Keeping Tabs — tech titans, zombies and the loneliness of the long distance worker
There is a huge amount of information to take in at the best of times in the capital markets. During a crisis, it can be overwhelming. So, each week, Keeping Tabs brings you the very best of what we in the GlobalCapital newsroom have found most useful, interesting and informative from around the web.
First off, Sean Markowicz at Schroders explores how the US tech giants have cemented their dominance in the economy and markets in the crisis.
One of many fascinating stats he draws out: Microsoft is sitting on $134bn of cash and cash equivalents, sufficient to fund over two years of contractual obligations. The median for the S&P 500 is a $6bn cash balance and a cushion of 10.5 months. But Markowicz gives investors some reason to worry about how crucial the so-called Faang group of companies are to both society and markets.
If you are short on time, this Uncle Jim’s World of Bondspodcast on defaults and zombie companies gives a handy summary of Deutsche Bank’s latest default study, released this week. While state action is keeping firms alive, it is still likely to be a hair-raising year for riskier corporate credit.
On the economic and financial policy side, Robin Brooks and Jonathan Fortun, economists at the Institute of International Finance, look at the responses to coronavirus from the US, the eurozone and Japan. Whatever the former’s failings in regards to the health crisis, the economists argue that its policy activism “looks far bolder”, and so they expect a deeper recession and slower recovery in the eurozone and Japan.
Do you struggle to get your head round G-SIB, D-SIB, CCyB and HQLA? Do you want to know how the alphabet soup of bank regulation is going to be used, and should be used, to cope with the Covid-19 crisis? Four experts at the Bank for International Settlements have produced a handy five page guide. Their advice: eat into the buffers, but don't scoff them all in one go.
As for how to deal with a different sector, at VoxEU academics Bary Pradelski and Miquel Oliu-Barton put forward a proposal for how Europe’s tourism industry — critical for parts of Southern Europe — could reopen for the summer season. They say that areas where the virus has been brought under control in different member states, known as “green zones”, should be bridged together to allow for safe travel.
Now onto working life. In this podcast by Harvard Business Review, the former US surgeon general Vivek Murthy discusses loneliness in the workplace, including in light of the present situation where many people are working remotely. He talks about the role of company culture and also the danger of overworking.
As companies may soon be deciding how much of an office presence employees should have, this point may be worth bearing in mind: “While we are blessed to have technology to allow us to participate from remote, there is something very different and quite powerful about being in person. And that doesn’t mean that no one should ever work from remote. But what it does mean is that we should recognize the trade-offs that we’re making and then seek ways to compensate for those trade-offs.”
Finally, Simon Jenkins writes in the New Statesmanabout the way the UK’s media outlets are reporting on the news, and the decline of reason when approaching the coronavirus. He calls for journalism to return to responsible scepticism.