China’s Slowing V-Shaped Economic Recovery Sends Global Warning

China’s V-shaped economic rebound from the Covid-19 pandemic is slowing, sending a warning to the rest of world about how durable their own recoveries will prove to be.

The changing outlook was underscored Friday when the People’s Bank of China cut the amount of cash most banks must hold in reserve in order to boost lending. While the PBOC said the move isn’t a renewed stimulus push, the breadth of the 50 basis-point cut to most banks reserve ratio requirement came as a surprise.

Data on Thursday is expected to show growth eased in the second quarter to 8% from the record gain of 18.3% in the first quarter, according to a Bloomberg poll of economists. Key readings of retail sales, industrial production and fixed asset investment are all set to moderate too.

The PBOC’s swift move to lower banks’ RRR is one way of making sure the recovery plateaus from here, rather then stumbles.

The economy was always expected to descend from the heights hit during its initial rebound and as last year’s low base effect washes out. But economists say the softening has come sooner than expected, and could now ripple across the world.

“There is no doubt that the impact of a slowing China on the global economy will be bigger than it was five years ago,” said Rob Subbaraman, head of global markets research at Nomura Holdings Inc. “China’s ‘first-in, first-out’ status from Covid-19 could also influence market expectations that if China’s economy is cooling now, others will soon follow.”

Group of 20 finance ministers meeting in Venice on Saturday signaled alarm over threats that could derail a fragile global recovery, saying new variants of the coronavirus and an uneven pace of vaccination could undermine a brightening outlook for the world economy. China’s state media also cited several analysts Monday saying domestic growth will slow in the second half because of an uncertain global recovery.

China’s slowing recovery also reinforces the view that factory inflation has likely peaked and commodity prices could moderate further.

“China’s growth slowdown should mean near-term disinflation pressures globally, particularly on demand for industrial metals and capital goods,” said Wei Yao, chief economist for the Asia Pacific at Societe Generale SA.

The changing outlook reflects the advanced stage of China’s recovery as growth stabilizes, according to Bloomberg Economics.

What Bloomberg Economics Says…

“Looking through the data distortions, the recovery is maturing, not stumbling. Activity and trade data for June will likely paint a similar picture — a slower, but still-solid expansion.”

— The Asia Economist Team

For the full report, click here.

Domestically, the big puzzle continues to be why retail sales are still soft given the virus remains under control. It’s likely that sales slowed again in June, according to Bloomberg Economics, as sentiment was weighed by controls to contain sporadic outbreaks of the virus.

Even with the PBOC’s support for small and mid-sized businesses, there’s no sign of a broad reversal in the disciplined stimulus approach authorities have taken since the crisis began.

The RRR cut was partially to “manage expectations” ahead of the second-quarter economic data this week, said Bruce Pang, head of macro and strategy research at China Renaissance Securities Hong Kong.

“It also provides more policy room going forward, as the momentum of the economic recovery has surely slowed.”

— With assistance by Enda Curran, Yujing Liu, and Bihan Chen

Source: China’s Slowing V-Shaped Economic Recovery Sends Global Warning – Bloomberg

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Critics:

The Chinese economic reform or reform and opening-up; known in the West as the Opening of China is the program of economic reforms termed “Socialism with Chinese characteristics” and “socialist market economy” in the People’s Republic of China (PRC). Led by Deng Xiaoping, often credited as the “General Architect”, the reforms were launched by reformists within the Chinese Communist Party (CCP) on December 18, 1978 during the “Boluan Fanzheng” period.

The reforms went into stagnation after the military crackdown on 1989 Tiananmen Square protests, but were revived after Deng Xiaoping’s Southern Tour in 1992. In 2010, China overtook Japan as the world’s second-largest economy.

Before the reforms, the Chinese economy was dominated by state ownership and central planning. From 1950 to 1973, Chinese real GDP per capita grew at a rate of 2.9% per year on average,[citation needed] albeit with major fluctuations stemming from the Great Leap Forward and the Cultural Revolution.

This placed it near the middle of the Asian nations during the same period, with neighboring capitalist countries such as Japan, South Korea and rival Chiang Kai-shek‘s Republic of China outstripping the PRC’s rate of growth. Starting in 1970, the economy entered into a period of stagnation, and after the death of CCP Chairman Mao Zedong, the Communist Party leadership turned to market-oriented reforms to salvage the failing economy.

Citation:

Global Boom in House Prices Becomes a Dilemma for Central Banks

Surging house prices across much of the globe are emerging as a key test for central banks’ ability to rein in their crisis support.

Withdrawing stimulus too slowly risks inflating real estate further and worsening financial stability concerns in the longer term. Pulling back too hard means unsettling markets and sending property prices lower, threatening the economic recovery from the Covid-19 pandemic.

Bubble Trouble

Countries seeing surging real house price growth

Source: OECD

With memories of the global financial crisis that was triggered by a housing bust still fresh in policy makers minds, how to keep a grip on soaring house prices is a dilemma in the forefront of deliberations as recovering growth sees some central banks discuss slowing asset purchases and even raising interest rates.

Federal Reserve officials who favor tapering their bond buying program have cited rising house prices as one reason to do so. In particular, they are looking hard at the Fed’s purchases of mortgage backed securities, which some worry are stoking housing demand in an already hot market.

In the coming week, central bankers in New Zealand, South Korea and Canada meet to set policy, with soaring home prices in each spurring pressure to do something to keep homes affordable for regular workers.

New Zealand policy makers are battling the hottest property market in the world, according to the Bloomberg Economics global bubble ranking. The central bank, which meets Wednesday, has been given another tool to tackle the issue, and its projections for the official cash rate show it starting to rise in the second half of 2022.

Facing criticism for its role in stoking housing prices, Canada’s central bank has been among the first from advanced economies to shift to a less expansionary policy, with another round of tapering expected at a policy decision also on Wednesday.

The Bank of Korea last month warned that real estate is “significantly overpriced” and the burden of household debt repayment is growing. But a worsening virus outbreak may be a more pressing concern at Thursday’s policy meeting in Seoul.

In its biggest strategic rethink since the creation of the euro, the European Central Bank this month raised its inflation target and in a nod to housing pressures, officials will start considering owner-occupied housing costs in their supplementary measures of inflation.

The Bank of England last month indicated unease about the U.K. housing market. Norges Bank is another authority to have signaled it’s worried about the effect of ultra-low rates on the housing market and the risk of a build-up of financial imbalances.

Beginning of the End of Easy Money: Central Bank Quarterly Guide

The Bank for International Settlements used its annual report released last month to warn that house prices had risen more steeply during the pandemic than fundamentals would suggest, increasing the sector’s vulnerability if borrowing costs rise.

While the unwinding of pandemic-era is support is expected to be gradual for most central banks, how to do so without hurting mortgage holders will be a key challenge, according to Kazuo Momma, who used to be in charge of monetary policy at the Bank of Japan.

“Monetary policy is a blunt tool,” said Momma, who now works as an economist at Mizuho Research Institute. “If it is used for some specific purposes like restraining housing market activities, that could lead to other problems like overkilling the economic recovery.”

But not acting carries other risks. Analysis by Bloomberg Economics shows that housing markets are already exhibiting 2008 style bubble warnings, stoking warnings of financial imbalances and deepening inequality.

New Zealand, Canada and Sweden rank as the world’s frothiest housing markets, based on the key indicators used in the Bloomberg Economics dashboard focused on member countries of the Organisation for Economic Co-operation and Development. The U.K. and the U.S. are also near the top of the risk rankings.

As many economies still grapple with the virus or slow loan growth, central bankers may look for alternatives to interest-rate hikes such as changes to loan-to-value limits or risk weighting of mortgages — so called macro-prudential policy.

Yet such measures aren’t guaranteed to succeed because other dynamics like inadequate supply or government tax policies are important variables for housing too. And while ever cheap money is gushing from central banks, such measures are likely to struggle to rein in prices.

“The best approach would be to stop the further expansion of central bank balance sheets,” according to Gunther Schnabl of Leipzig University, who is an expert on international monetary systems. “As a second step, interest rates could be increased in a very slow and diligent manner over a long time period.”

Another possibility is that house prices reach a natural plateau. U.K. house prices, for example, fell for the first time in five months in June, a sign that the property market may have lost momentum as a tax incentive was due to come to an end.

There’s no sign of that in the U.S. though, where demand for homes remains strong despite record-high prices. Pending home sales increased across all U.S. regions in May, with the Northeast and West posting the largest gains.

While navigating the housing boom won’t be easy for central banks, it may not be too late to ward off the next crisis. Owner-occupy demand versus speculative buying remains a strong driver of growth. Banks aren’t showing signs of the kind of loose lending that preceded the global financial crisis, according to James Pomeroy, a global economist at HSBC Holdings Plc.

“If house prices are rising due to a shift in supply versus demand, which the pandemic has created due to more remote working and people wanting more space, it may not trigger a crisis in the same way as previous housing booms,” said Pomeroy. “The problems may arise further down the line, with younger people priced out of the property ladder even more.”

Read More:
A Housing Frenzy Sparks Bidding Wars From New York to Shenzhen

World’s Bubbliest Housing Markets Flash 2008 Style Warnings

Stimulus ‘Pandexit’ Is Next Challenge as Recovery Quickens

As they tip toe away from their crisis settings, monetary authorities in economies with heavily indebted households will need to be especially careful, said Alicia Garcia Herrero, chief economist for Asia Pacific at Natixis who used to work for the ECB and International Monetary Fund.

“Real estate prices, as with other asset prices, will continue to balloon as long as global liquidity remains so ample,” she said. “But the implications are much more severe than other asset prices as they affect households much more widely.”

— With assistance by Theophilos Argitis, and Peggy Collins

By:

Source: Global Boom in House Prices Becomes a Dilemma for Central Banks – Bloomberg

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Critics:

A housing bubble (or a housing price bubble) is one of several types of asset price bubbles which periodically occur in the market. The basic concept of a housing bubble is the same as for other asset bubbles, consisting of two main phases. First there is a period where house prices increase dramatically, driven more and more by speculation. In the second phase, house prices fall dramatically.

Housing bubbles tend to be among the asset bubbles with the largest effect on the real economy, because they are credit-fueled, because a large number of households participate and not just investors, and because the wealth effect from housing tends to be larger than for other types of financial assets.

References

  • Brunnermeier, M.K. and Oehmke, M. (2012) Bubbles, Financial Crises, and Systemic Risk NBER Working Paper No. 18398
  • see eg. Case, K.E., Quigley, J. and Shiller R. (2001). Comparing wealth effects: the stock market versus the housing market. National Bureau of Economic Research, Working Paper No. 8606., Benjamin, J., Chinloy, P. and Jud, D. (2004). ”Real estate versus financial wealth in consumption”. In: Journal of Real Estate Finance and Economics 29, pp. 341-354., Campbell, J. and J. Cocco (2004), How Do Housing Price Affect Consumption? Evidence from Micro Data. Harvard Institute of Economic Research, Discussion Paper No. 2045
  • Stiglitz, J.E. (1990). “Symposium on bubbles”. In: Journal of Economic Perspectives Vol. 4 No. 2, pp. 13-18.
  • Palgrave, R.H. I. (1926), “Palgrave’s Dictionary of Political Economy”, MacMillan & Co., London, England, p. 181.
  • Flood, R. P. and Hodrick, R. J. (1990), “On Testing for Speculative Bubbles”, The Journal of Economic Perspectives, Vol. 4 No. 2, pp. 85–101.
  • Shiller, R.J. (2005). Irrational Exuberance. 3nd. New Jersey: Princeton University Press. ISBN 0-691- 12335-7.
  • Smith, M. H. and Smith, G. (2006), “Bubble, Bubble, Where’s the Housing Bubble?”, Brookings Papers on Economic Activity, Vol. 2006 No. 1, pp. 1–50.
  • Cochrane, J. H. (2010), “Discount Rates”, Working paper, University of Chicago, Booth School of Business, and NBER, Chicago, Illinois, 27 December.Lind, H. (2009). “Price bubbles in housing markets: concept, theory and indicators”. In: International Journal of Housing Markets and Analysis Vol. 2 No. 1, pp. 78-90.

China’s Xtep Closes At New Record On Hillhouse Investment; Ding Clan’s Fortune Tops $2 Bln

Xtep

Shares in China sportswear supplier Xtep ended the week at a new record high today after the company announced investment hook-ups with China private equity firm Hillhouse Capital Management, one of China’s largest private equity firms.

Xtep’s Hong Kong-traded shares rose 5.6% to HK$13.16 today; they’ve more than doubled since mid-May.

Xtep said it would raise HK$500 million from the sale to Hillhouse of bonds that can be converted into its own underlying shares. In addition, subsidiary Xtep Global raised $65 million from Hillhouse from the sale of bonds that can be converted into that unit’s shares. (See announcements here and here.) Funds will help boost sales of Xtep-owned brands.

The doubling of Xtep’s stock price has lifted the fortune of company’s controlling Ding family to $2.3 billion.  Trusts held by chairman Ding Shui Bo, executive director Ding Mei Qing (his sister) and executive director Ding Ming Zhong (his brother) collectively own 1.3 billion shares that were worth $2.2 billion today. Xtep’s annual report doesn’t give a clear down of the ownership split among them. Shui Bo has another 60.7 million shares worth another $103 million.

Spending on sportswear in China has picked up amid a continuing economic recovery from the Covid-19 pandemic. Xtep, whose rivals include Anta and Nike, said in April first-quarter sales had a mid-50% increase compared with a year earlier. Nike has faced backlash in China after a statement in March expressed concern about alleged forced labor practices its Xinjiang region.

Hillhouse is led by billionaire Zhang Lei, who is worth $3 billion today on the Forbes Real-Time Billionaires List.

See related story:

Hong Kong Is Gaining On The U.S. As An Alternative For Tech Listings

@rflannerychina

Send me a secure tip.

I’m a senior editor and the Shanghai bureau chief of Forbes magazine. Now in my 20th year at Forbes, I compile the Forbes China Rich List. I was previously a correspondent for Bloomberg News in Taipei and Shanghai and for the Asian Wall Street Journal in Taipei. I’m a Massachusetts native, fluent Mandarin speaker, and hold degrees from the University of Vermont and the University of Wisconsin at Madison.

Source: China’s Xtep Closes At New Record On Hillhouse Investment; Ding Clan’s Fortune Tops $2 Bln

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Critics:

Xtep International Holdings Limited (SEHK stock code: 1368) is a Chinese manufacturing company of sports equipment based in Kowloon Bay, Hong Kong.[2] Established in 2001, the company was listed on the Main Board of the Hong Kong Stock Exchange on 3 June 2008.[3]

Xtep engages mainly in the design, development, manufacturing, sales, marketing and brand management of sports equipment, including footwear, apparel, and accessories. Xtep is a leading professional sports brand with an extensive distribution network of over 6,300 stores covering 31 provinces, autonomous regions and municipalities across the PRC and overseas.

In 2019, Xtep has further diversified its brand portfolio which now includes four internationally brands, namely K-Swiss, Palladium, Saucony and Merrell. Xtep is a constituent of the MSCI China Small Cap Index, Hang Seng Composite Index Series and Shenzhen-Hong Kong Stock Connect.

In August 2019, Xtep signed on famous Asian basketball player Jeremy Lin as spokesperson, marking its foray into the basketball business realm. Xtep also unveiled its “Basketball Product Co-Creation Plan” to come up with basketball products via product co-creation.

After previously supplying then-Premier League side Birmingham City and La Liga side Villarreal in 2010 and 2014 respectively, Xtep left the major football scene in 2017 and focused on other sports, mainly in running. In mid-2018, Xtep returned again to the football scene by signing a contract with Saudi Professional League side Al-Shabab ahead of the 2018–19 season in a reported three-year contract. On 13 October 2019, Egyptian Premier League side Al Ittihad Alexandria announced Xtep as their new official kit supplier until 2022, replacing German company Uhlsport.

References

  1. “الاتحاد السكندري يُعلن عن الزى الجديد .. و يتعاقد حصرياً مع شركة سعودية للملابس الرياضية” [Al Ittihad Alexandria reveals new kits for the 2019–20 as they announce new deal with Chinese-Saudi Arabian company Xtep]. Al Ittihad Alexandria Club official website. 13 October 2019. Retrieved 5 January 2020.
  1. Xtep 2019 Interim Report [2019-08-21]
  2. XTEP INT’L Forms JV to Run Merrell, Saucony Brands – AASTOCKS [2019-03-04]
  3. Xtep buys E-Land Footwear to develop series – The Standard [2019-05-03]
  4. Xtep expands its sportswear portfolio into basketball shoes and apparel, signing on star Jeremy Lin as brand spokesman – South China Morning Post [2019-08-09]

Here’s Why Spiking Inflation And Labor Shortages Won’t Tank The Economic Recovery, According To Experts

New York City Reopens As Most Pandemic Restrictions Are Lifted

Spiking inflation, disappointing jobs gains and shortages of labor and commodities have investors wringing their hands over the state of the economy and the seemingly growing risk of overheating, but according to Moody’s chief economist, Mark Zandi, there’s no cause for alarm.

In a research note published Tuesday, Zandi emphasizes that all those factors are temporary.  “The recovery . . . may be uneven, given the considerable adjustments needed for the economy to fully reopen, but our outlook for a boom-like economy over the coming year has not changed materially,” he wrote.

The labor shortage and hiring difficulties will improve as students return to school and parents have more childcare options, he suggests, and he describes the evidence that federal supplemental $300 weekly unemployment benefits are keeping workers home as “thin.”

Zandi expects inflationary pressures to ease later this year once the economy returns to normal and businesses—especially those in the travel and leisure industry—get past the point where they are reversing their pandemic-era price cuts.

He suggested investor fears that stubborn inflation will force the Federal Reserve to hastily raise rates, thereby triggering a recession, are unlikely to materialize because of the significant slack still extant in the labor market.

Zandi also cites the ongoing semiconductor shortage as a major factor in the job losses and shortages in the auto manufacturing industry, but adds that he expects those pressures to abate by next year once surging demand and soaring prices for the chips prompt suppliers to boost production, thereby stabilizing the supply chain.

Crucial Quote

“Until the supply side of the economy wakes up and catches up with the fast-reviving demand side coming out of the pandemic, the economic statistics will undoubtedly hold more surprises—output and supply chains scrambled; labor, commodities and products in short supply; and price spikes,” Zandi wrote. “If history is a guide, when businesses can make a healthy profit, they will solve the problems,” he added. “Quickly.”

Key Background

Zandi isn’t the only expert looking beyond the risk factors to a robust recovery. Despite raising their expectations for one measure of inflation by more than a percentage point to a peak of 3.5% this year, analysts from investment giant Goldman Sachs believe the factors that caused them to hike the target for core CPI inflation—soaring used-car prices, production delays in the auto industry and changes in health insurance payouts—are temporary.

Not to mention, their impact isn’t as large across other measures of inflation that weigh prices differently. That sentiment is also beginning to make its way to Wall Street: “The inflation debate is not over, but the majority of Wall Street believes it will be transitory,” OANDA senior market analyst Edward Moya wrote in a Tuesday note.

Just as telling as the wage data, the share of working-age Americans who are in fact working has declined in recent decades. The country now has the equivalent of a large group of bakeries that are not making baguettes but would do so if it were more lucrative — a pool of would-be workers, sitting on the sidelines of the labor market.

Corporate profits, on the other hand, have been rising rapidly and now make up a larger share of G.D.P. than in previous decades. As a result, most companies can afford to respond to a growing economy by raising wages and continuing to make profits, albeit perhaps not the unusually generous profits they have been enjoying.

Chief Critic

But not everyone agrees. Larry Summers, an economist who served in the Clinton and Obama Administrations, wrote in a Monday op-ed in the Washington Post that while some of the recent inflation might normalize with time, “not everything we are seeing is likely to be temporary.”

Summers suggests that a handful of factors including demand that grows faster than supply, higher housing prices, inflation expectations and even higher minimum wages and more benefits for employees have the potential to push inflation even higher. Summer recommends that policymakers “explicitly [recognize] that overheating, and not excessive slack, is the predominant near-term risk for the economy.”

What We Don’t Know

When the Federal Reserve will move to tighten policy and raise interest rates. Atlanta Federal Reserve President Raphael Bostic told CNBC last week that given the 8 million jobs that have yet to be recovered, “I think we’ve got to have our policies in a very strongly accommodative situation or stance.” He added: “I don’t think we’re going to have answers on this until at least early fall, and it may take longer than that.”

One of the few ways to have a true labor shortage in a capitalist economy is for workers to be demanding wages so high that businesses cannot stay afloat while paying those wages. But there is a lot of evidence to suggest that the U.S. economy does not suffer from that problem.

If anything, wages today are historically low. They have been growing slowly for decades for every income group other than the affluent. As a share of gross domestic product, worker compensation is lower than at any point in the second half of the 20th century. Two main causes are corporate consolidation and shrinking labor unions, which together have given employers more workplace power and employees less of it.

I’m a breaking news reporter for Forbes focusing on economic policy and capital markets. I completed my master’s degree in business and economic reporting at New York University. Before becoming a journalist, I worked as a paralegal specializing in corporate compliance.

Source: Here’s Why Spiking Inflation And Labor Shortages Won’t Tank The Economic Recovery, According To Experts

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References

Nelson 1995, p. 158. This Marxist objection is what motivated Nelson’s essay, which claims that labour is not, in fact, a commodity.

America’s Best And Worst Banks 2021

For America’s biggest banks, the past twelve months have been one of the biggest tests of their resilience in history. The Coronavirus pandemic all but shuttered the U.S. economy for months, spurring enormous shifts in business and consumer habits. Lenders big and small, from America’s four megabanks to small regional firms, have passed their test with flying colors.

Despite some of the sharpest drops in gross domestic product and employment ever witnessed, banks were able to serve their customers and remain profitable. In 2020, there were just four bank failures in the U.S., despite the extraordinary economic circumstances. Only about 5% of banks nationwide were unprofitable, according to data from the Federal Deposit Insurance Corporation, and about 53% of banks reported annual increases in profits in 2020. 

The pristine shape is thanks to effective emergency measures implemented by Washington that thawed corporate and mortgage credit markets, offered stimulus and small business aid to Main Street, and allowed for widespread forbearance. These factors helped firms play their role as the financial cog that lubricates the American economy.

Corporations used low rates to issue and refinance debt at record rates in 2020, creating a cash cushion. Homeowners did the same, taking advantage of near-record-low interest rates to purchase homes or cut their interest costs. Technology also played a big role as the banking industry undergoes a digital transformation. Consumers could handle their finances on mobile apps during quarantine, instead of at temporarily closed bank branches, and digital change is helping to bolster profitability.

Not only did the stellar performance help the economy through the pandemic, it has positioned the United States for an enormous economic boom as Americans are inoculated from Covid-19 and the economy reopens in full. Millennials are entering the housing market in droves, industries like software and technology are growing rapidly, and businesses will soon be on the offensive in areas like travel, entertainment and retail.

Click here to see the full list of America’s Best Banks.

There are more than 5,000 banks and savings institutions in the U.S., but assets are increasingly concentrated at the top. The 100 largest have $16.4 trillion in assets, representing over 80% of total U.S. bank assets. Asset quality and profitability vary wildly among those institutions. With that in mind, Forbes examined the financial data to gauge America’s Best and Worst Banks.

Born out of the financial crisis of the late 2000s, this is the twelfth year Forbes enlisted S&P Global Market Intelligence for data regarding the growth, credit quality and profitability of the 100 largest publicly-traded banks and thrifts by assets. The ten metrics used in the rankings are based on regulatory filings through September 30. The data is courtesy of S&P, but the rankings are done solely by Forbes.

Metrics include return on average tangible common equity, return on average assets, net interest margin, efficiency ratio and net charge-offs as a percentage of total loans. Forbes also factored in nonperforming assets as a percentage of assets, CET1 ratio, risk-based capital ratio and reserves as a percentage of nonperforming assets. The final component is operating revenue growth. We excluded banks where the top-level parent is based outside the U.S.

CVB Financial, the parent company of Citizens Business Bank, was the top-rated bank in America for a second consecutive year, The Ontario, California-based small business lender was in the top-20 across every metric Forbes tracked, and it shone brightest in its efficiency ratio (39.%), operating revenue growth (41.5%) and posted a negative net charge off ratio. The median bank on Forbes’ list, by contrast, had a 57% efficiency ratio, posted operating growth of just 5.4%, and experienced a charge off rate of 0.17% of average loans. CVB, founded in 1974 and with over $13 billion in assets and over 50 branches across the state of California, has been profitable for 174 consecutive quarters, though a long streak of rising profitability was temporarily broken.

Smaller banks, and those focused on commercial lending, continued to dominate the top levels of the Forbes Best Banks list. Just one bank inside the top-20 had more than $100 billion in assets.

Houston-based Prosperity Bancshares ranked at #2, rising six spots from our 2020 list, thanks to its surging growth. Operating revenue rose 54% in 2020, and the lender performed well in efficiency and capitalization. Rounding out the top-5 were Kalispell, Montana-based Glacier Bancorp, Colorado Springs-based Central Bancorp and Conway, Arkansas-based Home BancShares. Average assets in our Top-5 was just $20 billion.

In the top-10 were McKinney, Tx-based Independent Bank Group, #6, DeWitt, NY-based Community Bank System, #7, Bank of New York Mellon, #8, Santa Clara, CA-based SVB Financial Group, #9, and Wilmington, DE-based WSFS Financial. Bank of New York Mellon was one of our biggest risers, gaining 44 spots, and outperforming on loan quality.

For the first time ever, the Big Four of U.S. banking—JPMorgan Chase, Bank of America, Citigroup and Wells Fargo—saw their combined assets exceed $10 trillion, or more than half the U.S. total. None of these banks finished in our Top-50, generally falling due to below-average growth as they set aside massive provisions to deal with the pandemic and were hit by plunging interest rates. JPMorgan Chase ranked highest at #51, dropping eight spots. Citigroup gained 10 spots to place at #65. Bank of America and Wells Fargo both slid, placing at #74 and #98, respectively.

JPMorgan, led by CEO Jamie Dimon, ended 2020 on a high note, reporting a record $12 billion profit as it released reserves built up to handle Covid-19 related economic stress. Despite the extraordinary circumstances, the lender saw average loans and its capital position rise to end the year, and it reported a surge in bank deposits. During 2020, the bank raised over $2 trillion of credit and capital for its clients, spanning ordinary U.S. households to the biggest corporations on the planet.

“In general, the banks have so much capital, so much liquidity and so much capability,” Dimon recently told investors in a December conference, weeks before the bank reported record annual revenues. While Dimon remains concerned about the pandemic as vaccines are distributed, and sees a varied recovery for consumers and businesses, he added of the banking industry, “I think we’re coming out of this looking great.”

Wells Fargo continued to fall in Forbes’ rankings in the wake of a 2016 fake accounts scandal that has cost the bank billions of dollars and led to dramatic change atop the lender. Wells dropped twelve spots in 2019, placing #98, due to a pronounced slump in revenues as the Federal Reserve limits its asset growth.

Over the past 12-months, JPMorgan’s stock has fallen 0.4%, making it the best performer among big banks, which all saw their stocks drop and underperform the S&P 500 Index. Citigroup shares have shed 19%, while Banks of America dropped 7%. Once more, Wells Fargo was the big laggard, falling by a third in value over the past year.

Rounding out the top-100 was Texas Capital Bancshares, #99, and CIT Group, #100.

New York-based business lender CIT Group is in the process of acquiring family-controlled First Citizens Bancshares, which ranked #62. The merger that will create a new diversified consumer and business lender with over $100 billion in combined assets, and a large presence in booming Sun Belt markets like Florida, Georgia and Tennessee. The merger comes a year after the combination of SunTrust and BB&T, which created $499 billion in assets Truist Financial, #48, which created a dominant lender in the Mid-Atlantic and Southeast.

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Antoine Gara

Antoine Gara

I’m a staff writer and associate editor at Forbes, where I cover finance and investing. My beat includes hedge funds, private equity, fintech, mutual funds, mergers, and banks. I’m a graduate of Middlebury College and the Columbia University Graduate School of Journalism, and I’ve worked at TheStreet and Businessweek. Before becoming a financial scribe, I was a member of the fateful 2008 analyst class at Lehman Brothers. Email thoughts and tips to agara@forbes.com. Follow me on Twitter at @antoinegara

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Clark Howard: Save More, Spend Less

Some of the biggest banks in the country were also ranked with some of the worst customer service in a recent survey. Clark tells you who ranks the worst, and which banks are the best.

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COVID-19 vaccine data reveals huge gaps in race, ethnicity, occupation information  http://www.beckershospitalreview.com – Today[…] which includes name, address, sex, date of birth, race and ethnicity, date and location of vaccination and the shot received […]0

Upcoming Virtual Speaking Engagements – reason.com – TodayWhile I hope that vaccination changes things over the next few months, for now only virtual  speaking engagements are possible […]0

What’s the New Phenomenon Called “COVID Vaccine Arm”? http://www.psychologytoday.com – Today[…] let me know that she was part of a group of health care practitioners comparing notes after the vaccination and that in her group, one physician had described the same delayed reaction as mine […] represent a long-term safety concern” and were “not considered a precaution or contraindication to vaccination with the 2nd dose […]0

Data Privacy Day 2021: Views and Tips from Top Industry Experts : @VMblog vmblog.com – Today[…] Covid19 and the subsequent vaccination initiatives raise new questions about the intersection of societal health and individual privacy […] A similar choice exists as vaccination becomes more widespread: how do you prove that you’ve been vaccinated without revealing mor […]N/A

Oregon health-care workers were stuck in a snowstorm with expiring vaccines. So, they gave shots to strangers caught in traffic. http://www.washingtonpost.com – Today[…] The impromptu vaccination session amid a snowstorm is the latest example of health-care workers scrambling to make use o […] Weber, who was in charge of the vaccination paperwork, carried the forms inside his coat […] An ambulance that had accompanied them during a vaccination session at a high school earlier that day was also present and ready to treat anyone in the rar […]3.3K

London & the start-up http://www.twobirds.com – Today[…] Travel, tourism and hospitality may require successful vaccination programmes before funding becomes available […]0

MakeMyTrip Rides India’s Early Domestic Travel Recovery – skift.com – Today[…] rollout is in its early stages, but expressed optimism because of India’s track record in mass vaccination programs […]0

Pfizer says its Covid vaccine DOES work against South African variant | Daily http://www.dailymail.co.uk – Today[…] in the production of antibodies, which are virus-fighting proteins made in the blood after vaccination or natural infection […] is the E484K mutation, which is believed to be able to ‘hide’ from antibody responses, both through vaccination and natural immunity […]N/A

Emergency Veterinary Technician job in Bridgeton, MO | Asso… jobs.frontend.la – Today[…] and San Diego counties, also allows eligible users to schedule an appointment for the vaccination […]0

Coronavirus Updates: Legal Advocates Call For Cuomo To Change Policy On COVID-19 Vaccines For State Prisoners gothamist.com – Today[…] The Centers for Disease Control and Prevention recommends vaccination for all incarcerated people and corrections officers simultaneously, given the coronavirus’ […] Last week, a state judge ordered the vaccination of a 65-year-old incarcerated man with chronic lung disease, but his attorneys say he still hasn’ […]1

Oregon health workers stuck in snow give other drivers COVID-19 vaccine 6abc.com – Today[…] — Oregon health workers who got stuck in a snowstorm on their way back from a COVID-19 vaccination event went car to car injecting stranded drivers before several of the doses expired […] vaccine clinic” took place after about 20 employees were stopped in traffic on a highway after a vaccination clinic […] including one to a Josephine County Sheriff’s Office employee who had arrived too late for the vaccination clinic but ended up stopped with the others, officials said […]0

New lockdown nixed amid 9.5% contraction businessmirror.com.ph – Today[…] Ana said this poses risks, especially given the “bungling” of the country’s vaccination strategy […]0

Oregon health workers stuck in snow give other drivers COVID-19 vaccine abc7news.com – Today[…] — Oregon health workers who got stuck in a snowstorm on their way back from a COVID-19 vaccination event went car to car injecting stranded drivers before several of the doses expired […] vaccine clinic” took place after about 20 employees were stopped in traffic on a highway after a vaccination clinic […] including one to a Josephine County Sheriff’s Office employee who had arrived too late for the vaccination clinic but ended up stopped with the others, officials said […]0

Manufacturing Activity in Central U.S. Accelerates in January — Kansas City Fed http://www.marketscreener.com – Today[…] “Covid-19 vaccination is a key factor in manufacturers’ overall business outlook for 2021, but with less impact on hiring […]0

Johnson: Focus on pandemic, not ‘pointless’ wrangling over Scottish independence – BelfastTelegraph.co.uk http://www.belfasttelegraph.co.uk – Today[…] He then met troops setting up a vaccination centre in the Castlemilk area of the city, bumping elbows to greet some of the soldiers […]0

HOT JOBS & COOL JOBS: REGISTERED NURSE, RN CASE MANAGER HOME HEALTH CANONSBURG PA USA http://www.e-physician.info – Today[…] Apply Now>> 33 *Registered Nurse – Covid – 19 Vaccination Support McKees Rocks, PA, USA CVS Health has a powerful purpose – “Helping people on their path t […]N/A

Peru mourns its ‘pandemic soldiers,’ doctors who died treating Covid http://www.nbcnews.com – Today[…] Lying on a mattress in a tent, Quiñones said doctors do not believe Peru can carry out a successful vaccination campaign when considering that officials have not been able to solve oxygen supply woes a […]0

Businesses welcome rates relief vow but demand more support – BelfastTelegraph.co.uk http://www.belfasttelegraph.co.uk – Today[…] “Yes there is light at the end of the tunnel with the vaccination programme, but restrictions to prevent the spread of the virus have been devastating […]0

OT Cybersecurity in 2021 and Beyond Series: Part III – Protection http://www.missionsecure.com – Today[…] it is possible that many practices implemented in 2020 will continue even after widespread vaccination programs are complete […]1

Needles are nothing to fear: 5 steps to make vaccinations easier on your kids medicalxpress.com – TodayThe COVID vaccine rollout has placed the issue of vaccination firmly in the spotlight […] So it’s important to establish positive attitudes towards needle procedures, particularly vaccination, early in life […] may result from feelings of powerlessness due to being under-informed or being “tricked” into a vaccination […] The guide below offers a strategy to help make vaccination a positive experience for your child […]0

UN chief: Russia’s vaccine can play crucial role in coronavirus battle – World tass.com – Today[…] When I see developed countries pouring a lot of investments into the vaccination of their people and not enough into the vaccinations of developing countries, I always remind the […]N/A

Scheduled reopening of schools in NI postponed until at least March – BelfastTelegraph.co.uk http://www.belfasttelegraph.co.uk – Today[…] take place between the Department of Health and Department of Education on the issue Decisions vaccination prioritisation are ultimately made on a UK-wide basis by the Joint Committee on Vaccination and Immunisation (JCVI) […] Those aged 65-69 can now book a slot for vaccination at a centre using an online portal. The initiative has been developed to ensure a batch of Pfizer vaccination allocated to Northern Ireland does not go to waste […]0

Villafuerte backs call to skip Charter change, focus on ‘doable’ legislation businessmirror.com.ph – Today[…] “Right now we are just catching up with other countries that have already rolled out their mass vaccination programs,” he added […]

Sharing Covid vaccines is in UK’s best interests, say scientists en.brinkwire.com – Today[…] “The critical thing is we must make sure that the schedule that has been agreed and on which our vaccination programme has been based and planned goes ahead […] Prof Andy Pollard, the chair of the UK’s Joint Committee on Vaccination and Immunisation, and one of the researchers behind the Oxford/AstraZeneca vaccine, told th […] University of Southampton, said that while there was an ethical imperative for the UK to support vaccination in lower-income countries, it also had to look after its own […]0

Dr. Rai talks about new COVID-19 Vaccination Clinic at UW-Green Bay | Wisconsin Public Radio – Inside UW-Green Bay News news.uwgb.edu – TodayA healthcare provider in Green Bay recently opened a COVID-19 vaccination clinic and plans to open more locations. We speak with the president of Prevea Health about how the clinic operates and challenges they face in meeting demand for the vaccine.0

Germany recommends Oxford Covid vaccine not be used on over-65s en.brinkwire.com – Today[…] “Any assessment about the efficacy of the vaccination among the highest age group (≥75 years) therefore comes with a high level of uncertainty […]0

What does the global picture look like for vaccine supply? – BelfastTelegraph.co.uk http://www.belfasttelegraph.co.uk – Today[…] ��‍⚕️ Over 1,000 led by GPs �� Over 240 hospital hubs �� Over 70 pharmacies �� 50 large vaccination centres This will help those at most risk to get the vaccine first […] The Seychelles was the only African country to start a national vaccination campaign, it added […]0

COVID-19: Ontario reports 2,093 new cases; admits misinterpreting data on number of people who received vaccine | Ottawa Citizen ottawacitizen.com – Today[…] On the vaccination front, Ontario administered 11,910 vaccine doses in the past 24 hours and has now administere […]2

Mowing Crew Member job in West Chester, PA | Andrew’s Lawn … jobs.frontend.la – Today[…] and San Diego counties, also allows eligible users to schedule an appointment for the vaccination […]0

Canada’s expected COVID-19 vaccine shipments deliveries reduced again – National | Globalnews.ca globalnews.ca – Today[…] have already used up nearly all their vaccine supply and have been forced to push back their vaccination schedules […]1

Why using fear to promote COVID-19 vaccination and mask wearing could backfire medicalxpress.com – Today[…] Evidence, ethics and politics So, why not use fear to drive up vaccination rates and the use of masks, lockdowns and distancing now, at this moment of national fatigue? Wh […]1

The United States has world’s fifth worst response to the coronavirus pandemic, scientists claim  | Daily http://www.dailymail.co.uk – Today[…] has made the pandemic his number one priority in office and has already sent goals to increase the vaccination rollout President Joe Biden has made the pandemic his number one priority in office and has already […] has made the pandemic his number one priority in office and has already set goals to increase the vaccination rollout in a bid to slow the rampaging virus […]N/A

COMMENTARY: The great Yukon vaccine caper — not exactly the perfect heist – National | Globalnews.ca globalnews.ca – Today[…] Ekaterina Baker expected to waltz into a remote Yukon village of 100 people and demand a COVID-19 vaccination meant for Indigenous elders without sticking out like proverbial sore thumbs is hard to comprehend […

The Positive Impacts of a COVID-19 Vaccine Will Arrive Before The Vaccine

Economic and financial impact during the Covid-19 health crisis deepens. Businesswoman with protective face mask checking financial trading data on smartphone by the stock exchange market display screen board in downtown financial district showing stock market crash sell-off in red colour.

Spending paused because of uncertainty now has some answers.

On Monday, Pfizer (PFE) and its German partner BioNTech shook markets with the most positive news yet on a potential vaccine for COVID-19.Before the market open, the companies announced their mRNA-based COVID vaccine candidate has indicated an efficacy ratio north of 90%.

Pfizer CEO Dr. Albert Bourla said of the results, “Today is a great day for science and humanity.” Dr. Anthony Fauci called the results “extraordinary.”Following this news, markets soared with the Dow (^DJI) and S&P (^GSPC) hitting intraday record highs before fading a bit into the close. The Dow’s close at 29,157 was still the index’s highest close since February 20.

And some of the biggest pandemic trends were reversed sharply as investors placed big bets on this news serving as a key step in the economy’s return to something like normal.Big “stay at home” winners like Zoom (ZM), Peloton (PTON), and Netflix (NFLX) were under pressure.

Airlines rallied, with shares of United (UAL), Delta (DAL), and American (AAL) all rising more than 15%.These lists go on — office space REITs were big winners, eCommerce plays like PayPal (PYPL) and Shopify (SHOP) sold off, gym operators rallied, banks jumped, credit card issuers were higher, and so on.

But the market’s reaction holds a key lesson for investors who might’ve been surprised to see such an enthusiastic reaction to this news. Especially considering the relative optimism the scientific community has had around vaccine development for some time.

And the lesson is that even a tentative roadmap for a vaccine allows businesses and consumers to plan in a way that has been nearly impossible for the past eight months.

“With the vaccine news today, households and firms are going to plan ahead, for example by booking travel, vacation, and capex,” said Torsten Sløk, chief economist at Apollo Global Management.

“The implication is that we will immediately begin to see the positive effects on employment, GDP, and earnings, even before the vaccine is available to the public.”

In other words, Pfizer’s vaccine or any others that follow need not be distributed to the population before starting to directly aiding the economic recovery. Sløk also notes that sectors of the economy that include close proximity to others account for about 22% of total employment.

And as we saw in the October jobs report published Friday, the number of workers out of a job in the leisure and hospitality and business and professional services sectors totaled 4.5 million, accounting for the vast majority of those who still remain unemployed. As of October, the number of workers unemployed remained 5.3 million higher than in February.

With these sectors able to see some light at the end of the COVID tunnel, the prospects for bringing workers back in the medium-term grow better.

And while no one sees Pfizer’s announcement on Monday as the end of the pandemic, an ability to reasonably contemplate the other side of this crisis is a welcome change for the businesses that had so far been left behind during the surprisingly durable economic recovery.

By Myles Udland, reporter and anchor for Yahoo Finance Live. Follow him at @MylesUdland

What to watch today

Economy

  • 6:00 a.m. ET: NFIB Small Business Optimism, October (104.1 expected, 104.0 in September)
  • 10:00 a.m. ET: JOLTS Job Openings, September (6.5 million expected, 6.493 million in August)

Earnings

Pre-market

  • 6:30 a.m. ET: Advance Auto Parts (AAP) is expected to report adjusted earnings of $2.65 per share on revenue of $2.48 billion
  • 7:00 a.m. ET: DR Horton (DHI) is expected to report adjusted earnings of 73 cents per share on revenue of $1.71 billion

Post-market

  • 4:05 p.m. ET: Lyft (LYFT) is expected to report an adjusted loss of 90 cents per share on revenue of $495.78 million
  • 4:10 p.m. ET: DataDog (DDOG) is expected to report adjusted earnings of 1 cent per share on revenue of $144.33 million
  • 6:20 p.m. ET: Rocket Companies (RKT) is expected to report adjusted earnings of $1.09 per share on revenue of $4.57 billion

Top News

European markets find calm after frantic rally on COVID-19 vaccine news [Yahoo Finance UK]

FDA approves Eli Lilly’s COVID-19 treatment for emergency use [Yahoo Finance UK]

Beyond Meat falls short in 3Q as restaurants struggle [AP]

Apple ‘One More Thing’ Mac event: What to expect [Yahoo Finance]

YAHOO FINANCE HIGHLIGHTS

There’s a new barrier to a fourth stimulus bill

Powell’s odds of Fed chair renomination brighten with President-elect Biden, GOP Senate

McDonald’s unveils its own meatless burger McPlant, a year after Beyond Meat test

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Find live stock market quotes and the latest business and finance news

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More From Yahoo Finance:

77% Of Economic Activity Lost To Social Distancing Is Back, But An Economic Recovery Still Depends On A Vaccine

Third-quarter earnings season officially kicks off this week with big banks, airlines and consumer-staple firms set to report on Tuesday, and though Wall Street’s eyeing improvements over the previous quarter, a sustained economic recovery is still ultimately contingent on widespread vaccination.

Big banks and airlines–two of the coronavirus pandemic’s worst-hit industries–kick off earnings season on Tuesday, with JPMorgan Chase, Citigroup and Delta Air Lines all set to report before the opening bell.

Expect weak and uneven sales growth, and a collapse in profit margins, to characterize third-quarter results, Goldman Sachs said in a weekend note to clients, adding that it still expects election results will have more of an impact on stocks than earnings, and that ultimately, vaccination is “essential for the normalization of the economy.”

Goldman believes there’s a 48% chance that there will be enough doses of an FDA-approved coronavirus vaccine to treat 25 million Americans by the second or third quarters, the most likely time lines, followed closely by 42% odds that this will happen by the first quarter.

Meanwhile, wealth management firm Glenmede said Monday that although it estimates 77% of economic activity lost due to social-distancing mandates has been regained, it only expects earnings will see a small rebound from an “abysmal” second quarter.

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Glenmede doesn’t expect earnings will reach new highs until the second half of 2021, which the firm adds is “not so coincidentally aligned with estimates for vaccine delivery.”

In a Monday note to clients, LPL Financial had similar hopes, saying, “The combination of efficiencies gained during the recession, the strong performance of the winners and the tremendous progress in Covid-19 treatment and vaccine development, all suggest we may be only a year away from reaching normalized earnings, though we fully recognize the risk that time line may end up being too aggressive.”

Key Background

The coronavirus pandemic has been a boon for stocks in software, biotech and consumer staples (think: Procter & Gamble, whose shares are at an all-time high and up 17% just this year), but it’s been terrible to a bevy of firms reporting this week, particularly in the banking and airline spaces. The best-performing sectors this year, as tracked by S&P 500 ETFs through Friday’s close, include technology (up 32%), consumer discretionary (up 23%) and communications (up 13%). The worst-performing sectors are energy (down 36%) and financials (down 16%). JPMorgan, the nation’s biggest bank, led by Jamie Dimon, reports tomorrow and has seen shares plummet nearly 28% this year.

Big Number

21%. That’s how much Goldman said it expects third-quarter earnings per share will fall among S&P 500 firms, compared to a 32% drop in the second quarter and a 15% fall in the first. 

Crucial Quote 

“In many respects, the economy’s recovery since this spring has been pretty remarkable. . . . Consensus estimates show an expectation that earnings reach new highs in the second half of 2021, perhaps not so coincidentally aligned with estimates for vaccine delivery,” Glenmede’s Jason Pride and Michael Reynolds said on Monday. “Consumers are driving the pandemic recovery, but the U.S. economy is not completely out of the woods yet.

There are pockets of the economy that continue to struggle, and an additional round of fiscal stimulus could put the U.S. economy on a gentler and less painful path toward full recovery once a vaccine becomes widely available.”

What To Watch For

Banks dominate the 12% of S&P 500 earnings due to be reported this week, Bank of America noted in a Monday research note. Among firms reporting Tuesday are Delta Air Lines, JPMorgan Chase, Citigroup, BlackRock and Johnson & Johnson–all before the opening bell. Bank of America, Wells Fargo, Progressive and United Airlines are slated to release earnings on Wednesday, while Morgan Stanley, Charles Schwab and Walgreens are scheduled for Thursday. Any signs on Tuesday from JPMorgan and Citi that the economy is on the mend will help bank stocks and the overall market, says Marc Chaikin, founder of Philadelphia-based quant investment research firm Chaikin Analytics.

Further Reading

Apple, Twitter, Twilio Shares Rise As Stocks Prep For Big Earnings Week Ahead (Forbes) Follow me on Twitter. Send me a secure tip

Jonathan Ponciano

Jonathan Ponciano

I’m a reporter at Forbes focusing on markets and finance. I graduated from the University of North Carolina at Chapel Hill, where I double-majored in business journalism and economics while working for UNC’s Kenan-Flagler Business School as a marketing and communications assistant. Before Forbes, I spent a summer reporting on the L.A. private sector for Los Angeles Business Journal and wrote about publicly traded North Carolina companies for NC Business News Wire. Reach out at jponciano@forbes.com.

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It’s a weird time to be alive. A pandemic is sweeping the world and life as we know it has gone through a seismic shift in a matter of weeks. But this isn’t the first time humans have encountered an epidemic. Today, Danielle (from the safety of her Chicago flat) looks back at a few of the world’s biggest pandemics. From the Black Death of the 1300s to the 17th c. Plague and the 1918 Spanish Flu, Danielle explores the human and economic tolls of past pandemics and what we can learn to prepare for life during and after COVID-19. Special thanks to our Historian Harry Brisson on Patreon! Join him at https://www.patreon.com/originofevery… Created and Hosted by Danielle Bainbridge Produced by Complexly for PBS Digital Studios — Follow us on… Facebook: https://www.facebook.com/originofever… Instagram: https://www.instagram.com/pbsoriginof… — Origin of Everything is a show about the undertold histories and cultural dialogues that make up our collective story. From the food we eat, to the trivia and fun facts we can’t seem to get out of our heads, to the social issues we can’t stop debating, everything around us has a history. Origin of Everything is here to explore it all. We like to think that no topic is too small or too challenging to get started. Works Cited: https://www.theatlantic.com/ideas/arc… https://www.newstatesman.com/politics… https://www.stlouisfed.org/~/media/fi… https://www.wsj.com/articles/lessons-… https://www.theguardian.com/commentis… https://www.economist.com/finance-and… https://voxeu.org/article/wars-plague… livescience.com/2497-black-death-changed-world.html https://papers.ssrn.com/sol3/papers.c… https://www.tandfonline.com/doi/pdf/1… https://academic.oup.com/ereh/article… https://www.sciencedirect.com/science… https://ec.europa.eu/economy_finance/… https://www.history.com/topics/world-… https://www.history.com/topics/world-… https://www.nytimes.com/2020/03/11/op… https://maximumfun.org/episodes/sawbo… https://www.history.com/topics/middle… https://www.theatlantic.com/health/ar… https://www.cdc.gov/flu/pandemic-reso… https://www.history.com/news/pandemic… https://www.acep.org/how-we-serve/sec… https://www.cdc.gov/plague/maps/index..

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More Than 50 Thousand SMEs Receive Loans To Sustain Their Businesses During The Pandemic

This article was translated from our Spanish edition using AI technologies. Errors may exist due to this process.

  • More than 50,000 SMEs have received working capital loans, with an average of 125,000 pesos each. And each venture has requested, on average, up to 2.5 credits.

Since the beginning of the pandemic, more than 15 thousand small and medium-sized companies (SMEs) found an option in Mercado Pago to keep their businesses running and 7 out of 10 who applied for a loan did so through Mercado Crédito.

The foregoing, according to a survey of 1,160 SMEs nationwide conducted by Trendsity, at the request of Mercado Pago. According to the survey, most of the resources obtained through Mercado Crédito allowed these business units to increase inventories (51%) and use it as working capital, which includes equipment and operating expenses, among others (46%).

So far, more than 50,000 SMEs have received working capital loans, with an average of 125,000 pesos each. And each venture has requested, on average, up to 2.5 credits.

“As part of the economic reactivation, credit has become essential to encourage the economic development of entrepreneurs. For that reason, we increase our offer every month and have placed more than 3,500 million pesos among SMEs so that they can get ahead in this difficult time, “said Jonathan Sarmina, director of Mercado Crédito México.

More online payments to keep trading

“50% of the SMEs that joined Mercado Pago do not have a physical store, so 65% of them chose to reinforce online sales and 55% to offer more payment options,” said Sergio Dueñas, director of Payment Market.

Among the payment methods preferred by SMEs, the Payment Link stands out (82%), followed by the payment through Mercado Pago with its own website (72%); the Point Blue card terminal (62%) and QR code payments in (49%).

He explained that, according to the results of the study, 92% of those consulted understand that offering a greater number of payment options allows them to reach more potential customers and the same percentage declares that they will continue to use Mercado Pago in a world without a pandemic.

By:Entrepreneur en Español

Trish Regan and Adam Johnson provide actionable insight on the capital markets daily with regular segments such as “Chart Attack,” depicting likely market moves before they happen, and “Insight & Action” which explains original trading ideas that can make you money. In addition, “Street Smart” is filled with breaking news, political analysis, and market-moving interviews with exclusive guests such billionaire investor Carl Icahn, hedge fund titan Bill Ackman, automaker Elon Musk and more. “Street Smart” broadcasts at 3-5pm ET/12-2pm PT. For a complete compilation of Street Smart videos, visit: http://www.bloomberg.com/video/street… Watch “Street Smart” on TV, on the Bloomberg smartphone app, on the Bloomberg TV + iPad app or on the web: http://bloomberg.com/tv Bloomberg Television offers extensive coverage and analysis of international business news and stories of global importance. It is available in more than 310 million households worldwide and reaches the most affluent and influential viewers in terms of household income, asset value and education levels. With production hubs in London, New York and Hong Kong, the network provides 24-hour continuous coverage of the people, companies and ideas that move the markets.

COVID-19 And The Board: A Chair’s Point Of View

The global COVID-19 pandemic has hit all states and provinces in the United States and Canada and as of this writing, the number of cases is rising every day. While our countries and others around the world grapple with how to respond, businesses should be supporting the health and well-being of their people and initiatives to help “flatten the curve.”

None of us can predict the true impact of the pandemic on the global economy, but at this pivotal moment, there are clear choices to be made. The way in which boards do their work at this time will be a critical factor in an organization’s ability to emerge from the current crisis and push forward into a new era of economic recovery and opportunity for the benefit of all stakeholders.

To accomplish this, boards—while maintaining appropriate separation from management—should support executive leadership and share the burden. Boards should also acknowledge there is no off-the-shelf playbook for the current situation, and that they must be flexible and pragmatic in how they govern their organizations.

As two chairs experiencing this within our own boards and those of our clients, we see five principles that strong boards exemplify as the crisis unfolds:

1. Take care of each other.

Boards are social constructs; Chairs and their board members must support each other and their executive teams during this time of extraordinary challenge. The tone from the top matters, and boards are also in a unique position to reinforce a culture of inclusive human concern for the mental and physical well-being of the entire organization at a time when it’s needed more than ever.

2. Challenge the operating models of your boards.  

Revisit existing structures and be agile in considering what aspects of the standard board agenda can be streamlined or deferred to create more time for management to focus on the short-term challenges facing the organization:

  • Leverage the skills and expertise of individual board members – and their experiences elsewhere – to support management’s specific set of near-term needs to enhance stability in the organization.
  • Evaluate if new crisis-based working groups could support the organization in more successfully navigating urgent issues. For example, establishing an ad-hoc committee to focus on response—specifically, business continuity and sustainability—while the larger board focuses on recovery, and ultimately on the ability to thrive after COVID-19.
  • Help management by reinforcing the concept that “perfect is the enemy of the good.” Set expectations for interaction, communication, and material production that respects the situation.

3. Be flexible in board engagement.

When thinking through engagement, boards should remember that the average corporate director in the United States and Canada sits on more than two boardsi, and that one-third of US CEOs sit on an outside board other than their own.iiIn our experience, this is a double-edged sword: On one hand, directors serving on multiple boards at this moment are dealing with a myriad of challenges at the same time.

 They may have less time to give. On the other hand, this may be precisely the time that organizations might want directors who serve on other boards given the significant value of sharing cross-board insights of how others are responding to the crisis. Contingency planning that takes into account the health and well-being of current board members and management teams should be considered as it is a very real possibility that more than one board member or executive may be unable to perform duties during overlapping periods. Issues related to illness, family caretaking duties, stress, and bandwidth due to multiple board seats, as well as board members who have to return to their primary C-suite responsibilities, all need to be considered.

4. Take the long view:

there is no question the primary near-term responsibility of the board is to support management in navigating the repercussions of the pandemic. However, the board must also keep a lens on two mutually inclusive issues: being the vehicle to hold an organization to its societal purpose, and balancing decision-making between the short-term need and long-term success.

As studies of past volatile times have shown, the organizations that emerge as winners are those that strike the right balance between shorter- and longer-term strategies.iiiBoards can support management in near-term moves and actions by thinking through what the mid- and long-term impact will be. This includes reflecting on how decisions will impact all stakeholders and encouraging the consideration of diverse needs, including meeting the most pressing societal needs right now.  

5. Ask deliberate questions:

Be thoughtful about avoiding questions out of personal curiosity. Focus instead on the critical issues facing the organization in the short term, and those that will chart its future course. Continuous dialogue, including constructive challenge, can create a healthy tensionivthat should be seen as positive and necessary to get to the best decisions.  

This pandemic and its aftermath will test the stamina of organizations to preserve, to endure, to be resilient. Boards can play an outsized role in providing the ultimate pressure test of an organization’s position and purpose, as what is decided today will define the future.

[i] 2019 ICD Member Survey

[ii] https://www.spencerstuart.com/research-and-insight/us-board-index

[iii] https://www2.deloitte.com/global/en/insights/economy/covid-19/heart-of-resilient-leadership-responding-to-covid-19.html

[iv] https://www2.deloitte.com/us/en/insights/topics/leadership/strategic-board-of-directors-ceo.htmlJanet Foutty

Executive Chair of the Board, Deloitte US

Janet Foutty is US executive chair of the board, Deloitte. Janet is also a member of Deloitte’s Global Board of Directors, and chair of Deloitte Foundation. She previously served as chair and chief executive officer for Deloitte Consulting LLP and held numerous leadership roles at Deloitte including leader of its federal practice; leader of Deloitte Consulting LLP’s technology practice, and lead on various client programs that spanned retail, technology, government, energy, and financial services industries.

Janet currently serves on the board of directors for Bright Pink, a nonprofit dedicated to women’s health, Catalyst, a global nonprofit working to build more inclusive workplaces, the advisory boards of NYU Stern’s Tech MBA program, and Columbia Law School’s Millstein Center for Global Markets and Corporate Ownership. 

Janet Foutty

By: Janet Foutty

Executive Chair of the Board, Deloitte US

Janet Foutty is US executive chair of the board, Deloitte. Janet is also a member of Deloitte’s Global Board of Directors, and chair of Deloitte Foundation. She previously served as chair and chief executive officer for Deloitte Consulting LLP and held numerous leadership roles at Deloitte including leader of its federal practice; leader of Deloitte Consulting LLP’s technology practice, and lead on various client programs that spanned retail, technology, government, energy, and financial services industries.

Janet currently serves on the board of directors for Bright Pink, a nonprofit dedicated to women’s health, Catalyst, a global nonprofit working to build more inclusive workplaces, the advisory boards of NYU Stern’s Tech MBA program, and Columbia Law School’s Millstein Center for Global Markets and Corporate Ownership. 

Duncan Sinclair

Duncan Sinclair

Chair of Deloitte Canada and Chile

Duncan is the Chair of Deloitte Canada and Chile and is a member of the Deloitte Global Board.

Duncan is passionate about growing and developing those around him, and building a better future for Canada and Chile. His deepest belief is that leadership is about rolling up your sleeves and getting to work on shared challenges. Throughout his career, Duncan has focused on the future of Canada and the impact that business leaders can have to shape outcomes for the benefit of our communities

Over his 31-year career, his professional activities include serving clients who are global institutional investors, public and private family owned global businesses in the mining, telecommunication, consumer business, manufacturing and real estate and construction industries, as well as national and regional governments.

Investors Are Way Too Optimistic About An Economic Rebound, According To This Market Expert

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Despite a minor sell-off on Friday, stocks have rebounded from the coronavirus recession strongly in recent months—too strongly, according to research from Vital Knowledge founder Adam Crisafulli, who believes investors are too optimistic about a quick economic recovery and the market is now overvalued.

KEY FACTS

The market remains “incredibly resilient,” with the S&P 500 still up around 2% last week despite more negative headlines about a resurgence of coronavirus cases. The default setting for most investors is still to “buy the dip” whenever the market falls, according to Crisafulli, while “FOMO” remains a major theme as well—with many investors fearing they’ll miss out on the stock market’s rebound over the past few months (The S&P is up nearly 40% from its coronavirus recession low point on March 23).

 

Stimulus from the Federal Reserve, which injected nearly $3 trillion into financial markets since late February, has been instrumental in helping the stock market move higher by providing assurance to investors that the Central Bank will continue to shore up the economy.

 

Hopes for more government stimulus, namely a Phase 4 coronavirus relief bill from Congress, have also helped boost stocks, he says.But Crisafulli maintains his forecast for the S&P 500’s fair value at 2,900 (around 6% lower than current levels) arguing recent economic and corporate news have a positive bias: Following the economic collapse in March and April, it’s “easy for conditions to see week-to-week or month-to-month improvements.”

 

“Investors are extrapolating this bounce in activity to a full V-shaped recovery, not paying nearly enough attention to the enormous permanent damage wrought by COVID,” Crisafulli warns.

Crucial quote

“The threshold to spark a wave of buying is miniscule (recycled news, higher analyst price targets, etc.) while the bar to spur selling is extremely high,” Crisafulli said in a recent note.

What to watch for

“While it’s unlikely politicians reimplement lockdown measures, all the negative press around the coronavirus will stunt the economic normalization process,” Crisafulli warns. That will further delay the time it takes for consumer behavior—and therefore economic growth and corporate earnings—to return to pre-crisis levels.

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Key background

Over the past few months, stocks have largely continued to rally on optimism about reopening the economy. But more recently, the market is now taking a sizable hit amid rising concerns over a resurgence of coronavirus, with many U.S. states reopening now seeing a spike in new cases. Expectations for a quick economic recovery are dwindling: On June 10, the Federal Reserve provided a grim update on the economy. The Central Bank forecasted unemployment will remain high for years and said interest rates will stay near zero until at least 2022.

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I am a New York—based reporter for Forbes covering breaking news, with a focus on financial topics. Previously, I wrote about investing for Money Magazine and was an intern at Forbes in 2015 and 2016. I graduated from the University of St Andrews in 2018, majoring in International Relations and Modern History. Follow me on Twitter @skleb1234 or email me at sklebnikov@forbes.com

Source: https://www.forbes.com

Larry Glazer, managing partner and portfolio manager of Mayflower Advisors, and Jimmy Lee, CEO of The Wealth Consulting Group, joins ‘Power Lunch’ to discuss what they’re telling investors amid the coronavirus outbreak market volatility. Stocks surged Tuesday — rebounding from their worst day in more than three decades — as Wall Street cheered White House plans that could inject $1 trillion into the U.S. economy to cushion the blow of the coronavirus.
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