Ed. Note: Below we post news of a business lawsuit against its insurance company that won’t extend their policy to account for the pandemic. Covid-19 insurance presents one of today’s most significant business risks — already the subject of dozens of lawsuits that, some believe, will ultimately be decided by the Supreme Court.
Working Capital Review subscriber exclusive: Today you’ll receive a second post — a podcast conversation with insurance and business risk expert Joe Coughlin, CEO & Founder of Corporate Risk Solutions — that explores the issues.
The World
EU documents indicate that Brussels will start a trade war with Britain if the UK presses ahead with plans to renege on the Withdrawal Agreement and ignores other sanctions, as EU lawyers conclude the UK has already breached the agreement. Meanwhile, the ECB held rates as its chief says the eurozone economy is experiencing a strong rebound and the euro jumped nearly 1% against the dollar. U.S. unemployment claims held steady at 884,000, a sign the labor-market recovery is losing steam. (The Telegraph, The Guardian, Financial Times, Wall Street Journal)
UK Prime Minister Boris Johnson’s mass testing “moonshot” plan to avoid a second lockdown would trap millions at home needlessly and could be “frankly dangerous.” Ministers admitted the technology needed to return to normality through testing healthy people every day did not yet exist. Meanwhile, the WEF found that 74% of people said they would take a Covid-19 vaccine when available. However, confidence levels drop significantly among countries, ranging from 97% in China to 54% in Russia. The U.S. rate is 67%. That 26% of people globally said they were not interested in getting a vaccine “is significant enough to compromise the effectiveness of rolling out a Covid-19 vaccine,” said Arnaud Bernaert, WEF’s head of shaping the future of health and healthcare. How does coronavirus attack the brain? It’s not just the lungs — the pathogen may enter brain cells, causing symptoms like delirium and confusion, scientists reported. (The Times, The Guardian, Caixin Global, New York Times)
Americans maintain a bleak view toward the pandemic: 62% are worried that the political pressure will lead the FDA to rush to approve a vaccine without making sure that it is safe and effective – including 85% of Democrats and 61% of independents. 35% of Republicans express this level of concern. 39% and 42% say the FDA and CDC (42%) are paying “too much attention” to politics. Less than half would want to get vaccinated if a vaccine were available before November. (Statnews, KFF)
Taiwan scrambled fighters after Chinese aircraft entered its defense zone, seemingly confirming Taipei’s fears that Beijing would raise military pressure after Covid threat has faded, as Chinese PLA parachute drills point to India border build-up. Meanwhile, India and Japan signed a pact for the reciprocal provision of supplies and services between their armed forces. Separately, the U.S. revoked the visas of more than 1,000 Chinese students and researchers it said had ties to the Chinese military, accusing some of espionage. (Financial Times, South China Morning Post, Nikkei Asian Review, The Guardian)
The producers of the upcoming Ben Affleck film “Hypnotic” filed a lawsuit accusing their insurance company of refusing to extend their policy to account for the pandemic. The lawsuit is among the first to test whether film insurers will be forced to accommodate delays caused by Covid-19. The suit contends that the insurer’s refusal could kill off the project. Insurers are now refusing to sell policies that would cover Covid-19 losses, so if the original policy were allowed to expire, the producers would not be able to replace it. The suit contends that without Covid-19 coverage, the producers “likely would not be able to proceed with the production.” (Variety)
A record-setting fire season worsened as more than two dozen fires forced thousands in CA, OR and WA from their homes. More than 250,000 acres consumed by a new monster blaze in Northern California that’s also also threatening the town of Paradise, just two years after it was destroyed. (Los Angeles Times, The Oregonian)
27% of parents do not feel their company supports them during back-to-school season, as 64% said they have stress and anxiety about sending their children to school during the pandemic. (EducationDive)
For the first time in Gallup's 20 years of tracking Americans' views of various business and industry sectors, farming and agriculture is the clear leader. The former top-ranking industries — restaurants and computers — remain in the top four, with the grocery industry rounding out the group. Meanwhile, the pharmaceutical industry's image has improved modestly since last year, yielding the "worst rated" distinction back to the federal government. (Gallup)
Economy
Jane Fraser will become the first woman to run a major Wall Street bank, succeeding Michael Corbat as Citigroup chief executive when he retires in February. Citigroup tapped Ms. Fraser to serve as the bank’s president and to run its global consumer bank last year. She worked at Goldman Sachs and McKinsey & Company before joining Citi in 2004. (Wall Street Journal, New York Times)
The French government may have played a key role in the LVMH-Tiffany & Co. split, asking LVMH to delay the deal close for two months past the agreed-upon deadline. An Aug. 31 letter from France's foreign affairs minister disclosed by Tiffany that reads: “The American government has decided to implement an additional customs duty on the import of certain French goods, in particular goods in the luxury sector, in reaction to France adopting a digital services tax, with the U.S. deferring the application thereof until January 6, 2021. France considers these measures legally objectionable. ... You should defer the closing of the pending Tiffany transaction until January 6, 2021. I am sure that you will understand the need to take part in our country’s efforts to defend its national interests." (Axios)
Coronavirus misinformation is infecting Wall Street research that investors rely on to trade in the financial markets. Meanwhile, small-business owners continue to face significant financial challenges as a result of the pandemic. The current index score of 60 is up from April's 48, but the results remain far below pre-pandemic levels which reached as high as 142 in 4Q19. (CNN, Wells Fargo/Gallup)
How do North Korean hackers turn billions in stolen cryptocurrency into real cash? In the last decade, North Korea’s Kim dynasty used armies of hackers to conduct billion-dollar heists against banks and cryptocurrency exchanges. Tactics include moving money in thousands of rapid and automated transactions from one Bitcoin wallet to other addresses, thus hiding the source and reducing the risk of setting off red flags. Another approach moves the money into different cryptocurrencies. The operation involves creating and maintaining hundreds of false accounts and identities. That means the ultimate destination of the coin is often an over-the-counter trader who can turn it into cash. (MIT Technology Review)
How to make rational decisions in the face of uncertainty: A simple four-step process for business leaders to work with and through ambiguity to make careful, reasoned decisions. 1. Identify the category of historical data you are working with. 2. Recognize which cognitive biases are triggered by each category. 3. Invert the problem to identify what you really need to know. 4. Formulate the right questions to get the answers you need. (Harvard Business Review)
Technology
Huawei will replace Google and put its own operating system into its smartphones and expand its ecosystem of apps as it tries to survive a battle over tech between Washington and Beijing. (Nikkei Asian Review)
TikTok’s Chinese parent, ByteDance, is discussing with the U.S. government possible arrangements that would allow it to avoid a full sale of U.S. operations. This outcome would likely involve some sort of restructuring of TikTok, possibly a deal in which TikTok takes on a U.S. technology partner that helps secure its data and potentially takes a minority stake. (Wall Street Journal)
Amazon spent $24,000 to kill Portland’s facial recognition ban — the toughest in the U.S. — that blocks the technology from private businesses as well as government agencies. Meanwhile, TikTok is censoring videos with LGBTQ+ hashtags in Russian and Arabic. (Vice, Cnet, New Scientist)
Colleagues who met on Zoom are freaking each other out in real life: Body language, height, weight, eye contact, and even walking styles are all things we use to judge others, but they’re also things that are rendered fairly invisible on Zoom calls. (Wired UK)
Walmart begins testing drone deliveries for household goods and groceries. Here’s how it worked in North Dakota. (The Verge)
Smart Links
CalPERS allocates $9.4 billion to private equity, real assets. (Pensions & Investments)
Apple design teams develop special face masks for employees. (Bloomberg)
Earth may temporarily pass dangerous 1.5℃ warming limit by 2024. (Science: The Wire)
Why Tesla’s Sept. 22 Battery Day will actually live up to the hype. (Marker)
How junk food and alcohol brands turned Covid-19 into the world’s largest marketing campaign. (The Telegraph)
The labor market doesn’t have a ‘skills gap’—it has an opportunity gap. (Brookings)
How James and Kathryn Murdoch became a political power couple. (CNBC)