Latest Business News & Stories

Germany Headed for Key Medical Kit Shortages, Experts Tell Paper

Sign up here for our daily coronavirus newsletter on what you need to know, and subscribe to our Covid-19 podcast for the latest news and analysis.

Germany may run into a shortage of critical medical equipment and hospital capacity even though the country has done relatively well in combating the coronavirus so far, scientists and politicians warned Sunday.

“We can’t rule out we’ll have more patients in need of ventilators than equipment,” Lothar Wieler, president of the public health group, Robert Koch Institute, told German newspaper Frankfurter Allgemeine Sonntagszeitung. The country “clearly has to acknowledge that capacities might not suffice,” he said.

Wieler has turned more wary of the virus’s spread compared with his statement from about a week ago, when he said he was “optimistic” because trends show the growth in new cases is flattening out in Germany.

Leading politicians in Europe’s biggest economy struck a similar tone. The country needs a strategy to increase capacity and boost central planning because there aren’t enough protection gear, testing or ventilators, the Social Democratic Party’s health-care expert and member of parliament, Barbel Bas, told the same newspaper on Sunday.

Germany needs to be able to make millions of respiratory masks, the Green Party’s co-head Annalena Baerbock said.

Relatively Low

The number of Covid-19-related deaths have been relatively low in the country compared with some other European nations. Cases rose to about 57,695 on Saturday, with 433 deaths. Spain has had more than 6,500 fatalities and Italy’s topped 10,000.

Germany has progressively tightened restrictions on residents in the past two weeks, beginning with limits on large meetings, border controls and school closures. It now bans gatherings of more than two people.

Chancellor Angela Merkel said lockdown rules are unlikely to be relaxed to protect the health-care system. Her chief of staff, Helge Braun, separately told newspaper Der Tagesspiegel on Saturday current measures will largely be in place until April 20.

“The number of new infections doesn’t give reason to ease the rules,” Merkel said in her weekly podcast Saturday.

Source: Read Full Article

What if kirana shops run out of stock?

’90 per cent of the food and grocery business is still with the kiranas.’
‘If kiranas are not allowed to operate, it becomes a serious issue.’

Metro Cash & Carry, one of the country’s biggest business-to-business wholesaler, has shut down eight of its 27 stores temporarily because of the lockdown.

It caters to three million kirana stores and HoReCa (hotels, restaurants and catering) clients.

Arvind Mediratta, bottom, CEO of the firm, tells Samreen Ahmad that employees were being threatened by the police and the situation was grim, with stores carrying just 5-7 days’s inventory.

How is Metro Cash & Carry running the show during the lockdown? What challenges are you facing?

We understand the situation and support the Centre’s decision to impose a 21-day lockdown.

A critical requirement during such times is access to food, groceries, and other essentials.

As of now, the situation is grim as 8 of our 27 stores are shut.

In addition, there is much confusion about what the central government’s notification said and how states have perceived it.

The advisory said retail and wholesale food stores would be open, but in states like Uttar Pradesh, Punjab and Gujarat, our stores have been shut down.

Even kirana stores have run out of stock.

We are in the business of servicing the kiranas, but if the stores are shut and we cannot deliver, it could lead to major shortage.

Our staff is being harassed and beaten up by the police.

We are in discussions with state-level police commissioners.

The attendance in our stores has gone down to 15 per cent.

As state borders close down, what issues are you facing related to logistics?

Supplies have been interrupted at borders.

Our delivery vehicles with essential supplies are not being allowed to reach the kirana stores.

The entire supply chain has been disrupted.

We are carrying inventory for only 5 to 7 days for essentials, which otherwise used to be 15 to 20 days.

If the situation doesn’t improve, we will have a shortage throughout the country.

We are also getting requests to supply to the army and government offices, but cannot cater to them if stores are shut.

We seek support from the authorities to allow uninterrupted and smooth operations.

What role can e-commerce play?

In this country, 90 per cent of the food and grocery business is still with the kiranas.

Modern retail is only 8 per cent, while e-commerce contributes to a mere 2 per cent.

E-commerce cannot scale up overnight to cater to the entire population.

It mostly has a greater share in apparel and electronic goods.

Hence, if kiranas are not allowed to operate and cannot buy from us, it becomes a serious issue.

What provision is the company keeping for the safety of employees and customers?

We have stopped selling loose items and pre-packaging commodities, so there is no chance of infection through hands.

We are controlling the number of people getting into the stores through a token system.

At any given point, not more than 25 people are allowed, that too after checking the body temperature using IR thermometers.

Customers and employees are being given masks.

Hand sanitisers have been placed at about 80 to 100 locations inside the stores and trolleys are being sanitised.

Has the company stopped selling non-essentials in the stores? Where is most of the demand coming from?

Yes, we have stopped selling all non-essentials such as apparel and electronic goods since 10 days.

We have seen an increase in sale of rice, pulses, and cooking oil.

Cleaning products have seen a 70 to 80 per cent surge in demand.

Another category that has seen a jump in demand is storage containers, at 50 per cent.

Nobody had expected a 21-day lockdown, else sales growth would have been higher.

Are you already witnessing an increase in prices of commodities?

Right now we are not seeing any increase in wholesale prices but prices of edible oils and pulses are rising by up to 6 per cent.

If we are allowed to open, we can control the prices immediately.

Source: Read Full Article

Rs 2000 cr of losses brewing for tea cos this year

Rough estimates from plantation companies have pegged production loss in excess of 100 million kg (mkg) across India which is valued at around Rs 2000 crore. Usually, plantation companies in Assam and West Bengal produce around 15 per cent of the total tea during March-April.

Tea plantation companies in the country maybe heading towards a consolidated loss of around Rs 2000 crore this calendar year as all estates have been shut to contain spread of the deadly coronavirus.

While the estates were initially kept open with plantation companies arguing that the risk of infection was extremely low on the estates, the call was taken following the announcement of the 21-day shutdown by the government and various state governments passing orders for lockdown.

All of the 1422 registered tea estates and more than 250,000 micro-small planters have stopped production citing safety precautions for workers, unavailability of transport to ferry finished tea and practically no demand either domestically or from importing countries.

“At the moment it is of utmost importance to stop the spread of coronavirus and estates are thus closed,” Arun Kumar Ray, deputy chairman, Tea Board.

Usually referred to as the tea-pot of India, Assam produces around 50 per cent of the total tea in the country annually, which stood at around 1390 mkg in 2019.

The closure has incidentally affected the prime first flush in the Darjeeling and Dooars region, where teas from this time of the year are sold at a premium, as there aren’t any buyers.

“Even after the estates open, another 10 days will be needed for skiffing to clear overgrown leaves”, Atul Asthana, managing director at the Goodricke group said.

Plantation companies are of the view that if the estates are shut till mid-April, production would not commence before May. The second flush season, which produces the best quality teas priced extraordinarily high, begins from May.

“However, a lot of preparation is needed to produce the best teas from the second flush. If operations start from May itself, it may be too late to produce the priciest teas”, a planter from Darjeeling said who usually exports luxury teas to Germany and Japan.

Earlier, citing the isolated nature of tea estates, companies had chosen to keep the gardens operational till the state governments ordered for closure.

On the other hand, exporters cited that there is practically no demand from major importing countries as most of them, including Iran, Japan, Germany, UK, USA and others are currently busy grappling the spread of the contagion. It in fact led to the cancellation of Mombasa auctions as well as buyers are unable to travel.

“Hardly any forward contracts have been signed and only goodwill buyers are showing interest. However, the demand is extremely low”, an exporting firm from Kolkata said.

Photograph: Rupak De Choudhuri/Reuters.

Source: Read Full Article

Passengers on ‘Death Ship’ Plead for Rescue After Virus Strikes

Sign up here for our daily coronavirus newsletter on what you need to know, and subscribe to our Covid-19 podcast for the latest news and analysis.

For passengers on a Holland America Line cruise ship, a fun-filled voyage on the luxury liner is quickly turning into a nightmare with deteriorating conditions on board and fears of a full-blown coronavirus outbreak after four travelers died and two others were infected.

“We are stuck on this death ship,” said Yadira Garza, who is on board with her newly-wed husband. “We are freaked out and terrified that we will be infected too. It’s just a matter of time if we stay on the ship.”

Passengers on the Zaandam, currently off the coast of Panama, say they are desperate to get off the liner after Chile wouldn’t allow the vessel to dock. The company also said all ports on the ship’s route have also refused entry. Guests and their family members have taken to Twitter to plead for help.

Then came some good news on Saturday: the ship’s captain announced Holland America is moving some passengers to a sister ship, the Rotterdam, because so many crew members have gotten sick, said Garza. The Panamanian government also agreed to let the Zaandam sail through the Panama Canal, reversing an earlier decision to block passage.

Meanwhile, relatives of crew members on board the ship say they are being asked to work despite falling sick, or shortly after recovering from fever. Food is being delivered uncovered, with Garza describing finding hair and eyelashes on their plates of food.

Holland America, a subsidiary of Carnival Corp., didn’t respond to an emailed request for comment on conditions for crew aboard the ship. It said in a tweet it’s working with Panamanian authorities on the transit.

The Zaandam is the latest vessel owned by Carnival, the biggest cruise line in the world, to be struck with outbreaks of coronavirus, plunging the ships into dramatic public health crises that gripped the world’s attention. Now, some angry passengers say they weren’t screened adequately, even as governments, including the U.S., advised citizens to avoid cruise ships.

Garza and her husband say they were reassured by Holland America that health screenings and temperature checks would be conducted on passengers getting on board. Health screenings consisted of a self-reported questionnaire of symptoms, she said, and they didn’t see any temperature checks done.

“We thought that since it’s a very well-known company, they would take severe measures,” said Garza.

The couple, both in their 30s and from Monterrey, Mexico, boarded the ship March 7 in Buenos Aires for their honeymoon.

And they’re not getting off anytime soon. Joel Gonzalez, Garza’s husband, had a slight and brief fever a few days ago and they’ve been told they wouldn’t be transferred to the Rotterdam. They are seeking help from Mexican consular officials.

The captain of the ship, originally carrying 1,243 passengers and 586 crew, asked guests to quarantine themselves on March 22 after a number of people on board reported influenza-like symptoms, said the cruise line. Four “older” passengers on the ship died and two individuals have tested positive, it said Friday, heightening anxiety on board.

A total of 53 guests and 85 crew members have reported to the medical center with flu-like symptoms, it said. And when Garza complained about long waits for service, a ship doctor told her Saturday that 40% of the crew are now sick, she said.

Three relatives of crew members say they’re worried that their family members working on board and many of their co-workers haven’t been tested. Two of them say their sick relatives are being asked to work, with many of them working overtime. Relatives of crew members have been discussing working conditions via a message group and they have asked not to be identified because crew members were recently instructed to not speak with the media about conditions on board.

Staffing Shortage

In an announcement to passengers on Saturday, the captain seemed to acknowledge the staffing shortage. The Rotterdam is delivering medical supplies and kits to test passengers and crew for Covid-19.

“We have to re-balance the workload of the crew,” the captain said over the loudspeaker, in explaining the transfer of passengers.

There’s growing concern about crew members spreading coronavirus. Crew members on two earlier Princess ships that had Covid-19 outbreaks hastened the spread of the disease to passengers, according to the Centers for Disease Control and Prevention studies released earlier this month.

Two Costa Ships Begin Disembarking Sick Crew Members in Miami

Like Garza and her husband, some passengers will be stuck on the ship, and may stay on as it sails through the canal and the Caribbean Sea, until it finally reaches Fort Lauderdale, Florida.

Lance Hutton, an 80-year-old retiree from Missouri, says he and his wife have been wracked with anxiety the past two weeks as the ship sailed from its last port of call, Punta Arenas, on the southern tip of South America. Chile refused to let passengers get off and it sailed for days to the waters off Valparaiso, 90 minutes west of Santiago. The ship took on fuel and supplies, and was denied permission to dock before reaching Panama.

The transfer of passengers to Rotterdam alongside the Zaandam was “to spread us out,” Hutton said, relating the captain’s announcement in which he said more people were falling sick, many with respiratory ailments.

The couple, who don’t have any illness symptoms, thought they were finally getting off the ship. Instead, they were told by an officer aboard they are being denied a transfer because Hutton uses a machine to help him breathe during sleep and combat snoring.

“Now, we just want to get off this ship and go home,” said Hutton in a telephone interview from his little cabin with a window. “That’s all we want.”

Source: Read Full Article

Caterpillar Stock Is Consolidating a Bear Market Decline

Caterpillar Inc. (CAT) stock is 39.1% below its all-time intraday high of $173.24 set on Jan. 19, 2018. The stock is also in bull market territory at 20.5% above its March 12 low of $87.50. Caterpillar has had a tough time when reporting earnings for several quarters in a row. It beat estimates on Jan. 31, 2020, missed on Oct. 23, 2019, missed on July 24, 2019, and beat on April 24, 2019.

The stock is cheap, with a P/E ratio of 9.99 and a dividend yield of 3.73%, according to Macrotrends. Caterpillar makes gas-powered equipment for the farm and heavy earth moving machines used in construction. China is one of its biggest markets, which has been a drag on the stock because of its slowing economy and tariffs due to the trade war. The company is also suffering from the economic slowdown caused by the spread of COVID-19.

The daily chart for Caterpillar

Daily chart showing the share price performance of Caterpillar Inc. (CAT)

The daily for Caterpillar shows that the stock has been chopping back and forth around its 50-day and 200-day simple moving averages over the past 52 weeks. The stock traded as high as $150.55 on Jan. 2, but it has been all downhill since then.

Caterpillar stock slipped below its annual pivot at $134.44 on Feb. 24, when it also failed to hold its 200-day simple moving average at $131.70. The stock failed to hold its monthly pivot at $127.49 on March 4 and then failed to hold its quarterly pivot at $121.54 on March 6. The shares then gapped lower before trading as low as $87.50 on March 12. The stock stabilized last week by rebounding above its weekly pivot at $98.78.

Note the formation of a "death cross" on March 16, when the 50-day simple moving average crossed below the 200-day simple moving average. This sell signal will likely limit the upside potential over the next several weeks.

The weekly chart for Caterpillar

Weekly chart showing the share price performance of Caterpillar Inc. (CAT)

The weekly chart for Caterpillar is negative, with the stock below its five-week modified moving average of $117.36. The stock has been below its 200-week simple moving average, or "reversion to the mean," at $123.04 over the past three weeks.

The 12 x 3 x 3 weekly slow stochastic reading ended last week at 20.83, down from 21.03 on March 20. This reading was above 90.00 at the January high, putting the stock in an "inflating parabolic bubble" formation, which has popped.

Trading strategy: Buy Caterpillar shares weakness to the weekly pivot at $98.78 and reduce holdings on strength to the quarterly, monthly, and annual risky levels at $121.54, $127.49, and $134.44, respectively.

How to use my value levels and risky levels: Stock closing prices on Dec. 31, 2019, were inputs to my proprietary analytics. Quarterly, semiannual, and annual levels remain on the charts. Each calculation uses the last nine closes on these time horizons.

Monthly levels for March were established based upon the Feb. 28 closes. New weekly levels are calculated after the end of each week. New quarterly levels occur at the end of each quarter. Semiannual levels are updated at mid-year. Annual levels are in play all year long.

My theory is that nine years of volatility between closes are enough to assume that all possible bullish or bearish events for the stock are factored in. To capture share price volatility, investors should buy shares on weakness to a value level and reduce holdings on strength to a risky level. A pivot is a value level or risky level that was violated within its time horizon. Pivots act as magnets that have a high probability of being tested again before their time horizon expires.

How to use 12 x 3 x 3 weekly slow stochastic readings: My choice of using 12 x 3 x 3 weekly slow stochastic readings was based upon backtesting many methods of reading share-price momentum with the objective of finding the combination that resulted in the fewest false signals. I did this following the stock market crash of 1987, so I have been happy with the results for more than 30 years.

The stochastic reading covers the last 12 weeks of highs, lows, and closes for the stock. There is a raw calculation of the differences between the highest high and lowest low versus the closes. These levels are modified to a fast reading and a slow reading, and I found that the slow reading worked the best.

The stochastic reading scales between 00.00 and 100.00, with readings above 80.00 considered overbought and readings below 20.00 considered oversold. A reading above 90.00 is considered an "inflating parabolic bubble" formation, which is typically followed by a decline of 10% to 20% over the next three to five months. A reading below 10.00 is considered "too cheap to ignore," which is typically followed by gains of 10% to 20% over the next three to five months.

Want to learn how to integrate trading levels into your everyday trading strategy? Check out my new publication, 2-Second Trader.

Disclosure: The author has no positions in any stocks mentioned and no plans to initiate any positions within the next 72 hours.

Source: Read Full Article

$2 Trillion Virus Bill Leaves ‘Gaping Holes’ For Restaurant Industry

Sign up here for our daily coronavirus newsletter on what you need to know, and subscribe to our Covid-19 podcast for the latest news and analysis.

The hospitality industry let out a sigh of relief this week after a $2 trillion coronavirus aid package made its way through the legislative ranks. But the road to recovery for restaurants already hit by the outbreak appears grim.

The House approved the largest stimulus package in U.S. history Friday as part of the response to the economic crisis caused by the coronavirus pandemic, sending the measure to President Donald Trump for his signature that afternoon.

The stimulus pot includes about $350 billion for small businesses loans, which won’t have to be paid back if they are used to make payroll, or pay mortgages, rents, utilities or other coronavirus-related expenses. But without a regulatory framework for how—and under what conditions—the loans will be forgiven, many restaurant owners may be been left in limbo. And the bill does little to assist those who’ve already had to fire employees.

The goal of the stimulus was to keep people on employment rolls, experts and business owners say.

“I don’t think this package was set up to save the restaurants, it’s to save employees,” Tom Colicchio, chef-owner of Crafted Hospitality. “Which is fine. But if they don’t afterwards save the restaurants, the employees won’t have jobs to come back to.”

Last week, Colicchio helped form the Independent Restaurant Coalition to lobby the government for financial relief for the industry; its founding members include former White House chef Sam Kass and Alinea co-owner Nick Kokonas.

The bill both increases the number of businesses eligible for the loans and the amount the loans offer. Businesses must have fewer than 500 employees to qualify, which includes both full-time, part-time and “other basis” staffers. Loans are capped at 2.5 times the outfit’s average monthly payroll, with a maximum loan amount of $10 million.

What If the Employees Are Already Gone?

The money is good news for restaurants that are still operating that need an influx of cash to keep people employed, experts say. But small business owners that have already fired their workers have little clarity on whether they are eligible to apply for the loans.

Restaurants are allowed to re-hire workers down the road, but can’t be sure whether they qualify for forgivable loans if they re-hire employees that received the unemployment benefits of the bill after they got fired.

“The initial inaction has left gaping holes for the restaurant industry that need to be plugged,” said Lee Jacobs, partner at New York-based hospitality firm Helbraun & Levey. “The stimulus bill is a good start, it takes care of employees that have already applied for unemployment; it takes care of the businesses and restaurants that made the decision to weather the storm. But it does nothing for those restaurants that were forced to close or terminate their staff before the government acted.”

Many restaurants saw their doors close far in advance of the government’s action, leaving thousands of hospitality workers around the country with no jobs. Unemployment claims spiked to 3.3 million last week, dwarfing previous highs in Labor Department reports published since 1967.

The stimulus bill provides funding to allow states to boost weekly unemployment benefits by $600 through July 31. Previous maximum state benefits ranged from $235 in Mississippi to $823 in Massachusetts, depending on income. This move might prompt fired workers to stay unemployed, rather than seek their old jobs back.

“The expansion of unemployment, the time-line and the amount of money that it’s capped at—adding $600 per person. In our state, that’s nearly tripling what people would get,” says Kaitlyn Goalen, executive director of AC Restaurants in Raleigh, North Carolina, which includes the popular Poole’s Diner.

Any Return to Normalcy Will Be Slow

“Do I hire people back now? It’s almost better, because of the robust unemployment package, to let them stay on that,” Colicchio said, adding that he anticipates a long, slow process of filling seats once the crisis begins to fade, with ongoing health concerns from customers who have gotten used to eating in their living rooms. “We don’t want restaurants to have no money one month in, and we’re closing again.”

Ashley Christensen, chef-owner of AC Restaurants, is also worried about how quickly the money can get to businesses.

“Many people are at zero or very low revenue. It’s a day-by-day analysis of how you’re going to make it to the next day. A very real fear among restaurants: when will we have access to these funds?” she asks. “And if we don’t have the ability to re-open in time, what happens to those funds?”

On his end, President Donald Trump did little to ease concerns of restaurant owners during a March 26 press conference, saying that restaurants will come back, but “it may not be the same restaurant or ownership.”

“I wish we could take the house apart instead of burning it, which is what’s happening in front of our eyes,” said celebrity chef Andrew Zimmern, host of What’s Eating America on MSNBC. “But when you disenfranchise the work force and dis-incentivize experienced restaurants, you don’t create more success, you create more uncertainty.”

What It’s Like Right Now

Deborah Williamson, the owner of James restaurant in Brooklyn, says that when the crisis began, she had to reinvent her business in just 48 hours. Williamson transformed her 40-seat boutique farm-to-table restaurant in the heart of Prospect Heights from a fully sit-down restaurant with a carryout option to a takeout and corner store grocer. Eighty percent of her employees were let go, turning a team of 28 staffers to a “skeleton crew” of five working seven days a week.

Williamson’s new takeout business plan went into effect on March 16, after non-essential businesses were prompted to shut down due to the coronavirus. That day, the restaurant brought in just $400 compared to what used to be $11,000 on average. Since then, revenue has averaged $1,500 a day.

“It’s down to me and a couple of people to bring together the elements of a small business,” Williamson said, adding that “it’s so madly overwhelming” and “the juggle is just insane.” James is one of the last restaurants standing in the neighborhood, and Williamson says she fears it would be extremely difficult to revive her restaurant if it were to shut down.

“Once you close for an extended amount of time, it’s like moving a mountain having to start it back up,” Williamson said. “You lose momentum, your staff goes elsewhere and you lose the drive.”

Even if she can keep her restaurant open, Williamson says that moving forward it’s going to be very hard to find staffers, because some employees prefer maintaining their unemployment benefits, while others have cited health concerns due to coronavirus and the necessity to stay home with families.

“We know this legislation is not adequate to ensure local restaurants survive this crisis, but it gives us a lifeline to keep our businesses afloat, pay our bills and help our employees for the next couple of months,” write the founders of the Independent Restaurant Coalition on the homepage of their new website. “It also gives us some time to gear up and go back to Congress to fight for more.”

Source: Read Full Article

AMC Networks Latest To Withdraw Quarterly Financial Guidance On Coronavirus-Related Uncertainty

AMC Networks said Friday it’s withdrawing first quarter and full year financial guidance provided earlier this year and not offering an updated fiscal outlook given the uncertainties surrouding the coronavirus pandemic.

There’s been an accelerating drumbeat of corporate announcements this week – from ViacomCBS to Walt Disney, Comcast, Sony, Discovery, Twitter and Facebook – publicly acknowledging the unusual and unusually harsh financial situation they may be facing.

AMC said in an SEC filing that it’s taken a hit from lower advertising sales and from suspended content production that has led to delays in the creation and availability of some television programming. The ultimate impact of the pandemic will depend on its duration and spread, actions to contain it and global economic conditions – which at this time are impossible to predict.

“This makes it challenging for management to estimate the future performance of our businesses, particularly over the near to medium term. However, the COVID-19 pandemic could have an adverse impact on our business, results of operations and financial condition, including during the near to medium term.”

In terms of liquidity, which is a major issue in times of uncertainty, AMC Networks said that at year end it had $816 million of cash and cash equivalents on its balance sheet and access to a $500 million revolving credit facility with no outstanding borrowing. Corporate debt maturities – money it has to pay back – are $56 million in 2020 and $75 million in 2021.

Source: Read Full Article

UK government orders 10,000 ventilators from Dyson

New York (CNN Business)The European Union announced on March 15 it was restricting exports of personal protective equipment, including face shields, surgical masks and gowns. India banned the export of ventilators and sanitizers on March 24. On Wednesday, Switzerland began requiring licenses for exports of masks, gloves, goggles and swabs.

“It’s the least we can do for the Swiss population to avoid a shortage of necessary medical equipment in an emergency situation,” said Swiss economic minister Guy Parmelin, according to the national broadcaster’s website. of the national broadcaster.
These are just a few of the trade restrictions governments have put in place on medical supplies since the coronavirus began to spread outside China at the beginning of this year.

According to Professor Simon Evenett of the University of St. Gallen and the head of Global Trade Alert, 60 countries have introduced new export curbs and more are being added every day.
While individual leaders are understandably concerned about providing for their own nations, Evenett and other trade experts argue such restrictions lead to inefficient distribution of essential goods. Ultimately, prices go up for everyone, and poorer nations can get cut off from crucial technology.

“We know there is a tendency of individuals to hoard. This behavior happens also at the international domain,” said World Bank economist Michele Ruta. He said national hoarding can lead to overall reductions in production, product scarcity and price increases. During the increase in global food prices from 2008-2011, many countries began restricting food exports. He and his colleagues calculated that those trade measures drove up food prices by another 13% on average.
To try and predict how trade restrictions could impact the global response to the Covid-19 outbreak, he and fellow World Bank economist Aaditya Mattoo took a look at the ventilator market, where they found just seven countries account for 70% of total exports. They estimate if just one producer imposed an export ban, world prices would go up by 10%.
“If more countries do it, the price increase would be much larger,” Ruta said.
None of the major ventilator-producing countries currently have an official export ban in place, but since March 6, Siare Engineering, Italy’s only ventilator producer, said all its production is reserved for domestic use after directions from the government. The company previously exported 90% of its products, which includes ventilators and anesthesia machines
“Prime Minister Conte directly called to explain the situation. He said there wasn’t an alternative. We had to organize a plan with the government in 48 hours with us and the civil protection and defense ministries,” said Gianluca Preziosa, Siare’s director general.
Siare is working with Italian auto giants like Ferrari, Fiat Chrysler and Lamborghini to obtain the parts it needs to raise its ventilator production from 166 to 500 a month to meet demand. Preziosa said his company is advising other countries’ ventilator producers, including GE, on similar collaborations.
He acknowledges, however, that nations without a domestic ventilator producer will likely have difficulties getting their hands on the number of machines needed during a large Covid-19 outbreak.
“The countries which are fortunate enough to have a national producer are lucky,” he said.
Many nations without their own ventilator manufacturers are likely to be poorer countries without the industrial or technological base to produce such products. Evenett found that there are no nations in Africa, the Middle East or South Asia that export ventilators and only one nation in Latin America does. While countries in these regions may have domestic ventilator producers, he argues it’s unlikely they would be producing the most advanced versions.
If nations stop letting ventilators leave their borders, that could effectively be “denying a life saving technology to literally billions of people,” Evenett said.

Instead of restrictions, trade economists are calling for global cooperation and coordination around the deployment of life-saving medical supplies. After years of trade tensions, tariffs and counter tariffs — many initiated by the Trump administration — and the weakening of global bodies like the WTO and the G20, there is a lot of bad blood and mistrust around trade negotiations. That will make it all the more challenging to foster international cooperation.
“We’ve had 10 to15 years of drip-drip-drip non-cooperation on trade, especially the last two years” Evenett says. “Now no one thinks about doing things together anymore.”
Source: Read Full Article

Coronavirus challenges for self-employed: Tips to survive

Mnuchin: Coronavirus small business loan program will keep 50% of Americans working

Treasury Secretary Steven Mnuchin discusses how the government’s new lending program is helping small businesses struggling from coronavirus fallout.

Get all the latest news on coronavirus and more delivered daily to your inbox. Sign up here.

Continue Reading Below

Many business owners are struggling to adapt to the regulations implemented by the federal government as well as state governments as the country attempts to prevent the spread of coronavirus throughout the U.S.

The virus has already begun to show signs of serious strain on the U.S. economy.

Initial jobless claims last week hit the highest level in recorded history at nearly 3.3 million.

TRUCK DRIVERS WORRY ABOUT CORONAVIRUS RISKS AS THEY HAUL ESSENTIAL FREIGHT

And the situation is likely to become more challenging.

James Bullard, president and CEO of the Federal Reserve Bank of St. Louis, said during an interview with Bloomberg over the weekend that the U.S. unemployment rate could hit 30 percent during the second quarter. The Economic Policy Institute has predicted that as many as 14 million Americans could find themselves without a job by summer.

DURING CORONAVIRUS, WASTE COLLECTION WORKERS DEMAND HAZARD PAY, MORE PROTECTIONS IN PITTSBURGH

And while the government has worked out a massive multitrillion-dollar relief package in an effort to prop up the financial situations of both individuals and businesses, there are some ways self-employed individuals can adjust their plans to shield themselves from at least some economic damage.

The first thing they can do is try to “pivot where their market has shifted,” L.J. Suzuki, founder of CFOShare, told FOX Business. For many businesses that means moving services online. For some nonessential wellness services, that could include telehealth visits. For gyms it could mean virtual classes. For the hospitality industry, it might mean making delivery available. Some bars, for example, have begun delivering cocktails since patrons are not allowed to visit.

“Most businesses can recover at least some of their revenue through a market pivot,” Suzuki said.

CLICK HERE TO READ MORE ON FOX BUSINESS

Suzuki also recommends that self-employed individuals reassess their situations daily. Some steps they may need to take include asking customers to pay in advance, taking out loans, laying off employees and keeping remaining employees motivated.

And for those who are completely shut down because of the restrictions that have been put on businesses to stem the spread of the virus, there are myriad relief programs that can be looked into.

“From federal SBA loans to local city grants, there are dozens of programs designed to help businesses distressed by Covid-19,” Suzuki said. “Get ready to wait in line, though, there are lots of businesses applying.”

As previously reported by FOX Business, the Small Business Administration administers one program that can provide up to $2 million for eligible businesses.

And the coronavirus relief bill approved by Congress on Friday also contains $370 billion in funding for small businesses.

GET FOX BUSINESS ON THE GO BY CLICKING HERE

Source: Read Full Article

Mnuchin: Coronavirus 'worse than 9/11' for airlines

(CNN)The $50 billion airline bailout passed by the Senate will help keep the airlines alive, but it won’t solve the industry’s most severe crisis in its history.

Only passengers can do that.
“We have an airline industry right now that is flying empty planes,” said airline consultant Mike Boyd. “This isn’t going to save the industry unless we get back in business of flying people.”

From April through June of last year alone, US airlines’ revenue totaled $64.4 billion, according to Transportation Department data. But it is getting only a small fraction of that revenue stream right now.
The latest figures from the Transportation Security Administration shows passenger traffic through checkpoints at only 8% of year ago levels as of Thursday. And revenue is off even more than that because fares have also plunged. Bookings for flights in coming weeks and months have also ground to a halt.

Airlines are now cutting their schedules for April and May by 60% to 80% because of the drop in traffic. But the planes still flying won’t have nearly enough passengers to be profitable.
The canceling of flights, along with the grounding of aircraft and employees taking unpaid leave, will help. It cuts fuel costs — the second biggest expense for airlines after wages — and it will also reduce maintenance expense.
But the only thing that will end this crisis is for passengers to begin buying airline tickets, and soon.
“The general assumption is that the rest of the year will not look as grim as the second quarter, but it will be a slow recovery,” said Philip Baggaley, chief credit analyst for the airline industry at Standard and Poor’s. “I think that [recovery] depends a lot on how the disease and the government actions progress, and how bad the economic damage is.”
The Senate’s bailout package, which deals with the economic crisis caused by the coronavirus, will give airlines $25 billion in direct grants as long as they agree not to place any employees on involuntary furloughs or discontinue service at any airports they now serve until at least the end of September. Another $25 billion is available for loan guarantees.
Salaries and benefits cost the US airline $35.2 billion in the six month period from April to September last year. The industry had about 750,000 employees at the start of this year.
Should domestic air travel be grounded?
The $25 billion in grants won’t cover all of those salary costs, although unpaid leaves, executive pay cuts and reduced hours for unionized employees will reduce those labor costs from year-ago levels.
But the biggest concern is whether traffic will recover to previous levels after the crisis. There’s reason to believe it won’t anytime soon.
No one knows how long the public will be urged to heed warnings to stay inside and avoid unessential travel. Lifted too soon, those restrictions could spark a second round of new cases of the disease and yet more restrictions on activity.
It’s also unclear how much economic damage has been done to consumers’ budgets, or whether they will even be willing to travel in the near term. And some business travel could be curtailed, either because businesses have less to spend on travel, or because the crisis showed companies they needn’t travel as much as they once did.
“It’s going to be a gradual recovery,” said Baggaley. “Airlines will probably be one of the last industries to recover.”
On Friday top executives at United Airlines (UAL) warned employees that while the bailout prevents any involuntary staff cuts for the next six months, reductions are likely in the future since it’s traffic is unlikely to return to prior levels in the foreseeable future.
“Based on how doctors expect the virus to spread and how economists expect the global economy to react, we expect demand to remain suppressed … possibly into next year,” said the letter from United CEO Oscar Munoz and President Scott Kirby. “We will continue to plan for the worst and hope for a faster recovery …. [However] if the recovery is as slow as we fear, it means our airline and our workforce will have to be smaller than it is today.”
Experts expect international travel to be affected far longer than domestic air travel. International flights, in addition to being more profitable for the US airlines that fly globally, account for nearly a third of passengers on domestic flights, Boyd said. That’s because international travelers fly around the country, and US passengers take domestic flights to get to or from international gateways.

“We’re talking about at least six to eight months down the road before flying starts to resume at anything approaching normal,” said Boyd. “And even then, we’re likely to see a significant reduction. One way or another, we’re going to have a smaller airline industry.”
— CNN’s Alicia Wallace and Greg Wallace contributed to this report
Source: Read Full Article