
emma.hinchliffe@fortune.com
@_emmahinchliffe
ALSO IN THE HEADLINES
- 'The losses we share.' Meghan, The Duchess of Sussex writes a personal, emotional op-ed for the NYT about suffering a miscarriage earlier this year. "Sitting in a hospital bed, watching my husband’s heart break as he tried to hold the shattered pieces of mine," she writes, "I realized that the only way to begin to heal is to first ask, 'Are you OK?'" New York Times
- And the nominees are. 2021's Grammy nominations are led by Beyoncé, with nine nods, followed by Taylor Swift and Dua Lipa. The Best Rock Performance category is one to watch this year; all six nominees—Big Thief, Fiona Apple, Phoebe Bridgers, Haim, Brittany Howard, and Grace Potter—are female artists or women-fronted bands. Vulture
- On board. Germany is the latest European country to introduce a quota for women's representation on corporate boards of directors. The details are still being finalized, but the coalition government agreed to a measure last week. Women hold just 12.8% of these roles in Germany now, compared to between 20% and 30% in similar EU economies. CNN
- Passed, period. Scotland's status as the first nation to provide free and universal access to menstrual products is official after the Period Products (Free Provision) (Scotland) Act passed on Tuesday. Monica Lennon of the Scottish Labour Party led the effort. Guardian
MOVERS AND SHAKERS: Jan Singer is out as J.Crew CEO after less than a year in the role, succeeded by Libby Wadle, the CEO of J.Crew's Madewell brand. Ann Shoket's New Power Media has acquired invitation-only women's community TheLi.st, which was founded by Glynnis MacNicol and Rachel Sklar. Susan McPherson of McPherson Strategies will be joining the group's board. Ford hired former eBay CMO Suzy Deering as global CMO. IAC promoted Kendall Handler to SVP and general counsel. Define Ventures founder Lynne Chou O'Keefe joins the board of Hims & Hers.
IN CASE YOU MISSED IT
- Eyes on YouTube. Senate Democrats including Amy Klobuchar and Mazie Hirono wrote to YouTube CEO Susan Wojcicki this week, expressing concern about misinformation on the platform. The senators are especially worried about the spread of misinformation ahead of Georgia's two Senate runoff races in January. CNBC
- Thrift this. Congresswoman-elect Cori Bush made headlines this month talking about her plans to source her Capitol Hill wardrobe from thrift stores. In this piece, the Missouri representative reflects on what thrift stores have meant to her—and offers her top tips for finding their best-quality items. Glamour
- Georgia watch. In a new interview, Stacey Abrams discusses the 2020 election's Democratic victories in Georgia and the decade-plus of work that led to them. Of divisions in the Democratic Party, Abrams says, "It is our burden and our benefit that we are faced with diversity," comparing the party to the GOP. New York Times
ON MY RADAR
Children of quarantine The Cut
52 years later, IBM apologizes for firing transgender woman New York Times
Almost half of NYC's public school teachers have kids at home—how are they managing the shutdown? Vogue
PARTING WORDS
"I'm a senator."
-Incoming Delaware State Sen. Sarah McBride, the highest-ranking transgender legislator in the U.S., responding to someone who asked if she was "a boy or a girl"


fortune--2020-11-25--Nancy Pelosi isn’t the only woman in House leadership anymore. Meet incoming Assistant Speaker Kathe

Nancy Pelosi isn’t the only woman in House leadership anymore. Meet incoming Assistant Speaker Katherine Clark

For years, the Democratic caucus has been led by House Speaker Nancy Pelosi—the lone woman at the top in Congress.
Next term, Pelosi will be joined by Rep. Katherine Clark, the Massachusetts congresswoman. Democrats elected Clark to the role of assistant speaker last week in a race against Rhode Island Rep. David Cicilline.
Although the role doesn’t determine who is next in line for the speakership, Clark’s ascension to the No. 4 position in the House is still notable during a two-year period that could be Pelosi’s last in the No. 1 slot; in 2018, the speaker promised some members of her party that she would serve only four more years.
Clark is only the second woman to ever serve in House leadership and will soon be the second highest-ranking woman in Congress. She succeeds Rep. Ben Ray Luján, who was elected to the Senate this month. (His departure leaves the group of four House leaders with one nonwhite member, Majority Whip Jim Clyburn.) Clark spoke to Fortune about the achievement of gender parity in House leadership and her goals for the caucus this term. This interview has been edited and condensed.
Fortune: What does it mean, from your perspective, for leadership to now be at gender parity?
Rep. Katherine Clark: This is an achievement for women. For too long, women have been left out and left behind. And it makes a difference. When we have a seat at the leadership table, the priorities shuffle. This is an important time as we see women facing such challenges from the economic fallout of this pandemic, to have another member of top leadership representing them.
When women have a seat at the table, we focus on caring for kids and older parents and on reproductive health care and maternal health, on economic issues like paid family leave, and childcare and gender pay inequality. These are the type of issues that are going to be key as we look at how we get our country back on track, not only from this pandemic and the economic devastation that women are facing, but also from the blatant misogyny of the Trump administration.
We represent 51% of our population. It’s long past time that we give up the idea that ‘one woman is enough.’ I’ve always been inspired by some trailblazing women—including Nancy Pelosi.
What do you think that House leadership should be doing to prepare for a potential transition of the speakership in two years?
What we need to do is focus on governing and let the American people know that we see them. And we’re working for them.
Those are going to be tremendously big shoes to fill when Speaker Pelosi decides to leave office. It’s going to take a team of us to be able to do what she’s done—to bring that legislative acumen, her fundraising star power, her ability to understand our caucus and lead us forward. For the moment, I am grateful that she is going to be the speaker for the next session and help us turn the focus back off the wealthy and the well-connected and back onto families—to the single moms who are trying to care for their children with schools that are closed to the women veterans who are facing food insecurity, and to all of our families who are looking at homelessness, and children who they are putting to bed hungry. That’s going to be the focus of my work as assistant speaker.
What are your legislative priorities as assistant speaker this term?
A top priority for me is childcare. I remember what it was like to realize that my entire salary was going to childcare for my three children—and the pandemic’s impact on what was already a very fragile industry has been devastating. We are not going to have an economic recovery without childcare. It’s the type of issue that resonates not only with parents of young children, and childcare providers, who are overwhelmingly women and women of color, but also with the business community. That’s the work that I’m going to be focused on helping our members be successful on.
In July, we passed in the House a $50 billion bailout package for the childcare industry. That’s what we need to stabilize. If we continue to lose childcare slots for children and see childcare centers close, we will not have an economic recovery. We know the losses are in the billions of dollars a year for loss of productivity due to lack of childcare. And we saw that 800,000 women left the workforce in the month of September—mostly because there wasn’t adequate childcare available. We need to make sure that we stabilize this industry, that we are investing in providers so that they can while they perform this essential work. We need to make sure that childcare remains affordable for low and moderate income families. We have to understand the connection that childcare has with the very basic foundation of our economy.
How are these priorities affected by the potential for a Republican-controlled Senate?
It is going to be up to the Senate, if they keep Republican control, to make a decision: that they are here to serve the American public and work with us. Not because these issues are Democratic or Republican, but because they’re issues for the American people. So far, we have not seen from Mitch McConnell in the Senate that they are willing to shift their focus to the American people. But that’s where we’re going to be. And I certainly hope that as we proceed, and Joe Biden takes takes office in January, that the Republicans in the Senate will drop their blind allegiance to President Donald Trump and return to their responsibility to governing for all Americans and addressing this pandemic.
What should House leadership do to address some of the divides between progressive and moderate Democrats that have become more apparent in the weeks following the election?
I’m a proud progressive. The reality is, we need a majority to get policies over the finish line. I know that this caucus is extremely diverse and really unparalleled in its talent. It is going to be my job to help pull on that diversity, to weave that into our agenda, to make sure that we are using all the talent of our caucus to move forward and be that engine of change. To make sure that we are committing to governing by including those who feel that they’ve been forgotten, oppressed and overlooked. We’re going to use our diversity of life experiences to inform our policies.
Besides the immediate needs of addressing the pandemic and economic relief, are there any pieces of legislation or issues that you are especially eager to get back to under a Democratic administration?
I would like to bring back our entire agenda that that we passed. For me, childcare, making sure we’re working on workplace harassment, pay equity, reducing gun violence, and addressing climate change are our top priorities as we go forward. As you look at the body of work that the Democrats in the House passed in the last session—there is the blueprint for success for our country.


fortune--2020-11-25--For AstraZeneca’s COVID vaccine, less may be more—and that’s puzzling researchers

The dose of AstraZeneca Plc’s Covid vaccine that showed the highest level of effectiveness was tested in a younger population than a bigger dose that showed less efficacy, according to the head of the U.S. Operation Warp Speed program.
The vaccine being developed with Oxford University was 90% effective when a half-dose was given before a full-dose booster, the partners said on Monday. However, that regime was administered to participants in a group whose age was capped at 55, Warp Speed’s Moncef Slaoui said Tuesday in a phone call with reporters.
Researchers have been puzzling about the AstraZeneca report since it was released, wondering why a smaller dose of the vaccine might have appeared to be more effective than a larger one. Most of the people in the trial received a placebo or the regimen of two full doses, which was 62% effective. That group included people who were older than 55, Slaoui said.
“I don’t believe that the FDA will look positively at any trial where the dose, or the age cohorts, or any other variable were changed mid-trial, inadvertently or deliberately,” said Geoffrey Porges, an SVB Leerink analyst who predicted Monday that the U.S. Food and Drug administration would not clear the vaccine.
AstraZeneca reiterated that the data will be published in a peer-reviewed journal in due course. The drugmaker’s American depositary receipts fell as much as 2.2% as of 4 p.m. in New York.
There was no age breakdown given for the two groups from AstraZeneca when the company reported its results on Monday. The initial half-dose was used in some people because of an error in the quantity of vaccine put into some vials, Slaoui said.
“There are a number of variables that we need to understand, and what has been the role of each one of them in achieving the difference in efficacy,” Slaoui said.
Older people have a weaker response than younger people to some vaccines, like flu shots. Results from a phase 2 study of the Astra-Oxford vaccine published last week in The Lancet medical journal confirmed a strong response to the vaccine in older people.


fortune--2020-11-25--Sweden sees no sign of COVID-19 immunity in population exposure, says country’s top epidemiologist

There’s little evidence that herd immunity is helping Sweden combat the coronavirus, according to the country’s top epidemiologist.
“The issue of herd immunity is difficult,” Anders Tegnell said at a briefing in Stockholm on Tuesday. “We see no signs of immunity in the population that are slowing down the infection right now.”
Swedes have been more exposed to the virus than their neighbors elsewhere in the Nordic region, and every third Stockholmer tested has antibodies, according to figures published this week. That’s after the country famously opted against a lockdown, relying instead on voluntary measures.
Tegnell has in the past said that herd immunity is hard to measure and even questioned official figures. Swedish authorities have made clear that immunity isn’t a policy goal, but the nation’s exposure to the virus makes it an obvious test case for observing the theory.
OECD Study
In a recent OECD study, Sweden consistently ranked among the hardest hit nations in Europe, as measured by relative Covid mortality and infection rates. It was also the slowest at containing transmission.
Sweden was recently forced to recalibrate its approach against the virus, as the daily case rate topped 7,000. In what Prime Minister Stefan Lofven called an “unprecedented” step earlier this month, Swedes will no longer be free to gather in public in groups larger than eight. The sale of alcohol is now also banned after 10 p.m.
Lofven used a rare televised address on Sunday to plead with his countrymen to do more. “The health and lives of people are still in danger, and the danger is increasing,” he said.
Vaccine
The new restrictions come amid warnings that Sweden’s intensive care beds are quickly filling up. Meanwhile, authorities in the country are warning against placing too much weight on a possible future vaccine.
“We are still seeing an increase in patients who need care and intensive care,” Thomas Linden, a departmental head at Sweden’s National Board of Health and Welfare, said at Tuesday’s briefing. “One must not take the fact that there is a vaccine a few months away as an indication to be careless with measures.”
“In a third wave, the health-care system will be even more strained than it has been so far,” he said.


fortune--2020-11-25--Europe—and Big Tech—will give Biden a headache from Day One

This is the web version of CEO Daily. To get it delivered to your inbox, sign up here.
Good morning. David Meyer here in Berlin, filling in for Alan.
When it comes to trade relations with Europe, President-elect Joe Biden is going to have a tricky start to his term. And while that’s partly down to the generally fractious transatlantic relationship cultivated by his predecessor, the biggest reason is Big Tech.
According to the Financial Times, France has ended its uneasy truce with the Trump administration over the issue of its so-called digital services tax. The paper reports that French tax authorities have been in touch with the likes of Facebook and Amazon, demanding that they pay the tax—designed to ensure French sales generate French tax revenues—for this year.
It’s now likely that the U.S. will respond with tariffs on things like French cheese and handbags, as threatened by U.S. Trade Representative Robert Lighthizer earlier this year.
A multilateralist Biden administration will be well-placed to clean up this mess. The Franco-American truce only existed because the countries agreed to let global digital-tax talks play out, but the U.S. pulled out of those OECD negotiations in June, citing coronavirus distractions. France claims it’s only going it alone until the OECD members (or the EU) come up with common rules. In theory, the Biden administration could make a global deal a reality.
But that’s no certainty. After all, the tech giants targeted by the tax are mostly American, and a global agreement could leave the U.S. worse off—though on the other hand, as the OECD warned recently, failing to strike that deal could trigger a trade war that lops a point off global GDP.
Tough choices lie ahead for Biden and his team. Meanwhile, Europe will continue developing its own approach to digital regulation.
On that note, the European Commission just proposed a new law that would “offer an alternative European model to data handling [practices] of major tech platforms.” It promises companies that, if they choose to share commercially-sensitive or personal data with other firms, they will be able to do so through neutral intermediaries that keep the information “trusted and protected.”
There’s a lot that might be achieved with this approach—particularly when it comes to the green transition and the development of personalized medicine—but it’s also an explicit challenge to U.S. tech giants whose value is largely bound up in their data hoards.
So stay tuned to both these sagas, because they’re about to get interesting. News below. And for those of you in the U.S., enjoy your Thanksgiving weekend—CEO Daily will return Monday.
David Meyer
@superglaze
david.meyer@fortune.com
TOP NEWS
Dow milestone
The Dow yesterday closed above 30,000 for the first time, up more than 60% from the depths of March. The rally is being fueled by COVID-19 vaccine optimism, the fact that the Trump-to-Biden transition seems set to run smoothly-ish, and Biden's reported selection of Janet Yellen as Treasury secretary. Some bearish investors don't think it will last, as the pandemic is still rolling on forcefully. Fortune
GE cuts
Vaccine or no vaccine, General Electric sees its aviation unit shrinking over the next 18 months. The company warned staffers that more job cuts are coming, due to the pandemic's impact on commercial air travel. A quarter of the division's workers have already been axed. Wall Street Journal
London blues
The EU's securities watchdog, ESMA, will from the start of 2021 force banks in the bloc to use platforms within the EU (or within non-EU countries that have permission, such as the U.S.) to trade derivatives. That means EU banks' branches in the U.K., which will have fully Brexited at that point, will face conflicting EU and British requirements about where to trade derivatives. Reuters
Tesla hatchback
Europeans like hatchbacks, so Tesla may make one to add to its stable of sedans and SUVs. “Possibly in Europe it would make sense to do, I guess, a compact car, perhaps a hatchback or something like that," CEO Elon Musk told a battery conference, adding that he had recently had trouble parking his Model X in Berlin. "In the U.S., the cars tend to be bigger for personal taste reasons. In Europe, [they] tend to be smaller." CNBC
AROUND THE WATER COOLER
Dosing error
The weird thing about AstraZeneca's candidate coronavirus vaccine is that its higher efficacy rate (90%) occurs when the first shot is just a half-dose. Turns out the half-dosing of trial volunteers was an accident, though a lucky one. However, it also turns out that the group receiving that dose was younger, with an age cap of 55. So, questions remain. Reuters
Bankruptcies loom
Fortune's Geoff Colvin writes about the imminent wave of COVID-related bankruptcies, which will disproportionately strike small firms: "It’s bad for the whole economy, because the surge of financial pain may overwhelm the bankruptcy system. As a result, the process could become chaotic, with viable businesses killed and doomed ones kept artificially alive. A major part of the problem: There are not enough bankruptcy judges." Fortune
UV sanitization
We should be sanitizing the air around us with ultraviolet light, writes James Guyette, the COO of UV-sanitization-device-maker Healthe, in a piece for Fortune. Guyette claims Healthe's Far-UVC 222 technology is safe for humans and could help limit exposure to the SARS-CoV-2 coronavirus. Fortune
King Donald
Jeffrey Sonnenfeld, the Yale luminary and regular Trump sparring partner, writes for Fortune that the president falls into the "monarch" category of departing leaders, which is to say he believes in the myths he manufactured about himself and will not leave gracefully. Fortune
This edition of CEO Daily was edited by David Meyer.


fortune--2020-11-25--JD Health IPO could raise up to $4 billion in one of the year’s biggest listings

Our mission to make business better is fueled by readers like you. To enjoy unlimited access to our journalism, subscribe today.
Chinese healthcare firm JD Health will reportedly raise as much as $4 billion in its upcoming Hong Kong initial public offering, making it one of the biggest IPOs of 2020.
JD Health, a subsidiary of Chinese e-commerce giant JD.com, will raise as much as $3.5 billion in the listing and could raise an additional $500 million in a green shoe option, a provision that grants the underwriter the right to sell investors more shares than initially planned by the issuer if demand proves higher than expected, the Financial Times reported on Wednesday. The listing would value the company at an estimated $28.5 billion.
The estimated numbers for JD Health’s debut, which is slated for Dec. 8, would make it one of the biggest listings in Hong Kong this year and the first big Chinese technology listing since the last-minute suspension of Chinese fintech firm Ant Group’s blockbuster IPO in Hong Kong and Shanghai.
Subscribe to Eastworld for weekly insight on what’s dominating business in Asia, delivered free to your inbox.
JD Health provides online healthcare services for customers in China, including online health consultations with doctors and an online pharmacy offering products to both wholesale and retail customers. The company made $1.3 billion in revenue in the first half of 2020, representing a 76% year-on-year revenue increase.
Starting in late January, at the start of the coronavirus outbreak in China, JD Health made online health consultations free for its users. Between January and May, JD Health’s online consultation platform recorded an average of over 120,000 daily consultations, compared to around 60,000 before the pandemic.
JD Health had 72.5 million annual active users as of June 30. Its pharmacy arm holds a dominant 30% market share in China’s online retail pharmacy market, according to the firm’s filing prospectus. JD Health’s IPO will be Asia’s biggest healthcare IPO ever, beating Japanese pharmaceutical firm Otsuka Holdings’ $2.3 billion 2010 IPO, according to Bloomberg.
The company’s rivals include Tencent-backed Wedoctor, Hong Kong-listed Pingan Good Doctor, and Ali Health, the healthcare affiliate of e-commerce giant and JD.com competitor Alibaba Group.
JD Health’s IPO will place it among the biggest IPOs in Hong Kong this year, a bracket that includes parent company JD.com, which holds an 81% stake in JD Health. In June, JD.com raised $4.4. billion in a secondary listing in Hong Kong.
Nasdaq-listed JD.com is one of several U.S.-listed Chinese firms to pursue secondary offerings closer to home to raise more capital and offset potential regulatory risks facing Chinese companies listed on U.S. exchanges. That trend has resulted in a windfall for Hong Kong’s exchange, with secondary IPOs from Chinese firms like JD, gaming company NetEase, and restaurant giant Yum China.


fortune--2020-11-25--The Dow’s record run to 30K is nothing compared to the rally in these small caps

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.
Buongiorno, Bull Sheeters. After yesterday’s record-breaking close, investors are pulling back slightly. Stocks in Europe and Asia have been retreating much of the morning, as have U.S. futures.
But that’s not to take anything away from this November-to-remember. The push into value stocks has propelled the Dow and Russell 2000 to all-time highs, with volumes that suggest the rally has plenty of legs. Bitcoin too is on the brink of hitting its own milestone: $20K.
Let’s check in on the action.
Markets update
Asia
The major Asia indexes are mixed in afternoon trading with Japan’s Nikkei the best of the bunch, up 0.45% .
are mixed in afternoon trading with the best of the bunch, up . Shares in HSBC soared as much as 8% in Hong Kong on Wednesday after it landed a “buy” rating from Goldman Sachs on speculation it will resume paying dividends, another sign its turnaround strategy is progressing.
in on Wednesday after it landed a “buy” rating from Goldman Sachs on speculation it will resume paying dividends, another sign its turnaround strategy is progressing. JD Health International, a unit of the Chinese e-commerce giant JD.com, is looking to raise $3.5 billion in an IPO, the biggest listing ever for a Chinese health care firm.
Europe
The European bourses were up modestly, with the Europe Stoxx 600 0.2% higher at the open, before dropping in the red.
were up modestly, with the higher at the open, before dropping in the red. Shares in Boeing closed 3.3% higher on Tuesday after the EU Aviation Safety Agency—the FAA of Europe—signaled it too is close to giving the green light to the long-grounded 737 Max .
on Tuesday after the EU Aviation Safety Agency—the FAA of Europe—signaled it too is close to giving the green light to the long-grounded . Things still look grim for the commercial airlines sector, however. Trade group IATA yesterday revised down its 2020-21 forecast, saying the world’s carriers will lose $157 billion this year and next.
U.S.
U.S. futures are off their highs this morning. On Tuesday, the three major indexes finished in the green with the Dow Jones Industrial Average securing a historic all-time high.
are off their highs this morning. On Tuesday, the finished in the green with the securing a historic all-time high. As good as the Dow’s performance has been of late, it’s nothing compared to the bull run in small caps . The Russell 2000 closed up 1.9% yesterday, extending its amazing November.
. The closed up yesterday, extending its amazing November. FX traders are cheering the prospect of Janet Yellen as the next U.S. Treasury secretary. She’s widely seen as a steady hand for global trade, and for the currencies market. Still, don’t bet on the greenback in 2021.
Elsewhere
Gold is flat, trading just above $1,800/ounce .
is flat, trading just above . The dollar is up a tick.
is up a tick. Crude continues to gain ground with Brent trading above $48/barrel , its highest price since March.
continues to gain ground with trading above , its highest price since March. Bitcoin topped $19,300 at one point yesterday, before slipping. It’s up more than 40% in November alone.
***
By the numbers
Note: Bull Sheet will be off tomorrow and Friday for the Thanksgiving break. As such, I’m doing a special Wednesday edition of “By the numbers.” Here goes:
30,046.24
In the very first Bull Sheet newsletter, back in January, I noted how we were on the cusp of Dow 30K. You may recall that I asked for your predictions on when we’d hit that milestone, and many of you figured it was mere days away. And then COVID crashed into those plans, and you know the rest of the story… Well, we finally made it yesterday. (I need to go through my emails to see whose Dow 30K guess came closest; I’ll report back on that in an upcoming Bull Sheet.) Here are a few amazing data points behind this achievement. The blue chip index is up 62% since its March low, and it’s on track to record its best month since 1987. And volume has been brisk, with 26 billion shares trading hands over the past two days. Perhaps that’s understandable when nobody’s traveling. Looking back, we first hit Dow 20,000 just three years ago, in 2017. And Dow 10K? That happened in 1999. It took 19 years to go from 10,000 to 20,000, and just under four years to go from 20,000 to 30,000. So, who has a guess for Dow 40K?
862.37
If, at the close of trade on March 18, you had put 10,000 bucks into a small cap ETF tied to the Russell 2000, you’d be looking at a return (minus dividends) of $18,700 this morning. (I know. Eighteen grand is tipping money for Bull Sheeters.) Yes, the Russell 2000 is having a bull run for the ages, up 87% since its March nadir. It’s up 20% this month alone as investors pile into value stocks, anticipating a vaccine-spurred recovery in the months ahead. The Russell 2000 gets somewhat overlooked, and that’s a mistake. It often presages big moves in the wider markets, including corrections and bull market rallies.
40
You know who’s having a better month than small cap investors? No, not Team Biden. But good guess…Answer: Bitcoin bulls. The crypto currency is up 40% in November alone—or it was when it hit $19,359.48 overnight. The rush into crypto is giving traders a flashback to November 2017. A reminder: that bubble popped a few months later. You know what else is on the rise? The volume of press releases I’m getting from Bitcoin PRs who all say the same thing: this time it will be different. I wish I got a Bitcoin for every time I’ve heard that one over the years.
***
Postscript
My first Thanksgiving in Italy was a snowy, smallish affair in Amandola 15 years ago. A week prior, I had called Mario, the local butcher, to check in about getting a turkey, an order that he found both baffling and troubling.
He could get one, no problem. What confounded him was that we’d chosen to celebrate such a special occasion with, of all dishes, turkey. Italians regard il tacchino (the turkey) as, well, a turkey. (They also think corn is little more than animal feed, fit only for pigs and other barnyard creatures.)
Mario tried to convince me that a veal roast would be more of a crowd-pleaser. When I pushed back, he suggested lamb. Nope. Cinghiale (wild boar)? No, the tradition is turkey, I emphasized.
He backed down, and I figured the matter was closed. That is until I got to town to pick up the bird and run some errands. Word had traveled around Amandola that the americano was here to celebrate Thanksgiving. The green grocer, Piera at the bank, the exhausted husband and wife duo that run the forno (bakery), all wished me a “Buon ringraziamento,” and then asked me some version of the same question: are you really going to be serving turkey?
The Italians who broke bread with us on that first Amandola Thanksgiving dinner had a lovely time, but each had suggestions for all future Thanksgiving meals—starting with the menu. As a super power, my wife explained, you really outght to find a more fitting beast to pop in the oven, and serve to friends and family.
And that’s when I embarked on my mission to prove the whole country wrong—that roast turkey ain’t no turkey, so to speak.
My wife and I started by poring through old Italian recipe books, and taking notes. (In one pre-war cook book I found in my mother-in-law’s kitchen, the turkey recipes came just ahead of the turtle soup recipes.) My wife, I should say, is a phenomenally creative cook who has a knack for reverse engineering recipes from a single bite of food. She too had some ideas about how to boost our bird. We combined all this data into a single recipe and then experimented in the kitchen.
In the end, we hit upon the key ingredients for a terrific turkey. They are: chestnuts, cognac and pig. The trinity, if you will. Here’s the recipe, if you’re interested. Another tip we learned from our Roman butcher, Federico: insist on a female bird. The males don’t cut it. You can taste the difference, he assured. I think he’s right.
So, what do the Italians think of our tacchino alla romana?
To say they’re crazy for it is a bit of an understatement. Thanksgiving meals at casa Warner have become grand affairs in recent years. We’ve had several dozen Italians—my kids’ classmates, friends, neighbors; someone even brought a monkey one year (it was not the worst-behaved primate that afternoon)—cram into our apartment on a late November Saturday afternoon to celebrate. Somebody always shows up with an uninvited guest, saying something to the effect: I had to bring her. She just doesn’t believe turkey can be this good.
Alas, this year our Thanksgiving will be a modest affair. Local lockdown measures mean we can’t invite over quite so many people. But I have all the ingredients—starting with the chestnuts, cognac, and plenty of pancetta.
Happy Thanksgiving, everyone! Buon Ringraziamento!
***
For those of you who are off, have a nice long weekend, everyone. Bull Sheet will be back on Monday. My colleague Rey Mashayekhi will take the keys. I’m off for a week’s break.
As always, there’s more news below.
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
The Dow, today and now. The blue chip index, as we know it today, dates back to the 19th century. It started with a mere 12 stocks, all big industrials. Names like American Sugar, U.S. Steel and American Tobacco were the big names in the early years. The Wall Street Journal has published a wonderful illustrative history of the Dow Jones Industrial Average, and how we got from triple digits to 30K.
The social butterfly effect. This one is not markets related, but it's as timely as ever. MIT researchers have found that a prolonged lack of human contact triggers the same kind of neurological effect as food deprivation. As my colleague Katherine Dunn points out, no, you're not going crazy if you find the thought of locking down and staying away from friends and family fills you with dread. For most of us, our minds and our bodies just aren't built for that kind of separation.
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
Quote of the day
Policy should focus on smaller firms.
That's the advice three researchers—Robin Greenwood of the Harvard Business School, Benjamin Iverson of Brigham Young University’s Marriott School of Business, and David Thesmar of the MIT Sloan School of Management—have for the incoming Biden Administration as America's Main Street braces for a wave of small-business bankruptcies in 2021. As Fortune's Geoff Colvin explains, if there's a crush of business failures in the year ahead, as is largely expected, the repercussions will be felt across the country.


fortune--2020-11-25--China’s Xiaomi becomes Western Europe’s third-largest smartphone seller

On Tuesday Chinese smartphone maker Xiaomi reported it earned 55% of its third quarter revenues from markets outside of China, marking the first time in the company’s ten-year history that contributions from the brand’s overseas business surpassed domestic ones.
“Excluding India, where we have been the number one smartphone brand for 13 consecutive quarters, our overseas smartphone shipments almost doubled on a year-over-year basis,” Xiaomi chief financial officer Alain Lam said during an investor call Tuesday. The smartphone maker reported $10.97 billion in revenue for the third quarter, logging a 34.5% increase over last year.
Western Europe, where Xiaomi sales soared 107% over the previous year, contributed significantly to revenue growth. According to the company, Xiaomi is now the third best-selling brand in the region, occupying 13.3% of the market.
Xiaomi says it is the second-most popular brand in Italy, third in France, fourth in Germany, and has been Spain’s preferred smartphone brand for three quarters.
Xiaomi’s growth in Europe, and overall throughout the third quarter, came at the expense of its rival and compatriot, Huawei Technologies, which was hit with trade embargos by the Trump administration.
Washington views Huawei as a national security threat fearing the Shenzhen-based telecom maker’s equipment could be tapped by Beijing’s spies. The White House has tried to curtail Huawei’s business by forbidding companies from selling U.S. technology—such as semiconductors—to the firm.
“Xiaomi will be a strong beneficiary if the U.S. keeps up the pressure on Huawei, and what we’ve seen in the last quarter would indicate that’s the case,” says Dan Baker, a senior equity analyst at Morningstar Research.
According to market tracker Canalys, Huawei’s global smartphone shipments declined by 15.1 million units in the third quarter while Xiaomi’s rose by 14.5 million, suggesting an equilibrium between the two. In Europe—Huawei’s biggest overseas market—Huawei shipments dipped 25% while Xiaomi’s rose 88%.
Xiaomi, once derided as an iPhone imitator, now sits as the third-largest smartphone maker in the world, pushing Apple into fourth place for third quarter shipments. Whether Xiaomi can stay there depends on several factors—not least of them the later-than usual release of the iPhone 12, which should drive Apple’s fourth quarter shipments.
Washington also has permitted U.S. chipmaker Qualcomm to provide Huawei with low-spec chipsets, which could help ease the pressure on Huawei’s component supplies. Meanwhile, according to the South China Morning Post, Xiaomi president Wang Xiang warned the company faces a “serious supply shortage” in its fourth quarter.
The shortage could be due to the pandemic forcing factories to close in India, which is Xiaomi’s largest market by unit shipments. Sales in the subcontinent, where Xiaomi has been the number one smartphone brand for thirteen quarters, bolstered Xiaomi’s previous position as the world’s fourth largest smartphone company.


fortune--2020-11-25--EU watchdog warns of risks after BlackRock appointed as ESG advisor

The European Commission failed to fully consider conflicts of interest when it appointed BlackRock Inc. to advise on new sustainable-finance rules for banks, according to a ruling by the European Union’s watchdog.
The EU’s executive body “did not provide sufficient guarantees to exclude any legitimate doubt” of potential conflicts of interest when it hired the world’s largest asset-management firm, according to the Wednesday ruling by EU ombudsman Emily O’Reilly. The decision has no legal power to force the Commission to cancel the mandate, but may pressure the body to do so.
The decision is a small win for environmentalists, who have long targeted BlackRock because of its outsized holdings of the world’s biggest fossil fuel companies — it’s among the largest investors in Exxon Mobil Corp., Royal Dutch Shell Plc and BP Plc — and its perceived reticence in taking them to task on their climate impact. Protesters have trailed CEO Larry Fink to work and have held demonstrations outside the firm’s offices.
In March, the Commission awarded BlackRock’s Financial Markets Advisory arm a mandate to help incorporate environmental, social and governance factors into European banking rules. The decision prompted a formal complaint from several European Parliament politicians and the Change Finance coalition, who argued that the firm’s fossil-fuel and banking investments presented conflicts of interest.
“It was questionable for the Commission to conclude that there were no legal grounds to exclude BlackRock Investment Management from the procurement procedure,” O’Reilly wrote in her report. She recommended the Commission provide its staff with clearer guidelines on potential conflicts of interest for policy-related procurement and should consider strengthening financial regulation provisions on the issue.
BlackRock’s FMA unit has “taken a wide-ranging and inclusive approach, including academia, civil society, banks, supervisors and market practitioners, and looks forward to completing its work and delivering its final report to the Commission,” Ryan O’Keeffe, a spokesman for the company, said before the ombudsman’s decision was published. The Commission declined to comment ahead of O’Reilly’s report.
The complaint that led to the ruling highlighted BlackRock’s bid for the contract. The firm offered to charge 280,000 euros ($332,000), around half of the contract’s initial estimated value. O’Reilly said the Commission failed to fully examine why the offer was so low. BlackRock “may have sought to win this contract because it gave it an opportunity to influence and gain understanding, from the inside, of the Commission’s policy-making in areas that affect its interests,” she wrote.
BlackRock’s segregation of its advisory arm from its investing unit was not enough to prevent staff from being “influenced by the general strategic interests of the company,” O’Reilly wrote, while noting that the Commission systemically faced conflict-of-interest issues when engaging the private sector in policy discussions.
BlackRock has taken steps to address criticism of its environmental impact. Fink said in January that the firm would make sustainability integral to its business and strengthen its commitment to transparency in its investment stewardship activities, including shareholder votes.
But with a majority of its roughly $8 trillion of assets in products that are linked to indexes, BlackRock has amassed large holdings of companies that may not pass the muster of some ESG investors. Where that is the case it is down to the company’s stewardship team to prod companies to change, though without the ultimate threat of divestment.
So far in 2020, BlackRock has consistently voted against the reelection of board members at firms it deems to be making insufficient progress on disclosing climate risks, though it has withheld support from some seemingly bolder resolutions.
“By choosing BlackRock, the Commission basically handed Big Finance the steering wheel for the implementation phase of its action plan on sustainable finance,” said Kenneth Haar, a researcher and campaigner at Corporate European Observatory, a member of Change Finance. “Asking BlackRock to suggest the best rules for sustainable finance is like asking a nuclear power company for advice on a nuclear phase-out.”


fortune--2020-11-24--What Blizzard learned by making a hit video game from home

Our mission to make business better is fueled by readers like you. To enjoy unlimited access to our journalism, subscribe today.
In early March, a data-savvy employee at the game studio Blizzard Entertainment started taking a hard look at rising number of U.S. COVID-19 cases, which then numbered in the low hundreds.
“We were able to do some math and say, looking at the China and Italy data, this is going to affect us very dramatically,” says J. Allen Brack, Blizzard’s president.
Within days, Blizzard, a unit of gaming giant Activision-Blizzard, asked groups of its designers, programmers, and other staff to work from home temporarily. They thought of it as a test, meant to refine the organization and infrastructure needed to keep creating video games, just in case things got really bad.
And of course, things got really bad.
“It was pretty damned fast,” says Blizzard executive John Hight. “We ran the test on Thursday [March 12]. A lot of people wound up staying home on Friday. By Monday, we’d made the decision, everyone’s going home, that’s it.”
It was a particularly serious decision for Hight. He’s executive producer for World of Warcraft, an online game with an estimated 4.8 million players, whose monthly subscription fees have helped make Warcraft one of the highest grossing game franchises in history.
WoW, as it’s often known, gets a major update every two years or so, adding new story and gameplay elements. And the latest World of Warcraft expansion, Shadowlands, was in the middle of development when COVID and the lockdowns hit.
The disruption would ultimately create a nightmare for Hight and his team of hundreds of programmers, artists, and writers. After first announcing the game would be released on October 27, Blizzard was forced delay the date to November 23.
But the difficult decision to delay Shadowlands, and the hurdles that Blizzard cleared along the way, came with invaluable lessons. Here are the most important takeaways Brack and Hight shared with Fortune.
The global advantage
Before it was clear what was coming to the U.S., Blizzard’s global reach gave it an even earlier warning.
“We have several offices in Asia, and an office in China,” says Brack. “So we were able to see, from our own employees, what was happening in China starting in February. And we saw the China response, which was to send everybody home.”
That, says Brack, gave company leaders a game plan when cases started showing up in the U.S. “We were able to prepare a little bit ahead of, I think, most companies.”
Office space is the place
“First, Mea culpa. This was my screwup,” says Hight of the Shadowlands delay, which inevitably disappointed fans.
But of course, much larger forces were really to blame. In particular, working from home made it more difficult to do the kind of refining needed to make a game – or any product – truly great. That didn’t become obvious until the original October 27 release date got closer.
“Functionally, everything was done” by early fall, says Hight. “But there were things that were confusing, the bug count was still kind of high … That polishing and tuning was something that we hadn’t done enough of before we made the decision to announce the [October] date.”
Getting those last few details right, Hight says, would have been a lot easier with the whole team in one place.
“Especially on the design side of the game, we [normally] work in a fairly open space. The combat designers sit together, the level designers sit together. There’s a sharing of ideas. When you’re in a room together, it’s very natural to have that communication … If we were all in a room together and playing, we could have said, ‘Hey, I don’t really get this.’”
Nerds (with high-end home PCs) rule
Blizzard had an edge when it came to the technical infrastructure of working from home. After years of collaboration between teams worldwide, infrastructure for remote access to things like email and the corporate intranet was basically ready to go. So were tools to share the huge video and texture files that make up modern games.
And getting designers and testers the hardware they needed wasn’t much of a problem either: “As a company of gamers,” says Brack, “There’s a lot of high-end hardware that our employees have at home already.”
Quiet staffers aren’t necessarily happy staffers
Running a company full of gamers does have its downsides.
“A lot of folks are super creative, says Hight of his team, “but they’re also kind of introverted.”
That became a bigger issue with the transition to working from home. “In the world where we’re all talking through webcams, in our own space, it’s natural for humans to kind of hole up.” Some team members, Hight says, felt “reluctant to ring somebody up and interrupt their home life to ask a question or share an idea. It took us a while to overcome that.”
Blizzard’s managers had to do more than usual to keep those channels open.
“You just check in on people,” says Hight. “Hey, how are you doing? How’s the family? They don’t necessarily think to get out and push themselves on others, but that also doesn’t mean they want to be neglected.”
The mission is the answer
World of Warcraft is meant to be enjoyed together, with players from around the world forming groups to delve into dungeons and take down fearsome enemies. That social element helps make it an ideal form of pandemic entertainment.
“That helped us,” says Hight, “Knowing that we were doing something that was super important to people who needed entertainment during this time, needed some connection to the outside world.”
“Every day, the news was getting more dire. Answers weren’t really there … Having purpose during all of this, I think, allowed us to carry on.”


fortune--2020-11-24--Secluded and deluded: Trump’s post-election actions show a mad-monarch mindset

Our mission to make business better is fueled by readers like you. To enjoy unlimited access to our journalism, subscribe today.
With the president hidden from public contact in the three weeks since he decisively lost reelection, President Trump’s public calendar has been blank. The emptiness implies that his days have been filled with brooding, TV, and golfing, all while refusing to concede defeat. He has continued to minimize the soaring pandemic, whose U.S. death toll has reached 260,000—lately claiming a 9/11-sized number of victims every two days. In Trump’s behavior, there appears an extension of his lifelong worship of Norman Vincent Peale’s theology of success through denial of failures.
A chorus of GOP leaders have begun joining Democrats outraged over the President’s absence from key duties and his denial of the election realities. But Trump’s conduct, along with his vindictive housecleaning of national security officials who countered him, is consistent with the tyrannical tantrums of other would-be monarchs. Many have drawn the parallel to Emperor Nero supposedly fiddling as Rome burned.
To me, it’s familiar behavior. As far as I know, I have known President Trump longer than anyone who has served on his cabinet and longer than any of his non-family advisors. As one of the first published critics of Trump’s TV series The Apprentice sixteen years ago, I wrote a Wall Street Journal column entitled “The Last Emperor.” This review particularly infuriated Trump as it revealed his simplistic modus operandi, which his allies and adversaries are still deciphering. I labelled Trump akin to a Roman emperor, relishing the fight he instigated among his gladiators as distractions.
Such divide-and-conquer tactics elevated the drama around him, while insulating Trump with an artificial imperial aura that freed him from the burden of adding substantive value himself. After Trump criticized my review, I warned in a follow-up 2004 Wall Street Journal letter that if he were ever elected President of the United States, Trump would be tempted to fire the FBI and CIA directors for being truth-tellers.
A decade later, when he considered running for President, Trump consulted with me, and I advised him that I thought his support would plateau at 15%. He replied that Melania assured him he would win. He continued checking with me throughout the early days of his campaign, dismissive of my concerns about the racial overtones of his message in the primaries. Trump insisted the controversy ensured free media coverage while recruiting new voters. He felt no “John McCain Moment” obligation to condemn racist statements made by others at his rallies, claiming he had no duty if he did not voice them.
Countering his 2015 Republican rivals who scoffed at his primary campaign, I published some of the first articles suggesting people take Trump’s candidacy seriously, as he had touched nerves in the American psyche. In exclusive Fortune interviews, I pointed out how the Republican Party’s “dump Trump” strategy would fail and how he would represent himself as a business titan, even though no top business leaders knew him personally nor respected him professionally.
Trump won, as well all know. Top business leaders who had walked out on him earlier rallied behind him post-election, viewing him as a useful instrument for regulatory rollbacks and tax relief. Reciprocally, Trump coveted their elusive acceptance, showcasing them at ceremonial meetings of his CEO advisory councils. At the same time, he also knew they resented him. So he reverted to his divide-and-conquer methods from his earlier career—setting up competitions of Ford vs. General Motors; Boeing vs. Lockheed Martin; Pfizer vs. Merck, et cetera. In the same vein, he would set up Republican legislators to fight with Democrats as well as each other, inflame battles among his own advisors, and even attempt to position France against Germany, Mexico against Canada, and Russia against China.
These diversionary tactics defined his ruthless climb and his brutal imperial rein, but they do not smooth his exit. In my study of leaders in late career, entitled The Hero’s Farewell, I examine the departure styles of top leaders across sectors who see themselves as indispensable to the world no matter how truly noble or wicked they were in reality. One type, the Monarch, either dies in office or is removed through a palace revolt–but always makes a feet-first exit. Fearing prospective strong successors, Monarchs surrounded themselves with weak sycophants in what psychoanalysts call a folie a deux, or a shared delusion.
These leaders come to believe in the myths they manufacture about themselves. No one called Alexander III of Macedonia “Alexander the Great” until he created the label himself, inventing a mythic lineage to Odysseus and Achilles. Their transcendent mythic identities and quixotic quests for immortality create elusive goals for these perpeturally grasping monarchs.
Immediately post-election 2016, then-President-elect Trump revealed that his two favorite films are Citizen Kane and Sunset Boulevard. Both films depict the late career collapse of mercurial, exploitive, extreme narcissists who retreat into the isolation of their grotesquely excessive palaces. The demagogic media baron Charles Foster Kane was furious over his lost public support. Fallen silent screen star Norma Desmond was furious over her lost audience appeal.
Through their angry, self-destructive impulses, both characters were the architects of their own misfortunes. Feeling trapped and cheated, they never conceded to their fates, retreating to delusion in seclusion. Kane barked at his enablers about the loss of public trust, telling them that people will think “what I tell them to think.” Norma Desmond shouted defiantly, “Oh, those idiot producers. Those imbeciles! Haven’t they got any eyes? Have they forgotten what a star looks like? I’ll show them. I’ll be up there again! So help me!”
There was no graceful retirement for Ferdinand Marcos, the Shah of Iran, Saddam Hussein, Attila the Hun, Genghis Khan, or Julius Caesar. Stripped of their regalia, emperors are defiant until the end—attempting to instigate infighting and undermine the legitimacy of their successors. As The Apprentice morphs into The Biggest Loser, prepare for the sequel series: daily rants on TrumpTV.
Jeffrey Sonnenfeld is senior associate dean and Lester Crown Professor of Management Practice at the Yale School of Management. He is the author of The Hero’s Farewell (Oxford University Press). You can follow him at Twitter @JeffSonnenfeld.


fortune--2020-11-24--It’s not too late: 5 ways to dramatically lower your COVID Thanksgiving risk

With Thanksgiving fast approaching, millions of Americans are facing the same dilemma: Is it worth having Thanksgiving gatherings during the time of COVID?
Public health officials are banding together with a definitive answer: No, especially if it requires travel. The Centers for Disease Control (CDC) has issued extensive guidance to that effect. There are more than 12.3 million COVID cases in the U.S., according to Johns Hopkins, and more than 257,000 deaths to date.
A pandemic which has lasted the better part of a year has, naturally, taken a toll on our collective mental health, so the impetus to gather with friends and loved ones is understandable this holiday season. But understandable isn’t the same thing as prudent. Here’s what experts say are the best ways to stay safe from COVID this Thanksgiving.
It’s not too late to change your plans
The stark reality is that it’s a bad idea to have a Thanksgiving gathering at all this year. With a microscopic pathogen, it’s easy to think you won’t be the one to get sick until you do.
Official CDC Thanksgiving guidance highly discourages traveling. But that’s just guidance, not an enforceable rule. And millions of Americans aren’t heeding the advice.
More than 3 million people passed through American airports over this past weekend alone, according to the Travel Security Administration (TSA). Millions more are expected to travel in the coming days. And that presents a domino of logistical problems.
For one thing, if just 1% of expected travelers this holiday season contract coronavirus, they may spread it to more than 500,000 other people over the course of the next two to three weeks given its infectiousness and incubation period.
That’s something to consider if you made plans in late summer when the virus was more under control but are getting cold feet now. It’s not too late to cancel and it might be the smartest move.
Don’t rely on testing
A pandemic is a series of lagging indicators which must all be considered to paint the full picture. We know that you can be an asymptomatic or barely-symptomatic COVID patient and still spread it to others.
So taking a COVID test before trekking to an indoor Thanksgiving feast, given it can take as long as two weeks to present symptoms after an initial infection, isn’t necessarily all that helpful because the earliest stages of infection come with the lowest “viral load” of coronavirus which may not be detected.
Then comes the next domino. Surging cases, as we’ve seen in the past month, lead to surging hospitalizations which limit hospital capacity. Surging hospitalizations lead to surging deaths. But those numbers take two to three weeks to fully manifest the pandemic’s overall impact.
The CDC’s guidance is clear: If you must have an indoor gathering for Thanksgiving, wear masks, wash your hands, distance as much as possible, and limit your party to people in your immediate household. Resist hugging, kissing, or shaking hands with other guests. And, most of all, avoid extended travel if at all possible.
Go outside
It’s unrealistic to think millions won’t still throw caution to the wind and travel for Thanksgiving given the numbers we’ve already seen. But if it’s absolutely unavoidable, public health officials have tiered advice on how to stay safe.
Again, avoiding crowded travel is a must, as well as the safety precautions experts have pushed since the first days of the pandemic such as wearing a mask and distancing. If you have to travel, the officials recommend driving rather than flying since it’s easier to avoid the masses.
Should a Thanksgiving gathering have guests outside of one’s own household, the CDC says you should strongly consider having outdoor, rather than indoor, gatherings and try to maintain mask-wearing and social distancing as much as possible. Indoor gatherings should likely be kept to fewer than 10 people total.
The overarching advice from frustrated health workers and experts dealing with this latest surge of cases is uniform: Use common sense and resist the urge to have anything approaching large indoor gatherings for the good of public health. And if the wine begins to flow and the masks start to slip off, try to limit the total duration of the gathering.
Cull the guest list
No matter how strong your desire to congregate, there are certain people who shouldn’t be traveling or gathering with people outside their households no matter the circumstance.
The highest-risk populations for COVID include the elderly, those with lung or heart problems such as hypertension, Americans with diabetes, and other underlying chronic conditions.
In the first months of the pandemic, thousands of people reported the devastating reality that they couldn’t visit their own sick, elderly loved ones at nursing homes or hospitals. Urging such high-risk people to stay home and safe this Thanksgiving is the most surefire way to prevent that reality from becoming even more entrenched.
Try to lower your own stress levels
As dire as the public health situation is, it’s still important to take care of our own mental health. Humans are social animals and crave camaraderie.
There are ways to balance those needs and the risks. Americans are likely sick of Zoom meetings at this point, but they can be a great way to mitigate the logistical problems of not being able to have large gatherings or certain high-risk family members over.
“Celebrating virtually or with members of your own household (who are consistently taking measures to reduce the spread of COVID-19) poses the lowest risk for spread,” writes the CDC.
Other methods of lowering your stress levels this Thanksgiving are more basic yet can be enormously effective. For instance: Get enough sleep. Stay active during the day. Check in with friends and family via text, calls, and emails to ward off loneliness. And try not to drown out sorrows with junk food and alcohol. At least, not too much.


fortune--2020-11-24--Pandemic fallout is about to overwhelm the bankruptcy system—and hit small businesses hardest

Our mission to make business better is fueled by readers like you. To enjoy unlimited access to our journalism, subscribe today.
If you think bankruptcies have been a scourge in the pandemic so far, brace yourself—they’re set to rise dramatically.
The business busts will strike small firms disproportionately, which is bad news for more than just the business owners. It’s bad for the whole economy, because the surge of financial pain may overwhelm the bankruptcy system. As a result, the process could become chaotic, with viable businesses killed and doomed ones kept artificially alive. A major part of the problem: There are not enough bankruptcy judges.
That worrisome outlook emerges from new research by Robin Greenwood of the Harvard Business School, Benjamin Iverson of Brigham Young University’s Marriott School of Business, and David Thesmar of the MIT Sloan School of Management.
Their findings are full of surprises, starting with the reality of bankruptcies in the pandemic so far. Despite a parade of high-profile Chapter 11 filings, especially in retail—J.C. Penney, Neiman Marcus, J. Crew, Brooks Brothers—overall bankruptcies through August were “actually 1% lower than in the same timeframe in 2019,” the authors report. It’s no illusion that big companies were more likely to file during the first eight months of 2020, but small businesses were much less likely to file. Maybe that’s because they still had some Paycheck Protection Program funds. Or maybe, as a Jeffries note to clients hypothesized, it’s because many small businesses were so strapped they couldn’t afford to hire a bankruptcy lawyer.
In any case, the researchers argue that the numbers have to rocket. “We expect overall bankruptcies to increase by as much as 140% in the current year,” they write. “By all metrics, corporate financial distress is set to increase.”
Economists don’t see bankruptcies as necessarily bad. When tough times strike, some businesses inevitably will struggle; the bankruptcy process helps sort out which should be given a second chance and which should be liquidated. The resulting reallocation of capital and labor, painful as it may be, helps to rebuild the economy.
The danger in the pandemic crisis is that the process may not work as it should. That’s partly because “the balance sheets of small firms are hit the hardest by the current recession,” the researchers find, which is a problem because “small firms restructure very rarely.” Instead of working things out with their creditors, they mostly just fail. They’re less likely to get a second chance because some of their most valuable assets, such as the entrepreneur’s know-how, can’t be pledged to investors.
Making matters worse, judges and lawyers in the bankruptcy field may be “overwhelmed by the large wave of financial distress,” the researchers find. “We predict that the coming surge of bankruptcies could increase the judge caseload by 158% from 2019 levels, well beyond the caseloads seen in 2009-2010.” When the system is stressed, resources get misallocated. For example, when Circuit City filed for bankruptcy during the 2008-2009 financial crisis, the court authorized the company to borrow $1.1 billion in order to keep it alive. But it was a zombie; two months later, Circuit City announced it would liquidate. More broadly, judges and lawyers make more mistakes when courts are overwhelmed, cases take longer, and smaller businesses are more likely to be dismissed, “leaving many of them to liquidate without court protection.”
Many policy prescriptions have been advanced to fix these problems, though whether any fixes could be adopted in time to improve the fate of small businesses is far from clear. Other researchers estimate that just bringing back 50 to 250 former bankruptcy judges would be a significant help.
The larger point is that even as new vaccines promise to end the pandemic eventually, thousands or millions of small businesses have to get from here to there. The authors of the new research show that the fewer small businesses that make it, the more long-lasting “economic scarring” we’ll suffer. Their strongest conclusion serves as a message to the incoming Biden administration: “Policy should focus on smaller firms.”


fortune--2020-11-24--1-in-5 Fortune 500 companies still use risky Chinese tech after U.S. ban

This is the web version of Data Sheet, a daily newsletter on the business of tech. Sign up to get it delivered free to your inbox.
Some U.S. companies may be violating a federal law, the so-called anti-Huawei rule, that went into effect in August to protect against Chinese spying threats.
Basically, any company that wants to sell products or services to the federal government must certify that it’s not using equipment or services from five Chinese tech firms: Huawei, ZTE, Hytera, Hikvision, and Dahua. (The exact terms are contained in Section 889, Part B, of the 2019 National Defense Authorization Act and a related “interim rule” that features additional guidance.)
But the government-blacklisted tech is widely embedded across corporate America. At least 1-in-5 Fortune 500 companies have devices potentially subject to the ban on their I.T. networks, says Expanse, a cybersecurity firm that scans the public Internet for signatures of the connected devices companies are using. (Anything on a private network or behind a corporate firewall is excluded from Expanse’s view.)
The equipment found through the survey ranged from web cameras and digital video recording systems (38% of all the Chinese-made devices detected) to W-Fi access points (21%) to core routers (11%) to building control systems, firewalls, VPNs, and web servers (30%). Expanse did not reveal identities of the companies, citing security reasons.
I personally viewed a half dozen login screens for such potentially risky devices originating everywhere from major U.S.-based research universities to healthcare and financial firms to airports. Here are two examples, scrubbed of identifying details, also for security reasons.
Screenshot of a login screen for a Huawei-linked device hosted by a North Carolina-based research university. Foscam cameras run on chips made by HiSilicon, a Huawei subsidiary.
Screenshot of a login screen for a Hikvision camera on the public network of a Fortune 500 healthcare company based in Pennsylvania.
The risk the U.S. is trying to ward off with its ban is Beijing forcing Chinese tech companies to abuse their access to I.T. systems to spy or steal American data and intellectual property, says Tim Junio, Expanse’s cofounder and CEO, who just agreed to sell his company to cyber-giant Palo Alto Networks for $800 million.
“The optics are not great” that so many companies are still using government-barred technology wide out in the open, says Matt Kraning, Expanse’s chief technology officer, of his team’s findings.
If companies fail to disclose their use of banned Chinese tech when applying for federal contracts, they could be breaching the law, whose penalties could include criminal and civil liabilities related to fraud or negligence. (Companies can request two-year waivers or special exemptions from the offices of the Director of National Intelligence.)
“A lot of large companies, particularly if they’re multinationals, are struggling because they will have ZTE hotspots and they do have Huawei servers in their server farms,” says Angela Styles, a partner at the Washington, D.C., law firm Akin Gump, who coauthored a blog post about the new law in August. The pain is particularly acute for overseas offices, especially in Asian countries, where Chinese tech is often deeply rooted in the telecom networks of local internet service providers, she says.
The new Section 889 rules are “indicative of a new approach the federal government is taking to protect its supply chain,” says Townsend Bourne, who leads the aerospace, defense & government services team at law firm Sheppard Mullin. “I think we’re going to see more of this” scrutiny applied to the geopolitical risk factors associated with particular companies, she says.
In other words, expect the U.S. government increasingly to force businesses to make a choice. “You can either do business with the Department of Defense, or you can do business with places like Huawei,” as Kraning puts it. “You can no longer do both.”
Robert Hackett
Twitter: @rhhackett
robert.hackett@fortune.com
THREATS
iPacking heat. The Santa Clara County district attorney's office charged Thomas Moyer, Apple's head of global security, with bribery after a two-year investigation. Moyer allegedly promised the Santa Clara Sheriff's office 200 iPads worth $70,000 in order to secure concealed weapons permits for four employees. The permits were being intentionally "withheld" from the Apple team, the prosecutors said. An Apple spokesperson said the company "found no wrongdoing" in its own investigation of the matter.
I spy with my private eye. In other Big Tech global security organization news, Vice obtained dozens of leaked documents from Amazon's internal intelligence unit. The reports show how closely the e-commerce leviathan tracks warehouse workers' union-organizing efforts, including by employing private investigators from spy-for-hire agency Pinkerton. An Amazon spokesperson said the security group strictly aims "to help keep our employees, buildings, and inventory safe."
Hot wheels. A Belgian security researcher discovered a way to hack a Tesla Model X—and speed off into the sunset—using vulnerabilities in the vehicle's wireless entry system. Lennert Wouters, the would-be grand thief auto, alerted Tesla about his findings in August. The carmaker told him it would begin to roll out over-the-air software fixes this week. Asked for comment about the incident by Wired, a Tesla spokesperson said...nothing! Tesla axed its PR office in Oct.
Snap out of it! Not to be outdone by Twitter's "fleets," and a month after it released music-integrations, Snapchat is copying more features from popular rival TikTok. The vanishing-video app debuted a feed, called Spotlight, where people can scroll through popular "snaps." To juice use, Snapchat said it will pay the most viral creators a share of a daily $1 million prize through the end of the year. Meanwhile, intensifying bids for digital advertising dollars by TikTok and Snapchat do not bode well for perennial foe Facebook.
The Bye Area. More tech CEOs are decamping from San Francisco post-COVID. In addition to the departure of big-time Silicon Valley investor Keith Rabois, news I broke here last week, others are on their way out. Dropbox CEO Drew Houston and Splunk CEO Douglas Merritt have bought houses in Austin, Texas, where they plan to plant roots, and the co-CEOs of corporate card startup Brex are relocating to Los Angeles, The Information reports.
Putting the "super" in "super-spreader."
ACCESS GRANTED
In the worldwide race to develop and distribute a COVID vaccine, who is looking out for poorer countries? One answer: Bill Gates, the Microsoft founder turned philanthropist and public health crusader. In a praise-showering profile, the New York Times calls Gates "the most powerful—and provocative—private player in global health," and sheds light on his particularly influential role in this still-unfolding drama.
The head of one of the world’s largest vaccine manufacturers had a problem. Adar Poonawalla, chief executive of the Serum Institute of India, needed $850 million for everything from glass vials to stainless steel vats so he could begin producing doses of promising coronavirus vaccines for the world’s poor.
Mr. Poonawalla calculated that he could risk $300 million of his company’s money but would still be more than a half-billion dollars short. So he looked to a retired software executive in Seattle.
FORTUNE RECON
Why Tesla stock could go to $1,000, according to a Wedbush analyst by Anne Sraders
Apple security chief charged with offering bribe for concealed gun licenses by Ian King
COVID vaccines won’t come fast enough to save struggling businesses. But plasma might by David Sullivan
Autonomous delivery startup Gatik raises $25 million in Series A funding by David Z. Morris
Lockdown, superspreader, unprecedented: 2020 has changed the English language, for good by David Meyer
The dealmakers embracing the chaos by Lucinda Shen
(Some of these stories require a subscription to access.Thank you for supporting our journalism.)
ONE MORE THING
Plato believed the world was composed of five elements: earth, air, water, fire, and aether (or star stuff). The ancient Greek philosopher associated five geometrics shapes—the so-called Platonic solids—with these foundational building blocks. Turns out he may have been onto something. A Hungarian mathematician and a U.S. geophysicist published a paper earlier this year showing that terrestrial fragmentation tends toward the cuboid, on average—just as Plato said. Learn more about this odd, semi-mystical scientific finding in this delightful Quanta Magazine article.
A bullish sign for the upcoming Roblox IPO, no doubt.