ZZZ Obamacare 01 Feature

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Fannie Mae and Freddie Mac face strong headwinds from the mayhem coronavirus has spread through the mortgage market, complicating the Trump administration’s plans to free them from U.S. control anytime soon.
The companies, which backstop roughly $5 trillion of mortgages, might have to set aside huge amounts of money to cover the risk of souring home loans. They may also take a hit from the pain being inflicted on nonbank mortgage servicers as millions of borrowers delay making their monthly loan payments. Meanwhile, the outlook for the U.S. housing market — the engine that powers Fannie and Freddie’s profits — looks bleak.
Wall Street will get its first look at the pandemic’s impact on Fannie and Freddie when they report first quarter results later this week. Weak earnings or discouraging revelations about the extent of the mortgage mess would be a setback for the White House, according to analysts. Administration officials and regulators have repeatedly said Fannie and Freddie need solid financials and a healthy U.S. economy to eventually raise the tens of billions of dollars they require from investors to survive outside the government’s grip.
“This crisis is dashing hopes for a quick exit from conservatorship,” said Jaret Seiberg, an analyst at Cowen & Co. “If there’s not a lot of clarity on their losses or capital it’s hard to envision the market providing the $100 billion of fresh capital they would need to raise down the road.”

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At issue is how to balance protecting businesses from lawsuits that could distract them and even lead to financial ruin, while also enabling justice for customers and workers who in a time of rapidly rising unemployment may not have the option of leaving their jobs for something safer.
“If there is no liability on the part of employers without a set of rules by which employers have to abide by, then that means you can have a wild wild west,” said Kent Swig, president of Swig Equities, LLC, a privately owned real estate investment and development company.
“You have to have a balance,” he added, “and you have to have rules and regulations.”
Swig says he’s planning measures like one-way lanes in public corridors in the lobbies and plexiglass dividers in offices at his properties. But he’s seeking national guidelines as well.

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There’s a lot to talk relating to Covid-19. Most of it bad news. Except the celebrating stock market, because the rich get even richer if the rest of us go broke. That was certainly true of the Great Depression. But as the virus eventually subsides, we’ll have a whole new pandemic: lawsuits.
It’s already begun, according to USA Today.
Workers are suing companies. Businesses are suing insurers. Prison inmates and migrants in detention, abortion providers and gun shop owners are suing federal and state governments.
Colleges, cruise lines and even China have been among the targets of lawsuits seeking damages for the COVID-19 calamity. And the nation’s notoriously litigious society is just getting started. . .
Type “coronavirus lawsuit” into Google and watch the numbers explode. A recent attempt turned up nearly 3 billion hits in one-third of a second.

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At a time when much of the retail sector is collapsing, Amazon is strengthening its competitive position in ways that could outlast the pandemic — and that could raise antitrust concerns. Increasingly, manufacturers of in-demand products are catering to Amazon, while competing retailers take the leftovers, consultants and brand executives told ProPublica.
“Amazon has the power to bury sellers and suppliers if they don’t comply,” said Sally Hubbard, director of enforcement strategy at Open Markets Institute, a think tank that has been critical of Amazon and other big tech companies. “It might be automated through an algorithm, but it’s still the wrath of the monopolist that they are afraid of. … Amazon is able to cut off its competitors’ access to inventory by leveraging its monopoly power.”
As locked-down shoppers have flocked to buy food, medicine, cleaning supplies and personal care products on Amazon, the retailer has in turn upped its suggested inventory levels for many manufacturers that sell their products on its platform. It has also expanded purchases of certain essential products that it sells directly to shoppers, often buying two or three times as much as it did before the pandemic, executives said.
The heightened demand has forced both third-party sellers on Amazon’s platform and its direct suppliers into difficult decisions over where to send inventory, consultants said. Often, like Rise Bar, they’re favoring Amazon ahead of other retailers. Third-party sellers like Spenuzza don’t have to keep as much merchandise in stock as Amazon recommends. But if they run out on Amazon, where “best seller” status and a listing’s position in search results are linked to availability, the impact on sales could be devastating.

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The Walt Disney Company was said to have lost $500 million last month after closing its parks and hotels in mid-March due to the coronavirus pandemic.
The decision to cut costs came as Disney readies a $1.5 billion dividend payout to shareholders in July of this year.
Also in place are executive bonus schemes believed to be worth roughly 900 times the average $52,000 annual salary earned by a Disney employee.
Disney heir Abigail Disney eviscerated the company on Twitter Thursday for “terrible management” and said “THIS COMPANY MUST DO BETTER.”
“Disney faces a rough couple of years, to be sure. The challenges are existential, even,” she said.
“But that does not constitute permission to continue pillaging and rampaging by management.
“In fact, if a bonus reflect performance, we might want to claw.”

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Some small businesses that obtained a highly-coveted government loan say they won’t be able to use it to bring all their laid-off workers back, even though that is exactly what the program was designed to do.
The Paycheck Protection Program promises a business owner loan forgiveness if they retain or rehire all the workers they had in late February. But owners say the equation isn’t so simple, in part because of current economic conditions and partly due to the terms of the loans.
As a result, the lending may not reduce unemployment as much as the Trump administration and Congress hope.
The government’s $2 trillion relief package included $349 billion for the small business loan program, which was besieged with applications and ran out of money Thursday. Congress and the White House reached a deal Tuesday that would provide another $310 billion.

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In Idaho, Republican Governor Brad Little signed into law two bills attacking the rights of transgender people. One measure prohibits transgender people from amending their birth certificates to reflect their gender identity; the other bars trans women and girls from playing on sports teams aligned with their gender identity. The anti-trans bills were signed on the eve of the International Transgender Day of Visibility, which is today. Rights groups have vowed to challenge the legislation.

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Democrats and labor groups say companies should be forced to establish formal workplace coronavirus protections, a demand set to become a point of tension with Republicans and the Trump administration in the next round of stimulus talks.
Rep. Bobby Scott (D., Va.), chairman of the House Education and Labor Committee, on Tuesday introduced a measure that would direct the Occupational Safety and Health Administration to order all companies to implement comprehensive plans to protect workers who continue in their (work)…..

Over the last decade, Amazon, Apple, Facebook, and Google have compromised the immunities of the retail and media sectors. Spend has rushed toward digital, where Amazon takes one out of every three ecommerce dollars and Google and Facebook take two of three digital marketing dollars. However, within your portfolio of the Four, it’s fun to speculate who accretes or leaks value, relative to each other, as it might inform the future and provide some insight into general business strategy….
Apple
The iconic tech firm saw its stock recast in 2019, experiencing a near doubling of its price-to-earnings ratio. There’s likely been a flight to safety, and the iPhone continues to be the most profitable item in the history of business, commanding Ferrari-like margins with the production volumes of Toyota. In addition, the firm’s recurring revenue business (services) is now a healthy 18 percent of revenues……

Facebook/Google
Facebook and Google’s business will have the rebound pattern the president is hoping for the economy: a V. (The key word is “hoping.” It won’t happen.) Search terms and ads on Google and Facebook have plunged 20 percent in the last 30 days. The recovery will be equally as bloody on the way back up. The duopoly’s share of the digital-ad market is predicted at 61 percent in 2021….

Amazon
Amazon will be the first $2 trillion-value firm by the end of 2021. Whether it’s an explosion in streaming media, grocery home delivery, or the ultimate supply chain for essential goods, one firm stands alone on the Iron Throne. No company is adding more market share or revenues than the Seattle giant. Even among the Four, Amazon stands alone on the podium of medals awarded to firms whose revenues have increased during COVID-19….

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Australia plans to require Alphabet Inc.’s Google and Facebook Inc. to pay local media organizations for their content, the latest development in a global debate over whether the tech giants are unfairly benefiting from news articles that appear on their platforms.
Details on how much the tech companies will need to pay are still being decided. Australian government officials said Monday that the country’s competition regulator would determine how the payments would be calculated, which the government plans to pass…

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China’s aggressive behavior to outright steal our technological secrets, build a generic version of our technological platforms, and re-orient U.S. tech companies has been exposed, to paraphrase Ernest Hemingway, “slowly… then suddenly.”
From China’s theft of intellectual property, including “one in five corporations saying China has stolen their intellectual property within the last year;” to Chinese influence and espionage in academia as exemplified by the recent criminal complaint against the Chair of the Harvard Chemistry and Biology Department; to Chinese investment in U.S. tech with “Chinese investor-backed deals with U.S. tech startups jumping as much as 185-percent” — China’s strategy has been fully exposed.
Retired Admiral William McRaven probably had it right when he said this is a “holy s— moment” for the United States.
U.S. policymakers now see China’s strategy for what it is — a not-so-subtle attempt to influence and ultimately control U.S. tech. The government of China has been engaged in a deliberate campaign to re-orient U.S. technology companies towards China.
But now that China’s true intentions have been unmasked, important questions remain: What “team” will U.S. tech companies ultimately choose, and what are the second and third order policy implications of such choices?

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OPEC, Russia and other oil-producing nations on Sunday finalized an unprecedented production cut of nearly 10 million barrels, or a tenth of global supply, in hopes of boosting crashing prices amid the coronavirus pandemic and a price war, officials said.
The cartel and other nations agreed to allow Mexico to cut only 100,000 barrels a month, a sticking point for an accord initially reached Friday after a marathon video conference between 23 nations. They reached the deal just hours before Asian markets reopen Monday as international benchmark Brent crude traded at just over $31 a barrel and American shale producers struggle.
Mexico’s energy minister said on Twitter that the group of nations agreed to cut 9.7 million barrels a day to begin May 1. Energy officials from other countries shared similar information.
Video aired by the Saudi-owned satellite channel Al-Arabiya showed the moment that Saudi Energy Minister Prince Abdulaziz bin Salman, a son of King Salman, assented to the deal.

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In Philadelphia, at least 100 protesters shut down traffic and parked their cars in the middle of city streets surrounding City Hall and other government buildings to demand the city release nonviolent prisoners and immigrant prisoners in light of the coronavirus crisis.
In New Jersey, families with loved ones imprisoned at the Bergen County Jail held a demonstration Friday outside the jail to demand Governor Phil Murphy free all immigrants in detention.

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Major U.S. lenders are preparing to become operators of oil and gas fields across the country for the first time in a generation to avoid losses on loans to energy companies that may go bankrupt, sources aware of the plans told Reuters.
JPMorgan Chase & Co, Wells Fargo & Co, Bank of America Corp and Citigroup Inc are each in the process of setting up independent companies to own oil and gas assets, said three people who were not authorized to discuss the matter publicly. The banks are also looking to hire executives with relevant expertise to manage them, the sources said.
The banks did not provide comment in time for publication.

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Richard Branson moved assets from the US to the British Virgin Islands, highlighting his use of tax havens at a time one of his businesses sought a state bailout because of the coronavirus pandemic.
Filings show a Delaware-based company for his $1.1bn stake in Virgin Galactic Holdings transferred shares in the space-travel firm on March 16 to the Caribbean territory where Branson lives. Residents in the BVI pay no income or capital-gains taxes while the US state is known for preserving the privacy of its corporate owners.

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The retail sector continues to reel from the impact of COVID-19 that has shuttered many stores and furloughed workers amid social distancing guidelines recommended by health and government officials.
Analysts Matthew McClintock and Bobby Griffin of Raymond James & Associates said consumer and investor sentiment favors digital retail leaders as the ultimate winner in a COVID-19 world. They base their assumption on information on how Nike was able to grow its digital business in China amid the COVID-19 crisis dated back to late last year.

They said Nike grew its digital business more than 30% in the third quarter, increasing more over the past few months, despite double-digit increases in physical retail traffic during the recovery taking place across China. They also report Lululemon is seeing changing shopper behavior with more adoption of digital channels during this crisis.

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China is transferring tens of thousands of Uighur detainees out of internment camps and into factories that supply some of the world’s leading brands, an Australian think tank said Monday.
Top global brands such as Apple, BMW and Sony have been accused of getting supplies from factories using the forced labour, an explosive allegation that could reverberate in boardrooms across the world.
The Australian Strategic Policy Institute said the Chinese government has transferred 80,000 or more Uighurs out of camps in Xinjiang and into factories across the country.
“Uighurs are working in factories that are in the supply chains of at least 83 well-known global brands in the technology, clothing and automotive sectors,” the think tank said.
“Some factories across China are using forced Uighur labour under a state-sponsored labour transfer scheme that is tainting the global supply chain.”
The brands, it added, included “Apple, BMW, Gap, Huawei, Nike, Samsung, Sony and Volkswagen”.

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One Tulsa, Oklahoma, bar owner said more than a dozen motorcyclists showed up unannounced, but he served them a round of shots anyway to celebrate a birthday. Another live-streamed a drag queen show on Facebook while up to 20 people drank inside the locked bar, ignoring police when they knocked on the door.
Both were busted — and received misdemeanor citations and court dates — after police responded to tips that the bars were violating the mayor’s order shuttering all nonessential businesses to help slow the spread of the coronavirus.
“There has to be some consequence for violating an executive order,” said Tulsa Police Lt. Richard Meulenberg.
It turns out plenty of people agree.
Snitches are emerging as enthusiastic allies as cities, states and countries work to enforce directives meant to limit person-to-person contact amid the virus pandemic that has claimed tens of thousands of lives worldwide. They’re phoning police and municipal hotlines, complaining to elected officials and shaming perceived scofflaws on social media.