The World
With some 30% of Americans laid off during the crisis worried about food and shelter, the stalemate between Republicans and Democrats risks dragging on for weeks. The White House says Dems must reduce demands for state and local aid and for $600 a week in unemployment relief. Democrats say the White House must agree to $1 trillion in spending beyond the $1 trillion it already put on the table. Congress and President Trump share the blame from voters for the lapsed unemployment benefits: 35% blamed Democrats and Republicans on Capitol Hill, while 27% blamed Trump. Meanwhile, U.S. consumer prices rose more than expected in July — the most in 29-1/2 years amid broad gains in the costs of goods and services. (Reuters, Bloomberg, Morning Consult, Reuters)
Britain’s economy shrank into recession — a record 20.4% in 2Q20, the deepest quarterly contraction of any large economy, laying waste to every UK industry. After a 2.2% fall 1Q20, UK GDP was 22.1% smaller than at the end of last year. The UK economy has lost 17 years of growth and is the size it was in 2Q03. Meanwhile, the number of first-time UK property buyers has slumped by almost a quarter since 2006 due to surging prices. (The Times, The Telegraph)
President Xi Jinping is laying out a major initiative to accelerate China’s shift toward more reliance on its domestic economy. Xi’s new strategy, translated as “domestic circulation,” prioritizes domestic consumption, markets and companies as China’s main growth drivers. Overseas investments and technologies would play more of a supporting role. Meanwhile, Wall Street bank fees from China listings have jumped despite political tension — as a leading Chinese economist warns that Chinese bank assets risk being seized overseas. In Hong Kong, media mogul Jimmy Lai was freed on bail. (Wall Street Journal, Financial Times, South China Morning Post-1, South China Morning Post-2)
Pressure is growing on Lebanon President Aoun after documents showed that he and the prime minister were warned of the dangers of a consignment of ammonium nitrate held at the Beirut port two weeks before it blew up: “There is an acute awareness among European countries and the U.S. that this blast might be the event that tips Lebanon into full collapse.” (The Times, Washington Post)
Scientists worldwide condemned Russia’s decision to approve a coronavirus vaccine for widespread use as dangerously rushed. Russia hasn’t completed large trials to test its safety and efficacy, and rolling out an inadequately vetted vaccine could put at risk people who receive it: “If they get it wrong it could undermine the entire global enterprise.” One U.S. virologist: “This is all beyond stupid.” The director of Johns Hopkins’ Institute for Vaccine Safety: “I think it’s really scary.” Meanwhile, Russia's sovereign wealth's fund chief dismissed skepticism, saying if they brought water to U.S. markets there'd be claims it was unsafe. (Nature, New York Times, CNN)
Belarus authorities say they have arrested more than 6,000 people during three nights of violently suppressed demonstrations against vote-rigging in Sunday’s disputed presidential election, as more footage and accounts emerged of police beating and violently detaining protesters. (The Guardian)
How did Kamala Harris navigate the VP selection process? The Washington Post goes inside Biden’s unusual VP pick process: Tough questions, 11 finalists and many lawyers. Politico explains how Kamala Harris outflanked her skeptics: A leak-free effort that contrasted with her undisciplined presidential campaign — and a late push by her supporters. (Washington Post, Politico)
Two U.S. institutions are gaining Americans’ confidence: A 15-point one-year increase in the percentage of U.S. adults who have "a great deal" or "quite a lot" of confidence in the medical system — the highest since tracking began in 1993. Confidence in the public school system also rose — by 12 points — to 41%, its highest point since 2004. (Gallup)
Economy
Small businesses are disappearing by the thousands, and the drag on the economy from these failures could be huge. This wave of silent failures goes uncounted in part because real-time data on small business is scarce, and owners often have no debt, and thus no need for bankruptcy court. Meanwhile, the Fed’s historic foray into the credit market has benefitted auto companies the most, supporting an industry that’s borrowed its way through the pandemic and is showing signs of recovery. (Bloomberg, Yahoo Finance)
Retail chains are abandoning Manhattan, where they are struggling more than their branches elsewhere, showing how the economic damage in New York has in many cases been far worse than elsewhere in the country: “It’s unsustainable.” (New York Times)
Miami and New York lead the U.S. in mortgage delinquencies: Almost 14% of mortgage borrowers in Miami were at least 30 days behind on payments in May, followed by New York at 12%, Las Vegas at 10.5% and Houston at 10%. (Crain’s)
VC Investment Only Took ‘Modest’ Coronavirus Hit: Just 10% of startup investors’ portfolio companies have been “severely negatively affected” by the virus. More than 90% of venture capitalists think their investments will outperform the stock market and few believe the virus will damage their fund internal rates of return. Finally, VCs predict their pace of investment in 2H20 will be roughly 80% of their normal pace. (Harvard Business School, The Information)
Morgan Stanley CEO James Gorman is a frequent caller to the SEC chairman, with more contacts with regulator than heads of other big Wall Street banks. Meanwhile, Goldman Sachs, Barclays among bidders for GM's credit card business. (Financial Times, Reuters)
Technology
Airbnb is close to filing to go public in a move that would underscore a surprising rebound for the home-sharing giant and the IPO market, laying the groundwork for a potential listing before the end of the year. Morgan Stanley has been tapped to lead the offering, with Goldman Sachs also playing a key role. (Wall Street Journal)
A new lawsuit filed against Facebook claims it illegally collected the biometric data of 100 million users without their knowledge or consent. Separately, TikTok skirted a privacy safeguard in Google’s Android operating system to collect unique identifiers from millions of mobile devices, data that allows the app to track users online without allowing them to opt out. Meanwhile, the EU is launching a market for personal data. (iMore, Wall Street Journal, MIT Technology Review)
Apple's annual global iPhone shipments could decline by 25–30% if it is forced to remove WeChat from its App Stores around the world. (MacRumors)
Is Facebook too big to fail? Society is becoming increasingly dependent on data-rich, “Big Tech” platforms and social networks, such as Facebook and Google. But what happens to our data when these companies close or fail? The existing governance frameworks are inadequate for addressing these risks. (Internet Policy Review)
Smart Links
SPACs now account for one in every five dollars raised in IPOs. (Financial Times)
Will the pandemic change views of the social safety net in the U.S.? (Los Angeles Times)
Pandemic workday is 48 minutes longer and has more meetings. (Bloomberg)
India, e-Commerce and electric vehicles raise supergiant funding. (Crunchbase)
First spike in dining out + ordering takeout observed in months. (Civic Science)