FT : Europe’s banks fear investor flight after dividend bans

Europe’s banks fear investor flight after dividend bans
Lenders are verging on uninvestable, making it harder to raise capital in the future

Bank bosses bragged at the start of the coronavirus pandemic that, unlike during the financial crisis, their institutions would help save rather than topple the global economy. But for many of their shareholders, 2020 was the year that Europe’s lenders verged on uninvestable.

Despite a modest recent rally, European bank share prices are down about a quarter this year. Industry executives fear that investor flight from the sector means lenders will find it harder to raise capital in future times of stress.

Europe’s banks have had to set aside more than €100bn of additional capital this year in preparation for souring loans — a 150 per cent increase on a year earlier. But the biggest hit to their reputation among shareholders was their cancellation of close to €40bn of dividend payments following pressure from regulators.

“That has clearly changed the investment case for European banks,” said Jaime Ramos-Martin, global equities manager at UK fund manager Aviva Investors, which controls £346bn of assets.

In March, the European Central Bank ordered the 113 lenders under its supervision to suspend €30bn of shareholder payouts within days of the coronavirus pandemic spreading to Europe.

Weeks later, the UK’s Prudential Regulation Authority, an arm of the Bank of England, called on British lenders to follow suit. After initially resisting the pressure, the UK’s five largest banks conceded and cancelled dividends worth £7.5bn.

Equity investors have traditionally viewed banks as solid, if low growth businesses that can be relied upon to pay steady income. “But dividend bans means that way of thinking does not really work any more,” said Mr Ramos-Martin.

Bank bosses have been caught in the middle of a tense showdown. On the one side, their regulators have prioritised building up capital buffers in expectation of a surge in defaults. On the other, their investors have demanded a resumption of payouts.

“All it has done is undermine investor confidence and is a major breach of trust with our shareholders, one they will not quickly forget,” said the chief executive of a large UK bank. “It will make future fundraising more expensive. Also, it was pointless, the industry didn't need it, we had and have strong capital.”

Robert Swaak, chief executive of ABN Amro, the Dutch bank that is majority owned by its government, added that the dividend ban has been a key discussion point with investors this year. “Shareholders are very vocal about returns,” he said. “What we’re feeling is what any bank is feeling.” ABN’s shares are down about 50 per cent this year.

The dividend bans drew criticism from some shareholders, notably those of HSBC. Although the lender is listed in London, a third of its shares are owned by Hong Kong-based retail investors who rely on its dividend for income.

Thousands of individuals threatened to sue HSBC over its decision to cut dividends for the first time in nearly 75 years. The issue reignited a debate about whether the bank should relocate its headquarters to Asia, where it makes the most of its revenue.

“Regulators are over focused on capital strength and under focused on profitability and ability to recapitalise in a crisis,” said Julian Wellesley, senior global equities analyst at Loomis Sayles, a US investment group with $328bn of assets. “If you make banks incredibly unattractive from a capital perspective you can hurt them in the long term.”

Throughout the year, bank bosses have lobbied regulators hard to allow them to restart paying dividends.

Speaking at an online event in September, the chairs of Société Générale and Santander, Lorenzo Bini Smaghi and Ana Botín, each criticised the ECB’s stance. Mr Bini Smaghi said the policy was making banks “uninvestable”, adding: “The prohibition to distribute dividends . . . is a measure which is scaring investors from entering the banking sector.”

Ms Botín argued that Europe’s regulators were giving her US competitors an advantage.

Debt investors have also pressed for a resumption of dividends. “If a bank runs into trouble, it needs to access equity capital markets to restore its buffers,” said Marc Stacey, a senior portfolio manager at fixed income specialist BlueBay Asset Management. “Low price-to-book values and equity stress absolutely matters to bondholders.”

After testing banks’ capital positions, the PRA and ECB eventually yielded to industry calls. This month they announced they would allow dividend payments next year, but with heavy restrictions in place.

British banks will be able to pay out dividends up to the higher of 25 per cent of their cumulative profits over the previous two years and 0.2 per cent of their risk-weighted assets. Eurozone banks, meanwhile, were given more stringent limits of 15 per cent of profits over the previous two years and no higher than 0.2 per cent of their common equity tier one ratio.

UBS analysts estimated that dividend yields would fall across eurozone banks from an average of 3.5 per cent to 1.5 per cent due to the limits. More profitable banks with stronger balance sheets — such as Nordic lenders, Intesa Sanpaolo of Italy and ING of the Netherlands — will be hit hardest.

British banks would have much more leeway, with potential dividend yields ranging from 1.6 per cent at Lloyds and 3.2 per cent at Barclays.

Despite the binding conditions, the lifting of the dividend bans has given bank executives reason for optimism that they can start to put an arduous 2020 behind them.

“It’s not been an easy year, needless to say, but banks in Europe — and certainly Société Générale — are in much better shape than people think,” said Frédéric Oudéa, chief executive of the French lender, whose share price is down about 45 per cent this year.

“Hopefully, quarter after quarter, step by step, things will improve.”

TechCrunch : National Grid sees machine learning as the brains behind the utilit

National Grid sees machine learning as the brains behind the utility business of the future

If the portfolio of a corporate venture capital firm can be taken as a signal for the strategic priorities of their parent companies, then National Grid has high hopes for automation as the future of the utility industry.

The heavy emphasis on automation and machine learning from one of the nation’s largest privately held utilities with a customer base numbering around 20 million people is significant. And a sign of where the industry could be going.

Since its launch, National Grid’s venture firm, National Grid Partners, has invested in 16 startups that featured machine learning at the core of their pitch. Most recently, the company backed AI Dash, which uses machine learning algorithms to analyze satellite images and infer the encroachment of vegetation on National Grid power lines to avoid outages.

Another recent investment, Aperio, uses data from sensors monitoring critical infrastructure to predict loss of data quality from degradation or cyberattacks.

Indeed, of the $175 million in investments the firm has made, roughly $135 million has been committed to companies leveraging machine learning for their services.

“AI will be critical for the energy industry to achieve aggressive decarbonization and decentralization goals,” said Lisa Lambert, the chief technology and innovation officer at National Grid and the founder and president of National Grid Partners.

National Grid started the year off slowly because of the COVID-19 epidemic, but the pace of its investments picked up and the company is on track to hit its investment targets for the year, Lambert said.

Modernization is critical for an industry that still mostly runs on spreadsheets and collective knowledge that has locked in an aging employee base, with no contingency plans in the event of retirement, Lambert said. It’s that situation that’s compelling National Grid and other utilities to automate more of their business.

“Most companies in the utility sector are trying to automate now for efficiency reasons and cost reasons. Today, most companies have everything written down in manuals; as an industry, we basically still run our networks off spreadsheets, and the skills and experience of the people who run the networks. So we’ve got serious issues if those people retire. Automating [and] digitizing is top of mind for all the utilities we’ve talked to in the Next Grid Alliance.

To date, a lot of the automation work that’s been done has been around basic automation of business processes. But there are new capabilities on the horizon that will push the automation of different activities up the value chain, Lambert said.

“ ML is the next level — predictive maintenance of your assets, delivering for the customer. Uniphore, for example: you’re learning from every interaction you have with your customer, incorporating that into the algorithm, and the next time you meet a customer, you’re going to do better. So that’s the next generation,” Lambert said. “Once everything is digital, you’re learning from those engagements — whether engaging an asset or a human being.”

Lambert sees another source of demand for new machine learning tech in the need for utilities to rapidly decarbonize. The move away from fossil fuels will necessitate entirely new ways of operating and managing a power grid. One where humans are less likely to be in the loop.

“In the next five years, utilities have to get automation and analytics right if they’re going to have any chance at a net-zero world — you’re going to need to run those assets differently,” said Lambert. “Windmills and solar panels are not [part of] traditional distribution networks. A lot of traditional engineers probably don’t think about the need to innovate, because they’re building out the engineering technology that was relevant when assets were built decades ago — whereas all these renewable assets have been built in the era of OT/IT.”

WSJ : Japan to Phase Out Gasoline-Powered Cars, Bucking Toyota Chief

Japan to Phase Out Gasoline-Powered Cars, Bucking Toyota Chief
All new vehicles must be hybrids or fully electric starting in mid-2030s, government says

TOKYO—Japan said it planned to stop the sale of new gasoline-powered cars by the mid-2030s, bucking criticism by Toyota Motor Corp.’s chief that a rapid shift to electric vehicles could cripple the car industry.

The plan released Friday followed similar moves by the state of California and major European nations, but it has faced resistance from auto executives in a country that still makes millions of cars annually that run solely on gasoline engines.

Japan would still permit the sale of hybrid gas-electric cars after 2035 under the plan. Many models from Japan’s top car makers—Toyota, Honda Motor Co. and Nissan Motor Co. —come in both traditional and hybrid versions.


Earlier this month, Toyota President Akio Toyoda said that if Japan banned gasoline-powered cars and moved to electric vehicles too hastily, “the current business model of the car industry is going to collapse.” He was speaking on behalf of Japanese auto makers in his role as head of a local industry association.

Mr. Toyoda said the electricity grid couldn’t handle extra summer demand and observed that most of Japan’s electricity is generated by burning fossil fuels.

Government officials said car makers needed to revise their business models. Prime Minister Yoshihide Suga pointed to a different portion of Mr. Toyoda’s comments in which the Toyota chief said he backed the government’s goal of making Japan carbon-neutral by 2050. Reducing carbon emissions “should be tackled as a strategy for growth, not as a limitation on growth,” Mr. Suga said.

Japan’s Christmas Day release, which also included a plan to introduce as much as 45 gigawatts of offshore wind-power capacity by 2040, capped a year in which major economies around the world competed to outdo each other in setting targets for renewable energy and electric cars.

In September, Chinese leader Xi Jinping said in a video message at the United Nations that China would go carbon-neutral by 2060, meaning it would have net zero emissions of carbon dioxide. A month later, Mr. Suga jumped ahead of Mr. Xi with a pledge to do the same a decade sooner, matching the European Union’s target.

The Japanese government’s plan calls for all new cars sold in the country from the mid-2030s onward to be electrified. That includes electric vehicles, hybrid gas-electric models and cars whose electricity is generated by hydrogen fuel cells. The plan says the cost of batteries should be reduced so that electric vehicles cost about the same as gasoline-powered vehicles a decade from now.

An outline of the plan released by the Ministry of Economy, Trade and Industry expressed concern that Europe and China were jumping ahead of Japan. It observed that sales of electric and plug-in hybrid vehicles more than tripled in the EU in the July-to-September quarter to around 270,000 units, while the equivalent figure for Japan was about 6,000.

Masayoshi Arai, a ministry official, said “Japan is very far behind” on vehicle electrification.

Japanese auto executives bristle at such statements, saying more hybrid gas-electric vehicles are sold in Japan than in any other country. Some question whether fully electric vehicles such as those made by Tesla Inc. are more environmentally friendly than hybrids given the carbon dioxide emitted in producing EVs and their parts.

“It is absolutely not the case that Japan is behind,” said Toshihiro Mibe, a Honda executive who heads an industry council on environmental technology.

Japan’s move, combined with those in China, Europe and California, adds pressure on global auto makers to shift more quickly to electric vehicles, although for now many are getting their profits from U.S. consumers hungry for gasoline-powered trucks and sport-utility vehicles.

Toyota and Honda have yet to release specific plans for mass-market electric vehicles in the U.S. and Japan, putting them behind the likes of Volkswagen AG , which plans to invest around $86 billion in developing electric vehicles and other new technologies over the next five years. Nissan says it will sell the Ariya, an electric crossover SUV, next year in the U.S. and other markets.

The announcement comes as the U.S. is poised to increase federal investment in the development of electric vehicles under an energy plan President-elect Joe Biden aims to implement after taking office in January.

Mr. Biden has pledged to create 1 million new jobs in the auto industry, including in the construction of electric-vehicle charging stations. His energy plan calls for a half-million new charging stations in the U.S.

The president-elect has said he hopes to use federal incentives—including tax, trade and investment policies as well as increased research and development—to make the U.S. the global leader in electric-vehicle manufacturing.

He has said he would encourage the public to switch to more environmentally friendly vehicles by offering rebates to consumers and incentives to manufacturing facilities that build parts for low-emissions vehicles. He also wants to strengthen federal fuel-economy standards for vehicles.

Mr. Biden’s presidential transition team didn’t immediately respond to a request for comment.

(ZH) Where Analysts Are Most Optimistic And Pessimistic On Company Ratings For 2

Where Analysts Are Most Optimistic And Pessimistic On Company Ratings For 2021

With the end of the year just days away, Factset looked at where sellside analysts are most optimistic and pessimistic in their ratings for S&P 500 stocks for 2021, and also how have their views changed since the start of the COVID-19 pandemic?
As Factset's John Butters summarizes, there are a total of 10,361 ratings on stocks in the S&P 500. Of these 10,361 ratings, 53.6% are Buy ratings, 39.6% are Hold ratings, and 6.8% are Sell ratings.
Curiously, at the sector level, analysts are most optimistic on the one sector that has been most beaten down in 2020 - Energy (62%) - followed by Health Care (60%), and Information Technology (59%) as these three sectors have highest percentages of Buy ratings. On the other hand, analysts are most pessimistic about the Real Estate (46%), Consumer Staples (47%), and Financials (48%) sectors, as these three sectors have the lowest percentages of Buy ratings. The Real Estate (46%) and Financials (46%) sectors also have the highest percentages of Hold ratings, while the Consumer Staples (10%) sector also have the highest percentage of Sell ratings.
At the company level, the 10 stocks in the S&P 500 with the highest percentages of Buy ratings and the highest percentages of Sell ratings are listed in the tables below.
Based on the percentage of Buy ratings on S&P 500 stocks, it is interesting to note that analysts are more optimistic on S&P 500 stocks today compared to the start of the 2020 (before the impact of COVID-19), and with the S&P500 trading above 3,700 - an all time high. On December 31, 50.6% of ratings on S&P 500 stocks were Buy ratings, compared to 53.6% today. Nine sectors have a higher percentage of Buy ratings today compared to the start of the year, led by the Utilities (to 51% from 42%) and Consumer Staples (to 47% from 39%) sectors. On the other hand, just two sectors have a lower percentage of Buy ratings today compared to the start of the year: Communication Services (to 55% from 60%) and Energy (to 62% from 66%).
However, there has been little change at the sector level in terms of ranking by Buy ratings. The same four sectors (Energy, Communication Services, Health Care, and Information Technology) that had the highest percentages of Buy ratings at the start of the year (before COVID-19) also have the highest percentages of Buy ratings today. Three of the four sectors (Consumer Staples, Financials, and Real Estate) that had the lowest percentages of Buy ratings at the start of the year also have the lowest percentages of Buy ratings today.

WSJ : Brexit’s Unwinding of Integration With EU to Test U.K. Economy

Brexit’s Unwinding of Integration With EU to Test U.K. Economy
Trade deal will lessen early turbulence, but disruption comes at a challenging time

LONDON—The free-trade agreement that the U.K. struck with the European Union on Christmas Eve will heap new challenges onto a British economy that has performed worse than its peers through 2020.

While avoiding a trade disruption of the magnitude that would have followed if efforts to reach a deal had failed, the new agreement is the first in history that will throw more obstacles in the way of importers and exporters. That is happening as the U.K. copes with a fast-spreading variant of the coronavirus that has forced lockdowns over most of the country.

On Christmas Day, ambassadors from the 27 EU countries met in Brussels to begin scrutinizing the agreement, ahead of its expected approval by governments next week. The British Parliament is set to meet on Dec. 30 to ratify the accord.

It will take effect with the U.K. and economies across the world already straining under the pandemic and governments’ efforts to contain it. The U.K. has been among the worst-hit economies, with gross domestic product at the end of the third quarter almost 10% less than it was a year earlier.

Britain will have to adjust to the new relationship with the EU as it simultaneously deals with the economic pain caused by the virus. That risks hindering a recovery, economists and business executives say, with unpredictable consequences for jobs and livelihoods as businesses adapt to the upheavals of both challenges.

“This deal is welcome. But it’s not a substitute for what we had, which was unfettered access to our largest trading partner and the largest single market in the world,” said Richard Swart, global sales and quality director at Berger Global, a northern England-based unit of Germany’s Ringmetall AG that manufactures rings used to seal container drums.

The free-trade accord does mean that the outcome most feared in corporate boardrooms—an abrupt end to 40 years of economic integration and the immediate imposition of tariffs on $900 billion of cross-border trade—has been avoided. “This deal above all means certainty,” Prime Minister Boris Johnson said.

The government’s hope is that greater freedom from Brussels-led regulation will, over time, yield economic benefits. From next year, Britain will be able to sign its own trade deals and redirect EU budget contributions toward education and technological research at home. It also will be freer to set its own labor and environmental regulations.

“I do see the opportunities,” said Nik Kotecha, chief executive of Morningside Pharmaceuticals Ltd., a maker of branded and generic drugs based in Loughborough, England. He said that in the past four years, time and resources that could have been directed toward investment and research and development have instead been absorbed by Brexit contingency planning. Now he is hoping to redirect his energy toward expanding sales in developing markets.

“Business always wanted certainty and I feel that in the last four years-plus we haven’t had that certainty,” he said. “Hopefully this deal will give us that certainty.”

For decades, manufacturing and financial-services companies, livestock farmers, fishermen and others have focused on mainland Europe’s accessible markets, where they could sell their products almost as easily as they could at home. Supermarkets sourced much of their produce—and manufacturers their components—from the continent, hauling them to Britain without hindrance.


There was also a ready supply of labor from across the EU, whose citizens all had the right to live and work in the U.K.

In stepping outside the EU’s customs area and single market, the U.K. is making it costlier to trade with neighbors that consume almost half its exports. Though the new free-trade accord eliminates the need for new tariffs, it means extra costs and paperwork for exporters and potentially higher prices for consumers. Companies seeking to hire staff will need to go through new bureaucratic procedures to get work permits.

U.K.-based financial-services firms will be barred from some activities in European markets, such as lending and deposit taking, and other activities will hang on a unilateral decision from the European Commission that has yet to be announced.

The arguments in favor of Brexit were mostly political: that it would return decision-making to London from Brussels and curb immigration from the EU. But Brexit was also sold on the basis that greater political freedom would bring economic benefits.

Advocates of Brexit say stricter immigration controls will bring more opportunities and fatter paychecks for British workers. They say a smaller labor supply might help push up wages and encourage businesses to make investments in automating processes that many have so far been reluctant to make.

Mr. Johnson, inspired by his now-departed aide, Dominic Cummings, also wants wider latitude than is available under EU subsidy rules to pump public cash into promising industries, such as green energy and artificial intelligence. Rishi Sunak, Mr. Johnson’s Treasury chief, wants to build a network of low-tax “freeports” along the U.K. coastline to lure foreign investment in jobs and factories.

“It will not be a bad thing for the EU to have a prosperous and dynamic and contented U.K. on your doorstep. It will be a good thing—it will drive jobs and prosperity across the whole continent,” Mr. Johnson said Thursday after the agreement was announced. “This giant free-trade zone that we’re jointly creating the stimulus of regulatory competition will I think benefit us both.”

Nonetheless, most economists expect Britain will be poorer in the years ahead than it would have been had it remained an EU member state. Leaving the bloc will crimp trade and diminish Britain’s attraction as an investment destination for foreign companies seeking a bridgehead to European consumers, they say. Lower levels of trade, foreign investment and immigration will drag on the country’s already slow productivity growth.

Some of those economic costs have already been borne in lower national income than would have been expected had the U.K. stayed in the EU. A paper published this month by the University of Sussex’s Trade Policy Observatory estimated the economy would be around 4.4% smaller by the middle of the decade than it would have been had the U.K. in 2016 voted to remain a member state.

Brexit advocates say such modeling overplays the role EU membership has in British prosperity and that completing the project will remove the uncertainty that has been holding back investment.

Economists contend uncertainty about the U.K.’s future ties to the EU has acted as a drag on growth since Britons voted for Brexit. The effect is most visible in weak business investment, a trend exacerbated by the pandemic. Business investment was flat after adjusting for inflation between 2016 and 2019, and fell by more than a quarter in the first half of 2020 as the pandemic took hold.

In 2016, the U.K. was the fourth-biggest export market for German factories, according to Germany’s Mechanical Engineering Industry Association. Now it is in eighth place, behind Austria and just ahead of Russia, a decline the association says reflects falling investment in Britain because of Brexit.

Brexit might encourage some domestic investment to substitute for imports that will become more expensive because of the new border formalities, though economists say British consumers are likely to face higher prices than they do now.

Car maker Nissan Motor Co. said in March it would invest 400 million pounds, equivalent to around $535 million, in building new vehicles at its plant in Sunderland, northeastern England. The investment, in a strongly pro-Brexit region, was cited as proof by Brexit supporters that the U.K. remained an attractive destination for multinationals irrespective of whether or not it was in the EU.

However, some companies are likely to focus on the EU’s huge market of 440 million people, rather than on the U.K.’s 66 million.

Ineos Automotive, a car-making unit of U.K.-based Ineos Group AG, said in December that it would build a new all-terrain vehicle in France. Founder Jim Ratcliffe, a prominent backer of Brexit, had previously said he planned to build it in Wales.

The free-trade accord agreed between the U.K. and the EU ensures there are no tariffs or quotas on traded goods but introduces new rules and formalities that economists say risks getting in the way of free-flowing trade. British food and animal exports to the EU will face checks on arrival. Exporters will need customs declarations. Professional qualifications for lawyers and accountants are no longer automatically recognized as sufficient to practice in the other jurisdiction. Logistics companies and airlines will face new bureaucratic hurdles to moving freight.

The pandemic has offered a taste of the possible short-term disruption Brexit might entail. A new variant of coronavirus loose in Britain prompted France to close the border crossing at the Channel Tunnel. Tailbacks of trucks stretched for miles.

Mr. Swart, of Berger Global, said his company has six truckloads of products shipping to European customers in January. Though he believes his company is ready with the correct paperwork, he said he isn’t confident there won’t be more delays.

Some major issues are unresolved. The EU has yet to grant a so-called equivalence decision that underpins the extent of market access afforded to U.K.-based financial-services companies.

Longer term, the agreement heralds a period of economic reorganization that will play out for years, as workers and companies that prospered from untrammeled trade with the EU find new markets or shift into new activities. Inking deals with the U.S. and major trading partners elsewhere will take time, and, according to a government analysis in 2018, would provide only minor economic benefits.

The pandemic has created similar upheavals, but at a much faster pace, with painful disruption to sectors such as hospitality and tourism, and windfalls for online grocery shopping and delivery services. It has, economists say, exposed weaknesses in the British economy that had been building for years. Business investment, already weak, fell more sharply in Britain in the first half of 2020 than in neighboring countries. The economy is heavily reliant on consumer spending, which also took a steeper dive in Britain during lockdowns than it did elsewhere.

Hande Küçük, deputy director of the National Institute for Economic and Social Research, a nonpartisan think tank, said one difficulty is that the disruption from Brexit and Covid-19 won’t fall evenly across the U.K. economy. For instance, supermarkets have been buoyed during the pandemic by consumer stockpiling and online orders, but are at risk from disruption to just-in-time, cross-border supply chains if crossings get jammed.

“We can’t rely on less Covid-sensitive sectors to take us out of this crisis because they will be dealing with the implications of Brexit,” Dr. Küçük said.

The twin reorientation “could leave deep and painful scars on the British economy,” NIESR said in November.

FT : Covid’s ‘viral tsunami’ floods California’s hospitals

Covid’s ‘viral tsunami’ floods California’s hospitals
There are too few nursing staff and emergency beds to cope with the Golden State’s coronavirus surge

In April, with California’s coronavirus rates among the lowest in the country, many of the state’s nurses flew to different parts of America to help with the pandemic. This Christmas, it is the Golden State’s hospitals that are desperate.

“You just never really know if you’re going to get enough staff,” said Valerie Ewald, who has been a nurse in the intensive care unit at UCLA’s Santa Monica Medical Center for almost 20 years.

“It’s a lot of calling and cajoling and begging,” she said. “It’s hit us and every hospital in California. But the LA area really is getting hit bad.”

California has the highest number of new daily positive cases in the US — an average of more than 40,000 cases each day over the past week, with about 250 average daily deaths over that time. On December 23 it became the first US state to surpass 2m known positive cases — with the second million cases coming in just the prior six weeks, versus 10 months for the first million.

The crisis is particularly acute in southern California where, at the time of writing, there were no ICU beds available. In LA County, the most populous in the country, the death rate over the past seven days has averaged out at more than three an hour.

“It’s a viral tsunami,” said Robert Kim-Farley, professor of epidemiology at the UCLA Fielding School of Public Health, and a former senior official at the LA Department of Public Health. “It is so much larger than we have experienced prior to this.”


The difference, he suggested, had been the combined effects of complacency, economic desperation, and the flurry of family-orientated holidays at the end of the year: Halloween, Thanksgiving, Hannukah and Christmas.

While the number of daily new cases in the state is more than 20 times higher than when lockdown orders were first enforced in April, Californians’ fear around the virus is considerably lower than it was at that time, according to University of Southern California’s Center for Social and Economic Research, which runs a bi-weekly survey assessing attitudes to the pandemic.

“People [in California] have grown less sensitive to increasing case rates, less sensitive to the risk than at the start of the pandemic,” said Kyla Thomas, a sociologist at the centre, though she noted researchers had seen the same pattern across most of the country.

Data from December 22 suggested the average perceived chance of catching coronavirus among Californians was 23 per cent, whereas it had been 30 per cent in April. The average perceived chance of dying from Covid-19 fell to 16 per cent, down from 29 per cent earlier in the year.

In LA County, the survey also suggested almost a third of respondents had visited a friend, neighbour or relative in the past week — or had people visit them.

“If the survey is representative of LA County residents,” the health department said in a statement pleading for adherence, “more than 3,000,000 residents are not following the safety guidance that directs us to not gather with people outside our immediate household.”

As California has sought to increase treatment capacity, nursing unions have resisted state efforts to loosen the minimum requirements for the number of nurses per patient, a move medical practitioners said would significantly worsen the quality of care and put nurses at even greater risk. The California Nurses Association had held strikes opposing the move, and a number of hospitals reversed their planned changes.

More than 60,000 healthcare workers in the state have caught Covid-19, according to the California Department for Public Health, with at least 240 deaths.

“Nurses stand together, always, and we’re never afraid,” said Mendy Baxter, an emergency room nurse from Texas who has been working in California since February, first in San Antonio and more recently in Salinas. The hospital where she works — Natividad Medical Center — has erected tents outside the main building to take care of the sick.

“It’s just everything that we can do just to keep our keep our head above water,” Ms Baxter said. “The hospitals are full, the beds are full, there’s nowhere to move the patients once you get them in and start taking care of them.”

According to Aya Healthcare, a leading national contractor of “travel nurses”, as of December 21 there were 4,390 open nursing positions in California, by far the largest number in the country. Nationally, the number of vacancies for “crisis” positions has increased by more than 90 per cent in the past month. Compared to this time last year, the number of vacant nursing positions is almost 200 per cent higher.

Other moves by the governor have included emergency training — in as little as two days — to get nurses from other disciplines into the ICU. This has raised yet more concern among nursing groups, who argue that the shortage of staff was a “manufactured crisis”. Hospitals have been accused of laying off nurses and cutting pay for contractors during the “quieter” months of the pandemic.

Looking to the new year, Mr Newsom said during a press conference that the vaccination efforts made him “enthusiastic that there is light at the end of the tunnel, but mindful that we’re still in the tunnel”. Just over 70,000 people in California — mostly health workers — had received a coronavirus vaccine as of December 21.

Much of the state will be under stay-at-home orders into 2021. To deter travellers, some popular getaway destinations have shut out tourists. In Tahoe, the northern California region typically teeming with skiers at Christmas, local officials have placed additional restrictions on lodging, urging short-term rental service Airbnb to tell guests about the stay-at-home order. Airbnb said it had informed hosts of the guidelines, with any actions or refunds being at the host’s discretion.

Among those having to call off their Tahoe trip was Josh Larney, who lives in Oakland and works at WeWork. There were “definitely frustrations around the cancellation”, he said, “but that has been the story of 2020.”

WSJ : Covid-19 Caused Chaos for Investors in 2020. These Hedge Funds Earned Bill

Covid-19 Caused Chaos for Investors in 2020. These Hedge Funds Earned Billions.
Managers who bet certain stocks would rise and others would fall had their best year in a decade. The biggest winners wagered that e-commerce and cloud computing would thrive while shopping centers and travel struggled.

For little-known hedge-fund manager Jim Davis, 2020 is a career-defining year.

The one-time analyst for famed hedge-fund manager Julian Robertson Jr. came into the year managing $675 million at his Woodson Capital Management. That ballooned to about $1.7 billion by the end of November after bets he made against bricks-and-mortar retailers and on e-commerce firms hit pay dirt. His returns soared more than 100% for the year through October and he remains up over 90% through November.

Mr. Davis, 40, isn’t alone. It was a banner year for hedge funds that bet on and against stocks. Two of that industry’s more prominent names, William Ackman and Chris Hansen, deftly navigated the market carnage and subsequent rally to gain 62.8% and 48%, respectively.

For the year through November, stock picking hedge funds posted their best performance relative to the total-return of the S&P 500 since 2010, according to data provider HFR, earning 11.9%. Their strong showing in 2020 partly reversed their underperformance relative to a portfolio of stocks and bonds over a one, three, five and 10-year period, according to Goldman Sachs Group Inc.

“Hedge funds have come back with a vengeance,” said Kieran Cavanna, whose New York-based Old Farm Partners invests $350 million largely in stock picking hedge funds for its clients.

Despite the comeback, major pressures remain. Clients have less patience with poor performance after years of high fees and weak returns. Interest from potential investors that animated the industry’s boom leading up to the financial crisis has shifted to private-equity and venture capital.

The funds that did well in 2020 bet early on an acceleration to online as people lived and worked remotely—then quickly shifted into a recovery trade betting on restaurants, hotels and travel. Hedge funds also benefited from the increased trading of individual investors who created more volatility in stock prices and, thus, opportunities for profit. Low rates boosted the stock market overall, too.

For Woodson, which gained 15% in March when the S&P 500 lost 12.5%, existing bets that physical stores would suffer while e-commerce thrived helped. So did a stake in fitness company Peloton Interactive Inc., which surged more than 300% this year through November.

Here are some other hedge-fund managers who had banner years, based on interviews with their clients and other people familiar with the firms:


Glen Kacher bet against travel companies and wagered that e-commerce would thrive.
PHOTO: VICTOR J. BLUE/BLOOMBERG NEWS
Light Street Capital Management
Palo Alto, Calif.
Glen Kacher, 49, started focusing on the novel coronavirus in early March after learning how rapidly it spread on cruise ships. He put on a series of bets against travel-related companies, including hotels and airlines, and made 10% in March. He quickly pivoted to betting on companies including online furniture seller Wayfair, Singapore-based Sea Ltd. and cloud commerce platform Shopify Inc., companies whose stock price soared as people stayed and worked at home. The moves earned Light Street a 46.8% gain through November and helped pushed assets to $2.7 billion.
Daniel Sundheim of D1 Capital Partners did well thanks to stakes in Snowflake and other companies that went public as well as bets on beaten-down travel stocks.
PHOTO: BRENDAN MCDERMID/REUTERS
D1 Capital Partners
New York
Bets on private companies supercharged the performance of Daniel Sundheim, 43, a former Viking Global investment chief and minority owner of the NBA’s Charlotte Hornets. He earned 54.1% through November for D1. Three of his private investments—software company Snowflake Inc., videogame software company Unity Software Inc. and dialysis company Outset Medical Inc. —went public this year. It also helped that D1 was a big investor in private grocery-delivery company Instacart Inc., which swelled in value. Mr. Sundheim also scooped up beaten-down shares of travel and aerospace companies he thought would eventually benefit from a pent-up demand for experiences, including plane-maker Airbus SE and theme-parks operator Walt Disney Co. D1’s assets have climbed to $20 billion.
Charles ‘Chase’ Coleman had a portfolio of e-commerce, online payment and cloud computing companies when the pandemic struck. By November he was up 37%.
PHOTO: AMANDA L. GORDON/BLOOMBERG NEWS
Tiger Global Management
New York
A focus on opportunities and disruption created by the internet paid off this year for Tiger’s Charles “Chase” Coleman, 45, who had a portfolio of e-commerce giants, online payments companies and cloud businesses when the pandemic struck. By November he was up 37%. Tiger added to existing stakes in companies like Microsoft Corp. ; cybersecurity company CrowdStrike Holdings Inc. and business software giant Salesforce.com Inc. Some tech investors have expressed concern about a bubble, but Tiger in an Oct. 30 client letter suggested it was too early to sell “the best growth companies.” The longtime China investor also bought JD.com Inc. and Alibaba Group Holding Ltd. , believing China would navigate through Covid-19 better than the U.S. and Europe because of its political system and experience with past viruses. Its biggest winner was home-solar company Sunrun Inc. The firm, which also manages private-equity funds, had $48 billion in assets at the end of November.
Theleme Partners
London
Theleme was down 12% for the year through September, but a 38% gain in November turned its fortunes around. A big reason was a decade-ago discovery by Theleme’s Patrick Degorce, a 51-year-old French native, of a little-known biotech company named Moderna Inc. He found it as he searched for a cure for his wife’s terminal cancer. This year Moderna developed a Covid-19 vaccine that was approved for U.S. use; its shares have soared 680% through November. Theleme was up 20.6% through November, pushing its assets up to $3.5 billion.
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Atreides Management
Boston
Gavin Baker’s fledgling tech-focused hedge fund bet big on payments company Square Inc. in March and other businesses the former Fidelity Investments portfolio manager thought would benefit from social distancing. But spooked by ever-rising tech valuations and confident in ongoing vaccine efforts, the 44-year-old Mr. Baker trimmed some of his more expensive tech holdings over the summer for shares in retailers and travel companies he thought would benefit when the economy reopened. “The ‘Roaring 20s’ followed World War I and the Spanish Flu,” Mr. Baker tweeted in November. The strategy earned Atreides 58% through November and helped nearly triple assets to $1.2 billion.
Skye Global Management
New York
Former Third Point analyst Jamie Sterne, 33, likes to invest in disrupters and bet against the disrupted. Longstanding bets against bricks-and-mortar retailers, cable networks and energy helped protect Skye against losses in March, while an existing stake he upped in Microsoft, Skye’s biggest position, contributed to gains. He also wagered on an eventual economic recovery by purchasing shares of Disney and Uber Technologies Inc. He lost just 1.6% in March and was up 63.8% through November, pushing assets to $3.2 billion.

Reuters - Mayor of major French fishing port warns of Brexit deal uncertainties

PARIS (Reuters) - The Brexit trade deal still leaves French fisherman facing a host of unknowns, warned the mayor of the major northern fishing port of Boulogne-sur-Mer on Friday.

British Prime Minister Boris Johnson said on Thursday, as he presented the last-ditch accord, that his country had agreed a “reasonable” five-and-half-year transition period with the EU over fisheries, longer than the three years Britain wanted but shorter than the 14 years the EU had originally asked for.

But Boulogne-sur-Mer Mayor Frederic Cuvillier said the agreement left much obscured.

“Relief for our fishermen, but what will be the impact on stocks? Who, for example, will be handling the controls? And over what time?” he told Europe 1 radio.

“The only certainty today is that we need to find, during the transition period, more deals within the deal.”

Cuvillier’s views were echoed by French politicians Loïg Chesnais-Girard and Herve Morin, whose responsibilities cover the Normandy region bordering the English Channel.

Chesnais-Girard and Morin issued a joint statement welcoming the fact that a Brexit “no-deal” had been averted, but also calling for a meeting with French Prime Minister Jean Castex to analyse more of the details.

French fishermen had lobbied President Emmanuel Macron not to give an inch over fishing rights, but his government dropped initial demands to maintain the status quo.

French Seas Minister Annick Girardin issued a statement to say the government would set up financial measures to help French fishermen affected by the Brexit trade accord.

There has also been discontent across the Channel, with Britain’s fishing industry expressing disappointment that the deal did not represent more of a reduction in the access that the European bloc currently has to British waters.