fortune--2020-10-14--J&J CEO still optimistic COVID-19 vaccine could come as early as this year

Alex Gorsky, chief executive of Johnson & Johnson, remains upbeat about the possibility of a COVID-19 vaccine arriving as early as this year, despite the health care giant suspending a late-stage clinical trial for one of its own candidates after a patient fell ill this week.
“If you just look at the sheer number of compounds that are in development right now, there is a very good probability that late this year or early next year, we will have options for vaccines,” Gorsky told members of the CEO Initiative, a group of corporate leaders convened by Fortune that met virtually on Wednesday.
Any eventual vaccine will likely be distributed in a tiered approach. Assuming regulators grant approval, vaccines will first be administered to caregivers, emergency responders, and health care facilities, potentially by year’s end. Then vaccines will be made available to everyone else.
“As we move through the course of 2021, most experts would agree that we should be in a position where we can go to a much broader population at that time,” Gorsky said. He didn’t comment on the status of the company’s halted candidate vaccine, saying only that it is adhering to regulatory and safety protocols.
Fortune CEO Alan Murray, who hosted the conversation, asked whether it would be safe enough for companies to call back knowledge workers en masse into city-based offices by next summer. (Incidentally, that is the time frame he last communicated to Fortune staffers.)
“Most people who try to predict this disease have gotten it wrong,” Gorsky replied with dose of expectation-tempering humility. “But I would think that, yes, by that point in time next year,” enough information and treatment options should be available to make people comfortable enough to return, he said.
Johnson & Johnson is just one company pursuing a coveted inoculation against the coronavirus. More than 170 candidate vaccines are in development at pharmaceutical giants such as AstraZeneca, Moderna, and Pfizer, according to the World Health Organization.
Johnson & Johnson isn’t alone in its cautious approach to testing. Eli Lilly recently stopped a clinical trial for an antibody drug owing to safety concerns. A month ago, AstraZeneca paused a vaccine trial after two patients became ill.
Medical experts caution that early vaccines may offer only limited protection. Others fear they could have unknown adverse effects.
The achievement of a vaccine, commonly viewed as a silver bullet, should be considered just one tool in society’s kit for curbing the pandemic, Gorsky said. It is the third prong in a “holistic, comprehensive approach,” he said, whose other components are basic hygiene (social distancing, mask wearing, and hand washing) and therapeutics (like antibody cocktails and steroids).
“We’re going to find out a lot in Phase Three”—the final stage before approval, which involves large-scale efficacy testing—“as we’re finding out right now,” Gorsky said, alluding to the company’s own recent findings.


fortune--2020-10-14--The myth—and danger—of COVID herd immunity

The polls are wrong .
The U.S. presidential race is a near dead heat , this A.I .
‘ sentiment @ @ @ @

The Trump administration is increasingly embracing a strategy of “herd immunity” to grapple with the COVID-19 pandemic, according to multiple reports. But the controversial strategy has scientists and public health experts on edge given the limited proof that it would work for this specific outbreak and the ethical concerns which accompany it.
Tedros Adhanom Ghebreyesus, director-general of the World Health Organization (WHO), has openly lambasted the idea of using herd immunity to fight a pandemic, asserting that it’s driven by a misunderstanding of the science of infectious diseases.
What is herd immunity?
To put it simply, herd immunity is the scientific theory that if enough of a population builds antibodies or gains immunity against a pathogen, they can protect those who are more vulnerable to infection. With enough immune people, the spread of a virus becomes much more containable.
The trouble is that herd immunity is a process that takes time and caution. It can’t be used as a hammer against a new pathogen like the coronavirus which we’re still trying to understand. Just ask Sweden, which employed a herd immunity strategy and saw disastrous results.
“Herd immunity is achieved by protecting people from a virus, not by exposing them to it,” the WHO’s Tedros said in a virtual town hall this week. “Never in the history of public health has herd immunity been used as a strategy for responding to an outbreak, let alone a pandemic,” adding that it would be “unethical” to rely on this strategy.
Achieving herd immunity would require a massive proportion of the population to become infected. “It varies from disease to disease. The more contagious a disease is, the greater the proportion of the population that needs to be immune to the disease to stop its spread,” according to the Mayo Clinic. “For example, the measles is a highly contagious illness. It’s estimated that 94% of the population must be immune to interrupt the chain of transmission.”
COVID has proven quite transmissible and contagious, suggesting that herd immunity would require a higher threshold of mass immunity.
Why the U.S. is considering the herd immunity approach
The Trump administration is reportedly open to the idea of letting coronavirus run amok among younger people, who generally don’t become as sick as higher-risk populations, in order to achieve herd immunity. A group of scientists endorsed the idea as a means to reopening the economy and society at large and caught the White House’s attention, according to the reports.
Most of the signatories to that declaration have not been made public. But Dr. Scott Atlas, a senior scientific advisor to President Trump, is one of its major proponents. Other doctors and epidemiologists who have signed on to the declaration espouse views that are largely rejected by the scientific community, including the notion that herd immunity would only require 10% to 20% of the population to be infected.
The results of such an experiment in the midst of a pandemic the likes of which the world hasn’t seen in more than 100 years could result in millions of deaths, according to critics. Current evidence, such as what’s already been seen in Sweden, appears to support that thesis. And willful exposure to the coronavirus wouldn’t resemble an actual, safe vaccine; it could very well just breed more chaos and suffering.


fortune--2020-10-14--‘We have to change who the investors are’: How women VCs are working to fund Black and female founde

‘We have to change who the investors are’: How women VCs are working to fund Black and female founders

It’s sadly no shock to anyone in the industry: The amount of venture capital dollars that go to female and Black founders is dismally scant.
In fact, according to a recent PitchBook report, VC funding for female founders just hit its lowest quarterly total in three years. But there are forces working to change those statistics in the traditionally male-dominated arena.
Sarah Kunst, managing director at Cleo Capital, Steph Mui, co-founder and general partner at the 2020 Fund, Leyla Seka, partner at the Operator Collective, and Alexa von Tobel, co-founder and managing partner at Inspired Capital, are all on the front lines working to get female and minority-owned businesses the startup funds they need. And that task is formidable: Kunst notes that the vast majority of VC funding doesn’t go to Black and Hispanic founders, and “even when it does, it tends to disproportionately go to Black and Hispanic male founders.”
“There are so many brilliant, amazing Black women starting companies and not nearly enough capital for them,” Kunst said at Fortune‘s Most Powerful Women NextGen conference on Wednesday.
According to Inspired Capital’s von Tobel, changing that reality largely needs to come from the top—from those holding the checkbooks. “When you have different archetypes at the top of a firm and you have different investors out there, … you simply have different deal flow,” she said. “So we have to change who the investors are.”
Ensuring that who writes the checks is representative of the potential founders can help change who the cash flows to, von Tobel argues. (For her firm, she says about 40% of their founders are female, while Operator Collective’s Seka says her firm’s new initiative, Black Venture Institute, is aiming to graduate 300 people in the next three years that are able to write those checks.) And that’s certainly one piece of the puzzle.
But Cleo Capital’s Kunst offers a reality check: “You certainly don’t have to be diverse to invest in diverse founders,” she said. “If you are a woman of color, … [and] you can’t wait for the investor world to get more diverse, I don’t think that means you can’t go out and raise,” she says. “I think it’s understanding that there’s a saying in the Black community that you have to be twice as good to get half as much.”
While that axiom is obviously unfair, instead of feeling dismayed at that prospect, Kunst offers that founders should “flip that and internalize it as, you get to be twice as good. How many times in your life can you look around and you’re like, ‘I’m so upset that I’m twice as good as everybody else around me’?’ Indeed, therein lies the upside, Kunst argues: “If you are a person of color, if you are a woman, when you do get funded, you should feel pretty good that you probably are better statistically” than the average white man raising funding.
Tips for founders
For those female and Black founders dealing with the VC landscape as-is, investors at Fortune‘s panel have a few tips: Cleo Capital’s Kunst suggests founders get “really, really active on social media. It’s a great place to get noticed by investors.”
And for investors on their 200th pitch, 2020 Fund’s Mui offers: “It’s a numbers game, so just keep pushing,” while Operator Collective’s Seka puts it this way: “If you don’t like selling your stuff and yourself, think again, because it’s all you do.”


fortune--2020-10-14--Twitter, like Facebook, to remove posts denying the Holocaust

Twitter will remove posts that deny the Holocaust for violating its hateful conduct policy, according to a company spokeswoman.
Twitter’s policy doesn’t explicitly state that denying violent events is against the rules, but the spokeswoman confirmed that “attempts to deny or diminish” violent events, including the Holocaust, would be removed based on the company’s interpretation of the policy.
“We strongly condemn anti-semitism, and hateful conduct has absolutely no place on our service,” she said in a statement. “We also have a robust ‘glorification of violence’ policy in place and take action against content that glorifies or praises historical acts of violence and genocide, including the Holocaust.”
Facebook announced Monday it would block posts denying the Holocaust, which saw the systematic extermination of 6 million Jews by the Nazis and their allies during World War II. The company’s move reversed a stance by Chief Executive Officer Mark Zuckerberg, who once defended such posts as examples of content he disagreed with but wanted to leave up to protect free speech. The company said it changed course after more data emerged, including a study showing almost a quarter of 18- to 39-year-old adults in the U.S. thought the Holocaust was a myth or was exaggerated.


fortune--2020-10-14--Zoom’s newest feature will provide a marketplace for virtual events and services

Zoom has become one of the leading services for holding virtual meetings and classes during the pandemic. Now it wants to expand into paid events, says Janine Pelosi, chief marketing officer.
Under a new program unveiled on Wednesday called “On Zoom,” the company will allow anyone from a yoga teacher to a speech therapist to a tax preparer to set up sessions on the service and charge attendees.
Pelosi described the new program as a way to help smaller brick-and-mortar based businesses that had been hard-hit by the COVID-19 pandemic. “This is an opportunity to allow them to drive their business on a platform that will allow them to make money for their knowledge and provide that knowledge in a great way to consumers,” Pelosi said on Wednesday, speaking at Fortune‘s Most Powerful Women Next Gen conference.
Zoom will create an online listing of all of the offerings and provide payment functionality. It won’t charge the people and businesses that are offering classes and services, at least for right now.
Even after the pandemic passes, Pelosi said she thinks the demand for virtual events will remain strong. “It’s not going to go back to the way things were before, 100%,” she said. “It won’t be that the virtual event is kind of a side hustle to something that’s physical. It is going to be a prominent part of any experience moving forward.”
Zoom’s stock price has rocketed more then sevenfold this year, as millions of people have turned to the easy-to-use service as an alternative to meeting in person. Zoom outpaced some better known rivals like Cisco’s WebEx and Microsoft’s Skype thanks to its simple and sharable meeting format. The company had some stumbles with security and privacy issues early on as it dealt with the torrid pace of growth, but it seems to have found its footing now.
Zoom is also allowing other companies to create applications, dubbed Zapps, that will run inside the Zoom app itself to provide extra features. One partner is Arianna Huffington’s Thrive Global wellness-services company. The new Thrive Reset Zapp offers brief guided meditations or breathing exercises accessible directly from any Zoom meeting for all participants.
“It is really reminding folks to get up and get out and get some exercise,” Pelosi says. “Taking the time for self-care and for getting what you need to done is going to be really critical. So we’re going to make sure that we listen and adapt the product to make sure that it’s delivering that.”
Other initial Zapp partners range from productivity developers Slack and Dropbox to fitness and wellness services like Exer Studio and WW (formerly Weight Watchers). “Many different companies are popping up,” said Pelosi, who added that she expects many more Zapps will be created in the future.
Pelosi also offered some advice for looking good while on Zoom. “Lighting is definitely important,” she says. Remember that as the sun moves across the sky, the light may change in your house, she explained.
That means people should have extra lights ready to turn on or move around to different parts of their house to maintain good lighting. Sitting in front of a window and facing outside, or even going outside, can provide excellent lighting, she said.


fortune--2020-10-14--GV, formerly known as Google Ventures, elevates its first Black female investing partner

GV (formerly known as Google Ventures) is getting its first black female partner.
The Alphabet-backed venture capital firm that has made investments in Slack, Uber, and GitLab promoted Principal Terri Burns to investing partner, a title that grants her the ability to write the checks. At 26, Burns will be the firm’s youngest ever partner. As a Black woman, Burns is also a rarity in an industry long dominated by white males.
True, the VC world has made some—slow—progress. The number of female decision makers grew from 9% at the end of 2017 to 13% in February, according to data from All Raise. But just one Black woman was named a partner at any VC firm in 2019. Black people made up just 0.67% of all entrants to the industry between 2010 and 2015.
Burns, who spent three years at GV as a principal and cut her teeth as an associate product manager at Twitter before that, has already made out checks through GV—one soon to be announced, and another in HAGS, an app created by Gen-Z founders that started out as a digital yearbook and is looking to transform into broader social site for high schoolers.
“Her investments display her interest in companies that are built by and for Gen Z, particularly as this generation comes of age in a remarkably uncertain time,” wrote Dave Munichiello, general partner at GV, in a blog post announcing Burns’ promotion.
While her recent checks have focused on consumer businesses, the investor will also invest in areas including the future of work and fintech. And while she has tended toward investing in founder teams and therefore seed stage deals, she will be stage-agnostic. “That’s broad,” she says, “but that is by design.”


fortune--2020-10-14--Audrey Gelman apologizes for leadership mistakes at The Wing after months of ‘inward’ reflection

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More than four months after employees called for her resignation, Audrey Gelman, the cofounder and former CEO of The Wing, responded Wednesday to protests by the women’s coworking space’s staff.
Workers who staffed The Wing’s front desks, cooked and cleaned in its kitchens, and handled other customer-facing jobs spoke to the New York Times in March about mistreatment they experienced while working at the venture-backed startup, including by Gelman directly. In June, many of those workers formed “Flew the Coup,” a collective of former Wing employees who shared experiences with racism and other issues. (With the chain’s spaces closed because of the coronavirus pandemic, no spaces staff were still working when Flew the Coup formed.)
Following these efforts, The Wing’s corporate staff and members organized two more similar protests calling for change in leadership; Gelman stepped down from her post as CEO in June.
“I chose to create a business model that was a continuation, not a radical reimagining of the service industry,” Gelman wrote in a letter directed to Flew the Coup, which she posted on her Instagram account on Oct. 14. “I sought to gain personal financial success, stature, and the self-worth associated with scaling a startup so fast and so well. I also sought to prove it was possible for young women to be just as successful in blitzscaling a business as men, and to inspire other women to do the same. Unfortunately, this came at the expense of a sustainable and healthy culture…No wonder our employees experienced the same indignities you’d expect at a restaurant, cafe, or country club in their day-to-day work.”
Gelman noted that she has stepped down from the company’s board of directors, which was a demand made by both members—who paid up to $2,700 a year to frequent Wing spaces—and employees. (Members also called for Gelman to dissolve her equity stake in the company; she did not mention that demand.) Gelman did not address protests by headquarters staff or by members in her letter, responding solely to spaces staff with Flew the Coup.
The indignities former Wing employees described gained attention in large part because of the conflict between the treatment of the women who worked for the business and the company’s stated feminist mission: to center and uplift women. Spaces staff called out that tension, which Gelman addressed in her letter. “The Wing positioned itself as an antidote to male supremacy and a patriarchal system while playing within that same system by promoting the continued social and material advantages of the women who could afford to become members,” she wrote. “We billed ourselves as an answer to the problem while failing to address that we were continuing to inflict it.”
In a statement to Fortune on Wednesday, a spokesperson for The Wing said, “Audrey Gelman resigned as The Wing’s CEO in June and has since left the board of directors. We are encouraged to hear of Audrey’s time of reflection and growth.” The company declined to specify when Gelman departed her board seat.
According to Flew the Coup’s Instagram account, the collective has recently held conversations with current Wing leadership. (The group has not publicly revealed the identities of the former employees who make up its membership.) The group then began to reiterate its demands online, which included public apologies from Gelman and her cofounder Lauren Kassan, who is now one of three executives running the business through an “Office of the CEO,” as well as for workers to be released from nondisclosure agreements they signed. The group has also put its resources behind raising money for former Wing workers who have faced unemployment throughout the coronavirus pandemic.
Gelman ended her letter with a graphic, stating: “I am the former CEO of The Wing and I support Flew the Coup.”


fortune--2020-10-14--How Walmart plans to manage Black Friday crowds this year

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Those infamous scenes of crowds thronging a Walmart store on Black Friday for deals on a big screen TV or a road bike will not be repeated this year, thanks to COVID-19.
The discount retailer said on Wednesday it was implementing strict crowd control measures on what has traditionally been a day where tens of millions of Americans hit stores to snap up bargains.
To avoid being overwhelmed by shopper traffic at a time many store workers and consumers are wary of being in crowded stores because of the pandemic, Walmart this year is opting to spread out Black Friday deals over three separate periods starting in early November. For the deals coming the week of Thanksgiving, Walmart will offer them online first on Wednesday, Nov. 25th before making them available in stores on Black Friday, when stores open at 5 a.m., the better to reduce any rush on stores.
Walmart, which this summer said it would close on Thanksgiving for the first time in decades, a move quickly followed by rivals like Target and Macy’s, will also limit the number of customers inside its stores to 20% of usual capacity.
“By spreading deals out across multiple days and making our hottest deals available online, we expect the Black Friday experience in our stores will be safer and more manageable for both our customers and our associates,” said Scott McCall, Walmart U.S.’ chief merchant.
On Black Friday and any other heavy traffic shopping day during the holiday season, Walmart will have shoppers enter the store single file and be reminded by Walmart’s “Health Ambassadors” to wear a mask if they are not. The retailer, which operates 4,800 U.S. stores, will meter customers and ask customers to shop down the right hand side of the aisles.
Walmart’s efforts to limit crowds of shoppers echo those of retailers such as Lowe’s, Best Buy and Home Depot, which this year have sought to limit the numbers of shoppers in stores at once, even dropping some sales events in the process to achieve that goal. Research firm ShopperTrak expects shopper visits to stores to be down as much as 25% on Black Friday this year.
Big in-store events are becoming less crucial than before for such retailers, which have reported staggering e-commerce growth during the pandemic. What’s more, some 66% of U.S. shoppers recently polled by the International Council of Shopping Centers said they are more likely to visit stores that have strict precautions in place because of COVID-19.
Major retailers began offering Black Friday-like deals this week to compete with Amazon’s Prime Day two-day sales event and to bring forward some holiday season sales. According to research firm Edison Trends, Walmart’s online sales were on 32% in the first hours of its sale on Tuesday compared to an average day.


fortune--2020-10-14--Facebook moves to limit spread of dubious Biden laptop story

A spokesperson for Facebook took to Twitter on Wednesday to say the media company would restrict the spread of a tabloid story that recounts the alleged discovery of a “smoking gun” email linking this year’s Democratic presidential nominee, Joe Biden, to corruption in Ukraine.
The decision by Facebook is significant since the platform has served as a key vehicle for spreading disinformation, especially during U.S. elections. The “smoking gun” nature of the story has been met with incredulity among reporters across the political spectrum. Here is how the Facebook spokesperson, Andy Stone, responded to the story:
While I will intentionally not link to the New York Post, I want be clear that this story is eligible to be fact checked by Facebook's third-party fact checking partners. In the meantime, we are reducing its distribution on our platform. — Andy Stone (@andymstone) October 14, 2020
The article in question alleges that someone left a laptop with a sticker for the Beau Biden Foundation—a nonprofit organization dedicated to fighting child abuse and named after Vice President Biden’s late son—at a computer repair shop in Delaware and then failed to pick it up. The laptop allegedly contains a slew of compromising information about Biden’s other son, Hunter, who has struggled with alcohol and drug addiction.
The owner of the shop then allegedly gave a copy of the laptop’s hard drive to an associate of President Trump’s lawyer, Rudy Giuliani. The story also alleges the hard drive has been circulating among Republican operatives, including Steve Bannon, since September.
The report has been met with widespread skepticism. Critics have questioned the timing of the story—20 days before Election Day, with dozens of states already in the middle of early voting—and the unlikely possibility that someone forgot a laptop containing all sorts of sensitive information at a repair shop.
ah, the old mystery-person-definitely-not-a-spy-drops-off-no-way-its-forged-kompromat-at-an-unscrupulous-repair-shop story pic.twitter.com/ueoGTQT94I — Robert Hackett (@rhhackett) October 14, 2020
Ed Morrissey, an influential blogger with the right-wing political site HotAir, expressed similar skepticism, noting that “until this gets some authentication, stay skeptical, or at least remember that things too good to be true usually aren’t.”
Veteran political reporters cast further cold water on the story’s authenticity.
Random store owner has it, copies it (a crime) and gives it to the president’s lawyer while also responding to a federal subpoena? A bit odd. https://t.co/KKECYxBRcE — Maggie Haberman (@maggieNYT) October 14, 2020
>@kyledcheney makes two important observations in this thread. https://t.co/GRxoTkrF4R — Jake Sherman (@JakeSherman) October 14, 2020
Given the high likelihood the tabloid story is false, Facebook’s decision to limit its spread could be key to preventing it from fueling conspiracy theories ahead of next month’s election. While Facebook has been widely criticized for allowing misinformation to run rampant on its platform, the company has taken steps this month to address the problem, such as declaring it will not allow anti-vaccination ads or posts that deny or distort the Holocaust. The company also said it would ban political ads from its platform after Election Day.
Facebook’s decision to limit the spread of the suspect Biden email story reflects another recent innovation by the company that involves using “circuit breakers” to preempt false stories from going viral.
Update: Twitter has responded to the controversy by blocking users’ ability to share the tabloid link in question.
More must-read finance coverage from Fortune:


fortune--2020-10-14--The ‘real’ jobless rate is much worse than the official numbers show

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At the height of lockdowns the unemployment rate reached 14.7% in April, its highest level since 1940. But as states eased those restrictions, the rate quickly fell. It dropped again in September, falling from 8.4% to 7.9%.
While that sustained drop signals an economy moving from recession to growth, it’s also severely undercounting joblessness.
It boils down to how the Bureau of Labor Statistics (BLS) calculates the official unemployment rate: Only out-of-work Americans who are searching for new positions are categorized as unemployed. If the jobless aren’t searching, they get thrown out of the civilian labor force altogether. (The unemployment rate is calculated by dividing the number of unemployed Americans by the civilian labor force count).
That’s been the case during the pandemic, with millions of jobless Americans choosing to wait out the virus and stay-at-home order before starting their job search. Recent numbers also show a stunning number of women have recently left the workforce, a trend that is likely tied to the fact that many schools have not resumed in-person learning or have implemented hybrid schedules. According to Fortune‘s The Broadsheet newsletter, 80% of the 1.1 million workers who dropped out of the workforce last month were women. Overall the civilian labor force declined from 164.5 million in February to 156.5 million in April. It has since climbed up to 160.1 million—but it’s still down 4.4 million.
If the 4.4 million jobless Americans who’ve yet to return to the workforce were to be included in the unemployment rate—what Fortune considers the “real” unemployment rate—it would sit at 10.3% in September, Fortune calculates. That’s well above the 7.9% official unemployment rate calculated by the BLS.
The real unemployment rate is falling too: It peaked at 18.9% in April, when the official unemployment rate was at 14.7%. But a real unemployment rate still sitting above double digits underscores that we have a long way to go for a full recovery: Both the real and official unemployment rates sat at 3.5% in February.
Jobless Americans often leave the workforce during deep recessions—but nothing on the level we’ve seen during the pandemic. The unemployment rate peaked at 10% in October 2009 during the Great Recession era. At the same time the real unemployment was 10.6%, according to Fortune‘s calculations. The October 2009 labor force was down about 1.1 million from the year prior—compared to the 4.4 million in September 2020.
Explore Fortune’s Q4 investment guide:


fortune--2020-10-14--Virtual Apple events just aren’t the same

Everyone misses something in this pandemic. Getting on planes. Hugging their faraway loved ones. Yelling and screaming in a crowded stadium.
Professionally speaking, I really, truly miss going to Apple events. There was a string, dating back to the late oughts, when I rarely missed one. In those days they were in or near the Moscone Center in San Francisco. Before the event started, I’d sit as far forward as possible so I could crane my neck to see which top Apple executives and what business/political/cultural luminaries were seated in the front row. Was that Al Gore? Of course. He’s on the board. (Still is.) Could that be J.J. Abrams, up from Hollywood? In fact it is.
If I was feeling bold I could wander up to schmooze with these personages until I was shooed away by a PR person. Otherwise, I could watch the bonhomie—lots of backslapping and broad grins, like the first day of summer camp—from a distance.
Music would thump from the speakers, and then, at precisely 10:00 a.m.—you could set your watch to it, in the days before the no-need-to-set-it Apple Watch—the lights would go down, and Steve Jobs, or later Tim Cook, would walk onstage to thunderous cheers. Thinking back, it reminds me of the bleating sheep in Animal Farm, which I just re-read. (“Four legs good, two legs bad!” “iOS good, Windows bad!”)
I’m taking you on this trip down memory lane, of course, because Apple held an iPhone event Tuesday. Attendance of an Apple product launch has been democratized. Anyone can watch Tuesday’s show here. If you’ve never been to an Apple gathering, this is a great development. It’s got the same pump-up-the-heart music, the same slick videos, the same strained, middle-aged corporate exuberance.
As for the substance, well, it was fine. The new iPhones look good, the prices have held steady, and someday, probably not as far away as the critics say, 5G will be exciting.
But it’s just not the same as being there in person. Nothing is.
***
Naturally, I’m going to miss Fortune too: This is my last day. I apologize if I didn’t respond to the wonderful notes so many of you wrote in response to my posts at Fortune, LinkedIn, Twitter, and Medium. I’ll try to be more active than usual on social media once I resume writing so you can follow my efforts. Until then, thank you from the bottom of my heart.
Adam Lashinsky
Twitter: @adamlashinsky
adam.lashinsky@fortune.com
This edition of Data Sheet was curated by Robert Hackett.
THREATS
Going apple picking. Spring-boarding off Adam's farewell above :'-(, Apple debuted four new 5G-enabled, wirelessly charging phones at its launch event yesterday. They are, in order from smallest to biggest and ranging from $699 to $1,099, the iPhone 12 Mini, iPhone 12, iPhone 12 Pro, and iPhone 12 Max. Other new products include a wireless MagSafe charging mat, a HomePod Mini smart-speaker, and magnetically-attachable phone accessories, like a clip-on leather wallet.
A worm in the apple. Despite Apple's plans to widely broadcast its product event in China, the demo-day was not carried by the country's biggest social media sites, such as Tencent Video, Bilibili, Iqiyi, and Weibo. The mysterious blackout is expected to dent the new iPhones' reception in a crucial market, as Fortune's Grady McGregor writes.
Who-are-we? The embattled Shenzhen phone-maker Huawei is said to be exploring a sale of its budget-conscious phone business called Honor. The phones' main distributor, Digital China, could purchase the unit for $3.7 billion, Reuters reports. Other companies said to be in the deal talks include Chinese electronics-maker TCL and rival phone-maker Xiaomi.
Straight cheesin'. The state of Wisconsin denied paying Foxconn, the Taiwan-based electronics contract-manufacturer, its first tranche of $3 billion in subsidies to build a factory in the village of Mount Pleasant. Officials allege that Foxconn failed to create enough jobs to qualify for the funding. The struggling deal was formerly hailed by President Donald Trump as an exemplar of his plans to bring overseas manufacturing back to the U.S.
Face-block. After banning QAnon and sexy onions last week, Facebook is pushing more content crackdowns. The media giant banned Holocaust denialism and anti-vaccination advertisements across its services. Election-related misinformation continues to proliferate, however.
No place like home. Google is apparently detecting a deterioration in productivity among engineers who work from home, especially among new hires. Dropbox, meanwhile, says it is going to make remote work a permanent fixture.
Blaming the victim.
ACCESS GRANTED
Loon began in 2013 inside Google X, Alphabet's so-called moonshot factory (now just "X"). The since spun-out startup is known for extending Internet connectivity around the world, especially in areas stricken by hurricanes and other natural disasters. Rest of World takes a look inside the project and profiles a couple of Loon balloon wranglers, who have recovered nearly a dozen downed broadband-beaming flotation devices where the company operates in Uruguay.
"A few hundred kilometers south of the Brazilian border and four and a half hours by bus from the capital of Montevideo lie Lavalleja and Treinta y Tres, rural departments in Uruguay’s bucolic interior. There, amid the thigh-high thistle and ombú trees that punctuate the undulating pampas, flightless ñandú birds sprint across the horizon, and mini-armadillos bumble around their burrows, oblivious to observers. With its unobstructed views, this wide-open landscape is perfectly suited for gauchos, the South American cowboys renowned for their resourcefulness. The dearth of trees, motor vehicles, and air traffic also makes the region an ideal landing zone for another, nonnative species: floating cell towers held aloft by giant helium balloons.
Occasionally, one of these space-age hot spots will appear above the pampas on their descent back to earth after completing its latest mission over the Amazon, Puerto Rico, or Brazil."
FORTUNE RECON
Facebook defends decision to leave anti-vaccine posts untouched as it bans anti-vaxxer ads by Danielle Abril
Solar power is “the new king of electricity” by Geoff Colvin
Ousted Pinterest exec says more transparency needed to fight Silicon Valley pay discrimination by Phil Wahba
‘Something, algorithmically, is creating this obsession’: Meghan, The Duchess of Sussex warns against social media addiction by Michal Lev-Ram
Inside Waymo’s autonomous trucks and A.I. systems by Jonathan Vanian
Amazon’s German workers launch Prime Day strike over pandemic pay by David Meyer
(Some of these stories require a subscription to access.Thank you for supporting our journalism.)
ONE MORE THING
There's something odd about the data transfer at the center of this New York Post cover story. The article purports to expose Hunter Biden's email exchanges with executives at Burisma, the Ukrainian energy firm where he held a directorship. As background: Conservatives allege that Burisma sought political favors from Biden via connections to his father, then-Vice President and now-Democratic presidential candidate Joe Biden. (Biden has long and heatedly denied any impropriety.)
Anyway, in the story, someone is said to have mysteriously dropped off a water-damaged MacBook Pro, ostensibly Hunter's, at a computer repair shop in Delaware in the hopes of recovering the hard drive's contents. The shop's owner allegedly failed to get back in touch with the mystery customer, so he alerted the Feds to the supposedly kompromat-laced laptop's existence. The Feds seized it—but not before the owner sent a copy of the hard drive to the lawyer of Trump pal and former Mayor Rudy Giuliani. Got all that?
So, I have questions—as does esteemed disinformation scholar Thomas Rid. Something's real fishy. And just when we thought we weren't going to get another election-time email scandal...
Robert Hackett
@rhhackett
robert.hackett@fortune.com


fortune--2020-10-14--Car-sharing startup Getaround raises $140 million

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Tech businesses are soaring while many travel businesses are struggling. We all know that.
And then there are the companies that stumbled at the beginning of the pandemic, but have not actually seen a massive fall-off in demand: Getaround, a car-sharing startup, announced on Wednesday that it has raised $140 million in Series E funding after a rough start this year.
PeopleFund led the round and was joined by investors including Reid Hoffman and Mark Pincus’ Reinvent Capital, Henry McGovern, Pennant Capital, and partners of VectoIQ. While Getaround did not disclose its valuation, the company has raised $600 million total from investors that also include SoftBank Vision Fund and Menlo Ventures.
Demand for Getaround’s services fell 75% in March on a month-over month basis. The company laid off some 100 employees and furloughed others. But as the pandemic wore on, consumers began trickling back in, with cautious ones using the platform to avoid public transportation and travel-hungry ones signing up to make day trips. Now, CEO Sam Zaid tells Term Sheet, revenue has “doubled compared to the pre-COVID baseline.”
It echoes Airbnb’s trajectory: Bookings at the company dried up at the start of the crisis, but later rebounded to pre-pandemic levels as consumers sought close-by escapes.
AN ANT FINANCIAL INVESTOR RAISES A NEAR $1 BILLION FUND: Lead Edge Capital, the growth-stage shop that has invested in companies such as Uber, Alibaba, Asana, and Bumble, closed its fifth fund with $950 million in commitments, vastly oustripping its last flagship $520 million raise in 2018, the firm announced Wednesday.
2020 is shaping up to be a strong year for Lead Edge, as high-profile bets near or enter exit territory. Aforementioned workplace collaboration tool Asana went public earlier this year and now trades at a $3.8 billion valuation. Another investment, Chinese payments giant Ant Financial, is also slated to go public this year in one of the largest offerings in history that could value the company at $250 billion.
For Lead Edge, the larger fund size allows the firm not only to write bigger checks and keep companies private longer, but also to invest over a longer period of time. Lead Edge plans to continue to invest in software and internet businesses, with check sizes going as high as $150 million.
But Ant Financial’s IPO came with some bruising: The company’s planned dual listing in Shanghai and Hong Kong has faced delays, and across the pond, the Trump administration has looked into leveling restrictions against its operations at a time of rising tensions between the U.S. and China. Lead Edge founder Mitchell Green, though, waved away concerns.
“We’re still investing in China. It has always been a scary place to invest in,” he tells Term Sheet. “I think it is a lot of noise.”
Lucinda Shen
Twitter: @shenlucinda
Email: lucinda.shen@fortune.com
VENTURE DEALS
- Calm, a San Francisco-based maker of a meditation and sleep app, is seeking to raise $150 million at a $2 billion valuation, per Bloomberg. Read more.
- Arrival, a U.K.-based electric vehicle company, raised $118 million in funding from BlackRock.
- Plenty Unlimited, a South San Francisco-based farming startup, raised $140 million in Series D funding. Softbank Vision Fund 1 led the round and was joined by investors including Driscoll’s.
- LIVEKINDLY, a maker of plant-based foods, raised $135 million in funding. Blue Horizon Corporation led the round and was joined by investors including Trustbridge Partners and EQT.
- Wealthsimple, a Toronto-based online investment firm, is nearing a deal to raise about $76 million led by TCV that would value it at over $1 billion, per Bloomberg. Read more.
-Alkira, a San Jose, Calif.-based cloud networking startup, raised $54 million in Series B funding. Koch Disruptive Technologies led the round and was joined by investors including Sequoia Capital, Kleiner Perkins, and GV.
- Augury, a New York-based machine diagnostics provider, raised $55 million in Series D funding. Qumra Capital led the round and was joined by investors including Insight Venture Partners, Eclipse Ventures, Munich Re Venture Capital, Qualcomm Ventures and Lerer Hippeau Ventures.
- Astroscale, a Tokyo-based company removing space debris, raised $51 million in Series E funding. aStart led the round and was joined by investors including Hulic, I-Net, Shimizu and Sparx Space Frontier Fund. Read more.
- New York Digital Investment Group (NYDIG), a subsidiary of Stone Ridge that digital asset services, raised $50 million. Fintech Collective led the round and was joined by investors including Bessemer Ventures and Ribbit Capital.
- Casai, a Mexico City-based short-term rental platform, raised $23 million in Series A funding. Andreessen Horowitz led the round and was joined by investors including Andreessen Horowitz’s Cultural Leadership Fund, Kaszek Ventures, Monashees Capital, Global Founders Capital, Liquid 2 Ventures, Tom Stafford (managing partner of DST Global), and founders of startups including Nova Credit, Loft, Kavak, and Runa.
- Menlo Microsystems, an Irvine, Calif.-based maker of electronic switches, raised $44 million in Series B funding. 40 North Ventures led the round and was joined by investors including Piva, Paladin Capital Group, Vertical Venture Partners, and Future Shape.
- apiiro, a New York-based platform that seeks to automatically remediate risk with changes in app development, raised $35 million funding. Investors include Ted Schlein (General Partner at Kleiner Parkins), Saam Motamedi and Asheem Chandna (General Partners at Greylock).
- Kasa Living, a San Francisco-based short term rental company, raised $30 million in Series B funding. Ribbit Capital led the round. FirstMark Capital led the firm’s $20 million Series A funding.
- BlackSwan Technologies, a company seeking to use artificial intelligence to increase operational efficiency, raised $28 million. Investors included Prytek, FinTLV, and MS&AD Ventures.
- Matroid, a Palo Alto, Calif.-based computer vision provider, raised $20 million in Series B funding. Energize Ventures led the round and was joined by investors including New Enterprise Associates (NEA), and Intel Capital.
- Hedvig, a Stockholm-based insurance carrier, raised $9 million in extended Series A funding. Investors included Obvious Ventures, Cherry Ventures, D-Ax, and CommerzVentures.
- Nym Health, a Boston-based provider of autonomous medical coding technology, raised $16.5 million in Series A funding. GV led the round.
- Engageli, a Palo Alto, Calif.-based digital classroom platform, raised $14.5 million in seed funding. BRM and Emerge Education were among the investors.
- Infiot, a San Francisco, Calif.-based maker of infrastructure for remote users, sites and IoT devices, raised $15 million in funding. Investors include Lightspeed Venture Partners, Neotribe Ventures, Westwave Capital, and Harpoon Ventures.
- JAXJOX, a Seattle, Wash.-based fitness technology company, raised $10 million in Series A funding. Investors included Dowgate Capital Ltd. and Nigel Wray.
- Tiltify, a Los Angeles-based creator of a fundraising platform, raised $6.5 million in Series A funding. Pace Capital led the round.
- Linear Labs, a Fort Worth, Texas-based maker of more energy efficient electric motors and generators, raised $6 million in funding. Investors included Champion Hill, Lowercarbon Capital, Kindred Ventures, Gen Fukunaga, Duke Angel Network, Spike Ventures, and Moving Capital.
- Lassogen, a San Diego-based company focused on lasso peptide, raised $4.5 million in seed funding. Playground Global led the round and was joined by investors including Better Ventures, First In Ventures, and Tsingyuan Ventures.
- Profitboss, a Beverly Hills, Calif.-based online ordering platform, raised $3.5 million in seed funding. Redpoint Ventures led the round and was joined by investors including Kimbal Musk, Dylan Field (Figma CEO), Naval Ravikant (AngelList cofounder), The Chainsmokers, George Bousis (Raise founder), and Sean Rad (Tinder founder).
- Grata, a New York and Boston-based maker of a search engine for discovering small to middle market private companies, raised $3.2 million in seed funding. Bling Capital led the round and was joined by investors including Accomplice and Alumni Ventures Group.
- BlackBoiler, an Arlington, Va.-based contract markup technology provider, raised $3.2 million in funding. Investors included DocuSign.
- Caliber Fitness, a New York-based fitness coaching platform, raised $2.2 million in seed funding. Trinity Ventures led the round.
- The Juggernaut, a New York City-based, media company, raised $2 million in seed funding. Precursor Ventures led the round and was joined by investors including Unpopular Ventures and Backstage Capital.
- Osmind, a Mountainview, Calif.-based healthcare technology startup providing software for mental health professionals, raised $2 million in seed funding. General Catalyst led the round and was joined by investors including What If Ventures, 20|20 Fund, Jeffrey Leiden MD (executive chairman of Vertex Pharmaceuticals), and Alice Zhang (co-founder of Verge Genomics).
- Genemod, a Seattle-based maker of data automation software for life scientists, raised $1.7 million in seed funding. Defy.vc led the round and was joined by investors including Omicron, Unpopular Ventures, Underdog Labs, and Canaan Partners Scout Fund.
PRIVATE EQUITY
- Vungle, backed by Blackstone, acquired AlgoLift, a Los Angeles-based company building algorithms to increase return on ad spend. Financial terms weren't disclosed.
- New Heritage Capital invested in Carnegie Dartlet, a Massachusetts-based provider of marketing solutions specializing in the higher education market. Financial terms weren't disclosed.
- JLL Partners acquired MedeAnalytics, a cloud-based enterprise analytics solutions provider for health systems and health plans. Financial terms weren't disclosed.
- Susquehanna Private Capital invested in Authority Franchise Systems, a Hickory, N.C. based franchisor of mosquito, pest and tick control services. Financial terms weren't disclosed.
- Clearwave, backed by Frontier Growth, acquired Odoro, a New York-based provider of digital patient-access solutions for healthcare providers, physician practices, and healthcare systems. Financial terms weren't disclosed.
- Dude Solutions, backed by Clearlake Capital Group agreed to acquire Confirm, an asset management platform, from Precisely. Financial terms were not disclosed.
- Leonard Green & Partners invested in Eyemart Express, a Texas-based optical retailer. Financial terms weren't disclosed.
OTHER
- Insider Inc. is in talks to acquire a controlling stake in MorningBrew, the financial newsletter startup, that values the company at over $75 million, per the Wall Street Journal. Read more.
EXITS
- Barentz International agreed to acquire Maroon Group, an Avon, Oh.-based distributor of life sciences ingredients, from CI Capital Partners. Financial terms weren't disclosed.
IPOs
- Sun Country Airlines, an airliner specializing in taking those in the midwest to sunnier regions that is backed by Apollo, may restart IPO plans as soon as next year. Read more.
- DoubleVerify, a New York-based digital media engagement analytics firm, could seek to raise $500 million through an IPO as soon as the first half of 2021, per Bloomberg. Providence Equity Partners backs the firm. Read more.
- McAfee Corp, the cybersecurity company carved out of Intel Capital, plans to raise $758 million in an offering of 37 million shares (16% sold by insiders) priced between $19 to $22. Read more.
SPAC
- E2open, a maker of supply chain software, agreed to go public via merger with CC Neuberger Principal Holdings I, a blank check company, valuing the firm at $2.6 billion. Insight Partners backs E2open.
- Finance of America Equity Capital, a lending and services platform, plans to go public via merger with Replay Acquisition Corp., a SPAC, valuing it at $1.9 billion. Blackstone backs Finance of America.
- Skillsoft, a digital learning company, will go public via merger with Churchill Capital Corp II, a SPAC, in a deal valuing the company at about $1.3 billion. Investors including Charterhouse Capital back SkillSoft.
- Advent Technologies, a fuel cell maker, plans to go public via merger with AMCI Acquisition, a SPAC. The deal values the firm at $358 million.
F+FS
- BC Partners has raised roughly half of its goal for its 11th fund, per Bloomberg. The fund is targeting about $10 billion. Read more.
- Canaan Partners closed its 12th fund with $800 million in commitments. Read more.
PEOPLE
- Bridges Fund Management promoted Ed Niemczyk to partner.
- Felix Capital named Angela Chou and Joseph Pizzolato as investors.


fortune--2020-10-14--How JPMorgan Chase is proceeding with extreme caution—and still making plenty of money

If a modern-day Rip Van Winkle had been slumbering since February and just awoke to read JPMorgan Chase’s headline numbers for Q3—before witnessing the masked throngs and boarded-up storefronts—he wouldn’t know that an economic crisis is ravaging America.
Before the market close on Oct. 13, the banking colossus smashed expectations by announcing $9.4 billion in net income, the second-highest quarterly number in its history. That’s a 4.4% gain over Q3 on $29.15 billion in revenues that slipped just a hair from last year. Wall Street analysts were forecasting a 2% fall in sales and 12% drop in profits, the latter driven by another big slug of provisions to cover future loan losses. The analysts reckoned that JPMorgan would book $2.8 billion in credit costs to bolster its reserves for looming write-downs that it hadn’t seen coming in the previous two quarters.
As it turned out, JPMorgan took around one-fifth of the predicted provisions. That underscores the most important takeaway from the release and conference call: The consumer and even most corporate borrowers are looking like much better credits than a few months ago as the economy rebounds faster than expected. The big unknown is whether the meltdown that appeared to be around the corner is lurking down the road.
In one of his most noteworthy statements, CEO Jamie Dimon declared that credit losses will remain mild until late next year. He says that’s mostly because the government’s unprecedented aid to families and businesses, and the banks’ forbearance programs, have delayed defaults for months that would have come far earlier. CFO Jennifer Piepszak provided a rough timeline. “We’ll see delinquencies pick up in the early part of 2021, and charge-offs will come in the back half,” she said.
Asked to put a number on how big those charge-offs could be a year hence, Dimon and Piepszak declined to even venture a guess. Dimon said that although more rounds of stimulus would “improve the picture,” by far the biggest factor is the pace and durability of the recovery and how fast lost jobs return. Because the outlook is so uncertain, Dimon said, JPMorgan is basing its estimates of future losses on a scenario that’s lot more negative than the Federal Reserve’s “base case” numbers that forecast positing an stubbornly high unemployment rate of 7.7% in Q4 of next year, and national income running 2.4% below last year’s levels.
The big positive is that JPMorgan has plenty of capital to withstand future losses and keep credit flowing, even in the direst of scenarios. In fact, its position epitomizes how much better fortified lenders are today than at the dawn of the financial crisis. “It’s night and day,” says David Fanger, SVP of the financial institutions group at Moody’s Investors Service. “The big banks are far stronger in capital and liquidity. They’re holding much bigger credit reserves than at this point in the cycle in 2008.” He adds that the Fed-imposed cap on dividends and prohibition on share buybacks is forcing them to hoard cash that further buttresses their balance sheets. Another safeguard: New accounting rules requiring lenders to take all anticipated losses, over the entire life of their loans, not when they stop paying, but when analysis of shifts in the economic climate show they’re likely to go bad in the future.
Despite his caution on forecasting the fate of the consumer who will determine the bank’s future profitability, Dimon made two observations that showed optimism. First, he hopes that the Fed will lift restrictions on stock buybacks soon so that “we’re allowed to do it before the stock is much higher.” That comment suggests Dimon sees no need to keep accumulating earnings previously spent on repurchases as an additional buffer for future losses. Second, he revealed that prudently navigating the pandemic doesn’t rule out acquisitions. Dimon revealed that JPMorgan is in the market for an asset manager. “Our doors and telephone lines are wide open,” he said. “We’d be very interested. We do think you will see consolidation in the business.”
Here are five trends that stood out in the Q3 report.
Trading and investment banking
The shift in JPMorgan’s profitability from the biggest traditional source, the consumer, to trading and capital markets, is nothing short of astounding. The much-criticized universal bank model is demonstrating what Dimon always claimed was a big plus, that it offers broad diversification by uniting businesses that rise and fall at different times. The waxing in those Wall Street staples as the results in consumer wane is what’s supporting JPMorgan in the crisis.
The corporate & investment bank, one of the four major profit centers, posted net income of $4.3 billion, triple the figure in Q3 of 2019. The star was trading, or what’s called “markets.” Bond, commodity, and equity trading combined garnered nearly $7 billion in revenue, up 27% year over year. Investment banking revenues, propelled by the surge in new IPOs, were also extremely strong. All told, the C&I segment accounted for 46% of JPMorgan’s profits, up 31% in the year-ago period.
Consumer lending
In consumer & community banking, revenues and profits both retreated by 9%, with earnings falling $4.25 billion to $3.87 billion. That shrank the segment’s share of total profits from around half through all of last year to 41%. The reason for the pullback is twofold. First, the pandemic has pummeled demand for consumer loans. In the past year, the combined portfolio for home, auto, and credit cards has fallen from $384 billion to $332 billion. Second, the interest collected on the average loan shrank as the Fed flooded the markets with liquidity to counter the COVID crisis, shrinking rates across the entire spectrum of lending. Interest income dropped by $1.1 billion or 13% in Q3, versus Q3 of last year.
An exception to the retreat was a jump in lending to small businesses driven by the federal Payroll Protection Program that guaranteed loans to employers that kept their workers employed. The initiative doubled JPMorgan’s portfolio to the likes of restaurant chains and contractors to $44 billion in the past several months.
Credit costs
The report’s most astounding feature is the unexpected drop in credit costs from crisis heights to below where they stand even in good periods. The shift from a sharp spike and steep fall are partly explained by a radical change in the accounting standards that dictate how banks must treat credit expense. Until this year, lenders booked credit costs, called “provisions,” mostly based on the length of time loans were delinquent. So in a bad economy, as more and more customers stopped paying, the credit costs would keep mounting quarter after quarter.
But at the start of 2020, the Financial Accounting Standards Board overturned the old regime. FASB stipulated that banks take a hit on all loans on their portfolio that the bank’s models forecast will go bad at any time in the future, even if the home or business owner was still paying right on time. The arrival of Current Expected Credit Loss provision, or CECL, coincided with the onset of the pandemic. The upshot: Banks took gigantic losses in Q1 and Q2 in a big, upfront wallop that, in past crises, they’d have parceled out over many quarters.
JPMorgan was no exception. In 2019, its credit losses were running at roughly $1.5 billion a quarter. The entire industry was benefiting from a balmy climate where relatively few car, credit card, or small-business loans were going into default, a benefit that countered the drag of low rates and brought one of the best runs in banking history. When the world changed in Q1, JPMorgan followed the CECL guidelines by taking a $8.3 billion blow for all the losses it saw coming. Then when the outlook turned darker in Q2, it took another $10.5 billion in provisions. In just two quarters, JPMorgan absorbed a blow that was six times bigger than the total damage for 2019, with two-thirds coming on the consumer side. Hardest hit was the $140 billion credit card portfolio.
It appears that JPMorgan did a good job estimating those future losses during the depths of the crisis. In Q3, the bank registered credit losses of just $611 million, 6% of the figure in Q2. In the consumer bank, the number dropped from $5.8 billion to $794 million. Overall, JPMorgan registered around $1.2 billion in losses on loans that looked all right in Q2 but that it now deemed would go bad. It also took “reversals” for mortgages and corporate credits that came due, and that borrowers paid back, money that flowed back into earnings. So the cost of $611 million is actually the net of the new hit from CECL, and the loans it reckoned were going bad, but that customers repaid, providing a kind of windfall.
The future
CECL is forcing lenders to assess potential losses far into the future. The new rules have provided added shelter against the COVID hurricane. What’s remarkable is that so far, JPMorgan is seeing a tiny fraction of its loans go delinquent. In the $438 billion consumer portfolio, only 1.62% of home loans are 30 or more days past due, the same fraction as a year ago, and in cards, the nonpayment rate of 1.57% is well below the mark in September 2019. The reason: So far, more people have been paying down or retiring their card balances than are falling behind.
JPMorgan has followed CECL by taking $20 billion in upfront credit expense in just three quarters for good reason. Those provisions signal that its models predict that it will actually write off that dollar amount in loans in future quarters. Of course, that $20 billion hit assumes an economy much worse than under the Fed scenario. On the conference call, Dimon and Piepszak cited that although forbearance has ended for auto and card loans, it’s still allowing customers with $28 billion in mortgages to defer payments. As all the deferrals programs run out, and aid from the stimulus fades—unless a new one is forthcoming—defaults will inevitably rise starting in 2021, and as Piepszak noted, lead to a surge in actual charge-offs late in the year. She’s also expecting trouble from airlines, retailers, hospitality, and other service sectors roiled by the pandemic.
But keep in mind, JPMorgan has already taken the $20 billion hit upfront. For the bank to face more loan losses, the consumer will have to suffer far more stress over the next year or two than shown under its conservative projections for the economy’s future. The big question is whether things will get that much worse.
Deep reserves
Right now, it’s remarkable that JPMorgan has managed to build a thick cushion against future losses and still generate substantial earnings over and above what it’s putting aside. But can that trend continue? JPMorgan now holds $34 billion in reserves for future loan losses, a $20 billion or 142% increase from the start of the year. On the call, Dimon said that if the recovery tracks the base case scenario, JPMorgan will have $10 billion in excess reserves that it won’t need. Recouping reserves would provide a big lift to future profits.
What JPMorgan has going for it is a combination of gigantic reserves and big earnings power that would enables it to swell its reserves if things get much worse, and still have plenty of profit left over. On the call, Dimon pointed out that after paying the regular $2.5 billion dividend and covering loan loss provisions in Q3, JPMorgan booked $7 billion in extra earnings that it added to capital, providing a stronger bulwark for future credit losses.
JPMorgan’s in no danger of getting in the same kind of trouble that crippled banks in the great financial crisis. Still, if the U.S. enters a period of grinding long-lasting unemployment, it could still take more CECL hits—as well as suffer from flagging loan growth—that could make it a lot less profitable than in last year’s golden days, or even in the last quarter. Wall Street certainly isn’t convinced. The bank’s share price fell 1.6% following the strong Q2 report, and its price/earnings ratio is languishing at a paltry 13.
Chris Wolfe, an analyst for Fitch Ratings, sounds a note of caution. “The banks are significantly better off than in the global financial crisis,” he says. “They should be well-reserved through into 2021. But it’s too early to tell how adequate their reserves are over the cycle. We’ll have to see the progress in containing the pandemic, and see how the employment data rolls in.”
So far, JPMorgan is proceeding with extreme caution—and still making plenty of money.


fortune--2020-10-14--Craft brewers upend their business models in fight to stay alive

While the days of explosive growth were already behind the craft beer industry when the COVID-19 pandemic hit, small independent brewers were still increasing their numbers each year—and there was no sign that any major reversal was on the way. Yet by spring, the numbers could be devastating.
Despite those many Zoom happy hours and tales of day drinking as you work from home, total beer sales haven’t changed much year to date, says Bart Watson, chief economist for the Brewers Association. And small breweries have had to pivot their business models to stay in business, as taprooms shut down, and restaurant draft business dried up.
Many have increased their production capacity to sell to-go beer. A limited number have been able to do direct shipping to customers. The looming cloud on the horizon, though, is that demand is about to dip.
“COVID really hit during the best period of the year for small brewer sales,” says Watson. “This is the time brewers make money to survive the lean times. That might be enough to get them through now, but we’re going to see what the winter brings…An event like this has to be drawing down the cash reserves and causing financial harm, so I do think there’s the potential we’ll see an elevated closure rate over the next six to 12 months.”
At Ale Asylum in Madison, business is down 40% so far this year, says cofounder Otto Dilba. That’s despite the brewery-restaurant having a large patio, which has reopened, a bustling pickup business, and the launch of a wildly successful beer—aptly named “Fvck Covid” —which sells out as soon as they can put it on sale.
The inside dining room at Ale Asylum has stayed shut so far to decrease the chances of the virus spreading. As winter hits, though, that might not be an option. And that presents another problem.
“We’re also a production facility,” he says. “If we had to quarantine for two weeks, our business would go under.”
Fvck Covid has proven to be a bright spot for Ale Asylum. The pilsner (and Fvck Covid 2.0 hazy IPA) has been in high demand not only at the brewery and through Wisconsin and Illinois, the usual distribution range for the brewery, but also in 12 other states as well. Up next is a line of beers called Apocalypse Bingo, which will be sold alongside Fvck Covid. The first beer will be called Murder Hornet Pale Ale.
While most breweries have replaced draft and taproom sales with canned products, that has been more challenging for smaller brewers who don’t have their own canning line. Mobile canning companies have been in high demand, meaning it’s harder to slot time to get the beer into cans—and the cost of working with those services cuts into margins.
Perhaps more concerning, a can shortage is looming. Ball Corp., the world’s largest manufacturer of cans, told investors last month that can demand in North America is growing at a pace of 8 billion to 10 billion cans a year, and it’s struggling to keep up.
“That reduces the ability of some brewers to pivot,” says Watson. “Some are re-sleeving misprinted cans. Some people are considering bottling, but there’s not as much mobile bottling options…There really isn’t a great option. This isn’t a problem that’s going to be solved until more canning capacity comes online.”
While many breweries are seeing a surge in direct sales, their efforts to supplement income via wider distribution aren’t progressing as quickly. Partnering with a beer distributor isn’t something that’s normally done quickly since it can have long-term repercussions. But some brewers are sidestepping that hurdle by partnering with Tavour, a beer shipping service.
So far this year, 90 new brewers have partnered with Tavour. And beer lovers have responded. The company’s business has tripled since March.
“They’ve been a great partner for a lot of breweries that did have excess capacity,” says Neil Fisher, cofounder and head brewer at WeldWerks Brewing Co. in Greeley, Colo.
WeldWerks has been one of the fortunate breweries in the pandemic, seeing sales increase and actually increasing its staff by 33% since March.
“We’re definitely in the minority,” says Fisher. “We’ve been very, very fortunate. We just have a lot of the right business model and the ability to adapt very quickly. We’re not so big that we have so much static friction based on long-term forecasts and plans made 18 months in advance…but we’re big enough to have commodities like our own canning line and access to cans.”
WeldWerks is the exception, though. A joint study by the Beer Institute, the Brewers Association, the National Beer Wholesalers Association, and the American Beverage Licensees estimates retail beer sales will drop by more than $22 billion due to the pandemic. And more than 651,000 jobs supported by the U.S. beer industry will be lost by the end of the year because of COVID-19.
In Texas, as many as two-thirds of local craft breweries could be forced to permanently close by the end of 2021, according to a survey from the Texas Craft Brewers Guild.
“This is do-or-die time for a lot of us,” says Dilba. “Right now, your local brewery needs you more than ever.”


fortune--2020-10-14--Facebook A.I. researchers push for a breakthrough in renewable energy storage

Facebook is one of the world’s largest corporate purchasers of renewable energy, having signed deals for more than 5 gigawatts of “clean” power—3.5 gigawatts of which is expected to be online by the end of the year. (One gigawatt is enough to power 700,000 homes for a day, according to some estimates.)
The company uses all that energy to power the vast data centers that run its social media platforms, as well as to keep its various offices humming—though Facebook, along with other large technology firms, has been faulted by environmental groups for the sheer amount of energy its data centers consume.
Now Facebook seeks to solve one of the biggest impediments to making power grids more green: the need to balance the irregular supply of power from renewable sources like wind turbines and solar panels more evenly so that it can match demand.
A major drawback of most clean energy sources is that they are only available intermittently—solar power when the sun shines and wind power when it’s windy. Often those conditions don’t line up with demand. As a result, most power grids still have to rely on fossil fuel–based power generation or nuclear power to ensure the grid has enough power, no matter the weather.
Storing excess renewable energy in batteries for use later is one potential solution to this problem. But even with a breakthrough in battery technology, it is likely to be prohibitively expensive and unwieldy.
Another option is to convert renewable electricity into some other form of relatively clean energy, such as hydrogen, ethanol, or ammonia. But achieving this today involves chemical processes dependent on expensive catalysts, such as platinum, and the processes remain fairly inefficient, which means that a good portion of the electric energy goes to waste.
Researchers at Facebook think artificial intelligence might be useful for finding better catalysts. They’ve teamed up with chemical engineers from Carnegie Mellon University in Pittsburgh on an initiative they hope will drive innovation in the field.
On Wednesday the group released a data set of 1.3 million simulations of the quantum mechanical interactions between molecules of two chemical compounds when they come into contact. Called Open Catalyst 2020, it is the largest such data set ever assembled and should enable researchers to train a machine learning algorithm to begin to make accurate predictions about these chemical interactions, according to a Facebook blog post.
Zachary Ulissi, a chemical engineering professor at Carnegie Mellon who is working on the project with Facebook, said that simulating the atomic-level interactions of two chemicals, particularly those with higher atomic masses, is extremely complicated and time-consuming using existing methods, which mostly involve a technique called density functional theory (DFT). Each simulation takes weeks to months, he said. “It’s very hard because of the number of electrons in the system.”
Modern chemistry labs, using very powerful computers, can use DFT to simulate at most 40,000 compounds per year, Facebook said in its blog. But there are billions of possible combinations to explore to find candidates that might make effective catalysts—and even after finding one that looks promising in simulation, it must still be validated through real experimental chemistry in the lab.
Facebook said that using the existing DFT process running on the company’s own high-performance computers, it took about 12 to 72 hours to create each set of simulations that is in the Open Catalyst data set.
The company said that by using a machine learning method based on deep neural networks—a kind of A.I. software loosely modeled on the human brain— it hopes to be able to train an algorithm that might be able to make accurate predictions about the catalytic potential of two compounds in just seconds.
Facebook is also making the Open Catalyst data set freely available to other researchers to use to train A.I. algorithms, and it is creating a leaderboard to rank how well various algorithms perform at predicting known catalytic interactions. In other areas—from predicting how proteins fold to figuring out how to detect hate speech—this kind of competition for bragging rights has proved to be a powerful incentive that has spurred progress toward creating powerful A.I. algorithms that can tackle real world problems.
Larry Zitnick, a Facebook A.I. researcher based in Menlo Park, Calif., who is helping with the catalyst project, said the company’s scientists thought they could make an important contribution to the search for better catalysts for two reasons: one is the sheer amount of computing power that Facebook has available. The other is the Facebook A.I. research lab’s expertise in a particular kind of neural network called a graph neural network that is good at capturing complex relationships and interdependencies between variables. Zitnick said he thinks graph neural networks may be especially useful in predicting catalytic interactions, although this has yet to be proven.
Ulissi said that chemical engineering had only recently begun to figure out how to apply A.I. techniques to some of its biggest problems. He pointed to recent progress that has been made in training algorithms to accurately predict the shape and structure of small molecules that might be useful in creating new medicines as an example of what might now start happening with chemical catalysts too.
But he cautioned that it is even more difficult to make accurate predictions about the subatomic interactions of the large inorganic compounds and metals useful for converting electricity into energy stored in another type of fuel than it is to make forecasts about the small organic molecules often used in pharmaceuticals.
This post has been updated to clarify that the 12 to 72 hours mentioned in the story refers to the time it took Facebook to simulate each catalyst included in the Open Catalyst data set using the DFT method, not the training time for a neural network to learn to accurately predict a catalytic interaction.
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fortune--2020-10-14--Meghan Markle on motherhood: ‘It makes you more courageous’

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! Amy Coney Barrett is questioned by Sen. Kamala Harris, Michaela Coel talks ‘I May Destroy You’ and the creative process, and Meghan, The Duchess of Sussex joins MPW Next Gen. Have a wonderful Wednesday.
– More Meghan. When Meghan, The Duchess of Sussex joined us at the Fortune Most Powerful Women Summit last month, we were thrilled to feature her insightful conversation with Fortune‘s Ellen McGirt about humane tech and how to build healthy communities online.
But there was more to come: the duchess joined us yesterday, this time at the Fortune MPW Next Gen Summit, to talk about the theme of “courageous leadership”—how she finds courage within, approaches risk-taking, and thinks about her role as a leader on the world stage.
Fortune‘s Michal Lev-Ram covered my conversation with the duchess, which spanned healthy social media use, how motherhood influences her approach to leadership (Meghan and her husband, Prince Harry, are parents of nearly year-and-a-half-old Archie), and more.
The Broadsheet’s Emma Hinchliffe and Meghan, The Duchess of Sussex at the Fortune MPW Next Gen Summit.
Meghan’s thoughts on motherhood especially stood out to me. “My gut is that it makes you more courageous,” the duchess said, answering my question about whether parenting has made her more cautious or more courageous in her choices. “It makes you so concerned for the world they [your children] are going to inherit. At the same time, I am cautious of putting my family at risk by [saying] certain things—I try to be very clear with what I say, and not make it controversial.”
You can watch Meghan’s clip about motherhood here and a clip featuring her thoughts on social media—she points out that the term “users” suggests a tendency toward addiction—here.
Today at Next Gen, we’ll be joined by actor Yara Shahidi and her mother and business partner Keri Shahidi; Zoom CMO Janine Pelosi; investor Alexa von Tobel; and more. Read on for more of yesterday’s highlights.
Emma Hinchliffe
emma.hinchliffe@fortune.com
@_emmahinchliffe
MORE FROM MPW NEXT GEN
- Riding on. Peloton's Ally Love kicked off Next Gen reflecting on staying motivated—and being kind to yourself: Fortune
- Pinterest's problems. Françoise Brougher spoke to Kristen about her gender discrimination lawsuit against Pinterest, where she formerly served as COO (Pinterest has said it is reviewing the claims). "This problem can be solved only if there is much more transparency," Brougher said, specifically referring to pay disparities. Fortune
- Food fight. How are restaurants fighting to make it through the pandemic? Momofuku CEO Marguerite Zabar Mariscal and Mashama Bailey, chef and partner of Savannah establishment The Grey, took to the virtual stage to explain. Fortune
- Coel's creativity. Any I May Destroy You fans here? Michaela Coel spoke alongside HBO exec Amy Gravitt about her creative process and the pair's partnership. Fortune
- All about the vaccine. Once a coronavirus vaccine is available, how will public health professionals convince the public to get it? Chelsea Clinton moderated a panel about combatting vaccine hesitancy. Fortune
MOVERS AND SHAKERS: Time's Up hired MomsRising's Monifa Bandele as COO and National Network to End Domestic Violence VP Latifa Lyles as VP for advocacy and survivor initiatives; former COO Rebecca Goldman will become senior adviser. Twitter VP of diversity partnership strategy and engagement Candi Castleberry Singleton joins the board of the Ms. Foundation for Women. The American College of Surgeons voted Dr. Julie A. Freischlag president-elect. Brex hired former Spotify global head of consumer and product marketing June Sauvaget as CMO.
ALSO IN THE HEADLINES
- Building confidence. Speaking of Chelsea Clinton's panel at Next Gen, this NYT story profiles Heidi Larson, founder of the Vaccine Confidence Project. Larson works to understand where lack of trust in vaccines comes from and determines how to address those feelings. New York Times
- Court questioning. On the second day of Amy Coney Barrett's Supreme Court confirmation hearings, Sen. Kamala Harris questioned the judge. The vice presidential nominee grilled Coney Barrett on the Affordable Care Act and abortion rights. Questioning continues today. CNN
- Keeping her distance? First Lady Melania Trump's pandemic messaging continues to conflict with the President's. The day after he returned from the hospital and removed his mask for a photo op, she released a detailed statement about her office's safety protocols. The tactic is either about self-preservation or an effort to project that there is some level of sensibility in the White House. Washington Post
- Women of the Year. Glamour picked its 2020 women of the year, who include women in health care on the front lines of the coronavirus fight; 90-year-old Dolores Huerta; Regina King; and more. Glamour
ON MY RADAR
NASA finally made a toilet for women The Atlantic
The three-child American family, under siege New York Times
Solange Knowles: Reflections on stillness, joy, and the year that changed everything Harper's Bazaar
PARTING WORDS
"She’s still the woman in charge, who wants to own her life, whether at work or whatever it is. That woman still exists today whether she’s getting on a plane or not."
-Talita von Furstenberg, the designer and granddaughter of Diane von Furstenberg, on the state of the DVF customer who wears the brand's travel-friendly wrap dress. The duo joined the Fortune MPW Next Gen Summit.


fortune--2020-10-15--COVID could reinvent how we go to the movies

Like the shuttering of museums, concert halls, and theatrical spaces across the country during the pandemic, Cineworld’s decision last week to close all 536 Regal Cinemas in the U.S.—and furlough 40,000 employees—is at once both deeply painful and understandable. The news only got worse this week, as the largest chain, AMC Theatres, announced that it’s facing bankruptcy by the end of the year.
I’m a screenwriter, whose early experiences swept up in the power of movies (Sex, Lies, and Videotape, Do the Right Thing, and, okay fine: Dreamscape) have made me park myself in a chair for untold hours trying to reproduce it. The American way of moviegoing is long overdue for a “page one” rewrite, and I hope that these closures might serve as the inciting incident of a profound transformation in how we experience movies.
Megaplexes, designed during a blockbuster era of moviegoing, resemble airport hangars, with no discernible atmosphere or curatorial imprint, and “concessions” conceding to our worst instincts. Not surprisingly, before COVID, Regal (second in the U.S. in number of theaters only to AMC) was in desperate need to win back audiences from their dialed-in home theater sound systems and infinite streaming options. The fact that one movie getting bumped from this fall to April 2021—the next James Bond—triggered Regal’s announcement reveals the tenuous nature of megaplexes’ boom-or-bust economic model. The dinosaurs got very big before they got very dead.
The plight of chain movie theaters was already serious. The men’s bathroom at the local Regal here in upstate New York has had broken urinals and a broken water fountain since I moved here. How financially strapped—or checked out—do you have to be to let the same urinal go unrepaired for eight years?
As consumers, we’ve been going to the movies almost in spite of the movie theaters themselves. Could you imagine saying the same about a restaurant or a museum? ArcLight, IPIC, and the Alamo Drafthouse phenomenon—plush seating, food, and adult beverages at smaller-scale theaters with actual cinema programmers at the helm—point to a better future of moviegoing.
But here in New York, the current law works against exhibitors—like Ithaca’s beloved local nonprofit Cinemapolis—trying to appeal to grownups. Serving drinks requires having a full kitchen, table service, and a table for every seat where alcohol is being served. (The governor has tried twice to change the law, but it’s been stymied in the State Senate.)
In the late 1940s, the Paramount consent decrees (decided in a Supreme Court case) prohibited movie studios like Warner Bros. and MGM from also owning and operating movie theaters. This August, the Justice Department terminated the decrees, which signals that a wave of innovation might be coming. But we already can guess what it will look like. Disney accounted for 40% of the U.S. box office in 2019, and there’s no doubt it will lead the charge, remaking theaters into “attractions,” enveloping us in highly polished entertainment.
But I don’t just go to the movies to be entertained—I go to travel, discover, empathize, be challenged, and come out changed. It’s difficult to imagine brilliant, visceral Oscar-winners like Moonlight or Call Me by Your Name or The Favourite on the Disney marquee—the kinds of films that demand social viewings, in theaters, followed by rich conversations to explore their unanswered questions and provocations. It’s even more difficult to imagine those conversations happening at Disneyland’s Blue Bayou Restaurant.
There’s another model at work right now, a consequence of COVID, that might prove to be a path forward.
This week, I was supposed to be in Toronto at the Inside Out film festival, screening a new short film. But because of the pandemic, the festival had to go virtual, so instead of two weekends full of screenings, Q&As, and dinners with filmmakers, the festival released tickets to the films online. This meant that the kinds of films you might ordinarily only see at a film festival—those without distribution, or unknown actors, or simply no hype or marketing budget—were available to stream and take a risk on. I hope that highly selective and remote festivals like Sundance, Telluride, and Cannes can use these kinds of public access screenings even after the pandemic fades.
The only issue is that this smart workaround for movies misses the going part of moviegoing—and when we lose the communal aspect of watching together, we’re at risk of losing the substantial power of the art. In Aristotle’s Poetics, he argues that catharsis is the central effect of great drama—a feeling of purgation and reawakening forged from a deep link between the audience and the protagonist.
But he didn’t have the Startled Cats subreddit or my Oculus Quest to worry about. When we watch at home, when we watch with our attention scissored up by other screens, that amplitude of feeling is next to impossible, like listening to a symphony from outside the concert hall.
Movie theaters are the best environment for catharsis, but they need to respond to shifts in attitudes and taste. Movies themselves deeply reflect our culture. Theaters should as well.
Austin Bunn is a screenwriter and an associate professor in the performing and media arts department at Cornell University.


fortune--2020-10-15--‘A curfew at nine o’clock is like closing restaurants’:  For the French, the latest COVID measures c

‘A curfew at nine o’clock is like closing restaurants’:  For the French, the latest COVID measures cross a line

Steps from Paris’s Notre-Dame Cathedral sits one of the city’s oldest restaurants, Au Vieux Paris D’Arcole, a medieval jewel whose stone walls and chandeliers (not to mention fine cuisine) have wowed visitors for decades. Built in 1512, it has withstood the French Revolution, two World Wars, the Nazi occupation, and much else.
But after nearly 500 years, the restaurant is battling to survive the newest calamity: the pandemic. After a two-and-a-half month nationwide lockdown earlier this year, and a ban since March on American tourists—a major source of revenue for Paris—the restaurant recently laid off six of its eight employees.
Then on Wednesday night came the latest blow, when French President Emmanuel Macron announced a four-week curfew in Paris from 9 p.m. until 6 a.m., beginning Saturday night. The measure extends to eight other cities and came after weeks in which the French returned from their long summer break and poured into the parks, markets, and restaurants, reveling in cities that have suddenly come alive with action—and with no tourists, all their own.
Within weeks, coronavirus cases began soaring and this week hit about 20,000 new cases a day. In the Paris region, about 46% of all ICU beds are now filled with COVID-19 patients, according to Paris’s public-health officials on Thursday. Reassuring the alarmed public, Macron said in a televised address on Wednesday night that it would be “disproportionate to lock down the country again.” The curfew, he said, was a targeted measure: “With this, it is our objective, in a very concrete manner, to halt the virus.”
But to many Paris restaurants, Macron’s curfew might just as well be another total lockdown.
“To have a curfew at nine o’clock is like closing restaurants,” Georges De La Rochebrochard, the owner of Au Vieux Paris D’Arcole, told me on Thursday morning. “The French begin eating dinner at about 8.30 p.m.,” he says. “Only Americans eat at seven o’clock, and they are not here.”
Last blast of freedom
To us Paris residents, that has long been clear. In normal times, hordes of tourists jam the streets during the day around the Louvre Museum, and the Champs-Elysées and other major shopping districts; tourism represents about 11.7% of Paris revenue, and Americans contribute by far the biggest share, with nearly 2.26 million U.S. visitors to the city last year.
But it feels like real Paris comes alive at nighttime. On Wednesday night, as Macron made his televised address to the nation, I was at a book launch attended by about 20 women, many of them American. Midway through the evening, our phones began buzzing with news of the curfew. “Come for dinner Saturday night, we’re cooking,” said a friend as I was leaving, before hearing about the curfew. Suddenly robbed of her dinner plans, she seemed stumped for an alternative.
On the walk home through my Left Bank neighborhood, I sidestepped a restaurant that was packed both inside and at the tables set up along the sidewalk. Several people were browsing the menu, seemingly in no rush to decide what to eat for dinner. It was 9.30 p.m.
Less visible, of course, was that the pandemic has hit hardest among those lower-income Parisians cooking in the kitchen and serving tables, and whose commute often involves long train rides from peripheral suburbs.
Like countless other families around the world, mine has struggled to define how exactly to behave during the pandemic. My son, 14, returned to school on Sept. 1—masked in class—and now zips around the city on the Paris Metro, to tennis lessons and his jazz-music school. Last Saturday night, he met four friends in the old Le Marais district, where they ate falafel and then walked two miles home. With the pandemic’s second wave raging, was it a fun night out, or a life-threatening act? Without clear rules imposed upon us—like a nationwide lockdown—it has been difficult for us parents to set our own. We ultimately decided it might be his last blast of freedom, before the walls close in again.
“We are very skeptical”
For the restaurant industry, those walls feel like a catastrophe. De La Rochebrochard says his revenues so far are down more than 80% this year, from about $1.18 million in 2019, to about $234,000, but estimates that could drop to about $134,000 by the end of the year—a figure that the restaurant might not be able to survive. Will it recover in the end? I ask. “We are very skeptical,” he says.
He is hardly alone. The sense of doom among restaurateurs reached a peak on Thursday. “The government does not say they are closing restaurants, but this is the same thing,” says Christine Fabre, co-owner of five restaurants and one bar, most around the busy Montparnasse district on the Left Bank. She says half of her restaurants would likely close the whole day, while the others will attempt to survive the four-week curfew. It will not be easy. “Our rush is between 9 and 11 p.m.,” she says.
De La Rochebrochard says he does not know whether he can keep the old treasure, Au Vieux Paris D’Arcole, going. Generations of his extended family have run the restaurant for about 200 years.
At 67, he is getting ready to retire, and until COVID-19 hit, one of his three children had been interested in taking over the restaurant. But now, he says, “not at all.” He and his wife are weighing what to do. If their revenues plunge further, they will struggle to pay utility bills. “If someone comes to me now wanting to buy, I would sell immediately,” he says. “Many restaurants are for sale. But there are no buyers.”
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