The World
The top Democrats in Congress pushed Wednesday for an “interim” emergency coronavirus bill to include at least $500 billion in relief for small businesses, hospitals, states and food assistance programs. In a joint statement, House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer supported another $250 billion in loans to small companies — a sum the Trump administration has requested and Senate Majority Leader Mitch McConnell aims to pass through the Senate on Thursday. It would add to the $350 billion in aid approved as part of the $2 trillion emergency package passed last month. The Democratic leaders described the bill as separate from one they aim to pass to expand the provisions of the CARES Act. (CNBC)
Janet Yellen has a message for policymakers racing to get emergency coronavirus relief into the hands of small-business owners: You can encourage banks to issue loans faster by clarifying they won’t face lawsuits for fraud in the program. The former Federal Reserve chair made the point to House Democrats on a conference call earlier this week — and spelled it out to me in a Tuesday email. “I did indicate to the caucus that banks’ concern about liability could cause them to restrict the loans they initiate and engage in due diligence that could slow down payments,”Yellen said. “Banks rightly worry about this in the aftermath of the financial crisis where they bore considerable put back risk,” Yellen continued. (The Finance 202)
A high-level Small Business Administration official criticized several big banks over their reticence to get involved in a $349 billion federally subsidized small business lending program, in a recorded teleconference obtained by the Washington Post. The comments from SBA Nevada district director Joseph Amato offer a rare candid glimpse behind the scenes at the frustrations federal officials face as they work with banks to quickly ramp up one of the most ambitious economic stimulus programs in American history. The webinar features Amato talking candidly about the $349 billion program on a Zoom teleconference that was recorded and provided to The Post. (Washington Post)
Government officials and business leaders are turning their attention to a looming challenge in the fight against the new coronavirus pandemic: Reopening a $22 trillion U.S. economy that has been shut down like never before. With some preliminary signs that infections from the virus are slowing, the whole nation is hopeful to get back to business as soon as possible. But a host of questions arise: Under what conditions should people be allowed back to work and stay-at-home orders be lifted? How will people at work be monitored for reinfection or antibodies to prevent a resurgence of the deadly virus? Does it all happen at once or is it staggered? Who is in charge of the effort? (Wall Street Journal)
China’s central bank will ramp up its policy easing to support the coronavirus-ravaged economy but debt worries and property risks will prevent it from following the U.S. Federal Reserve’s steep rate cuts or quantitative easing moves, policy sources said. China’s leaders have pledged to combat the impact from the pandemic that looks to have tipped the world’s second-largest economy into its first quarterly contraction in at least 30 years, as mounting job losses pose a threat to social stability. The People’s Bank of China (PBOC) will boost credit and lower funding costs, especially for small firms seen as vital for growth and jobs, and accommodate increased fiscal spending, according to three sources involved in internal policy discussions. (Reuters)
Xi Jinping, general secretary of the Communist Party of China (CPC) Central Committee, on Wednesday chaired a leadership meeting to make new arrangements on implementing regular epidemic prevention and control measures and fully advancing work resumption. The meeting of the Standing Committee of the Political Bureau of the CPC Central Committee analyzed the COVID-19 situation and economic performance at home and abroad. Noting that China is under rising pressure of guarding against imported COVID-19 cases, Xi said new difficulties and challenges have emerged for China's work resumption and economic and social development. (Xinhua)
Chinese leaders and many medical experts have held up [Wuhan] as an example of what can be achieved through extreme efforts to contain the coronavirus. It’s now becoming clear the battle in Wuhan is far from over—and the human cost much higher than officially acknowledged. The city has announced only three new confirmed cases with symptoms since March 18. Authorities have just formally ended the 77-day lockdown on the city, allowing inbound and outbound travel for healthy people, after easing some residential restrictions to revive a crippled local economy. (Wall Street Journal)
European Union finance ministers failed in all-night talks to agree on more economic support for their coronavirus-stricken economies, spurring Spain to warn the bloc’s future was on the line if it did not forge a joint response to the crisis. (Reuters)
The coronavirus pandemic will cause the German economy to shrink by 4.2% this year, according to a joint forecast from 5 leading German institutes. In the second quarter alone, the economy will slump 9.8%, the worst figure ever recorded since quarterly accounts were tracked in 1970 and more than twice as steep as during the global financial crisis. For next year, they are forecasting a recovery and growth of 5.8%. The Bank of France forecasts a 6% gross domestic production contraction in the first quarter, the biggest contraction since the Second World War. Meanwhile, the Belgian economy could contract by 8% this year due to measures to contain the coronavirus before a sharp rebound in 2021, the country’s central bank and national planning agency said on Wednesday. And in the Middle East, the Arab world’s middle-income nations face tough coronavirus choices, as countries from Jordan to Egypt will struggle to mitigate the pandemic’s economic impact. (MarketWatch, MarketWatch, Reuters, Financial Times)
Even with a record stimulus package, Japan’s economy is heading toward a record contraction of 25% this quarter following Prime Minister Shinzo Abe’s declaration of a state of emergency in Tokyo, Osaka and some other parts of the country, according to Goldman Sachs. (Bloomberg)
Two weeks into the world’s biggest lockdown, India’s food supply chain is struggling with a shortage of one of its crucial commodities: people. Essential industries—such as growing, harvesting and delivering food—are allowed to operate under the lockdown but the people who move the essentials from farm to fork aren’t showing up for work. Stores say some basics such as eggs, yogurt and cooking oil are increasingly hard to find, a development they say could point to bigger problems ahead if things don’t return to normal in the coming month. (Wall Street Journal)
Wild swings in oil prices are making it difficult for private equity firms to strike deals in the oil patch. Bargain-hunting firms with capital may have to wait as much as six months for prices to settle, experts suggest, but the situation has opened up opportunities. “There’s going to be some really high quality assets that were maybe a little too expensive last year that all of a sudden are going to look a whole lot more attractive,” said Andrew Dittmar, a senior mergers and acquisitions analyst at analytics and data provider Enverus in Austin, Texas. (Private Equity News)
The federal government has been quietly seizing some orders of [hospitals’] supplies, leaving medical providers across the country in the dark about where the material is going and how they can get what they need. Hospital and clinic officials in seven states described the seizures in interviews over the past week. The Federal Emergency Management Agency is not publicly reporting the acquisitions, despite the outlay of millions of dollars of taxpayer money, nor has the administration detailed how it decides which supplies to seize and where to reroute them. Officials who’ve had materials seized also say they’ve received no guidance from the government about how or if they will get access to the supplies they ordered. (Los Angeles Times)
Finance
Staples recently informed landlords that it will not pay April rents for its U.S. stores, even though the locations remain open, Axios has learned. Multiple landlords tell Axios that Staples reached out within the past 72 hours to inform them of its decision. It didn't propose any sort of deferred payments, nor would it pledge to pay May rents. (Axios)
A top U.S. housing-market regulator said he isn’t likely to heed mortgage companies’ calls to help ease the cash-flow crunch they are expecting when Americans who lose their jobs stop making mortgage payments. Mark Calabria, who leads the Federal Housing Finance Agency, described industry concerns as “spin.” In an interview on Tuesday, he also said he doesn’t see it as the role of government-backed housing-finance giants Fannie Mae and Freddie Mac, which he oversees, to help the mortgage companies. “I’ve seen zero [evidence] to suggest that there’s a systemic crisis across the nonbank servicers,” Mr. Calabria said. “If this goes on for a year, maybe. But I think the frustration here is a lot of just misrepresentation.” (Wall Street Journal)
Weekly mortgage applications sink nearly 18% as coronavirus causes homebuyers to back away. The average contract interest rate for 30-year fixed-rate mortgages of $510,400 or less increased to 3.49% from 3.47%. Applications to refinance a home loan dropped 19% from the previous week but were 144% higher than a year ago. Mortgage applications to purchase a home continued their sharp decline, falling 12% for the week and 33% year to year. (CNBC)
Rent non-payments shoot up in April as US families struggle. Apartment industry survey offers latest evidence of economic toll from coronavirus pandemic. (Financial Times)
Americans are hoarding cash as recession fears grow. (Quartz)
When Citadel Securities, a sibling to the hedge fund company Citadel, decided to isolate a team of stock traders to keep business humming during the coronavirus pandemic, the firm’s billionaire founder, Kenneth Griffin, secured sumptuous Florida quarters: the Four Seasons hotel in Palm Beach. The resort is guarded by off-duty officers from the Palm Beach Police Department who are hired by Citadel Securities. No one other than employees for the firm or the hotel is allowed inside. (New York Times)
Technology
Zoom Video Communications Inc. was slapped with a class action suit by one of its shareholders on Tuesday, accusing the video-conferencing app of overstating its privacy standards and failing to disclose that its service was not end-to-end encrypted. Shareholder Michael Drieu claimed in a court filing that a string of recent media reports highlighting the privacy flaws in Zoom’s application have led to the company’s stock, which had rallied for several days in the beginning of the year, to plummet. The company’s shares closed down about 7.5% at $113.75 on Tuesday. They have lost nearly a third of their market value since touching record highs in late-March. (Reuters)
Corporate technology leaders are facing shortages of laptops and other devices that have enabled the sudden shift to remote work amid the coronavirus pandemic. “The lead time to order new IT hardware keeps moving to the right, whether it’s employee laptops, networking gear, servers or otherwise,” International Business Machines Corp. Chief Information Officer Fletcher Previn said. Large enterprises that have ordered laptops and were originally experiencing a delay of three to four weeks could now expect delays of eight to nine weeks, Mikako Kitagawa, a director analyst at research firm Gartner Inc. said. (Wall Street Journal)
Tesla will cut pay for all of its salaried employees and will furlough hourly workers until May 4, when it intends to resume production of electric cars, according to an internal e-mail that multiple employees shared with CNBC. The pay reductions are expected to be in place until the end of the second quarter. (CNBC)
Between January and late March, internet traffic increased by around a quarter in many major cities, according to Cloudflare, a US company that provides network infrastructure to businesses around the world. Demand has skyrocketed for certain online services in particular. But despite the odd hiccup, the internet is doing just fine. In fact, the covid-19 crisis is driving the biggest expansion in years. We may have an industrial revolution to thank. Two decades ago there was little commercial interest in the internet, which meant its infrastructure was managed in a relatively ad hoc way. No other utility—not electricity, not water, not transportation—could handle such an increase in usage, says Cloudflare CEO Matthew Prince: “The internet was built for this.” (MIT Technology Review)
Google’s auto-complete for speech can cover up glitches in video calls. With many of us now relying on video calls for face-to-face interaction, choppy connections are more frustrating than ever. An artificial intelligence that mimics an individual speaker’s way of talking can smooth over the cracks by filling in small gaps with snippets of generated speech. (MIT Technology Review)
Asia’s tech start-ups hit by liquidity crunch. (Financial Times)
Huawei and ZTE win contracts to build 200,000 5G base stations. (Caixin Global)
When the World Health Organization launched a 2007 initiative to eliminate malaria on Zanzibar, it turned to an unusual source to track the spread of the disease between the island and mainland Africa: mobile phones sold by Tanzania’s telecoms groups including Vodafone, the UK mobile operator. Mapping how populations move between locations has proved invaluable in tracking and responding to epidemics. With much of Europe at a standstill as a result of the coronavirus pandemic, politicians want the telecoms operators to provide similar data from smartphones. (Financial Times)
The layoffs at Away reflect an escalation in the scope of job cuts underway. A few weeks ago, startups were laying off 20% of their workforce. Now we’re often seeing cuts of close to half of employees. Away furloughed roughly half of its 500-person workforce and laid off an additional 60 corporate employees. Toast, a well-funded startup that sells hardware and software to restaurants, laid off hundreds of employees —and possibly as many as 1,000 on Tuesday, people familiar with the matter said. The Boston-based firm, valued most recently at about $4.9 billion, had about 2,400 employees earlier this year, according to PitchBook. (The Information)
A growing number of tech firms are redeploying their resources to fight the pandemic. Apple has designed and is now shipping face shields to medical workers. A group of Tesla engineers is developing a ventilator, using the Model 3 infotainment touchscreen and computer. Blade, an Uber-like service for the air, has redeployed its workforce to ferry doctors and equipment to hospitals in New York. (The Information)
Smart Links
Disney might check visitors' temperatures when theme parks reopen.(Reuters)
NBA players could refund millions to owners. (CNBC)
Blockchains could help global supply chains. (MIT Technology Review)
Grocery prices are rising as eat-at-home demand soars. (MarketWatch)
The commercial fishing industry is in a free fall. (Washington Post)
EU carbon emissions tumble during lockdowns (Financial Times)
Flushing out the true cause of the global toilet paper shortage. Meanwhile, border jams clog toilet paper's only ingredient. (Washington Post; Reuters)