The World
A tsunami of job cuts is about to hit Europe as companies prepare sweeping downsizing plans to offset a business collapse. Government-backed furlough schemes that have helped keep around a third of Europe’s work force financially secure are set to unwind in the coming months. As many as 59 million jobs are at risk, especially in industries like transportation and retail. Meanwhile, as countries world-wide boost spending, government debt has soared to levels not seen since World War II. Among advanced economies, debt rose to 128% of global gross domestic product as of July. (New York Times, McKinsey, Wall Street Journal)
China’s foreign minister will begin a five-nation “damage control” tour of Europe that is expected to focus on 5G and Huawei as more countries ban the Chinese technology giant. Beijing’s hard line on Hong Kong and its handling of the pandemic have also drawn European criticism. (South China Morning Post)
The Trump administration may bypass normal regulatory standards to fast-track an experimental coronavirus vaccine from the UK ahead of the presidential election. One option: the FDA’s awarding “emergency use authorization” in October to a vaccine being developed in a partnership between AstraZeneca and Oxford University. Meanwhile, if the U.S. is the first country to develop a vaccine, most Americans don't want to share it right away with the rest of the world — but 69% are OK putting high-risk people at the front of the line within the U.S., while just 31% said they’d prefer a first-come, first-served approach. Separately, UK’s Chief Medical Officer warned the country is unlikely to see a coronavirus vaccine before Winter 2021, while China says it began public use of covid-19 vaccine a month ago, bypassing clinical trials. (Financial Times, Axios-1, The Telegraph, Washington Post)
Sweden is beating many European countries in the fight against new infections, possibly because of its decision not to implement tough lockdown measures. As cases surge across Europe, the infection rate in Sweden is falling. Meanwhile, France will impose tit-for-tat quarantine on British visitors. (The Times, The Telegraph)
Tests at the Berlin hospital treating Alexei Navalny suggest the Russian opposition figure was poisoned, “but there is currently no acute danger to his life.” In Belarus, a strike leader and a prominent opposition activist have been seized as a crackdown looms following a huge rally. (Deutsche Welle, The Times)
Many companies that planned to reopen offices after Labor Day are rethinking their plans, amid employee outcry and fears over outbreaks. Meanwhile, London office vacancy rates are forecast to hit their highest level since the financial crisis next year as companies shrink their headquarters. Vacancies are forecast to rise from 6.5% this year to 7.2% next year, before peaking at 8% in 2022, as several big companies plan to offload space. (Wall Street Journal, The Times)
Births in Japan and the U.S. are forecast to fall next year as the pandemic’s economic toll prompts young people to think twice about getting married and having children. In Japan, which saw its population decline for the 11th consecutive year in 2019, births will drop about 10% in 2021. Babies born in the U.S. could decline by 300,000 to 500,000 next year compared with 2020, roughly a 10% drop in country's 3.7 million average annual births. (Nikkei Asian Review)
The four-day Republican National Convention is underway and is expected to paint a rosy picture of an economic comeback well underway. The GOP will forgo releasing a policy platform. Meanwhile, Axios sifted through speech transcripts and other documents from the 2016 convention, to compile a list of Trump's campaign pledges. Then they checked to see what happened. (Los Angeles Times, Finance 202, Axios)
Economy
80% of economists surveyed by NABE see a 1-in-4 chance of a double-dip recession. The economists are concerned about the increasing amount of U.S. debt, with 88% at least “somewhat” concerned and 22% are very concerned. (CNBC)
Many investment firms are waiving charges on money funds to keep investors’ yields from dropping below zero — the latest sign of how a roughly $5 trillion piece of the financial system is bracing for new pressure as interest rates plummet. (Wall Street Journal)
Large US corporate bankruptcy filings are running at a record pace and are set to surpass levels reached during the financial crisis in 2009. As of Aug. 17, a record 45 companies each with assets of more than $1 billion have filed for Chapter 11 bankruptcy. This compares with 38 for the same period of 2009 during the depths of the financial crisis and is more than double last year’s figure of 18 over the comparable period. (Financial Times)
America’s college towns are facing an economic reckoning: Communities that rely on student spending and higher education jobs are struggling with fiscal woes and Covid-19 fears as the school year begins. Many of the towns and cities that host the more than 4,000 colleges and universities in the U.S. are built on a seasonal model, earning the bulk of their revenue between August and May, when school is in session. All of that changed last spring, leaving local leaders and residents with a difficult dilemma: They fear the virus risks that returning students bring — and the economic devastation that awaits without the cash they spend. (Bloomberg CityLab)
While 96% of public company CEOs include their General Counsel on the management team, only 57% of private company CEOs report the same. Yet, the majority of CEOs surveyed said the GC role in providing early legal input into the strategy and its translation into operations is critical regardless of size. In fact, possibly even more so with smaller, more fragile companies that must have a robust risk mitigation strategy in place to survive the constant flow of disruption. (Chief Executive/BarkerGilmore survey)
Technology
Zoom users reported problems with the service, just as many students in the U.S. returned to school for virtual classes dependent on the technology. The company said it is working to address the problem. (Wall Street Journal, New York Times)
TikTok is filing its lawsuit against the Trump administration to fight an impending ban. Meanwhile, Facebook CEO Mark Zuckerberg stoked Washington’s fears about TikTok, emphasizing the threat from Chinese internet companies as he worked to fend off U.S. regulation of Facebook. (Washington Post, Wall Street Journal)
Microsoft stepped into the legal battle between Apple and Epic Games over the former’s policies with regard to its ubiquitous App Store. Microsoft said that allowing Apple to block Epic Games’ developer account would deal a significant blow to game makers including Microsoft by making them unable to use Epic’s Unreal Engine. (CNBC)
iPhone 12 event date? Apple posts and deletes September 10 event test on YouTube. (9to5Mac)
Final regulations that guide businesses and consumers under California’s new digital privacy law went into effect, marking a significant step towards giving Americans the right to request their data be deleted from e-commerce websites and social media. (Reuters)
Why do employees resist new tech? While the use and application of technology has become near ubiquitous around the world, the actual adoption of new and emerging technologies across most organizations continues to be less than optimal. Due to several barriers, tech adoption at an organizational level is often slow or even nonexistent. This keeps old legacy systems alive and hinders an organization from achieving its full potential efficiently. This lag in adoption has long been a concern for companies but now, amid a pandemic, it’s a crisis. (Harvard Business Review)
Smart Links
Companies fret as vacation days go unused. (Wall Street Journal)
Goldman plans to raise about $2 billion for new venture fund. (Bloomberg)
Why your CEO might not be right for the job. (Forbes)
Death of a Smart City: Alphabet bet big in Toronto. Toronto didn’t play along. (OneZero)
Solar, wind, and batteries are mainstream investments. (Bloomberg)
Jerry Seinfeld: So you think New York is ‘dead.’ You Think New York Is ‘Dead.’ (New York Times)