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What will everything look like after the coronavirus

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Will we ever shake hands again? Or hug?

Yes. Though we may do so a little less often—and with some trepidation.

The coronavirus has turned life upside down, and when it’s over—which seems far off and even worse, indeterminate—our lives will be changed permanently. That’s always the case after an economic crisis like the Great Recession of 2008-2009 or the stock market crash of 1987. It’s even more true following major turning points in history like 9/11, World War II/the atomic bomb and the Great Depression.

The cause and effect is axiomatic and Newtonian. The bigger the cause, the greater the effect. 

Clearly this is a biggie. 

My point is the pandemic and its aftermath will be super-consequential for how we live the rest of our lives. It’s not too soon to think about that, in fact it’s responsible to do so—even though the virus has yet to peak—if only to take our minds off the never ending river of difficult news.

In its essence a post-pandemic world, (or really one where we acknowledge and accept that pandemics can and will occur—more on that from Dr. Mehmet Oz below) is about mitigating a new type of risk. There will be implications across the board; for business,  government, culture, sports and the arts, as well as behavior like shaking hands.

Let’s start with some first order effects for commerce, and move on from there.

First many businesses that are booming during the pandemic will continue to thrive, maybe not explosively, but should grow above trend for some time. People are already busy figuring out the new, new things.

“I think the next generation of amazing companies will be invested as we come out of this,” Mark Cuban, billionaire entrepreneur and owner of the Dallas Mavericks wrote us in an email. “Someone will have a unique and compelling vision of what the world on the other side can look like that will make us all wonder ‘why didn’t I think of that?’”

Let’s run quickly through the obvious to get your juices flowing: Teleconferencing and remote working tools; (Zoom—the No. 1 downloaded app for iOS—Skype, Teams, Slack, Hangouts, WebEx, etc.) Medical supplies and medicine, (masks, gloves, gowns, ventilators, rubbing alcohol, and then, huge, vaccines.) Cleaning supplies, (I know Clorox has outperformed the market by 30 percentage points year-to-date and still has a P/E of 27, but you have to figure CLX and its ilk will do well over the next five to 10 years.) 

Clorox bleach disinfecting wipes on shelf in grocery store, graphic element on black

Streaming services like Netflix of course and the other FANGS as I wrote about last week are generally well-positioned. Same for meal kits, grocery and food delivery, and digital cooking and weight loss ideas. Ditto for exercise-from-home programs like Mirror and Peloton etc. (NB: The great TP hoard of 2020 will end at some point.)

By the way, while some may continue working from home, most will run screaming from the house—15 pounds heavier—back to work when that all-clear bell sounds. As many of us are figuring out, WFH can be significantly more stressful than the office. “People see staying home has lots of advantages, but people want to see other people,” says Kathleen Day, an author and lecturer at the Johns Hopkins Carey Business School. “Who knew grocery shopping could be a social activity?”   

On the flip side of the companies that will make out, are those that will suffer. Mark Penn of the Harris Poll says many Americans won’t fly even six months after the virus is mostly gone. “People see airports and particularly planes and they really fear that,” Penn told me. “Airlines are going to have their job cut out for them.” More so with cruise ships of course, as well as hotels and resorts and all the millions of jobs associated with them. 

(Domestic vacation locales, accessible by car, will be big.)

Then there’s the restaurants. While the big chains; Subway, McDonald’s, Starbucks and KFC have the wherewithal to survive, many independent restaurants could be decimated. In all cases, it’s likely prices will go up to cover new unemployment protections that companies will put in place voluntarily or that are mandated by the government. That could prove  to be inflationary.

[See also: An Update From the Yahoo Finance Live Team]

What about entertainment? “Do I think people will return to movies? Sure. Do I think people will return to theme parks? Sure,” says Rich Greenfield, equity entertainment industry analyst at LightShed Partners. “Do they open up to vastly different volumes of people, given fears around or once ingrained on social distancing in people’s heads. How quickly does it disappear?”

Greenfield says that linear TV is up (ABC’s “World News Tonight” had 12 million views last week, its biggest numbers in 20 years, as much as Monday Night Football) but streaming is exploding. “This is like putting lighter fluid on things, acceleration in terms of trend,” he says. The new reality is putting even more pressure on Hollywood’s theatrical window, which was already under assault, he says.

As for music, digital concerts are already taking off. (Over 3 million people viewed a Dave Mathews concert produced by Yahoo parent company Verizon on Thursday.) How will these be monetized? Someone’s working on that. Live concerts will return of course, but streaming concerts won’t disappear either. Personal concerts, which we’ve seen by the likes of Yo-Yo Ma, John Legend, Bono, Pink and regular musicians from their homes may become ordinary.

A teenager watches Sienna’s online concert at her home following the recommendation of staying at home to fight COVID-19 on March 13, 2020 in Madrid, Spain. ‘#yomequedoencasa’ is a streaming music festival promoted by more than 40 Spanish artist to entertain people who has to stay at home due to COVID-19. (Photo Illustration by Carlos Alvarez/Getty Images)

‘Supply chains are changing’

Let’s turn to government and politics. A few huge points here. A) The government, especially the federal government will be playing an outsized role in our lives for years to come. (It’s ironic of course that big government will return during a GOP administration—not in the DNA don’t you know.) 

And B) The election in November and the voting process will be high stakes. Some of us may not be healthy enough to go to the polls, and we must be able to vote electronically or by mail. This will not be a one shot deal either. (In fact everything that we had been migrating to electronically, DMV, depositing checks, and shopping will get a massive push from this crisis.)

Another critical point: The dividing up we’ve seen over the past five years will accelerate. Even within the U.S. we’re now seeing states and municipalities screen outsiders. The president wants to rate counties. And more Americans are sick in blue, i.e., populous states than red, i.e., rural ones. All this separates us. 

And of course globally we’re seeing a day-by-day closing down of borders. Russia, China, Australia and the U.S. are all making it increasingly difficult for mostly humans, but goods and services too, to flow back and forth. This will abate at some point, but we’re not going back to where we were.

The economic implications are obvious: “All of these supply chains are changing,” says Shulamit Kahn, economics professor at Boston University. “We’ll be sourcing materials more from our own countries.” Remember this is what Donald Trump and his supporters always wanted. Maybe they should be careful of what they wish for. Yes squeezing the global supply chain helps some domestic businesses, but it will likely result in higher prices (that again) for everyone. Plus who-knows-what other consequences.

A million smaller effects will come to the fore too. Walmart says it’s selling more tops than bottoms as people want to be (partly) dressed just for a Zoom call. (How would anyone have figured that out?)  WMT also says it’s selling tons of popsicle sticks for home-crafters (i.e., keeping kids—and parents sane.) Christopher Denby, CEO and founder of Advisory Board for the Arts expects “a huge amount of coronavirus-themed art in the next two years, he says. “Think about the AIDS crisis for instance and the impact on art and extraordinary pieces of filmmaking and theater and music that came out of that crisis.” 

And maybe, just maybe Kahn says, we’ll learn to take science more seriously. “If we find something to kill the virus, it will help people realize we need science and scientists,” he says. “What I’m hoping is people will fill in the dots and say, you know, maybe global warming is the same kind of thing.”

In a way we were living on borrowed time, weren’t we? Whether it’s global warming or pandemics, we simply must prepare better. Leaving aside the tragic and incalculable human cost, if we had spent $200 billion preparing for an epidemic like this, we might not be spending $2 trillion on a stimulus package.

Here’s what Dr. Oz told me recently: “It’s hard to imagine not having another virus like this that’s more dangerous. That’s why this is a dry run. We gotta get it right, now. So next time it happens, everyone does the same thing. We’d have the same hymnal, the same notes.”

Amen, doctor. Amen.

We can’t go back to a world before coronavirus. Wouldn’t it be amazing if we ended up in an even better place? 

 This article was featured in a Saturday edition of the Morning Brief on March 28, 2020. Get the Morning Brief sent directly to your inbox every Monday to Friday by 6:30 a.m. ET. Subscribe

Andy Serwer is editor-in-chief of Yahoo Finance. Follow him on Twitter: @serwer.

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Hong Kong Stocks See Relief Gains; Dollar Slips: Markets Wrap

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(Bloomberg) — Stocks in Asia nudged higher, with Hong Kong jumping at the open after U.S. President Donald Trump on Friday stopped short of specifying tough sanctions over China’s new national security law for Hong Kong.

The dollar retreated. Hong Kong’s Hang Seng saw early gains of over 3%, while Tokyo, Seoul, Sydney and Shanghai saw more modest moves. U.S. stock futures erased earlier declines as investors weighed the violent protests in some American cities that have stoked concerns about a reacceleration in infection rates and a damper on the economic recovery. Crude oil fell.

The escalation in tensions between the U.S. and China last month had threatened to derail a recovery in global equities. While the U.S. president’s speech Friday was heated in rhetoric, it lacked specifics around measures that would directly affect Beijing.

“President Trump’s response on Friday was pretty muted and far less disruptive than markets had feared,” said Shane Oliver, head of investment strategy at AMP Capital Investors Ltd. in Sydney.

The U.S. president also promised sanctions against Chinese and Hong Kong officials “directly or indirectly involved” in eroding Hong Kong’s autonomy but didn’t identify individuals. The administration hasn’t yet decided under what authority it would implement that action, according to a person familiar with the matter.

“The impact is likely to be limited and more symbolic while the financial sector is unlikely to be affected,” Sean Darby, Jefferies’ global equity strategist in Hong Kong, wrote in a research note. “We are not too surprised by the move and don’t expect the Hong Kong financial markets to be either.”

Here are some key events coming up:

Australia’s central bank is expected to keep its main policy programs unchanged on Tuesday. So too is the case for Canada, which has options to add stimulus but will probably stand pat on Wednesday to allow more time to evaluate the progress of policy action.In Europe, the ECB is expected to top up its rescue program with an additional 500 billion euros of asset purchases. Anything less than an expansion at Thursday’s meeting would be a big shock, Bloomberg Economics said.The U.S. labor market report on Friday will probably show American unemployment soared to 19.6% in May, the highest since the 1930s.

These are the main moves in markets:

Stocks

Futures on the S&P 500 Index rose 0.1% as of 10:50 a.m. in Tokyo. The index climbed 0.5% on Friday.Japan’s Topix index rose 0.5%.Hong Kong’s Hang Seng advanced 3.4%.South Korea’s Kospi index rose 1.3%.Australia’s S&P/ASX 200 Index gained 0.7%.Euro Stoxx 50 futures advanced 1.3%.

Currencies

The yen rose 0.1% to 107.68 per dollar.The euro bought $1.1135, up 0.3%.The offshore yuan rose 0.1% to 7.1263 per dollar.The Australian dollar climbed 0.9% to 67.27 U.S. cents.

Bonds

The yield on 10-year Treasuries rose one basis point to 0.66%.Australia’s 10-year yield was at 0.90%, up about one basis point.

Commodities

West Texas Intermediate crude fell 0.6% to $35.27 a barrel.Gold rose 0.4% to $1,737.21.

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©2020 Bloomberg L.P.

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The Villages’ policy on face masks presents a financial risk

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Scott Fenstermaker

Villages-news.com has reported on the new Recreation Department policy of not requiring masks for situations in recreation centers where social distancing is not feasible. In fact, the new policy has just turned the task of checking Villager ID’s into a potential suicide mission for employees.

Furthermore, if the staff, themselves, don’t wear masks, a sick, maskless ID checker could infect hundreds, and indirectly, thousands of Villagers. While this potential death and suffering has been discussed, at length, on this site, what has not appeared here is a discussion of the financial risk of the new policy.

In addition to the death and suffering that the new policy will likely cause, the new policy could jeopardize the financial solvency of our amenity system. Sick employees (or their survivors) will be filing worker compensation claims. Even more costly, sick Villagers (or their survivors) will be filing lawsuits against the amenity system for negligently not following the recommendation of both the CDC and virtually every other expert in the field.

I won’t get into the merit of such lawsuits (which will depend on the facts), the intricacies of the ownership and administration of the amenity system, or the effectiveness of masks. But do not think for a moment that such worker compensation claims and lawsuits will have no chance of succeeding. For people interested in learning more, here is a link to one of many articles that have appeared on the general subject: https://www.nytimes.com/2020/04/28/business/businesses-coronavirus-liability.html For more, Google: “COVID-19 business liability”.

Scott Fenstermaker is a resident of the Village of Winifred.

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Pandemic-related restaurant closures take an emotional and financial toll

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Michael Raviele agonized for hours over how to break the news to his loyal customers before finally announcing at 4:30 a.m. on May 15 that he was closing Il Gatto Nero, the Italian restaurant his father first opened some six decades prior.

“I did that road for 18 years — up and down, every single day,” said the man with a tattoo of the restaurant’s logo on his arm. “I worked there every single day.”

Restaurants across Canada — from local institutions to newer spots hustling to establish themselves — have closed permanently in recent weeks as the COVID-19 pandemic ravaged an industry already plagued by razor-thin margins. Their owners face not only the emotional loss of their business, but also often large debt, little savings and an uncertain future.

Il Gatto Nero started as an Italian social club featuring pool tables and espresso more than 60 years ago. Raviele joined the business in the early 90s and slowly added to the club’s repertoire with a pizza oven, sandwiches and other tweaks.

The club moved to Toronto’s College Street about 18 years ago. At the new location, they saw a lot of success — like when Italy won the FIFA World Cup in 2006 — as well as some down times — like the 2008 recession — that prompted Raviele and his father to dip into personal savings to keep the restaurant afloat. Raviele invested more money into the business in 2014 for a renovation and expanded to a second location, a small cafe in Etobicoke, in October 2019.

When COVID-19 hit and government ordered dining rooms to close, Raviele attempted to shift to take away, but eventually stopped. Bills piled up from utility companies.

“I obviously incurred some debt and debt that wasn’t there,” he said.

But uncertainty over the future of dining was the final nail in Il Gatto Nero’s coffin.

Raviele speculated he might be required to remove the restaurant’s 10 bar seats and slash his 65-seat capacity in half to comply with pending physical distancing rules, which would cripple his business.

“I don’t see a future for my business or for my family,” he said. “The model for opening any restaurant is based on feeding capacity versus space, and how many people can you do over the course of a night… I mean, if you have one bad weekend, it could be disastrous for many small business.”

He plans to focus on the small espresso bar, add a pizza oven and hustle to keep that business going, which he said he invested his second life into.

“I’m angry because I wanted to do something good and now the possibility of losing both is always there.”

Mohammed Bin Yahya, co-founder and chief executive at Plentea, found the coronavirus to be “just like the knock out punch” for his Toronto tea bar.

Before the pandemic, the company was struggling to pay some $5,000 in rent. When they shifted to takeaway to abide by health regulations amid the pandemic, foot traffic dropped dramatically.

The tea shop, which Bin Yahya opened in 2015 with dreams of growing to multiple locations, will close at the end of the month.

“The numbers. Straight up, the numbers don’t lie,” he said.

The company had to pay penalties when closing some of their accounts with cleaning companies, internet and phone providers, and others, he said.

“We are in debt,” he said, estimating they’ll owe some $40,000 in the end.

For now, he’s trying to minimize his expenses, and said he may have to find a side job and move in with family to help pay back the loans.

But he’s keeping the dream alive. Plentea will continue selling tea online, he said, and — for now — he’ll keep the equipment in storage with the hopes of opening again.

With nearly four decades in the food industry, 77-year-old Frances Wood’s retirement plan relied heavily on the Cajun-and-Creole food restaurant she co-owns, Southern Accent in Toronto. 

After 34 years in one location, Wood dipped into her nest egg to help cover a move to a new spot about three years ago. It took some time to build up a new customer base and Wood noticed in recent years, lucky restaurants made 10 per cent in profit.

Still, at the start of this year, she started seeing “the light at the end of the tunnel” in making the new location work.

She debated selling the restaurant after her five-year lease ended. But with about one-and-a-half years to go, COVID-19 hit.

Southern Accent also attempted take-away and delivery, but found with high delivery app fees, it was losing money each day it stayed open.

Wood and her co-owner decided to close permanently in April and have about $60,000 in loans and bills to pay back between them.

In what Wood called “a miracle,” their landlord released them from their roughly $10,000 monthly lease early, Wood said.

“I don’t know what we would have done. We would have to go personally bankrupt, I guess” had that not happened, she said.

The next phase of the septuagenarian’s life “doesn’t look very good.” Wood didn’t draw a salary for the past several years, but the restaurant did pay some of her expenses. She collects Old Age Security, the Canada Pension Plan and has some personal savings, but that hardly covers her monthly expenses.

“My livelihood, what I was expecting to have at the end of 37 years in the restaurant business was some money from the restaurant when I sold it to help with my senior years.”

She planned to sell the name and recipes, and help set the buyer up for success. She even kept the restaurant’s 1940s bar in case a buyer emerges. It’s tucked away in the garage.

Still, she considers herself lucky all things considered.

“I think, ‘Okay, I’m lucky. I have my health.’”

This report by The Canadian Press was first published May 31, 2020.

Aleksandra Sagan, The Canadian Press



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