|Bid||32.61 x 800|
|Ask||32.70 x 3000|
|Day's Range||31.77 - 32.77|
|52 Week Range||20.00 - 45.86|
|Beta (5Y Monthly)||0.78|
|PE Ratio (TTM)||20.25|
|Earnings Date||Jul. 24, 2020 - Jul. 28, 2020|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||29.61|
(Bloomberg) -- Venezuela President Nicolas Maduro defended the right to “freely trade” with Iran, rejecting criticism following a gasoline vessel sent from the Middle East country to aid the fuel-starved South American nation.The first of an expected five Iranian vessels bringing millions of barrels of gasoline and components have arrived, Maduro said on state TV Sunday. The socialist leader thanked Iranian President Hassan Rouhani and Supreme Leader Ayatollah Khamenei for the deliveries, saying Venezuela has “good and brave friends” in the world.Maduro defended the deal as part of a previous cooperation agreement. “We, Venezuela and Iran, want peace,” he said. “We have the right to freely trade products throughout the seas of the world”.The delivery was announced earlier by Vice President for Economy and Oil Minister Tareck El Aissami. “Ships from our sister Islamic Republic of Iran are already in our exclusive economic zone,” El Aissami wrote on Saturday night.Venezuela’s armed forces escorted the vessel as it entered Venezuelan waters. Iran’s embassy in Caracas also tweeted about the arrival. A second vessel, the Forest, will also soon arrive in Venezuela, Iran’s state TV news reported, without giving more details.The shipments mark Iran’s latest effort to help Maduro’s regime. Venezuela, home to the world’s largest oil reserves, is nearly out of gasoline following years of mismanagement and U.S. sanctions on its oil. Over the past two months, authorities have imposed rationing at gas stations nationwide, handing control over to military personnel.The Trump administration is reviewing a host of options to deter Iran’s support for Maduro, according to a person with direct knowledge of the matter. Advisers to the president are urging a measured approach that doesn’t flare up U.S.-Iran tensions over a small supply of fuel, the person said.Iran’s foreign ministry has said any attempt by the U.S. to stop them will be met with “a swift and decisive response.”A crew of Iranian technicians is already at work at state-run Petroleos de Venezuela’s Cardon and Amuay refineries, as part of a broader assistance plan that’s brought over workers, supplies and parts in exchange for about 9 tons of gold, or $500 million worth.(Updates with oil minister confirmation from first paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Twitter Inc. and Facebook Inc.’s WhatsApp are in the firing line as Europe’s leading privacy watchdog for U.S. tech giants edges closer to delivering its first major sanctions under the region’s tough data-protection rules.The Irish Data Protection Commission said on May 22 that it finalized a draft decision linked to a data breach at Twitter and has asked its peers across the European Union for their sign-off.The regulator said it’s also completed a draft decision in a probe of WhatsApp’s transparency around data sharing. The Facebook service will be asked to give its comments on any proposed sanctions before EU counterparts can weigh in.The Irish authority’s probes have been piling up since the bloc’s tough General Data Protection Regulation took effect in May 2018 -- but with no final decisions to date. The regulator is the lead data protection authority for some of the biggest U.S. tech companies, including Twitter, Facebook, Google and Apple Inc.GDPR empowered regulators to levy penalties of as much as 4% of a company’s annual revenue for the most serious violations. The biggest fine to date was a 50 million-euro ($54.5 million) penalty for Google by France’s watchdog CNIL.The Irish regulator said it has also made progress in a number of its other pending cases, including an investigation into obligations of Facebook’s local unit “to establish a lawful basis for personal data processing,” adding that this “inquiry is now in the decision-making phase.”Twitter and WhatsApp representatives declined to comment on the Irish probes.While sanctions in the two cases wouldn’t be the first under the new GDPR rules, they will be the first to test the cooperation between all 27 EU data authorities. Due to the EU-wide effects of the alleged violations in the two cases, the Irish regulator has to share its draft decisions with other regulators, allowing them to weigh in and either approve or object to its findings.(Updates with company response in seventh paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- With his bombastic demeanor and populist agenda, Ontario Premier Doug Ford has often been compared to Donald Trump. That was before Covid-19.Ford’s handling of the coronavirus crisis has turned his political fortunes around. At his daily news conferences, the 55-year-old leader of Canada’s largest province delivers a calm, factual assessment of the pandemic and the government’s efforts to combat it. He defers to experts. Sometimes he cracks a joke. Occasionally, he chokes up.A pugnacious politician who once taunted public spectators at Toronto city hall and ridiculed Prime Minister Justin Trudeau as a “camp counselor and part-time drama teacher,” Ford is now getting high marks for his empathy. That’s helped send his approval rating to 76% in early May from a dismal 29% in early February, according to Campaign Research Inc. polling.It’s a textbook example of how to manage a crisis, experts say. Ford is doing the one thing that’s required by leaders in times of unease, said Shachi Kurl, executive director of the Angus Reid Institute, a polling organization: He’s assuming the office.“In a crisis like this, your job is not about being political or being partisan,” she said. “Your job is about being premierly and executing the role of premier.”Global leaders have seen their political fortunes rise and then fall through the pandemic. Trump’s approval rating has fluctuated but is now at 41%, similar levels to before the pandemic, according to a new poll from The Associated Press-NORC Center for Public Affairs Research. British Prime Minister Boris Johnson’s popularity has declined lately as the government began to ease lockdown restrictions. French President Emmanuel Macron has come under fire for dithering.Ford, who leads a province with more people than 46 U.S. states, may eventually suffer the same fate. But not yet.Tears at the PodiumFord, who swept to power in June 2018 on a platform of smaller government, lower taxes and a promise to fight “for the little guy,” has found the reality of office much harder. He’s faced teachers’ strikes as his government moved to cut costs and start digging the province out from under the world’s biggest sub-sovereign debt pile. Net debt will reach C$404 billion ($288 billion) by the end of March 2021, a 13% increase from the previous year, according to the province’s fiscal watchdog.He’s had to reverse course on a number policies –- including a cut to autism funding that was seen as heartless -- and went to war with Trudeau over a carbon tax. Things went so badly that he did a major cabinet shuffle after one year in office and replaced his finance minister.All that has faded into the distance since the pandemic.David Soberman, a marketing professor at the University of Toronto’s Rotman School of Management, notes two things Ford is doing right: he listens to experts and has surrounded himself with a strong team.“Typically populists are very dismissive of people who come from an expert or academic background,” Soberman said. But Ford was among the first in Canada to release epidemiological models of virus projections and has relied on medical officials to craft his government’s policy response. Unlike Trudeau, who appears alone in front of his Ottawa residence most days to deliver virus updates, Ford brings along cabinet ministers and steps to the background while they answer questions.It’s the empathy he displays that is most surprising to many. At an April news conference, he almost came to tears talking about a newspaper picture that depicted the terrible damage the virus has wreaked on long-term care homes. “You see a loved one with their elderly parent and they put their hand up against the window, that’s heartbreaking,” said Ford, whose own mother-in-law contracted Covid-19.That doesn’t mean he hasn’t had missteps. Most of Ontario’s 2,000 fatalities have been in long-term care homes, highlighting the shortcomings of a system that cares for vulnerable citizens. His government has also struggled to ramp up testing.Ford himself has been criticized for breaking his own emergency orders, having his adult daughters over for a visit on Mother’s Day and traveling to his cottage outside of Toronto. He often sounds robotic when reading from a teleprompter and while he comes alive when answering questions, he can be as evasive as the next politician.Debt ConcernsWhat happens to his popularity once the pandemic is over will depend on the economic recovery and the decisions he makes to advance his political ideals of smaller government. The deficit is poised to soar to C$41 billion in 2020-21 as its economy shrinks 9% this year, according to the fiscal watchdog. That will send the province’s net debt as a proportion of the economy to almost 50% in this fiscal year, up from about 40%.Kory Teneycke, managing partner at Rubicon Strategy Inc., dismisses detractors who say this new Ford is just a show. “There’s a self-deprecating honesty in him which is kind of endearing,” said Teneycke, campaign manager for the Ford’s Progressive Conservative Party during his winning election run. “Your personality is your personality.”At times, Ford has found ways to lighten the mood. Urging patience on the reopening of golf courses, he made fun of his own rotund shape. “I understand people want to get out there get a little bit of fresh air, get a little bit of exercise,” he said. “God knows I need a little bit of exercise myself.”He also talked about his love of cherry cheesecake and followed up by holding a cooking session online, like a master chef. His recipe contains no less than three packages of Dream Whip.During a May 9 news conference, a reporter slipped and addressed him as “Prime Minister.” Ford didn’t miss a beat. “Not yet,” he said. “You called me prime minister and I just said, not yet.”Managing a crisis well is no guarantee of future political success, of course. Winston Churchill lost the election almost immediately after leading Britain to victory in World War II, points out Richard Ciano, principal at Campaign Research. “You can’t get a case where someone played their role as a leader better than Winston Churchill did in WWII.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The worldwide coronavirus crisis that have locked many citizens indoors is also rapidly diminished the allure of shiny trophy office towers.
(Bloomberg) -- Libyan military commander Khalifa Haftar raised the prospect of a dangerous new escalation in the North African country’s war with a threat to target Turkish forces backing the internationally recognized government, prompting Ankara to warn it would retaliate.The chief of Haftar’s air force, Saqr Al-Jaroushi, vowed to unleash the “largest aerial campaign in Libyan history” with all Turkish positions now “legitimate targets for our air force.” The comments came as the head of security in the Tripoli administration said officials received information that several Soviet-era jets had arrived in Haftar’s eastern stronghold from a Russian base in Syria.Haftar has been stung by defeats over the past week at the hands of the Tripoli government, effectively foiling his yearlong offensive to capture the capital. The strongman’s self-styled Libyan National Army, that’s backed by Egypt, the United Arab Emirates and Russian mercenaries, was dislodged from a key airbase on Monday and is encircled in one of its few remaining bastions in the country’s west.International concerns have grown as Libya’s conflict drew in regional powers, tipping the country ever deeper into a proxy battle that’s collapsed peace efforts to heal the country’s rifts and shuttered 90% of oil production in the OPEC member state. The possibility of an all-out military confrontation with Turkey, which backs Prime Minister Fayez al-Sarraj’s Government of National Accord, has set alarm bells ringing.Ibrahim Kalin, spokesman for President Recep Tayyip Erdogan, warned Turkey would respond to any attack in the “strongest way.” A senior Turkish official said the country’s military was well prepared to defend its sites and areas under its protection using Turkish drones and warships deployed near Tripoli.Turkey has also sent surface-to-air missile defense systems to Libya that have given it an edge over armed drones operated by the U.A.E., Western and Libyan officials have told Bloomberg. An aerial campaign by Haftar’s forces would first have to neutralize air defenses that had effectively ended strikes on the capital since January.Haftar’s forces had made inroads into the capital’s suburbs and seemed poised to enter Tripoli before Turkey escalated its intervention at the start of the year, including sending in thousands of Syrian militiamen.Syrian BaseU.S. Secretary of State Michael Pompeo urged all sides to ease tensions following a conversation with al-Sarraj.“A ceasefire leading to a political resolution is the only option for the Libyan people,” Pompeo wrote on Twitter Friday after the call. Haftar’s latest setbacks were accompanied by a Turkish armed drone campaign that targeted Russian-made Pantsir air-defense systems. One of the batteries was captured intact and paraded in Tripoli on Wednesday.Haftar’s foreign backers aren’t going to accept defeat and would look to dig in, a senior Arab official with direct knowledge of the campaign said. Earlier this week, the United Nations acting Libya envoy Stephanie Williams warned of a possible escalation in the war for control of the country, which has seen a series of conflicts since a 2011 revolt ousted dictator Muammar al-Qaddafi.Fathi Bashagha, the security chief in Tripoli, said at least six MiG 29s and two Sukhoi 24s had flown into the east from the Russian-controlled Hmeimim Air Base in Syria, escorted by two Su-35 Russian air force jets. It wasn’t clear whether those were refurbished jets that had belonged to Haftar’s air force or additions to his fleet.“The Russians will need to show that they are willing to enter a direct confrontation with the Turks in Libya,” said Wolfram Lacher, a Libya expert with the German SWP research center. That didn’t necessarily mean a surge in fighting, he said.“If the Turks believe they are serious about this and can take out air defenses, then I think we’re in a situation where the two can again launch a cease-fire.”Turkey and Russia both pressed their local clients in January to sign a truce, but while the Tripoli-based government signed on, Haftar walked out of the meeting in Moscow. After this week’s losses, his forces pressed for a pause in fighting and said they’d withdraw from the front-lines in Tripoli, an offer rejected by the now-emboldened government.“It’s hanging in the balance,” Lacher said.(Updates to add Pompeo comments starting in eighth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Twitter may be the first big technology firm to face a fine by the EU's lead regulator under the region's tougher data protection rules after it submitted a preliminary decision in a probe into the social media firm to other member states. Ireland's Data Protection Commission (DPC) also said on Friday it had sent a preliminary decision to Facebook-owned WhatsApp for their submissions and made further progress in three other investigations related to Facebook. Ireland hosts the European headquarters of a number of U.S. technology firms, making the DPC the EU's lead regulator under the bloc's General Data Protection Regulation's (GDPR) "One Stop Shop" regime introduced in 2018.
(Bloomberg Opinion) -- Anyone who’s ever taken the London Tube or New York subway during rush hour will feel right at home watching Fritz Lang’s 1927 sci-fi dystopia Metropolis. Crowds of workers, heads down and shoulders hunched, march through underground tunnels on their way to daily drudgery while the wealthy live in pleasure palaces high above. If the movie was remade today, there would be even more dystopian elements of 21st-century life to add: Overvalued real estate totally out of whack with workers’ earnings and a Covid-19 pandemic that has turned densely populated and vibrant cities into barren spaces where human contact is avoided. Simple pleasures like going to a concert now mean wearing a mask and doing a temperature check. If 1960s New York had been like this, Bob Dylan might very well have stayed in Minnesota.Small wonder that city dwellers, emerging from months of lockdown, are now readier than ever to quit their urban homes and search for leafy utopias. Properties for sale are flooding the market in Paris and London, and prospective buyers are increasingly looking for homes with gardens — the kind of place where you’d be glad to work remotely — rather than apartments with an average area of 30 to 40 square meters (323 to 431 square feet). Nearly a third of Americans are considering moving to less densely populated areas, according to an April survey by Harris Poll. Wealthy New Yorkers, who once looked down on anyone quitting the vibrant city for a McMansion and manicured lawn, are doing exactly that.But even if an urban real-estate correction looks unavoidable — even healthy — we shouldn’t write off post-pandemic cities too quickly.While it’s clear that metropolises simply aren’t set up for a life of lockdowns and social distancing, it seems very pessimistic to imagine these are long-term phenomenons. It supposes human ingenuity will totally fail to treat, vaccinate against or find better ways to live with Covid-19. Cities have bounced back from deadlier epidemics, like cholera or the plague, and some of the greatest achievements in urban development — such as sanitary water and waste systems — were responses to disease. A vaccine is obviously more complex than, say, the removal of a handle from a pump that halted cholera in 1850s London. But finding one is not impossible.As for remote work, it seems very optimistic to imagine that permanently working from a grassy suburban lawn far from the office is going to be a breeze. White-collar workers who have job security or a successful self-employed career might find it easy. Single mothers and women in couples who bore the brunt of duties such as childcare and housework during the lockdown might not.One French survey of more than 1,500 people found that a fifth of under 30s — whom you’d expect to be the most at ease with Zoom and least interested in water-cooler gossip — wanted to go back to the office. A good proportion of those starting out on the career ladder prefer face-to-face training, networking and socializing to brainstorms by Slack. And the jury’s still out on what widespread remote working does to employee motivation, productivity and mental health. In 2013, for example, the internet search company Yahoo! banned working from home, saying it hurt “speed and quality.” Companies clearly expect to save office and staff costs (why pay city wages to suburban workers?) but there are downsides too.The old trade-offs involved in moving to the exurbs or suburbs aren’t going to disappear overnight. France’s Gilets Jaunes stormed Paris precisely to protest the decaying quality of life outside cities. The typical U.S. city resident lives near almost three times as many jobs as a typical suburbanite, according to the Brookings Institution. Those jobs pay better, too, with average wages per worker in urban areas some 46% higher than lower-density suburbs. So it’s likely that making the move will mean trading subway rides for car commutes. And when journeys get longer, there’s generally less inclination to travel to enjoy the fun stuff — the so-called “friction of distance.”And make no mistake, the fun stuff will be around as long as cities can keep attracting people, money and ideas. In the 1980s and 1990s, metropolises like London and New York reversed decades of decline by focusing on services such as finance and leisure rather than factories. While it’s true that excessive property speculation turned them into playgrounds for the rich, threatening their draw as diverse and creative melting pots, things could change for the better. The next reinvention, according to urbanism expert Laurent Chalard, will be about making cities less dense and more livable: More cycling, fewer cars, bigger homes. Outside the city, life may end up less green and less convenient.The great cities of history — Athens, Rome, Baghdad, Constantinople — showed the tremendous network effects of mixing commerce, art, science and power in one place. It would take a truly radical shift to make cities obsolete. Maybe once society really values the online agora of Twitter or the marketplace of Amazon over the physical versions, the city’s ability to compress space and time might look pointless. But that sounds depressing enough to justify a remake of Lang’s Metropolis — to be streamed safely away from the crowds, of course.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Lionel Laurent is a Bloomberg Opinion columnist covering Brussels. He previously worked at Reuters and Forbes.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Hong Kong saw a spike in downloads of software designed to mask internet usage Thursday after Beijing signaled plans to usher in a new national security law that could tighten its grip on the city.Virtual Private Networks, the tools that help people bypass web restrictions and disguise their digital footprints, represented seven of the 10 most-downloaded apps in Apple Inc.’s Hong Kong app store, excluding games, on Thursday, according to data provider Sensor Tower. There weren’t any on the list in the preceding days.One popular provider, NordVPN, said it received 120 times more downloads Thursday compared with the day before. Competitor Surfshark VPN reported a 700% surge in Hong Kong sales, recording as many in one morning as it did in the prior week. Its Friday sales are maintaining that pace and may go even higher, the company said.Unlike in mainland China, Hong Kong maintains an open internet and relatively loose constraints on online speech because of the city’s semi-autonomous status. VPNs and U.S.-based messaging apps like Twitter and WhatsApp, which are banned on the mainland, are legal in Hong Kong.The national security law is expected to pass in China’s parliament before the end of its annual session next Thursday, but it would still take several procedural steps before being implemented. The law could lead to increased surveillance and censorship in Hong Kong, privacy advocates said.“The Chinese government is taking advantage of the pandemic and stepping up its attempts to enforce control over the region,” said Ray Walsh, of digital privacy advocacy group Proprivacy.com. “For Hong Kong citizens, who fear how this could impact their ability to work and communicate with the outside world online, this has led to an almost instant spike in searches for VPNs.”Read more: How China’s VPN Ban Asserts Digital ‘Sovereignty’: QuicktakeNordVPN’s downloads began to surge around 6 p.m. in Hong Kong, prompting efforts by the company to add new servers there and in Taiwan, said Laura Tyrell, a spokeswoman for the company. The effect mirrors similar responses in other countries after governments took measures to restrict online speech, such as when the U.K. expanded electronic surveillance in 2016 or the U.S. repealed net neutrality rules in 2018. The last time NordVPN saw a spike in Hong Kong was in October, when anti-government protests erupted across the city over a now-frozen extradition law.The Hong Kong protests resulted in violent demonstrations and sent the local economy into recession.It also spurred Hong Kong Chief Executive Carrie Lam to invoke a colonial-era emergency law, which granted officials control and suppression of all means of communication, including the internet. The protests simmered after the coronavirus emerged at the end of 2019 and swept across the globe, prompting protesters to stay home. Talk of restarting demonstrations began circulating recently on Telegram, another popular messaging app that’s blocked in mainland China.(Updates with Surfshark sales increase in third paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- The dams that breached after days of heavy rain in central Michigan are privately owned and had been the center of controversy for several years. Now Governor Gretchen Whitmer is saying these critical facilities should not be in private hands.“We need to be very clear,” Whitmer said at a news conference Thursday. “This is a privately owned dam. We can talk about the merits of whether private companies should own critical infrastructure. I don’t think that they should.”Entire communities in Midland County were flooded by the failure of two dams, escalating tensions with their owner, Boyce Hydro Power LLC. The collapse also renewed debate about whether private ownership of such structures pits the quest for profit against the public good.During a visit to a Ford Motor Co. plant in Michigan on Thursday, President Donald Trump said the dams involved were old and that “perhaps there was a mistake” made. “Our prayers” are with the flood’s victims, he said. The president on Thursday approved a declaration of emergency for the state, setting federal assistance in motion.The U.S. Army Corps of Engineers says more than half of the nation’s 91,458 dams are privately owned, some by power utilities and large corporations and others by private land owners.Boyce’s Edenville Dam was breached May 19, releasing water that overpowered a second dam the company owns. As waters rushed from lakes and over the banks of the Tittabawassee River, more than 10,000 people were evacuated from the city of Midland and the surrounding area, and Dow Inc. was forced to shut a chemical production complex.Nearby Wixom Lake drained, leaving marinas and pleasure boats high and dry, while thousands of homes and businesses downstream were inundated with floodwater.The wrestling match among four communities in Michigan’s heavily flooded areas, state and federal officials, and Boyce goes back several years. The company and the community have been trying to get the other to pay for improvements as far back as 2012.Boyce put out a statement laying some blame on the state and the communities near the dams. The company, which bought the 95-year-old dams in 2006, said it spent hundreds of thousands of dollar putting together an $8 million plan to upgrade the structures to meet the Federal Energy Regulatory Commission’s maximum spillwater requirements, which would enable the Edenville Dam to withstand more water. Boyce said it couldn’t finance the improvements, and the surrounding communities rejected its request for funding.Years of DisputeFor several years, Boyce tried to come up with an affordable plan to meet the heavier flood requirements. With none deemed satisfactory, FERC revoked Boyce’s license to produce power at the 4.8-megawatt facility, saying that it wouldn’t handle a major flood.“Of particular concern is the project’s inability to pass the Probable Maximum Flood due to inadequate spillway capacity,” the report said. “The Commission’s Dam Safety Guidelines require the project works to be designed to safely handle a flood up to the PMF either by withstanding overtopping of the loading condition during such a flood or alleviating the risk such that dam failure would no longer constitute a hazard to downstream life or property.”Boyce appealed the ruling and was denied in 2019.When Boyce stopped generating power at the Edenville Dam, which is on the border of Midland and Gladwin counties, the company let the water level on Wixom Lake fall. Four area homeowners associations that had banded together to form the Four Lakes Task Force crafted a plan to have the two counties buy out Boyce and give oversight of the dams to the task force.Buying Dams“People were upset because they couldn’t use the lake the way they wanted to,” said Stacy Trapani, a spokeswoman for Four Lakes.In December, they reached an agreement with Boyce to buy out the Edenville Dam and three others, including the now-breached Sanford Dam, for $9.4 million. The deal would take two years to complete. Four Lakes wanted time to do due diligence to examine the condition of the dam before completing a deal.The motivation was to wrest control of the dams from a private enterprise, whose main motivation was profit, and run the dams to preserve home values, manage the lakes for recreational purposes and make sure the dams were upgraded for maximum safety, Trapani said.Last year, she said, Four Lakes hired a firm called Spicer Group Inc. to examine the dams. The firm reported back that there was no structural damage, but the dams would need maintenance and upgrades to prepare for Maximum Flood Spillway capacity, she said. That would have ensured that they could withstand a flood like the one that just occurred.The other idea was to give the counties ownership. That way officials could levy taxes or assessments to raise money to upgrade the dams, said Bridgette Gransden, administrator and controller of Midland County.“In this situation, public ownership has an advantage,” Gransden said. “We’d have more impact on funding. It’s easier to maintain the dams.”Boat Owners ComplainWhen FERC revoked the power-generation license, Boyce said it lowered lake-water levels as a safety move in October 2018. The following spring, boaters complained about low water levels, so Boyce raised them.The company did the same thing last month, under pressure from lakeshore residents and Michigan’s Department of Environment, Great Lakes & Energy, which governs the dams for the state, and from Michigan’s Department of Natural Resources, the statement said.“In April 2020, again under pressure from the shoreline residents of Wixom Lake, the EGLE and the MDNR, Boyce began to raise the level of the Wixom impoundment and normal pond level was reached during the first week of May,” the company said in the statement. “Before Boyce did so, the EGLE issued it a permit to raise the impoundment, despite the fact that the EGLE Dam Safety division was well aware of the Edenville Dam’s inability to meet even 50% of the PMF standard.”The company said the state threatened it with litigation because lower water levels were killing fresh-water mussels even though higher pond levels risked a breach of the dam.“The state agencies clearly care more about mussels living in the impoundment than they do about the people living downstream of the dams,” said Lee Mueller, co-member manager of Boyce Hydro, in a statement.Ryan Jarvi, a spokesman for the Michigan attorney general’s office, said it was Boyce’s decision to raise water levels in 2019 and recently in 2020.“The company has a troubling track record of noncompliance and neglect, which led the State to file its suit for compensation for damages caused to Wixom Lake by Boyce’s unauthorized actions,” Jarvi said in an email.Dams BurstAfter the years of tussling, everyone’s feared scenario came true this week. The dams gave way after the more than 4 inches of rainfall over 48 hours, driving the Tittabawassee’s level to a record 35 feet -- 10 feet above flood stage. At 10 a.m. Thursday, the level had receded to just under 31 feet, according to the National Weather Service website.While fingers are pointing in all directions, FERC has ordered Boyce to examine the dams and give a report, according to a spokeswoman for the commission. The company owns four dams in central Michigan.Going forward, it’s not clear what will happen with the acquisition of the dams and upgrades, Trapani said.What is clear is that Whitmer doesn’t like private ownership of the dams and says they need more investment, just like much of the state’s crumbling roads and bridges.“I ran on and have been introducing solution after solution to fix infrastructure in Michigan,” said Whitmer, whose campaign used “Fix the Damn Roads” as its slogan in 2018. “We have underinvested over a period of decades in this state. When you have 500-year events, 100-year events, happening with more frequency, we know that this underinvestment will come with a very big cost if we don’t take this seriously.”(Updates Michigan attorney general response in paragraphs above ‘Dams Burst’ subhed.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- “The United States is now the most powerful empire by not much, it is in relative decline, Chinese power is rapidly rising, and no other powers come close,” billionaire investor Ray Dalio wrote Thursday in the latest installment of his series on the changing world order.Titled “The Big Cycles Over The Last 500 Years,” the LinkedIn post came as tensions between the U.S. and China intensify. Speaker of the House Nancy Pelosi has promised that the House of Representatives will review legislation that would impose restrictions on U.S.-listed Chinese companies. China is moving to impose a new national security law on Hong Kong, which President Donald Trump has said would force the U.S. to respond. And Trump also lambasted China on Twitter after criticisms by a Chinese government spokesman; Trump said China could have easily stopped the pandemic but did not.In the 10,000-word essay that explores the trajectories of the Dutch, British and American empires and their reserve currencies, the founder of Bridgewater Associates says that empires -- just like humans -- have a typical life cycle that ultimately comes to an end.“No two are exactly the same but most are similar,” Dalio wrote, noting that the U.S. and China are approaching a point of comparability when “the risks of wars of one type or another are greater than when the leading powers are earlier in the cycle.”While Dalio’s latest chapter focuses on the past instead of predicting the future, he says both the U.S. and China are leading the way in a new period “of great inventiveness due to advanced information/data management and artificial intelligence supplementing human intelligence.”“Human adaptability and inventiveness has proven to be the greatest force in solving problems and creating advances,” Dalio wrote. “Because the world is richer and more skilled than ever before, there is a tremendous capacity to make the world better for more people than ever if people can work together to make the whole pie as big as possible and to divide it well.”Read More: Ray Dalio Says Capitalism Must Be Reformed, Not Abandoned(Updates with Dalio quote in sixth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- In the aftermath of the new coronavirus, New Jersey’s finances have been a blur of uncertainty, save for Governor Phil Murphy’s commitment to make record payments to the state’s 800,000-member public pension system.Beyond that, Murphy is counting on an undisclosed amount of borrowing and cash from the federal government to make up for $10.1 billion in lost revenue. Any spending adjustments or tax increases will be disclosed Friday, the deadline for his treasurer to present revised spending plans to the legislature.“It’s not pretty,” Murphy said on Thursday of the updated budget, without being specific. “That’s the reason we have to borrow money, unfortunately. It’s also the reason we need direct federal cash assistance.”Murphy’s commitment to a $3.8 billion payment this fiscal year to the pension fund, the worst-funded among U.S. state governments, puts him on track to be the first New Jersey governor since the mid-1990s to make all promised contributions. It also has him depending partly on long-term borrowing to fill budget gaps in a state that has a constitutional ban on such maneuvers.The practice is frowned upon within public finance, and may pose a downgrade risk to a credit rating that’s second-worst, behind Illinois, among U.S. states.“He’s talking about creating a longer-term liability to take care of an operating budget, which is a cardinal sin within budgeting,” said Howard Cure, managing director for municipal bond research at Evercore Wealth Management, which holds New Jersey debt and has $8.3 billion of assets under management.Cutting CostsCalifornia, New York and Pennsylvania are slashing budgets, just as more than half of U.S. states -- including New Jersey -- did a decade ago, during the Great Recession. In New Jersey, a bipartisan group of lawmakers has approved a public-worker furlough plan with potentially hundreds of millions of dollars in savings.But Murphy has criticized the measure, saying “we don’t need to be raising the unemployment ranks” with more than 1 million people -- one in nine New Jerseyans -- newly out of work and collecting benefits.The state lost 757,700 jobs in April, said Robert Asaro-Angelo, the state labor commissioner, and the jobless rate reached 15.3%, higher than the 14.7% national figure. From March 20-May 16, the state has paid $3.4 billion in unemployment benefits.In the face of such numbers, Murphy named pensions as a priority. “We will make the quarterly -- we’ll make the pension payments,” he said on May 14.Union BackingThat commitment earns the governor praise from Communication Workers of America, the state’s largest public-employees union, whose endorsement and political-action committee contributions helped elect Murphy, a former Goldman Sachs Group Inc. director, in November 2017. The pension system had just 39.7% of assets needed to cover liabilities through June 2019, compared with 38.4% a year earlier, according to a state audit.“These are the pensions that hundreds of thousands of people depend on,” Hetty Rosenstein, the union’s state director, said in an interview. “We put them last for 25 years.”Senate President Stephen Sweeney, New Jersey’s highest-ranking state lawmaker, said in a May 20 interview that Murphy has no choice but to make the pension payments because ratings agencies will impose an “automatic downgrade if he doesn’t.” Amid the economic crunch, now is the time to make cost-saving changes to the pension system that Murphy has resisted, said Sweeney, his fellow Democrat.Downgrade FearAt the same time, Murphy’s plan for borrowing is “going to be an automatic downgrading, too,” Sweeney said. Plus, it’s backed by collections from taxes that have tanked in recent weeks.The governor is faced with “not good choices,” Sweeney said.Murphy had started to build a surplus -- the state’s first in more than a decade -- and committed to record pension payments when the virus struck. New Jersey trails only New York as the state hardest-hit by the virus, with 10,843 deaths and 151,472 cases through Thursday.Murphy on March 21 closed nonessential businesses and ordered social distancing -- a life-saving step, he says, that also sent tax revenue “falling off the cliff.” Days later, he froze $920 million in spending, including municipal aid and property-taxpayer relief, citing the virus’s “unpredictable and rapidly changing” economic effects.In April, Murphy’s administration proposed the New Jersey Covid-19 Emergency Bond Act to authorize $5 billion in general-obligation bonds, and to access unspecified amounts from short-term notes and the U.S. Federal Reserve’s new $500 billion Municipal Liquidity Facility.“Absent the borrowing permitted by the bond act, the state will experience a cash-flow low point in July and a very stressed liquidity position in late August due to the economic impact of the Covid-19 pandemic,” state Treasurer Elizabeth Muoio wrote in an April 17 bond disclosure statement.Filling HolesIn a May 13 statement, Muoio disclosed a projected $10.1 billion revenue shortfall. For 2020, revenues of $36.7 billion were expected to be $2.75 billion short, about 7% less than anticipated. For 2021, the state now expected $33.8 billion in revenues, for a $7.34 billion gap, or 18%.The next day at a Trenton press briefing, Murphy said the only alternative to borrowing was “enormous cutting of services and headcount from the very people we need at the point of attack right now, in the biggest health-care crisis in the history of our state and country.”The last time the state was in the grip of a national fiscal crisis was the Great Recession. Midway through fiscal 2009, then-Governor Jon Corzine, a Democrat and former Goldman Sachs senior partner, proposed $800 million in spending cuts; public-worker pay freezes; and reductions in pension payments and municipal and school aid.David Rousseau, Corzine’s treasurer, commended Murphy’s commitment to the pensions -- but said he personally “would have pushed for freezing the March and June pension payments to give more flexibility and liquidity.” And he would have considered cutting Murphy’s planned $4.6 billion payment for next year to fend off budget reductions and new debt, he said.Delaying or reducing the pension payment would alleviate the need for borrowing, which may be challenged by lawmakers. Murphy has also proposed issuing general obligation bonds, despite a constitutional requirement that voters must approve such borrowing unless there’s “an emergency caused by disaster or act of God.”The nonpartisan Office of Legislative Services has said that borrowing without voter approval to cover Covid-19 costs is permissible, but it can’t be used to supplement revenue.Murphy is relying too much on borrowing, said Regina Egea, who was former Republican Governor Chris Christie’s chief of staff and now heads the Garden State Initiative, an affiliate of the State Policy Network, a non-profit group that advocates for conservative economic practices.“We had spending problems that were not helpful for the New Jersey economy or the cost of living in the state,” Egea, referring to Murphy’s fiscal priorities, said in an interview. “More borrowing and avoiding that problem longer just makes everything worse.”Christie, who had promised to rely more on “pay-as-you-go” spending for the state’s Transportation Trust Fund highway-improvements account, instead borrowed $6.6 billion, 100 times more than the cash he put into it, from 2011 to 2016. The state’s lackluster economy, high debt and skipped or reduced pension payments all contributed to a record 11 credit downgrades by the three major ratings companies during Christie’s eight years in office.Murphy on April 21 saw his first downgrade, by Fitch Ratings, to A-, seventh-highest, with a negative outlook, matching the levels and outlooks assigned by S&P Global Ratings and Moody’s Investors Service. If revenue doesn’t match Murphy’s planned borrowing repayments, the governor has pledged to raise property and sales taxes.“It’s a tough environment to raise taxes,” said Cure, the Evercore managing director. Atop the nation’s highest property levies, New Jersey residents are subject to the $10,000 limit on the state and local taxes they can apply against federal taxes.Funding pensions is going to be hard for Murphy as the state potentially faces economic recession, Cure said.“Investors were skeptical about New Jersey fully funding the pensions during good times,” Cure said. “This obviously makes it much more difficult. He’s really just replacing potentially one liability with another.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Facebook Inc. plans to hire more remote workers in areas where the company doesn’t have an office, and let some current employees work from home permanently if they’d like to.Chief Executive Officer Mark Zuckerberg said the company plans to “aggressively open up remote hiring” starting immediately with the U.S., particularly for engineering talent. Based on internal employee surveys, he believes remote workers could make up as much as 50% of Facebook’s workforce in the next five to 10 years.“We and a lot of other folks were very worried that productivity was going to really fall off a cliff,” Zuckerberg said in an interview. “It just hasn’t. We are at least as productive as we were before, and some people report being even more productive.”The social network, which closed its Menlo Park, California, offices in early March due to the coronavirus outbreak, has already told employees that they can work from home through the end of the year. Zuckerberg shared the remote hiring plans with workers Thursday. Facebook had more than 48,000 global staff at the end of March.“The vast majority of people at the company are working remotely anyway, so constraining ourselves to only hiring people who live near an office that’s not open anyways isn’t really that efficient,” he added.Facebook is the latest, and largest, tech company to announce a full or partial move to more permanent remote work amid the Covid-19 pandemic. Twitter Inc. and Square Inc., both run by CEO Jack Dorsey, have announced that their employees can work from home permanently if they’d like. Canadian e-commerce company Shopify Inc. said this week it will allow its 5,000 staff to work from home indefinitely.It’s a trend that could drastically change Silicon Valley and the San Francisco Bay Area, which has for decades been the mecca for high-paying technology jobs. Many of the world’s most valuable companies, including Facebook, Apple Inc. and Alphabet Inc.’s Google are headquartered just south of San Francisco, which has made the surrounding area one of the wealthiest and most expensive in the world.Facebook employees who wish to work remotely, and are approved to do so, will be paid based on their new location, Zuckerberg added. That means employees who move to areas with a lower cost of living than the Bay Area would likely take a pay cut. Employees currently working remotely who want to extend their remote work plans beyond the end of this year will need to alert Facebook for tax and payroll reasons.“We’ll localize everybody’s comp on January 1,” he said. “They can do whatever they want through the rest of the year, but by the end of the year they should either come back to the Bay Area or they need to tell us where they are.”Zuckerberg said his decisions aren’t driven by employee demand, but there are a number of other benefits to remote hiring. This will extend the “talent pool” of people Facebook can hire, he said, and could help Facebook increase the diversity of its workforce, both racially and ethnically, but also ideologically.There is also a potential environmental benefit, Zuckerberg said, pointing out that pollution and emissions have dipped as people have stopped traveling. “I’d rather have our employees teleporting to work with VR or video chat than sitting in a commute and kind of poisoning the atmosphere,” he said.There could be product advantages, too. Facebook’s mission is to create products that help people feel closer even when they are physically apart, Zuckerberg said. This would give the company a chance to put its own products to the test and “eat our own dog food,” he added.There are still some unknowns. Zuckerberg believes a change like this could impact some of what he calls “the softer stuff,” like social connections, group brainstorming and creativity. Companies like Facebook and Google have changed work culture by offering employees never-ending perks, like free food, shuttles to work and even laundry. Those elements of work cultures will undoubtedly be affected.“We don’t know yet how much we are drafting off of culture, relationships, strategy and direction that have been developed up until this point. We’re kind of just gliding forward,” he said. “We don’t know how hard it’s going to be to evolve.”Zuckerberg said the Covid outbreak and current plan to increase remote workers won’t change the company’s real estate ambitions – at least not in the short term. Facebook has been expanding its sprawling headquarters for years, and has other plans to expand East across the San Francisco Bay to Fremont. Facebook has also embarked on a major push in New York, where it last year signed a lease for more than 1.5 million square feet of space in the Hudson Yards development. The company had planned to start moving employees into the space this year.When some employees do return to work following the July 4 holiday, Facebook plans to keep office capacity at just 25%, so will need as much room as possible. “If anything we just don’t have enough office space,” Zuckerberg said.The virus “is going to be with us for a while, so we really need to get good at this,” Zuckerberg added. “I just don’t think there’s going to be a single day where it’s like, ‘OK, Covid is done.’”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- After a prolonged shutdown, Ford Motor Co. officially resumed production at its North American factories this week. It hasn’t been as smooth a process as the company might have hoped: Ford had to temporarily close two critical facilities this week to allow for a deep cleaning after workers tested positive for the coronavirus. An Explorer SUV plant in Chicago was closed a second time after an employee at a nearby supplier facility tested positive for the virus, causing a parts shortage.This is the reality of manufacturing for the time being as companies fret about worker safety and the legal and reputational risks of not doing enough to protect employees. Unlike Ford, whose products fall into a category of consumer spending that’s become even more discretionary amid the pandemic, wide swaths of the industrial sector were deemed essential and allowed to remain operational. Those companies, too, have had their share of growing pains as they adjust to a new way of working.Boeing Co. temporarily closed its factories in the Puget Sound area in March after a worker died of the coronavirus and later briefly shuttered work at its 787 plant in South Carolina. CBS Minnesota reported earlier this month that a Honeywell International Inc. facility in Minneapolis had closed after a worker tested positive. Whirlpool Corp. closed its Amana, Iowa, refrigerator plant at least twice after employees tested positive for the virus, according to the Gazette local paper. Deere & Co. and Altria Group Inc.’s Philip Morris USA are among the many others that have had to close plants on a limited basis to avoid outbreaks among workers. Lockheed Martin Corp., meanwhile, said this week it will temporarily slow production of the F-35 fighter jet because of delays at suppliers. It’s a lot harder, though, to bring factories back to life than it is to just figure it out as you go along. Ford may be a manufacturer, but because it’s one of the few to have experienced an extended lockdown, it’s arguably a better benchmark for the non-industrial economy. You better believe that office-based companies that have sent most of their workers home are keeping a close eye on how the likes of Ford fare in flipping the switch back on. Seeing the automaker’s setbacks this week, companies that can operate without their employees clustered in the same place may be less keen to rush back. They’re getting a more continuous stream of work out of their employees now than they would if they had to hit the pause button and clear out the office every few weeks. And the mixed messages from the White House aren't helpful: President Donald Trump is due to visit a Ford factory in Michigan that’s been converted to ventilator production and has been wishy-washy on whether he will adhere to the company’s face-mask requirements. Already, American Express Co. CEO Steve Squeri and Visa Inc. CEO Al Kelly said this week that most of their employees would work from home for the rest of the year. Some 28% of employers recently surveyed by Challenger, Gray & Christmas said they would make work-from-home arrangements permanent for at least some employees. Cryptocurrency exchange Coinbase and social media site Twitter Inc. are among those who have publicly said remote working will be their indefinite default option. Facebook Inc. said Thursday it would follow suit and move to a more permanent remote workforce.At the end of the day, manufacturing or non-manufacturing, it's all interconnected. How permanent this shift to work from home will be is debatable, but if companies end up needing less office space, by default that means fewer HVAC systems, commercial lighting, fire and security products or even 3M Co.’s Post-it notes. And if workers aren’t going to be commuting, do they still need to buy cars from Ford? There's a lot riding on getting reopening right. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brooke Sutherland is a Bloomberg Opinion columnist covering deals and industrial companies. She previously wrote an M&A column for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Virgin Trains USA said Wednesday that it won’t restart its fledgling railroad service in Florida for months, even as the state begins reopening and mass transit reemerges from the coronavirus shutdown in other parts of the country.The company, which is backed by private-equity firm Fortress Investment Group and billionaire Richard Branson, suspended its Miami-to-West Palm Beach service in March, shortly before Florida’s stay-home order.“We do not anticipate resuming operating in the coming months,” the company said in a statement.“It is expected to take a long period of time for service demand to return to pre-virus levels,” the company said, citing social distancing guidelines from the Centers for Disease Control and Prevention and work-from-home policies at many U.S. firms.Amtrak has said it will restore Acela service on the Northeast Corridor starting on June 1. In Florida, Governor Ron DeSantis has started to reopen the economy, allowing retailers and restaurants to operate at 50% indoor capacity, starting this week.The train service, initially known as Brightline, is one of the nation’s most ambitious transportation projects and is the first privately-owned inter-city passenger railroad to be built in the U.S. in over a century. It is being financed in part with municipal bonds issued through a Florida government agency.In its statement Wednesday, Virgin Trains USA said it was focused on construction to Orlando and the development of new stations in Boca Raton, Aventura and PortMiami, the world’s largest cruise passenger port.Even before coronavirus, its ridership had been off to a slower-than-projected start.But it’s counting on service to the Orlando tourism hub, home of Walt Disney World, to drive future profit. It’s also planning a high-speed train between Apple Valley, California, and Las Vegas.In a regulatory filing later Wednesday, the company said it has “access to ample operating liquidity to withstand a protracted slowdown.” It’s also anticipating that it will figure into Florida’s economic development plans.“We are actively working with public entities that have an interest in leveraging our infrastructure in the expected stimulus program if one is established,” it said in the filing. “We believe labor‐intensive, shovel‐ready projects in Florida will be attractive candidates to help restart the economy.”(Updates with regulatory filing in last paragraphs)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- ByteDance Ltd.’s valuation has risen at least a third to more than $100 billion in recent private share transactions, people familiar with the matter said, reflecting expectations the owner of video phenom TikTok will keep pulling in advertisers.Stock in the world’s most valuable startup has changed hands recently at a price that suggests its value has risen more than 33% from about $75 billion during a major round of funding two years ago, the people said, asking not to be identified because the matter isn’t public.Some trades recently valued the Chinese company between $105 billion and $110 billion on the secondary markets, some of people said. It has also traded as high as $140 billion, one person said.The trades are private transactions and may not fully reflect broader investor expectations. Stock in the secondary market is usually valued at a discount to primary shares since it’s less liquid and there are fewer financial details on company performance available to investors.“The trading of ByteDance is reflective of the global wave of consumers who agree that ByteDance can displace Facebook as the leading social network,” said Andrea Walne, a partner at Manhattan Venture Partners who follows the secondary markets.In the past decade, Bytedance is surpassed only by Alibaba Group Holding Ltd. and Ant Financial Services Group as companies that have traded at a higher premium in the secondary market, she added.ByteDance has grown into a potent online force propelled in part by a TikTok short video platform that’s taken U.S. teenagers by storm. Investors are keen to grab a slice of a company that draws some 1.5 billion monthly active users to a family of apps that includes Douyin, TikTok’s Chinese twin, as well as news service Toutiao. That’s despite American lawmakers raising privacy and censorship concerns about its operation. This week, it poached Walt Disney Co. streaming czar Kevin Mayer to become chief executive officer of TikTok.The company was in the very early stages of exploring a share sale abroad last year, people familiar have said. But any float remains a longer-term objective given ByteDance remains well-funded, the people added. ByteDance declined to comment on Wednesday. Its backers include SoftBank Group Corp., General Atlantic and Sequoia.The Chinese startup in the ballpark of the market capitalizations of some of the world’s biggest public companies, ahead of rivals such as Twitter Inc. and Snap Inc. but still behind Facebook Inc. ByteDance -- whose TikTok remains the venue of choice for half a billion lip-syncing, dancing music video aficionados -- is now going head-to-head with Chinese internet leaders from Tencent Holdings Ltd. to Alibaba for user traffic and marketing dollars.It’s also strengthening its operations in newer arenas such as e-commerce and gaming. ByteDance this year kicked off a wave of hiring it envisions hitting 40,000 new jobs in 2020, hoping to match Alibaba’s headcount at a time technology corporations across the globe are furloughing or reducing staff.Longer term, the company will have to grapple with rising scrutiny from Washington. Two prominent senators have urged investigations into TikTok, labeling it a national security threat.Read more: ByteDance Launches Global Hiring Spree With 10,000 New Jobs(Updates with a quote, new details in the fifth paragraph. An earlier version of the story was corrected to reflect executive’s proper title.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Relations between U.K. and European Union officials have been under strain for more than a month. This week, the tensions finally boiled over.After Britain’s chief negotiator David Frost accused the EU of believing the U.K. is “unworthy” of anything more than a derisory deal, on Wednesday came his counterpart’s response: “I would not like the tone that you have taken to impact the mutual trust and constructive attitude that is essential.”The spat between Frost, Prime Minister Boris Johnson’s adviser, and his opposite number in Brussels, former French Foreign Minister Michel Barnier, serves only to underline how little the two men have achieved over the negotiating table. Next month’s key summit now looks certain to expose the deep divisions that still exist between the two sides.Unless they can bridge them before before the U.K. severs ties with the bloc at the end of the year, Britain will leave the EU’s single market and customs union without a trade deal in place, spelling disruption and extra cost for businesses and consumers already reeling from the coronavirus.At the heart of the disagreement is the U.K.’s unwillingness to accept EU rules the bloc says are necessary to stop the European economy from being undercut. Britain argues there is no precedent for this in other EU trade deals. The bloc says precedent is irrelevant because the EU hasn’t ever done a deal with a country geographically so close and economically so large as Britain before.“The U.K. cannot expect high-quality access to the EU single market if it is not prepared to accept guarantees to ensure that competition remains open and fair,” Barnier wrote.‘Cherry Picking’And he resurrected a complaint he often made during negotiations on the U.K.’s divorce from the EU, accusing Frost of “cherry picking” the best bits from the bloc’s previous trade deals with other countries.“There is no automatic entitlement to any benefits that the EU may have offered or granted in other contexts and circumstances to other, often very different, partners,” Barnier said.Both sides say they want conclude a trade deal that would exclude all tariffs and quotas. But in his letter, Barnier doused any expectations the U.K. has of easing the conditions if it lowers its ambitions and pursues a more limited accord.“The EU has always made clear that any future trade agreement between us will have to include strong level playing field guarantees, irrespective of whether it covers 98% or 100% of tariff lines,” Barnier said.The two sides need a deal by the end of the year, when the U.K.’s transition period ends, to avoid reverting to World Trade Organization terms, which would mean the imposition of tariffs and quotas. A no-deal outcome would also lead to uncertainty in areas such as aviation, law enforcement, data sharing and fishing rights.‘Unbalanced and Unprecedented’In a four-page letter on Tuesday, Frost said it is “perplexing that the EU, instead of seeking to settle rapidly a high-quality set of agreements with a close economic partner, is instead insisting on additional, unbalanced, and unprecedented provisions in a range of areas, as a precondition for agreement between us.”Talks between negotiators resume on June 1 before senior politicians are scheduled to meet later in the month. In a bid to break the deadlock, London has called for EU leaders to intervene and change Barnier’s negotiating mandate. But EU officials say there are no plans to put the matter before the bloc’s 27 leaders who would have to agree unanimously to rewrite Barnier’s mandate.Meanwhile, disagreements over whether the U.K. is meeting obligations it signed up to in last year’s Brexit divorce agreement are threatening to further worsen the already fraught atmosphere.On Wednesday, the U.K. published a document setting out how it will implement plans to avoid customs checks on the Irish border -- the most contentious issue in the negotiations over Britain’s departure.The Brexit deal required that there are no customs checks on the Irish border, so the bloc wants rigorous inspections of goods entering Northern Ireland from the rest of Great Britain to protect the integrity of its single market -- but Johnson has previously said there will be no such customs checks.Minimalist ChecksThe U.K. said it will implement only minimal administrative checks on goods traveling from Great Britain into Northern Ireland and that no new physical customs infrastructure will be put in place. Companies moving goods in the other direction shouldn’t be required to submit export declarations.That minimalist interpretation of the Northern Ireland protocol will be scrutinized carefully by EU officials, who have expressed concern about the lack of detail in the British document.“The proposals that we put forward today mean there is no need for new customs infrastructure and, at the same time, Northern Ireland stays within the customs territory of the U.K.,” Cabinet Office Minister Michael Gove told members of Parliament on Wednesday.Britain argues that there is no need for Northern Irish companies to submit export declarations if they are sending goods to the rest of the U.K.Traders moving goods into Northern Ireland from the mainland will still have to fill out electronic import declarations as well as safety and security information because the protocol requires the U.K. to implement the EU’s customs rules, the government said.On Thursday, Irish Prime Minister Leo Varadkar said that while the U.K. isn’t seeking to walk away from the terms of the Withdrawal Agreement, Johnson wants to use Northern Ireland as “leverage” in the wider trade talks.Britain is “trying to use Northern Ireland to get a better trade deal for all the U.K., and they would do that, wouldn’t they?” he said in an interview with broadcaster Newstalk. (Adds Varadkar comments in final two paragraphs.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- For the world’s most important commodity, there’s never been a month like it.Just a few weeks ago, crude oil was akin to industrial waste in some parts of the world, something you had to pay people to take away. Now prices are surging, up about 70% in New York since the start of May.The turnaround, which has been welcomed from Riyadh and Moscow to the White House, came quicker than most people were expecting but wasn’t easy. Painful OPEC+ production cuts and the world’s risky first steps out of coronavirus lockdown have lifted the market out of the abyss of negative prices, but either of them could falter.“I think the worst is behind,” said Pierre Andurand, chief investment officer and founder of Andurand Capital Management LLP. “OPEC+ cut enough, and demand will slowly, gradually recover.”It was the afternoon of April 20 when panicked sellers drove the price of the U.S. crude benchmark below zero for the first time in history. In one of the most extraordinary 20-minute spans in the history of financial markets, West Texas Intermediate fell as low as minus $40.32 a barrel, stunning everyone from veteran brokers to retail investors.Two big things have changed since then.First, the flood of unwanted crude has abated. Saudi Arabia ended its price war with Russia and stopped flooding the market with record production. Instead, the pair led their allies in the OPEC+ alliance to make their deepest and fastest output cuts on record.U.S. shale companies have also shut down unprofitable wells at an unprecedented rate.As much as 17 million barrels of a day of crude will have been taken off the market by next month, Mohammad Barkindo, secretary-general of the Organization of Petroleum Exporting Countries, said in a Bloomberg TV interview.At the same time, the 30% drop in global oil consumption seen in April is abating. Green shoots of recovery are emerging around the world as businesses reopen and drivers return to the roads from Berlin to Beijing.The oil glut is shrinking and the great fear that motivated the slump in U.S. prices below zero -- that holders of expiring contracts would have nowhere to store crude when it was delivered -- appears to have been averted.WTI for June delivery settled at $32.50 a barrel on Tuesday, slightly higher than the price for July. That’s a clear sign that holders of the expiring front-month contract weren’t fearful of getting stuck with unwanted barrels.“Concerns about the planet running out of places to store crude and product have evaporated,” said Judith Dwarkin, chief economist at RS Energy Group. “Near-month prices in the physical market are factoring this in as well as for the outlook ahead.”The month dubbed “Black April” by International Energy Agency Executive Director Fatih Birol is over, but the market still faces considerable risks.The reopening of any number of battered economies across Asia, Europe and the Americas will be difficult, and could be set back at any moment by a second wave of Covid-19 infections. The enthusiasm for cutting production shown by U.S. shale companies or OPEC+ could weaken.The faltering recovery from the 1998 Asian economic crisis offers a playbook, said Greg Sharenow, a portfolio manager focused on energy and commodities at Pacific Investment Management Co.“You had a bunch of rallies, a bunch of sell-offs” in the 18 months after the initial oil-price slump, Sharenow said in an interview from Newport Beach, California. There’s a strong recovery right now, but “you have unemployment numbers around the world and you have income shocks -- those are pretty powerful opposing forces.”Federal Reserve Chairman Jerome Powell said this week that the U.S. economic recovery could drag on until the end of 2021. Even that gradual timetable could be threatened if there’s a second wave of the pandemic, he warned.“I think it will take a long time for demand to recover fully though, probably until we have a vaccine,” said Andurand, whose main fund is up almost 70% this year after successful bets on the direction of prices.Topsy TurvyFor now, there’s palpable relief that normal service has returned to the oil market. While a crude price in the $30s is still too low to balance the budgets of most OPEC+ states, ministers from Saudi Arabia to Russia appear satisfied with the fruits of their labor.Even major energy importers show little desire to return to those few days when producers had to pay consumers to take their crude.Price wars, topsy-turvy oil benchmarks and dislocations in long-standing relationships between markets “are things you don’t see normally and are unsustainable,” said Mukesh Kumar Surana, chairman of India’s Hindustan Petroleum Corp.(Updates with tweet from Faith Birol.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Facebook Inc. will limit offices to 25% occupancy, put people on multiple shifts and require temperature checks when it lets employees back into workplaces beginning in July, according to people familiar with the matter.The social media company outlined to staff globally how it plans to handle a return to major job sites starting July 6, providing a glimpse at what offices may look like more broadly when businesses reopen their doors in the face of the coronavirus pandemic.Facebook will also limit how many employees can gather in meeting rooms, create 6-foot spaces between work stations, replace cafeteria buffets with grab-and-go meals and initially keep office gyms closed, according to the people, who asked not to be identified discussing company internal policy. The Menlo Park, California-based company also will bar outside visitors initially.Staff must wear masks in the office when not social distancing, and in some locations, masks will have to be worn at all time while working. Facebook doesn’t plan to test employees for Covid-19, but it may do so in the future once quicker testing becomes more readily available, the people said.Facebook also is working to create a way to social distance on its shuttle buses, which are used by many Bay Area employees to get to the offices. The company declined to comment on its plans.Major technology companies, including Facebook, Alphabet Inc.’s Google and Microsoft Corp. were among the first to close offices and send their workers home as Covid-19 began to spread in early March, particularly along the West Coast where the companies have their headquarters.Facebook announced earlier this month that employees who are able to work remotely can do so through the end of 2020. While major offices will open in early July, some, such as in Asia, plan to let workers in earlier.Not all staff can work remotely. Employees working on hardware, operations, or other tasks that aren’t possible at home will be asked to return to the office, the people said. In the Bay Area, local governments just relaxed shelter-in-place rules for employees who can’t work from home. Facebook may ask some hardware employees to return to the offices before July 6 as long as they are willing and abide by the new policies being put in place, one of the people said.Facebook already has canceled events through mid-2021. Chief Executive Officer Mark Zuckerberg has said he doesn’t want employees who can work remotely clogging up public infrastructure, like buses or subways, for people who don’t have the option to work from home. Twitter Inc., has told staff they can work remotely “forever,” while Amazon has disclosed an October return-to-work date. Apple Inc. has told employees it will start bringing more workers back to the office in phases beginning in late May or early June.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Rapper Travis Scott zoomed onto stage riding an asteroid during a concert witnessed last month by British YouTube videographer Jon Hutchinson. The special effects were vivid, the set constantly changing, the venue intimate.“One of the coolest events yet,” Hutchinson said on Twitter. “Absolutely unreal.”If you’re thinking a concert in the middle of a pandemic-induced global lockdown is reckless, you’re right and it is. This concert, however, was hosted virtually by mega-hit video game Fortnite.A smash success since its release in 2017, Fortnite’s popularity has again exploded as people flock to video games amid the tedium and isolation of Covid-19 quarantines. Concerts are just one example of how Fortnite creator Tim Sweeney has redefined gaming as an immersive, social experience. His efforts have diversified revenue at his Cary, North Carolina-based developer, Epic Games, boosting his net worth to $9.6 billion, according to the Bloomberg Billionaires Index.The company has held talks to raise a new round of funding, valuing it above its last valuation of $15 billion, Bloomberg reported last month.Sweeney is just one of a few video-game titans benefiting from a warp-speed renaissance moment brought about by lockdowns and shutdowns. Not only have gamers had more time to lavish on their hobby, fans of traditional sports have increasingly turned to their virtual equivalent to slake competitive thirsts.“With people sheltered in place around the world, gaming is one of the few options available,” said Carter Rogers, an analyst at research firm SuperData.Digital DistributionAnd that’s being reflected in sales. U.S. consumer spending on video games jumped to a record $10.9 billion in the first quarter, up 9% from a year earlier, research firm NPD Group said in a report released Friday.Anticipation over the launch of Cyberpunk 2077, a futuristic role-playing game starring Keanu Reeves, has propelled the fortunes of the co-founders of Polish game developer CD Projekt. The stock has surged about 75% since mid-March, giving high school friends Marcin Iwinski and Michal Kicinski net worths of $1.1 billion and $970 million, respectively. The company only distributes games digitally, which has proven to be an advantage over some rivals.Pony Ma, co-founder and chief executive officer of China’s Tencent Holdings Ltd., is one of the biggest gainers on the wealth index this year, up $4.4 billion. The company’s online gaming sales soared 31% in the first quarter even as China’s economy contracted at a record pace. Tencent, the world’s largest game publisher, has more than 100 titles, including League of Legends and Honor of Kings. It also owns a stake in Sweeney’s Epic.Kim Jung-Ju, the Korean founder of Tokyo-listed gaming company Nexon Co., has seen his fortune jump by almost 40% this year to $6.9 billion. Nexon pioneered the “freemium” business model, where players get free access to games but pay for virtual extras. That strategy was also adopted with success by Fortnite.Read more: Everyone Is a Gamer Now, But Most Don’t Spend Much Money on ItNo-cost games have helped lure newcomers. In ordinary times, the volume of players is a key factor in driving a game’s revenue. SuperData estimates that Fortnite generated $1.8 billion last year from players buying its virtual currency to spend on things like costumes and dances. Fortnite has more than 350 million users, the company said in a statement this month.Arrogance, HumilityWith a recession deepening, it’s unclear whether new players will make up for a decline in in-game expenditures.For Sweeney, any drop in Fortnite purchases will likely be overshadowed by the broader success of the Epic empire, which is coalescing around his vision of gaming as a unifying and communal activity. That mission has been bolstered by the success of HouseParty, a group video-chatting app Epic acquired whose popularity has skyrocketed during the pandemic.He’s also upending the industry through the Epic Games Store, an online marketplace that Sweeney started to compete with dominant seller, Steam. Epic has won favor from developers for charging less than half the commission of Steam for titles published through their site and enticed gamers with regular free downloads. Last week, the offering of free copies of Grand Theft Auto V proved so popular it crashed the website.Sweeney has excelled at understanding the social significance of games, according to Joost van Dreunen, an investor and professor of the business of video games at New York University.The company’s ethos “is an interesting mix of arrogance and humility,” he said. “It’s what you’d expect from Sweeney. He started this company from his parent’s basement, the man has never had a reasonable job. He just thinks, ‘We’ll eat the world no problem.’ To dream that big you have to have guts.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- German Chancellor Angela Merkel and French President Emmanuel Macron agreed to support a 500 billion-euro ($546 billion) aid package to help the European Union recover from the coronavirus pandemic in a major step toward tighter integration.Following a videoconference between the two leaders, Merkel said that Germany would accept a fund within the framework of the EU budget, financed by additional borrowing, that would make grants to member states that have been hardest hit by the virus. Crucially, she said the bonds issued by the European Commission would be repaid from the EU budget, the lion’s share of which is covered by Germany. Italian bonds jumped.“The EU must act together, the nation state has no chance if it acts on its own,” the chancellor said in a joint online press conference with Macron. “This is the biggest challenge in the history of the EU.”The proposal marks a significant step in efforts to shore up the European project and a potential win for Macron, who’s been calling for Germany and the richer northern states to do more to help those in the South who’ve suffered most. The sums involved would dwarf the commission’s existing debt issuance, a sign of Merkel’s determination to keep the EU together.Yet the plan is still only a foundation. A final deal will need the backing of all 27 members, and Austria signaled immediately that it remains opposed to direct handouts. A spokesman for Dutch Prime Minister Mark Rutte said the commission should come up with a proposal for members to discuss and that his team took note of the Franco-German outline.If it goes through, the agreement could relieve some of the pressure on the European Central Bank, which has so far taken the lead in the EU-level response, pledging to buy more than a trillion euros of debt to stabilize markets while political leaders struggled to coordinate their own efforts.Italian bonds jumped the most since March on Monday, with 10-year yields dropping as much as 20 basis points to 1.68%. The risk premium over German bonds, which declined on the news, narrowed to 216 basis points, the lowest level this month. The euro climbed 0.6% to $1.0887.ECB President Christine Lagarde praised the proposal as “ambitious, targeted and, of course, welcome” in an interview with multiple newspapers published on the central bank’s website.“They pave the way for the European Commission to borrow funds over the long term and, above all, they allow a substantial amount of direct support to be provided to the countries most affected by the crisis,” she said. “This is testament to the spirit of solidarity and responsibility.”Bond BuyingLagarde could still ramp up her bond purchasing program when policy makers meet on June 4. Governing Council members have repeatedly said they’ll do what’s needed to guide the euro-zone economy through the crisis and, before this week, most economists predicted that would mean an extra 500 billion euros of bond buying this year.The ECB is concerned that if it doesn’t mop up the massive amount of debt needed to combat the fallout from the virus, financial markets will tighten and delay the recovery. In the worst case, the bloc could be tipped into another debt crisis.Until now, the EU response has been delayed by a dispute over so-called eurobonds, with France and Italy leading calls for jointly issued debt to shield public finances in the worst hit countries from the biggest decline in economic output since World War II. The commission projects that Italy’s public debt will be close to 160% of its gross domestic product by the end of this year.Spanish Prime Minister Pedro Sanchez indicated his support for the Franco-German proposal, saying on Twitter that “it is a step in the right direction, in line with our own demands.” The proposal Merkel outlined on Monday marks a major shift toward bolstering the EU’s financial power while skirting Germany’s constitutional ban on debt mutualization. While the plan would see member states share liability for the recovery fund, it wouldn’t breach the German constitution because the exposure is limited, according to an official for Merkel’s Christian Democratic party.“As Germans, we are ready to make a significant contribution to the regions and industries that are particularly hard hit,” said Eckhardt Rehberg, the CDU’s budget spokesman in the German parliament. “European assistance is possible without coronabonds or Eurobonds -- and thus without debt pooling.”Green PushMerkel said that EU treaties won’t be changed at this point but that might be possible in the future, opening the door to conversations about deeper fiscal integration.A jointly-financed recovery fund would help to restore the level playing field within the EU single market, which has been distorted by deep-pocketed states like Germany showering their firms with subsidies while countries like Italy can’t match that spending power. The proposal also includes ambitious plans to overhaul the European economy, including stricter emissions-cuts targets for 2030, measures to punish imports from polluters outside the EU and looser state-aid rules to help the creation of larger and greener companies.The agreement between France and Germany “acknowledges the scope and the size of the economic challenge that Europe faces,” Commission President Ursula von der Leyen said in a statement. The commission will unveil its proposal for the recovery fund on May 27. But the key deliberations will be taking place in Austria, the Netherlands, Denmark and Sweden, which have so far proved to be the staunchest opponents of increasing aid to the areas worst hit by the virus. Austrian Chancellor Sebastian Kurz said on Twitter that the four nations’ position hadn’t changed and that a recovery effort should be done through loans. That’s in contrast to the German proposal, which would distribute money through grants. But the initiative by Merkel and Macron could make it difficult for other member states to object.“This Franco-German agreement means that the other ‘frugals’ cannot really oppose anymore the principle of European debt instruments,” said Daniel Gros, director of the Brussels-based CEPS think tank. “But they can still nibble at the edges, making eligibility more stringent.”(Updates with Spanish comment in the 13th paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Financial services company Square (NYSE: SQ) announced on Monday that it would permanently allow many of its employees to work from home, even after the pandemic ends. The move comes just a week after a similar announcement was made by social media platform Twitter (NYSE: TWTR). "We want employees to be able to work where they feel most creative and productive," a spokesperson for the fintech said.
The U.S. Treasury is gearing up to auction a $3 trillion in debt to finance the growing federal budget deficit. Charles Schwab Chief Fixed Income Strategist Kathy Jones joins Yahoo Finance’s Seana Smith to discuss.