UPDATED
HSBC warns loan losses could hit $13 billion as profit plunges 65%

Lawrence White, Alun John

LONDON/HONG KONG (Reuters) - HSBC Holdings PLC warned its bad debt charges could blow past a previous estimate to $13 billion this year and said its profits more than halved, as the coronavirus pandemic hammered the bank’s retail and corporate customers worldwide.


The lender warned its capital reserves could deteriorate, its revenues would come under pressure and it faced heightened geopolitical risk as Europe’s biggest bank set out a gloomier than expected outlook for the second half of the year.

HSBC increased its estimate of the total bad debt charges it could take this year to between $8 billion and $13 billion from $7 billion-$11 billion, reflecting worse-than-expected actual losses in the second quarter and expectations of a steeper decline in the economy.


“What we have seen this quarter is quite a sharp shift in economic outlook for the global economy, the famous ‘V’ has got a lot sharper and as a result we have materially increased our provisions,” Chief Financial Officer Ewen Stevenson told Reuters.

HSBC’s shares fell 4.6% to a nerly twelve-year low as investors digested the scale of the challenge facing HSBC, as it grapples with a global pandemic, political unrest in its core Hong Kong market, and low interest rates on its lending worldwide.

The bank reported a pre-tax profit of $4.32 billion for the first six months this year, lower than the $5.67 billion average of analysts’ forecasts.
FILE PHOTO: HSBC logo is seen in the financial district in New York, U.S., August 7, 2019. REUTERS/Brendan McDermid/File Photo

HSBC’s business in Britain has been hit particularly hard, Stevenson said, as it took a $1.5 billion charge against expected credit losses.

HSBC’s results reinforced the trend of lenders across the world increasing their buffers to absorb souring loans at a time when companies - from aviation to retail and hospitality sectors - are reeling from the impact of COVID-19.

TROUBLE AHEAD

The bank’s credit impairment provisions in the first-half soared to $6.9 billion, compared to $1 billion in the same period a year earlier.

Impairment charges included a $1.2 billion writedown on the value of software it owns, mainly in Europe, it said.

While HSBC’s core capital ratio, a key measure of financial strength, rose to 15% at the end of June, the bank warned the metric would likely decline later this year as falling credit ratings hit its risk-weighted asset ratio.

Its revenues fell 9% in the six-month period, as global interest rate cuts and declining market values on assets in investment banking and insurance outweighed higher trading income.

HSBC is continuing to review its long-term dividend policy, CEO Noel Quinn said in a statement.

FILE PHOTO: A Chinese national flag flies in front of HSBC headquarters in Hong Kong, China, July 28, 2020. REUTERS/Tyrone Siu/File Photo GLOBAL BUSINESS WEEK AHEAD

The bank earlier this year halted payouts in response to a regulatory request in Britain, infuriating many of its retail investors who rely on it for income, particularly in Hong Kong.

Quinn told Reuters the bank’s staff headcount has fallen by some 4,000 this year after it restarted a redundancy programme that was put on ice after the coronavirus outbreak.

The bank is aiming to cut costs by 3% this year from that restructuring as well as lower employee spending on travel and other items during the pandemic, he said.

Only a fifth of the around 9,000 staff in its headquarters in London’s Canary Wharf district would be able to return to work in the near term for safety reasons, Quinn told Reuters.


Reporting by Alun John in Hong Kong and Lawrence White in London; Additional reporting by Noah Sin in Hong Kong; Editing by Muralikumar Anantharaman and Louise Heavens


HSBC profits sink by 82% as loans sour: Shares plunge to lowest levels since 2009 crisis

By LUCY WHITE FOR THE DAILY MAIL

PUBLISHED: 3 August 2020 

HSBC profits plunged more than 82 per cent as the bank warned £10billion worth of loans could turn sour this year due to the coronavirus pandemic. 

The London-headquartered lender, which makes most of its money in Asia, said pre-tax profits slid to just £824m in the three months to June 30, down from £4.7billion over the same period last year. 

This was much worse than the £1.9billion expected by analysts, and caused shares to slump 2.9 per cent, or 9.95p, to 332.25p – their lowest level since March 2009 during the depths of the last financial crisis. 

+1

Slump: The lender said pre-tax profits slid to just £824m in the three months to June 30

HSBC boss Noel Quinn said he was planning to 'accelerate' his shake-up of the bank in a cost-cutting drive which was already set to see 35,000 jobs axed globally by 2022. 


The brutal restructuring was initially put on hold during the pandemic, but chief financial officer Ewen Stevenson confirmed yesterday that 3,800 jobs had been cut since the beginning of the year. 

And in a worrying sign for office landlords and business districts around the world, Quinn added that the bank may need less office space in future as the pandemic pushed more staff to work from home. 

He said: 'I do think there's potential over the medium term to reflect on different ways of working, allowing people greater flexibility to work from home or in the office.' 

Prime Minister Boris Johnson has urged workers to return to their offices where possible as lockdown eases, to bring life to deserted business hotspots. 

But the majority of staff at HSBC and other major financial institutions have been working at home throughout the pandemic, and many firms are now wondering whether they need all of their towering skyscrapers in costly locations such as Canary Wharf and London's Square Mile. 

The pandemic has also been weighing on HSBC's loan book, as it thinks more borrowers will become unable to repay their loans due to job losses and the resulting economic downturn. 

It had already set aside £2.3billion to cover bad loans in the first three months of 2020, and ramped this up to £5.3billion in June as the extent of the damage began to emerge. 

HSBC warned the cost over the full year could be as high as £10billion. Its outlook for the UK was gloomy, as around £1billion of the expected losses were linked to the country. On top of the coronavirus troubles, HSBC has been dealing with a flare-up in tensions between the US and China. 


The bank angered MPs, customers and investors when it supported the controversial law imposed by China on Hong Kong in June. 

The national security law drastically reduces Hong Kong citizens' rights, and makes it a crime for anyone to criticise Beijing's Communist regime. 

Quinn yesterday denied the bank would be forced to choose between its operations in the West and its more profitable business in Asia. He said: 'Current tensions between China and the US inevitably create challenging situations for an organisation with HSBC's footprint.' 

And despite prominent pro-democracy protester Joshua Wong claiming he had faced increased questions from HSBC over his finances since the law was introduced, HSBC denied it was screening customers specifically to check whether they had pro-democracy links. 

Quinn insisted that the bank was simply complying with all laws in the jurisdictions it operates in, and refused to speculate on the possible impact which US sanctions on Chinese officials could have. 
Metro Bank has bought Ratesetter as it ramps up its efforts to expand into more profitable lending. Metro, which is trying to recover from a bleak 2019 when it swung to a £11.7m loss, will buy the online lender for up to £12m. Ratesetter matches investors who want to lend with borrowers who are in need of cash, and offers personal loans, financing for car dealers, and loans for property developers, and has handed out more than £4billion since it launched.

UNDERDOGS
Start considering the Raptors real NBA title contenders

Kirk Goldsberry ESPN Staff Writer

The Toronto Raptors are the defending NBA champions, yet they remain horribly under the radar in this year's title race. That needs to change. Dating back to before the league's stoppage in March, this team has won 23 of its past 27 games. They've been awesome in their first two restart matchups, beating the Los Angeles Lakers by 15 points on Saturday night and outlasting Jimmy Butler and the Miami Heat on Monday.

Still, a recent poll of my esteemed ESPN colleagues revealed that only three of 16 NBA experts expect Toronto to come out of the Eastern Conference. That's harsh, but Nate Silver's robots are even harsher. The FiveThirtyEight prediction model, which is even called RAPTOR, is currently insulting its namesake -- giving the dysfunctional Philadelphia 76ers a 29% chance of making the Finals while the Boston Celtics have a 19% chance. The Raptors are down at 10%, but some folks have noticed how good they are.

"It's a great team," LeBron James said after Saturday's game. "No ifs, ands or buts. Exceptionally well coached. Championship DNA, you can never take that away from a ball club. ... The media may not talk about them much or give them as much credit because Kawhi [Leonard] is gone, but players know what type of team they are."


LeBron James discusses the "championship DNA" that the Raptors possess and explains why they are more of a threat than they get credit for.

James is absolutely right. Toronto has a 71.6% win percentage over the past three seasons, the best in the NBA. In that same time period, the Raptors have also recorded a plus-6.8 point differential -- again, No. 1 overall. This team is legitimate with or without last year's NBA Finals MVP.

While they're grabbing hold of the East's No. 2 seed with the league's No. 4 net rating, the Raptors' first two games in the bubble have revealed one key driver for their success: This is an emerging defensive juggernaut.

In a league increasingly dominated by perimeter production, head coach Nick Nurse and the Raps have found a way to frustrate the dominant tactics. The basketball world took notice when Nurse dusted off a highly unusual box-and-one defense that frustrated Stephen Curry and the Warriors in the Finals last year, but that was just the beginning. Nurse's staff has earned a reputation for innovative, unpredictable and unconventional approaches.


"The whole fourth quarter they were playing some janky defense ... Over the course of the game, it's kinda disrespectful to leave Andre Iguodala open like that. ... He's made big shots like that before."

-Steph Curry on the finish to Game 2 pic.twitter.com/eQ9Bymczv2— NBA on ESPN (@ESPNNBA) June 3, 2019

Nurse's weird bag of defensive tricks includes full-court presses, 2-3 zones, surprise traps and double-teams. The real trick, though, is having a roster full of guys ready and willing to implement these strategies. Masai Ujiri and the front office have loaded the roster with a bunch of guys who love to fight on the unglamourous end of the floor.

It all starts with Marc Gasol and Serge Ibaka shoring up the frontcourt with elite rim protection and communication. Toronto allows 41.9 points per game in the paint, trailing only the Milwaukee Bucks in that department.

The wings are led by Pascal Siakam and his stunning versatility. At 6-foot-9, Siakam can do it all. He has become one of the NBA's best 3-point deterrents, leading the NBA in contested 3s this season, per Second Spectrum tracking data. And shooters have only made 31.2% of the 337 3s that Siakam has challenged, the third-best mark among the 33 players with at least 250 contests.

The backcourt includes both Fred VanVleet's remarkable perimeter activity -- he leads the league in deflected passes, and was great on Curry last year -- and Kyle Lowry's never-ending love of drawing charges.

Bottom line: These dudes love the dark arts of defense. They each thrive in their own unique ways, but the collective strength is undeniable. It allows the Raptors to implement diverse, unorthodox defensive strategies tailored to each opponent. Game to game, you never know what you're going to get, and the results are solid.

https://www.instagram.com/p/CDcPmKIl1J_/?utm_source=ig_embed

Raptors opponents are making just 33.6% of their triples this season, the lowest such figure in the NBA. But the numbers behind that stat are interesting. Toronto actually allows the easiest 3s in the league, according to Second Spectrum's shot quality data. The negative difference between opponent's expected field goal percentage on 3s -- when accounting for things such as defender distance and shooter location -- and their actual shooting performance is greater than that for any other team by a considerable margin.

There's certainly some luck involved here, but there's a case that the Raptors' No. 2 overall defense should be credited more to strategy and execution. The Heat came into Monday's matchup as the league's most efficient 3-point shooting team, but Toronto held Miami to just 31% from deep in large part by limiting Duncan Robinson -- who trails only James Harden in total 3s this season -- to just one made 3 on four attempts. The way Robinson was swarmed and hounded was not luck.

The Raptors also like to shut down unassisted 3s, which are surging in popularity. Back in 2013-14, NBA shooters attempted just 4.5 such shots per 100 possessions. This season that number has surged to 7.8 -- but not against the Raptors, who give up 5.7 such tries per 100 possessions, the fewest in the NBA, per Second Spectrum. And opponents are converting just 29% of those looks, which ranks second in the league.

All told, Raptors opponents are managing to convert just 1.6 unassisted 3s per game, meaning they have to try to find offense elsewhere. Good luck.

Following the departure of Leonard, many NBA observers expected Toronto to crater. But the leftover Raptors have very different expectations. This team is playing like it can win it all again, and its case is strong. As Curry and Giannis Antetokounmpo both found out last year: Defense wins championships.

GDP crash

U.S. gross domestic product plunged at a 32.9% annualized rate in the second quarter of 2020, showing the depth of the coronavirus pandemic’s effect on the health of the American economy.

Graphics by Travis Hartman

PUBLISHED JULY 30, 2020

Gross domestic product is the broadest measure of everything produced by U.S. workers, private capital and the government. In 2019 that came to about $19.2 trillion adjusted for inflation. In 2020, that number has fallen enormously because of the COVID-19 pandemic, with the largest drop in history during the second quarter.

Three large aspects of the economy are particularly reflective of the pandemic’s impact. Overall consumer spending has suffered with millions of people out of work, government spending has soared because of the CARES act and business investment has languished with companies so unsure of the future.

Consumer spending

Consumer spending has historically been the driving force behind GDP, accounting for roughly two thirds of the total. The pandemic has had a big effect on how consumers spend their money. Spending on goods has remained relatively buoyant as people stocked up on food and other essentials, while stay-at-home orders and restaurant and bar shutdowns hit the service sector quite hard.

Consumer spending since 2002

Total consumer spending

Services

Goods

Note: Grey bars denote recession

Government spending

The U.S. government has spent money at an unprecedented pace to cushion the blow to households and businesses from the pandemic. That is most reflected in a nearly 40% increase in non-defense government spending during the second quarter. This massive bump in spending fueled a range of crisis relief programs, including a $1200 check to all qualifying Americans, enhanced unemployment benefits of $600/week on top of normal state programs, and a range of programs targeted at supporting businesses from airlines to pizza shops.

Non-defense government spending since 2002

Q2 2011

$471.6 billion

Note: Grey bars denote recession

Business investment

Business spending also retreated sharply as many companies are canceling capital spending projects due to overall insecurity.

Business investment since 2002

Note: Grey bars denote recession

Note

Headline chart is real GDP, percent change from preceding period, quarterly, seasonally adjusted annualized rate

Editing by Dan Burns

Source

U.S. Commerce Departme

Nippon Steel to appeal South Korea ruling allowing seizure of assets

FILE PHOTO: The logos of Nippon Steel Corp. are didplayed at the company headquarters in Tokyo, Japan March 18, 2019. REUTERS/Yuka Obayashi

TOKYO (Reuters) - Japan’s Nippon Steel Corp (5401.T) said on Tuesday it will appeal a South Korean court ruling that allows for the company’s assets in that country to be seized and sold as compensation for forced wartime labour.

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Japan will respond if South Korea seizes Japanese assets: deputy PM Aso

The ruling followed a South Korean Supreme Court decision in 2018 that Nippon Steel should pay 100 million won ($83,836.35) to each of four South Koreans as compensation for forced labor during World War II.


A lower court there approved in 2019 the seizure of part of the domestic assets of Nippon Steel, and Yonhap News Agency said the Daegu District Court in June set a Tuesday deadline for the process to begin.

“We will continue to take appropriate measures based on the diplomatic negotiations between the two nations and other situations,” a Nippon Steel spokeswoman said on Tuesday. “We will immediately make an appeal against procedures for seizure of assets which took effect at midnight on Aug. 4.”


At stake are 81,075 shares Nippon Steel holds in PNR, a Korea-based joint venture with steelmaker POSCO, worth about 400 million won by face value, according to Yonhap.

Nippon Steel has until the end of Sunday to file the appeal before, Yonhap said.

Japan has held that all matters concerning wartime reparations must be settled under a 1965 treaty that normalised relations between the countries.

Fed policymakers call for fiscal support to save U.S. economy

Evans, in an uncharacteristically passionate outburst during his call with reporters, said that the virus’ unequal toll was an “indictment” of unequal access to U.S. healthcare. “The state of equal healthcare in this country is abysmal,” he said.

Ann Saphir, Lindsay Dunsmuir


(Reuters) - The U.S. economy, battered by a resurgence in the spread of COVID-19, needs increased government spending to tide over households and businesses and broader use of masks to better control the virus, U.S. central bankers said on Monday.


FILE PHOTO: Federal Reserve Board building on Constitution Avenue is pictured in Washington, U.S., March 19, 2019. REUTERS/Leah Millis/File Photo

The calls for increased government intervention came as U.S. lawmakers and the White House resumed talks on a new government relief package, including a possible extension of unemployment benefits that expired on Friday.

“The ball is in Congress’ court,” Chicago Fed President Charles Evans told reporters on a call. “Fiscal policy is fundamental to a better baseline outlook, to a stronger recovery and getting the unemployment rate down, people back to work safely, and ultimately reopening the schools safely.”

Without more government aid, Evans said, “aggregate demand trouble is brewing.” Translated for non-economists: people could stop spending and the bottom could really fall out of the economy.

Or, as Richmond Fed President Thomas Barkin put it, “quickly pulling away the support that consumers and businesses are receiving would be a pretty traumatic move for what’s happening in the economy.”

The full court Fed press for more government spending came as Republicans appeared reluctant to spend much more than the $3 trillion Congress had already committed to bolstering the economy in the face of the virus. But things have gotten worse since then, Barkin said.

“Four months ago, when we did the first stimulus, we thought the economy faced a pothole and the stimulus put a plate over it so we could navigate,” he told the Northern Virginia Chamber of Commerce. “Now escalation of the virus may be making that pothole into a sinkhole and creating a need for a longer plate.”

Echoing those sentiments in slightly different terms were Dallas Federal Reserve Bank President Robert Kaplan and St. Louis Fed President James Bullard. Kaplan pushed back on the notion that the extra $600 weekly benefits to the unemployed had made it harder for businesses to hire, while Bullard said earlier efforts to keep businesses and households whole through the crisis have paid off so far.

“We’ve looked at a number of studies, we’ve done our own work: we don’t see it as much in the data but I can tell you I’m hearing it from business people,” Kaplan told Bloomberg TV earlier Monday when asked about whether the enhanced jobless aid was deterring people from returning to work.


“While it may have made it hard for certain individual businesses to hire, it has helped create jobs, because it has helped bolster consumer spending, so the net effect still has probably been positive for the economy for employment.”

Kaplan also said he did not agree with his colleague, Minneapolis Fed President Neel Kashkari, who at the weekend said he thought the U.S. economy should shut back down again for four to six weeks to suppress spread of COVID-19.

Instead, Kaplan said, universal mask-wearing could substantially mute transmission of the virus without a widespread lockdown. “I think we are going to have to learn to live with this virus. We are going to have to learn to re-engage in our daily activities but still control the virus,” he said. “Widespread mask-wearing is essential to that.”

Bullard, too, emphasized mask-wearing as a significant risk-management tool, especially as he does not expect health officials to be able to reduce disease transmissions to zero because it is so contagious. He also warned against placing too much emphasis on the development of a successful vaccine.

“If you put too much emphasis on the idea that a vaccine is going to come and save us, and someone’s going to crack a very difficult scientific problem ... then you get people not doing anything and sitting around waiting for the vaccine,” Bullard said in a presentation during an online event hosted by the bank’s Memphis, Tennessee, branch. “So if you do that, you do risk a depression because you could get a lot of business failures while you’re waiting, potentially a very long time for a vaccine to come and save the day.”

The regional bank presidents’ comments came just days after the Fed’s latest two-day policy meeting, at which officials repeated their pledge to do all in their power to help the economy weather the recession that began in February as the outbreak began ricocheting around the globe. The U.S. central bank has slashed interest rates to near zero - where they are expected to remain for years - and has rolled out roughly a dozen emergency programs to backstop financial markets and support businesses.

Bullard also said he expects that economic growth has resumed in the current third quarter, but that after a better-than-expected start to the rebound in May and June, the rebound slowed in July with the resurgence in infections in many areas of the country.

“We shouldn’t expect a completely smooth transition as you go forward because this is a crisis and there’s going to be ups and downs,” Bullard said.

Those swings were on display Monday, as U.S. manufacturing activity rose even as factory job losses persisted. California - the most populous U.S. state - reported a decline in hospitalizations and cases, but the state’s farmbelt has a severe outbreak, concentrated among Latinos.

Evans, in an uncharacteristically passionate outburst during his call with reporters, said that the virus’ unequal toll was an “indictment” of unequal access to U.S. healthcare.
“The state of equal healthcare in this country is abysmal,” he said.

(Open tmsnrt.rs/2WTOZDR in an external browser for a Reuters interactive)


Reporting by Ann Saphir and Lindsay Dunsmuir; Additional reporting by Jonnelle Marte; Editing by Dan Burns and Lisa Shumaker

L.A. teachers reach deal with school district on remote education
Steve Gorman

LOS ANGELES (Reuters) - The Los Angeles teachers union and local education officials on Monday agreed to a plan for resuming online-only classes later this month in the nation’s second-largest school district amid the coronavirus pandemic.


Protesters participate in a caravan protest during a national day of resistance to demand a safe, scientific, racially just and fully funded approach to reopening schools during the outbreak of the coronavirus disease (COVID-19) in Los Angeles, California, U.S., August 3, 2020. REUTERS/Mike Blake - RC2K6I952GYL

The deal encompasses new standards and work rules governing how the 30,000 teachers of the Los Angeles Unified School District (LAUSD) will provide instruction to 700,000 students remaining at home when the new academic year begins on Aug. 18.

The plan, hammered out during two weeks of negotiations between the district and United Teachers Los Angeles union, is designed to avoid the chaos that ensued when the worsening COVID-19 outbreak forced schools to abruptly switch to remote learning in March.

“We have all learned from our experiences with distance learning since March, and we’ve applied what we learned to this agreement,” LAUSD Superintendent Austin Beutner said in a statement.

Under the plan, age-appropriate class schedules have been created for all grade levels, from kindergarten to high school, including daily “synchronous” instruction by teachers — real-time lectures through video conferencing.


Teachers will also use “asynchronous” instructional materials and assignments posted online for students to complete independently, a joint statement from LAUSD and the union said.

While the plan gives teachers the option to work from their regular classrooms, students will remain at home, with daily attendance taken for each class session.

The plan also calls for:

- small-group instruction, teacher-guided “peer-to-peer” learning, and individual tutoring as necessary.

- guidance counselors and other non-teaching staff to follow a weekly schedule of services and office hours.


- special staff training and professional development.

Announcing its decision last month to proceed with online-only instruction, LAUSD cited “skyrocketing” coronavirus infection rates and a lack of adequate safeguards to ensure student and staff safety in classrooms.

Monday’s online-learning pact came as teachers at more than 35 other U.S. school districts staged protests over plans to resume in-class instruction while COVID-19 is surging in much of the country.


Reporting by Steve Gorman in Los Angeles; Editing by Aurora Ellis

U.N. chief warns world facing 'generational catastrophe' on education

Michelle Nichols


FILE PHOTO: United Nations Secretary-General Antonio Guterres is seen on a video screen during a virtual climate summit, known as the Petersberg Climate Dialogue, in Berlin on April 28, 2020. Michael Kappeler/Pool via REUTERS

UNITED NATIONS (Reuters) - U.N. Secretary-General Antonio Guterres warned on Tuesday that the world faces a “generational catastrophe” because of school closures amid the coronavirus pandemic and said that getting students safely back to the classroom must be “a top priority.”

Guterres said that as of mid-July schools were closed in some 160 countries, affecting more than 1 billion students, while at least 40 million children have missed out on pre-school.

This came on top of more than 250 million children already being out of school before the pandemic and only a quarter of secondary school students in developing countries leaving with basic skills, he said in a video statement.


“Now we face a generational catastrophe that could waste untold human potential, undermine decades of progress, and exacerbate entrenched inequalities,” said Guterres as he launched a U.N. “Save our Future” campaign.

“Once local transmission of COVID-19 is under control, getting students back into schools and learning institutions as safely as possible must be a top priority,” he said. “Consultation with parents, carers, teachers and young people is fundamental.”

The U.N. recommendations for getting global education back on track come as U.S. President Donald Trump pushes for schools to reopen in the face of opposition from some teachers and parents while COVID-19 is surging in many parts of the country.


The coronavirus, which first appeared in China late last year, has infected 4.6 million people in the United States and killed more than 155,000 Americans since February, according to a Reuters tally. Deaths rose by over 25,000 in July and cases doubled in 19 states during the month.

Globally the coronavirus has infected at least 18.1 million people and there have been more than 689,000 known deaths worldwide, according to the Reuters tally.

U.S. teachers protest school reopenings, coronavirus cases down in South, West

Brendan O'Brien, Dan Whitcomb


CHICAGO (Reuters) - Teachers at dozens of school districts protested from their cars on Monday over plans by some U.S. governors to resume in-class instruction during the coronavirus pandemic, while Arizona, Florida, California and Texas saw declines in new cases.


People participate in a caravan protest during a national day of resistance to demand a safe, scientific, racially just and fully funded approach to reopening schools during the outbreak of the coronavirus disease (COVID-19) in Los Angeles, California, U.S., August 3, 2020. REUTERS/Mike Blake - RC2K6I98ZD1X

The teachers, who painted messages on their cars and formed caravans with other school employees, want instruction conducted online until testing shows that classrooms are safe and districts hire more nurses and counselors.

The Milwaukee Teachers’ Education Association, the union representing public school teachers statewide, posted pictures on Twitter of protesters making cardboard gravestones with messages such as “Here lies a third grade student from Green Bay who caught COVID at school” and “RIP Grandma caught COVID helping grand kids with homework.”

Teachers in Chicago, Milwaukee and Philadelphia honked their horns in car protests. Demonstrators rallied outside the Los Angeles Chamber of Commerce building, and in Connecticut about 400 formed a car march that passed Governor Ned Lamont’s home.

“I do not want to put my students or myself in harm’s way. I do not want to be an experiment,” Chicago elementary school teacher Andrea Parker told reporters.

More than 155,000 people have died nationwide from COVID-19 since the virus was first identified in the United States in January. Cases nationally fell for a second week in a row but rose week-over-week in 20 states, including Missouri, Montana and Oklahoma.

Deaths in the United States rose for a fourth week in a row to more than 8,500 people in the seven days ended Aug. 2, a Reuters analysis found.

CASES TREND DOWN IN SUNBELT STATES

Arizona, California, Florida and Texas, U.S. states with some of the largest populations, saw fewer cases and hospitalizations.

Californian Governor Gavin Newsom said intensive care unit admissions were also down in his state but it was too early to celebrate.

“This virus is not going away,” Newsom said at a briefing. “It’s not going to take Labor Day weekend off or Halloween off or the holidays off. Until we have a vaccine, we are going to be living with this virus.”

The governor said the decline was not enough to merit a change in his order that Californian schools begin the August term with online learning.

The Los Angeles teachers union and education officials on Monday agreed to a plan for resuming online-only classes later this month in the nation’s second-largest school district. [L1N2F52C4]

Schools are at the center of negotiations between Democrats in Congress and the administration of President Donald Trump over a coronavirus economic relief bill. Democratic leaders and White House negotiators both said on Monday they had made progress in those talks, though the administration said Trump could act alone if no deal is reached. [L1N2F50O6]

With Democrat Joe Biden leading in polls ahead of the November presidential election, Trump, a Republican, has made school reopenings part of his re-election campaign.

Dr. Anthony Fauci, the U.S. government’s top infectious disease expert, said in an interview with the Journal of the American Medical Association on Monday that states with spiraling case numbers should consider re-imposing lockdown restrictions on residents and businesses.

But Fauci told a news conference with Connecticut’s Lamont that he favored getting students back in class, citing negative psychological impacts of keeping them home as well as the role schools play in feeding children.

“The default position should be to try as best as you possibly can to open up the schools for in-person learning,” Fauci said.


Previously hard-hit parts of New York and New Jersey with dense populations have seen an increase in new cases in recent days, prompting New Jersey Governor Phil Murphy to reduce indoor limits to 25 people per room from 100.

New York Governor Andrew Cuomo said he would announce later this week whether to reopen schools in his state, which has recorded by far the greatest number of COVID-19 deaths, more than 32,000.


Reporting by Brendan O'Brien and Lisa Shumaker in Chicago, Gabriella Borter and Maria Caspani in New York and Steve Gorman and Dan Whitcomb in Los Angeles; writing by Grant McCool and Dan Whitcomb; Editing by Howard Goller and Stephen Coates
Our Standards:The Thomson Reuters Trust Principles.

Manhattan district attorney raises scope of Trump probe

Manhattan’s district attorney suggested a subpoena for Trump's tax returns was part of an investigation of ’possibly extensive’ criminal conduct at the Trump Organization, including alleged insurance and bank fraud — more than just ‘hush-money’ payments made to women in 2016.

WOT ME WORRY THE GRIFTER IN CHIEF

Europe cushions workforce as U.S. lifeline runs threadbare

SOCIAL DEMOCRACY VS DOG EAT DOG CAPITALISM

Tom Sims, Norma Galeana


FRANKFURT/LOS ANGELES (Reuters) - - While millions of U.S. workers thrown into unemployment by the coronavirus pandemic fret about feeding their families, idled German airline purser Marco Todte is mainly concerned about his next vacation.



FILE PHOTO: Hundreds of people line up outside a Kentucky Career Center hoping to find assistance with their unemployment claim in Frankfort, Kentucky, U.S. June 18, 2020. REUTERS/Bryan Woolston

Todte, 41, hasn’t flown for work since April. But Germany’s state-subsidized “Kurzarbeit” furlough scheme and a top-up from employer Lufthansa means he is getting 90% of his regular income and has the cash to explore what few leisure options there are in an economy still emerging from lockdown.

“It is hard to go to the cinema or to go out in the evenings. I had planned on a cruise but that was cancelled,” Todte complained. “It’s not a question of money - more a question of what there is to do with it.”

That’s a problem that Juan Ruiz, a 56-year-old billing agent who lost his job at a Los Angeles forklift company in March when he contracted COVID-19, would love to have.

The failure of Congress to agree on replacing the $600-a-week extra unemployment benefit before its expiry on Friday means his family’s finances are now in jeopardy.

Ruiz used his first benefit cheques to pay down his debts but still has a mortgage to cover and says the new proposal of just $200-a-week on the table when talks resume on Monday is nowhere near enough.

“We have a lot of bills, we need to pay the house, taxes, everything,” Ruiz, still struggling with his breathing as a result of the disease, told Reuters at his home.

“We desperately need that help.”

Nothing illustrates the contrasting economic responses of the United States and Europe to the pandemic more clearly than how they are dealing with the devastation it has brought to their jobs markets.

The extra U.S. weekly benefit was an attempt to cushion the short-term blow to households as over 30 million people became jobless. It is based on the assumption that they will be able to return to the workforce as soon as the economy recovers.

The European approach, building on schemes like “Kurzarbeit” already in existence, has been to use costly state subsidies to keep workers on company payrolls with wages near regular levels even when they work part-time or not at all.

At the most generous end of the spectrum, the Dutch “NOW” programme retains workers on 100% of their income even when they work zero hours. For those laid off, the baseline Dutch dole programme is worth around $1,000 a month.

WHEN TO WIND DOWN?

Advocates of furloughs argue that, by maintaining the link between worker and employer, they make it easier for a company to ramp up activity quickly when demand returns.

Critics say they keep many non-viable jobs alive when it would be better for them to be replaced by new positions in healthier sectors.

The recent resurgence of new coronavirus cases in the United States and Europe has raised fresh questions about the timing of any recovery and how long either approach can be maintained.


But for now, it is clear the European way is alleviating more pain.

By the end of May, an estimated 45 million workers in Britain and the four largest euro zone economies - Germany, France, Italy and Spain - were registered in furlough schemes. For the euro zone, that has kept the jobless rate at just under 8%, barely a point higher than its pre-lockdown level.

That approach has been lauded by the European Central Bank (ECB) for supporting consumer morale and buffering household income, seen by many economists as key to the recovery.

Data on Friday showed French consumer spending for example shot back to its pre-pandemic level in June even as the overall economy shrank by 13.8% in the second quarter. Consumer morale in Germany is also strong.

“(The system) stabilizes the income of households so that they still consume,” said Sebastian Link, labour expert at the Ifo economic institute, which estimates some 42% of German firms still had workers on Kurzarbeit in July.

June data show consumer spending in the United States has held up but households have had to bite into savings as income levels have fallen. The wealth squeeze will only get worse if the expiring jobless benefit is not replaced.

While the immediate challenge for U.S. policymakers is to come up with new support to ensure millions are not thrown into poverty, European governments face hard questions about how long they can sustain their furloughs.

Britain is planning from October to wind down its scheme, which has supported 9.5 million jobs at a cost of $41 billion so far, despite predictions that would cause unemployment to more than double to 10% by year-end.

Brian Coulton, chief economist at Fitch Ratings, said he expected other job subsidy schemes across Europe to be removed gradually, with the timing dependent on a recovery which in turn could be threatened by future spikes in infections.


“A lot of it was predicated on this being short-term. If the recovery process is slower then it becomes tricky,” he said.

(Graphic: European furlough schemes link: here)



Reporting by Tom Sims and Norma Galeana; Additional reporting by Toby Sterling in Amsterdam; Writing and additional reporting by Mark John in London; Editing by Hugh Lawson