Viewsroom: Vices and more 9 Apr 2020 Breakingviews columnists in Ireland, New York and Lantau check in with Editor Rob Cox to discuss Jamie Dimon’s annual letter and coming earnings onslaught, fraud at Luckin Coffee and, everybody’s favorite coronavirus obsession: a boom in sales of porn, weed, booze and junk food.
Fed bridges over economic chasm lack destination 9 Apr 2020 With more than 15 mln unemployment claims in three weeks, the U.S. central bank is focused on the present. The latest expansion of its debt-buying capacity to $2.3 trln is a lifeline for many. It’s also probably not the last. There will inevitably be tolls to pay later.
CEO pay sacrifices could use a pinch of altruism 9 Apr 2020 Disney, HSBC and Solvay are just a few big companies where bosses are volunteering pay. Solidarity with staff, prudence ahead of government bailouts and dwindling cash are the key motivators. Real generosity will need to come from those that are thriving amid the crisis.
UBS sets high-water mark for 2020 bank earnings 9 Apr 2020 Outgoing CEO Sergio Ermotti unveiled a one-third jump in first-quarter profit. Market volatility has boosted trading income, while wealth clients shifted more money around. Yet both are temporary. With more pain to come, it makes sense to bow to regulators by trimming dividends.
Corona Capital: Expressive earnings 9 Apr 2020 Concise views on the pandemic’s corporate and financial fallout: The U.S securities regulator encourages companies to ditch the boilerplates, ahead of what’s likely to be an unusual earnings season.
Chancellor: How to think straight during a crisis 9 Apr 2020 Plagues have always induced panicky responses. The key is to avoid innate cognitive flaws overwhelming better judgement. The findings of modern psychologists like Daniel Kahneman offer protection against groupthink and other behavioural biases unleashed by the Covid-19 pandemic.
Wells Fargo relief is one piece of bailout jigsaw 8 Apr 2020 The Fed is easing its cap on the bank’s growth so it can funnel more rescue loans to small U.S. businesses. It will help a few of the up to 30 million firms in dire Covid-19 straits, but there are plenty of other glitches to fix in the $350 billion-plus federal guarantee program.
Guest view: Can we achieve gender equality? 8 Apr 2020 In an unequal world, the coronavirus pandemic hurts women disproportionately. They are on the frontlines of the fight caring for the sick but are more exposed to hardships. Women might end up suffering the most while saving the world. Leaders can respond now to fix the equation.
For staff, Jeff Bezos is more CEO than trailblazer 8 Apr 2020 The Amazon founder has transformed shopping. But the way the $950 bln firm treats its workers is not so futuristic. Like Walmart, it only recently provided protective gear to warehouse employees. That might fit with short-term profit, but not with long-term innovation.
Bernie Sanders may yet get his healthcare dream 8 Apr 2020 The U.S. senator from Vermont, who pushed the Democrats to the left, has suspended his campaign to be the party’s presidential nominee. The Covid-19 pandemic helped end his bid, but it could also bring closer his signature goal – remaking America’s dysfunctional medical system.
Icahn’s Volkswagen-Navistar deal is DOA 8 Apr 2020 The activist was finally set to make a fat return on the U.S. truck maker thanks to the German carmaker’s $2.9 bln offer. But the deal was never signed, and the target’s shares have halved. Given CEO Herbert Diess may have to take state aid, another Icahn bet may bite the dust.
Hadas: Beware of excessive economic gloom 8 Apr 2020 The recession is deep and the recovery may be slow, but the coronavirus will eventually pass. Capital stock is not deteriorating, and demand and money are being stored up for post-lockdown spending. Debts are the biggest risk, but a health crisis need not become a financial one.
EU banks get scary bad-debt warning from Sweden 8 Apr 2020 Swedbank’s first-quarter impairments jumped tenfold from a year earlier because of Covid-19. That’s despite a relaxed Swedish attitude to lockdowns and lenders’ accounting wiggle room. A similar spike across Europe would wipe out most profits for 2020, and bigger hits may come.
Corona Capital: Latin America and Covid-19 8 Apr 2020 Concise views on the pandemic’s corporate and financial fallout: Six Latin American countries want a $15 billion loan to help fight Covid-19. "There's no harm in trying" says Peru's president, a sad sentiment reflecting the global shortage of needed equipment.
Guest view: Recovery requires greater cooperation 7 Apr 2020 A rapid, “V-shaped” economic rebound after coronavirus passes seems increasingly unlikely, former Citi Chairman William Rhodes and Stuart Mackintosh argue. Policymakers must gird for a long haul back. A globally joined-up approach, which has been thus far absent, is critical.
TikTok is a winner in global viral challenge 8 Apr 2020 Millions of bored people are hooked on the video app for the latest dance moves and more. Owner ByteDance is getting a goldmine of user data and a bigger audience for a follow-up hit. But the unprecedented global success for a Chinese startup comes with uncharted risks.
Coronabonds can issue social goods 8 Apr 2020 Indonesia sold $4.3 bln worth of bonds, partly to tackle Covid-19. It copies a Chinese template. And an unusually long 50-year tranche found favour with life insurers. Investors welcome spin that makes portfolios look responsible, and this one may go viral faster than most.
Bailout oversight vacancy causes big risks 7 Apr 2020 The U.S. president forced out the inspector general providing supervision for $2.3 trln in emergency relief. Robust supervision over the 2008 bailout fund didn’t allay critics though it made money. Now the potential for exploiting the biggest assistance package ever is high.
Silver Lake bets virus won’t overstay 7 Apr 2020 The private equity firm is part of a group investing $1 bln in home-share app Airbnb. It also aims to raise $16 bln of fresh cash for tech investments. It’s bold timing, but depressed markets offer bargains. The question is how Covid-19 will change behavior, including in travel.
The Exchange: “Too Small to Fail” 7 Apr 2020 In normal times, some of the world’s littler nations like Denmark and Singapore tend to outperform larger ones in a variety of economic and social areas, author James Breiding tells Rob Cox. Covid-19 will likely show that big isn’t necessarily better in handling a crisis either.