What Will Change?

Buyout barons will keep getting cake and eating it

18 May 2020

Private equity blowups like retailer J. Crew take on extra frisson in a crisis, because buyout firms themselves are benefiting from subsidized credit, low asset prices and tax loopholes. The cycle can continue while investors keep coming, and politicians have bigger fish to fry.

Carmakers’ green future gets revved up by Covid-19

18 May 2020

The virus has added pollution fears to climate-change concerns. That should be a boon for electric vehicles when production restarts. But cheap oil makes gas guzzlers look even more economical. State incentives like trading in clunkers for EV discounts would help tip the balance.

Climate fight will survive pandemic’s mixed legacy

14 May 2020

Covid-19 distilled into weeks the havoc global warming will cause over years. Going green will help states avoid a permanent version of stranded airline, oil and other assets. The challenge is to balance short-term jobless worries with the need for a sustainable economic future.

Pandemic protection will be a governmental affair

14 May 2020

With insurance losses set to top a record $200 bln, enterprising risk managers and investors are trying to capitalise by creating insurance products to mitigate future crises. But unlike 9/11 and earthquakes, the pandemic’s cost is so big states must act as ultimate paymasters.

One odd U.S. healthcare habit to get a viral cure

13 May 2020

About half of Americans are insured through their employers. Many like it that way, which has hindered reform of an irrational system. With millions out of work, firms and workers will be more willing to consider alternatives. The window for improvement is about to crack open.

Silicon Valley gears up to leave Silicon Valley

13 May 2020

Remote work has highlighted the Bay Area’s high costs. Some startups are closing San Francisco offices; giants like Facebook were already expanding their national footprint. Covid-19 will hasten the planting of tech flags across America, altering recruiting and local economies.

Hadas: Welfare states will be big Covid-19 winners

13 May 2020

National systems of income support and social care are being expanded in the fight against the pandemic. Some of the special welfare measures are going to become permanent parts of governments’ repertoire. That will benefit marginalised groups, especially in the United States.

Emerging markets will see less index, more Rolodex

13 May 2020

Epic Federal Reserve action has stemmed an unprecedented flood of capital from developing countries. But ongoing virus concerns make it risky to invest by lazily following an index. Sensible fund managers will now need to appreciate the local nuances of the places they buy into.

Hotels can ride out a cleaner, more vacant future

12 May 2020

The U.S. lodging industry is bleeding $1.4 bln a week in sales. The lockdown wind-down will offer some respite, but new hygiene measures like deep cleans and 24-hour delays between guests will slash occupancy. Big brands like Hilton and Accor have a leg-up in the post-Covid era.

Fringe taxes will go mainstream when lockdowns end

11 May 2020

Governments are currently handing out money, but their focus will eventually shift to recouping the costs of the crisis. The target will be those who benefited most from bailouts. Expect wealth taxes, tariffs on tech firms, and levies earmarked for public health to gain new fans.

Virus will accelerate European mall king’s decline

11 May 2020

Unibail-Rodamco is facing a cash crunch as retail tenants withhold rent. Although the crisis looks temporary, the accelerated advance of online shopping is an existential threat to the 7 bln euro Westfield owner. Disposals may be the only way to shrink its 24 bln euro debt load.

M&A bankers should consider going back to college

8 May 2020

Not for the frat parties. Even before the pandemic, demographics were working against the economics of higher education. Crunched finances make it worse, and online learning has exposed absurd tuition costs. Colleges seeking size, scale and stability will need strategic advice.

China’s soft power will be hardened by the virus

8 May 2020

Even before Covid-19 emerged in Wuhan, partners were rethinking economic and diplomatic ties. Rising foreign criticism is sharpening attitudes in China. And Western disarray is emboldening Beijing. Restraining China’s influence will be the geopolitical struggle of the decade.

Viewsroom: Mega-mega mergers

7 May 2020

The Great Lockdown will inevitably encourage governments to foster the creation of ever-larger “national champions” through corporate consolidation. Rob Cox, Edward Chancellor and Lauren Silva Laughlin discuss possible combos – and why this would be a bad outcome for capitalism.

Cable networks risk post-virus vicious cycle

7 May 2020

Live sports are a big reason Americans tolerate pricey pay-TV packages. The lack of games is an excuse to cut the cord. Yet the NFL and others will want more for broadcast rights to make up for empty seats. That could push cable bills higher, and more subscribers toward the exit.

Supply chains’ tectonic shift will get viral jolt

7 May 2020

Tariffs, automation and climate change had businesses rethinking how best to secure their goods even before Covid-19. The pandemic has highlighted global supply chains’ vulnerability to lockdowns. Countries and companies alike will increasingly set their sights nearer home.

Critical workers hold keys to higher minimum pay

6 May 2020

U.S. ambulance drivers make under $15 per hour, EMTs under $20. And “essential” retail staff make about $13. These and others indispensable in a lockdown and at risk on the Covid-19 front line are under-rewarded. Any post-virus rethink of supply chains must also include wages.

Will casual sex get shafted by the pandemic?

6 May 2020

That’s what dating apps like Tinder, Match and Bumble are trying to answer. Diseases like AIDS changed intimacy patterns before. Covid-19 will make it harder for lovers to swipe right with peace of mind. But more engagement, if fewer hookups, may benefit the matchmaker model.

New normal will demand new gold-standard portfolio

6 May 2020

Parking 60% in equities and 40% in fixed income is the traditional balanced approach. That’s off kilter if bonds are going to offer less and less income and are sometimes almost as volatile as shares. The solution may be to hold more stocks and cash, and possibly gold, too.

Cox: Brace for America’s version of Saudi Aramco

5 May 2020

And that’s just a start. After the pandemic, governments will foster the creation of national champions. Bigger, supposedly safer and more diversified will be in. Conglomerates may even be fashionable again. In the hardest-hit sectors, like the oil patch, anything can happen.