The antimalaria drugs that U.S. President Donald Trump has touted to fight Covid-19 are linked to an increase of death and heart ailments.
Oxford University and AstraZeneca started recruiting subjects for advanced human studies of one of the fastest-moving experimental vaccines. Anthony Fauci, who is leading the U.S. infectious disease control effort, said he was “cautiously optimistic” about Moderna’s vaccine, boosting the stock.
Brazil had another record day of deaths and its government agreed to the terms of a financial aid package. Beijing abandoned a growth target for 2020 amid the uncertainty caused by the coronavirus, while central banks in Japan and India stepped in to help their economies. Britain posted a record budget deficit in April and retail sales slumped.
Virus Tracker: Cases top 5.1 million; deaths around 333,000
Coronavirus is a stress test many world leaders are failing
Millions face risk of virus contagion in storm-hit South Asia
Nobody’s happy about all the contact-tracing apps out now
Bankers to the ultra-rich deprived of glamor turn to Zoom
Scared and sick, U.S. meat workers crowd into reopened plants
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25,294 in U.S.Most new cases today
-14% Change in MSCI World Index of global stocks since Wuhan lockdown, Jan. 23
-1.077 Change in U.S. treasury bond yield since Wuhan lockdown, Jan. 23
-4.8% Global GDP Tracker (annualized), April
Malaria Drugs Linked to Death, Heart Risk (9:30 a.m. NY)
The antimalaria drugs touted by U.S. President Donald Trump to treat Covid-19 patients were linked to an increased risk of death and heart ailments in a study published in The Lancet medical journal. Trump said Monday that he had taken the drug for about a week.
Hydroxychloroquine and chloroquine didn’t benefit the patients either alone or in combination with an antibiotic, according to the study based on records of 15,000 people treated with the antimalarials and one of two antibiotics often paired with the drug. Treatment with any combination of the four drugs was associated with a higher risk of death than seen in 81,000 patients who didn’t receive them, the study found.
Puerto Rico Cases Surpass 3,000 (8:14 a.m. NY)
Confirmed coronavirus cases in Puerto Rico surpassed the 3,000 mark on Friday, as the Health Department said an additional 117 people had tested positive. This is the third time this month that more than 100 cases were detected in a 24-hour period.
According to government figures, the pandemic has now affected 3,030 people and 126 have died. The figures come as the commonwealth of 3.2 million people pushes ahead with plans to reopen the economy after declaring a broad lock-down on March 16. On Tuesday, malls, retail outlets and restaurants will be allowed to resume operations.
Russia Tests Covid-19 Vaccine on Researchers (8:10 a.m. NY)
A Russian government research institute said it conducted successful unofficial tests on a potential coronavirus vaccine. Laboratory staff who volunteered to receive the vaccine at the Gamaleya epidemiology institute in Moscow had no side effects and are healthy, said its director, Alexander Ginzburg, the state-run Tass news service reported.
It didn’t state how many people took part in the trial.
Fauci Optimistic About Moderna Vaccine (7:36 a.m. NY)
Moderna shares rose after Anthony Fauci, the leading U.S. infectious disease official, said he was optimistic about the company’s vaccine. “Even though there were only eight individuals, we saw neutralizing antibodies at a reasonable dose of the vaccine,” Fauci said on CNN. “Although the numbers were limited, it was really quite good news because it reached and went over an important hurdle in the development of vaccines. That’s the reason why I’m cautiously optimistic about it.”
Fauci said on NPR that he expects the full results of a Phase 1 study of the biotech’s experimental Covid-19 vaccine within weeks. Earlier this week, an experimental vaccine from the company showed signs that it can create an immune-system response to fend off the new coronavirus. In 25 people who got either of the two smaller doses used in the study, researchers reported that the levels of antibodies equaled or exceeded the levels of antibodies found in patients who had recovered from the virus.
The second test, evaluating the quality of those antibodies, was only available for eight of the people because it takes longer to perform. But in all eight people, the vaccine successfully stimulated the body to create antibodies capable of neutralizing the virus in the test tube, so it can no longer infect cells.
Alibaba Growth Slows; Deere Tractor Sales Hold Up (7:15 a.m. NY)
Alibaba Group Holding Ltd. reported its slowest pace of revenue growth on record after China’s economic contraction drove down spending across its online marketplaces. The results demonstrate the world’s second largest economy has yet to fully shake off Covid-19, with consumers still hesitant about spending on big-ticket items.
Deere & Co. shares rose after the world’s biggest tractor maker navigated coronavirus upheavals better than expected in the height of the pandemic. For the three months through April, sales and earnings fell less than analysts projected as agriculture -- deemed essential in the lockdown era -- proves more resilient than many other industries.
Britain’s mobile phone app for tracking coronavirus infections has been delayed by bureaucracy and the addition of more symptoms to monitor, according to a person familiar with the matter -- who said they expected the government to abandon it in favor of the model backed by Apple Inc and Alphabet Inc.’s Google.
The app is being developed by VMware Inc. and Zuhlke Engineering Ltd at a cost of 4.7 million pounds ($5.8 million). There has been controversy about the U.K.’s decision to reject the structure backed by Apple and Google, a move that has been criticized by privacy campaigners.
The U.K. has opted for a “centralized” model, where people who test positive for coronavirus upload all their recent contacts to a database, and those people are then contacted and warned. Apple Inc. and Google released their Covid-19 exposure-notification tools on Wednesday. Some governments have criticized the “decentralized” system because it doesn’t let authorities store data on who has the virus and track where it is spreading. Instead, it just notifies individuals if they have been exposed.
Germany Plans One-Time Child Bonus (6 a.m. NY)
German Finance Minister Olaf Scholz is planning a one-time bonus for families of 300 euros ($327) per child as part of a government stimulus program worth as much as 150 billion euros, Der Spiegel magazine reported, without identifying the source of its information. The bonus could cost the government 5 billion to 6 billion euros. Scholz is also considering vouchers to boost consumer spending.
Belgian Virus Spread Remains Under Control (5:54 p.m. HK)
A weekly update of Belgium’s infection rate showed the epidemic remains under control in the country after lock-down measures were gradually eased starting May 4. The so-called reproduction factor rose to 0.86 for the 7 days ending May 20 from about 0.8 in the previous week, below the key threshold of 1.0.
Belgium reported 276 new infections in the past 24 hours, based on 18,182 diagnostic tests. That’s up from 252 the prior day, which was based on 18,918 tests. New hospital admissions fell to 56 from 71 the day before, as the total number of beds occupied declined to 1,415.
U.K. Will Fine Arrivals Who Break Quarantine (5:29 p.m. HK)
Passengers arriving in the U.K. will be forced into quarantine for two weeks and face fines of 1,000 pounds ($1,217) if they break the rules. The plan is designed to stop travelers re-introducing coronavirus to the country after becoming infected overseas and is likely to have a major impact on the aviation industry’s attempts to recover after the lockdown.
Home Secretary Priti Patel will set out the details of the new quarantine system at the daily government press conference at 5 p.m. on Friday. Her Cabinet colleague, Brandon Lewis, said the measures will be reviewed every three weeks, along with the rest of the government’s coronavirus response.
Putin Presses Plan to Extend Rule (4:20 p.m. HK)
Thrown off course by the coronavirus pandemic, Vladimir Putin is moving to regain the political initiative for his plan to remain as Russia’s president potentially until 2036. Putin may announce a snap ballot within weeks on proposed changes to the constitution that allow him to sidestep term limits, said four people familiar with Kremlin discussions on the matter. Electronic voting will be used as well as polling stations to boost turnout and the result, the people said.
Putin delayed the referendum on constitutional amendments originally scheduled for April 22 when the coronavirus crisis erupted in the spring. What had seemed a formality then now looks a harder sell. Like millions around the world, Russians were thrust into hardship and uncertainty about their jobs after Putin in late March ordered a nationwide lockdown that sparked a 33% plunge in economic activity.
While there are signs the Covid-19 epidemic is starting to wane in Russia, which has the world’s second-highest number of infections, the turmoil unleashed by the virus and an unprecedented slump in oil prices continues to rip through the economy. Confirmed cases increased by 8,894 to 326,448 on Friday, while the number of deaths in the past day rose by 150, the most so far, to 3,249.
Oxford, AstraZeneca Begin Advanced Trials (3:47 p.m. HK)
The University of Oxford and AstraZeneca Plc have begun recruiting more than 10,000 subjects for advanced human studies of one of the world’s fastest-moving experimental Covid-19 vaccines.
A smaller part of the trial will expand the age range of testing to children from 5 to 12 years old and adults 56 and older, according to a statement. The other, larger stage will test the vaccine’s effectiveness in volunteers 18 and older.
AstraZeneca received a boost in its efforts to get the immunization tested and ready for use when the U.S. pledged as much as $1.2 billion toward development on Thursday.
Nissan May Cut More Than 20,000 Jobs (2:15 p.m. HK)
Nissan Motor Co. is planning to cut more than 20,000 jobs across the world, as the Japanese carmaker grapples with factories and showrooms that have been shut down due to the coronavirus pandemic, Kyodo News reported.
The outbreak is forcing Nissan to cut back on production, and restructuring measures in Japan are also being considered, the news agency reported. The job reductions are part of a mid-term reorganization plan that Nissan is due to unveil on May 28, Kyodo said. The reduction would be much larger than the 12,500 staff cuts announced in mid-2019.
Britain posted a record budget deficit in April as the government unleashed an unprecedented package to prevent the collapse of the virus-stricken economy. The shortfall stood at 62.1 billion pounds ($76 billion), the Office for National Statistics said. The figure is equal to total borrowing in the whole of the previous fiscal year. In a separate report, the ONS said retail sales fell the most since at least 1988.
The figures reflect the cost of interventions announced by Chancellor Rishi Sunak, including paying the wages of 8 million furloughed workers, a surge in welfare claims and the hit to tax revenue from a shrinking economy. Meanwhile, the U.K. also announced that banks should extend mortgage holidays for struggling homeowners by a further three months, as part of its measures to shore up households.
German Infection Rate Holds Below Key Level (1:20 p.m.)
Germany’s coronavirus infection rate held below the key threshold of 1.0, while the number of new cases and deaths dipped for a second day. There were 548 new cases in the 24 hours through Friday morning, bringing the total to 179,021, according to data from Johns Hopkins University. Fatalities increased by 59, to 8,203.
The reproduction factor of the virus, known as R-naught, was 0.89 on Thursday, compared with 0.88 the previous day, according to the Robert Koch Institute. The figure reflects the number of additional cases generated by one infected person, and authorities consider it important to keep the number below 1.0 to prevent exponential growth that could overwhelm the health system.
Thailand Extends State of Emergency (1:15 p.m. HK)
Thailand will extend its nationwide state of emergency for another month through June, according to Taweesilp Witsanuyotin, a spokesman for the Covid-19 center. That will help facilitate the country’s reopening in stages three, which begins June 1, and four, Taweesilp said. Once stage four is completed, the government may consider reopening its borders.
India Unexpectedly Cuts Interest Rates (12:26 p.m. HK)
India’s central bank cut interest rates in an unscheduled announcement on Friday, ramping up support for an economy it expects will contract for the first time in more than four decades.
The benchmark repurchase rate was lowered by 40 basis points to 4%, Governor Shaktikanta Das said in a live streamed address. The reverse repurchase rate was reduced to 3.35% from 3.75%. The monetary policy committee met ahead of its scheduled meeting in early June, Das said.
Australian State Relaxes Curbs on Pubs, Cafes (11:36 a.m. HK)
Australia’s most-populous state will allow pubs, clubs, cafes and restaurants to have as many as 50 customers from June 1, as authorities try to breathe life back into the economy.
New South Wales Premier Gladys Berejiklian said that strict social distancing guidelines, including ensuring premises allow for 4 square meters per person, would be in force.
Coronavirus Reshapes New Zealand’s Politics (10:42 a.m. HK)
New Zealand’s main opposition party elected a new leader after a slump in opinion polls spooked its members of parliament four months out from a general election. National Party MPs backed agriculture spokesman Todd Muller to replace Simon Bridges in a caucus vote Friday in Wellington.
Muller challenged for the leadership after two polls this week showed support for National plummeting to as low as 29%, from 46% just three months ago.
Muller now faces the daunting task of trying to dethrone Prime Minister Jacinda Ardern, whose crisis management during the coronavirus pandemic has seen her popularity soar. Support for Ardern’s Labour Party surged to 59% in a 1News/Colmar Brunton poll published yesterday, 30 percentage points ahead of National. The election will be held on Sept. 19.
China Abandons Growth Target (8:29 a.m. HK)
The Chinese government abandoned its decades-long practice of setting an annual target for economic growth amid the storm of uncertainty unleashed by the coronavirus pandemic, and said it would continue to increase stimulus.
“We have not set a specific target for economic growth this year,” the report said. “This is because our country will face some factors that are difficult to predict in its development due to the great uncertainty regarding the Covid-19 pandemic and the world economic and trade environment.”
Premier Li Keqiang said the government is setting a target for urban job creation of over 9 million jobs. That’s lower than the 2019 target of around 11 million, and a target for the urban surveyed unemployment rate of around 6%, higher than 2019’s goal, according to the document.
IBM Joins Tech Giants in Cutting Jobs (7:23 a.m. HK)
International Business Machines Corp. cut an unspecified number of jobs across the U.S., eliminating employees in at least five states. The company declined to comment on the total number, but the workforce reductions appear far-reaching.
Based on a review of IBM internal communications on the Slack corporate messaging service, the number of affected employees is likely to be in the thousands, said a North Carolina-based worker who lost his job along with his entire team of 12.
It’s unclear how many of IBM’s cuts are caused by the pandemic; the company has suffered years of falling revenue. But the tech industry has suffered widespread job losses after the coronavirus pandemic triggered a severe recession. Airbnb Inc. and Uber Technologies Inc. have cut about a quarter of their workforces. Earlier on Thursday, Hewlett Packard Enterprise Co. said it will eliminate some employees to save money, while Dell Technologies Inc. suspended several staff benefits.
— With assistance by Mark Schoifet, John Martens, Adveith Nair, and Jonathan Levin
Argentina’s largest creditors sent Alberto Fernandez’s government new counteroffers in an effort to reach a $65 billion restructuring deal in the coming week, according to people familiar with the matter.
A bondholder group that includes BlackRock Inc., Ashmore Group Plc and Fidelity Investments submitted one of the proposals late Friday, while two other groups — the Argentina Creditor Committee and the Exchange Bondholder Group — presented a joint plan, said the people, who could not be named because the talks are private.
Economy Minister Martin Guzman had signaled potential progress earlier in the afternoon on a call with the Council on Foreign Relations.
“We know creditors have been working hard on this in getting together to make an alternative proposal,” he said. “We want to listen, we want to see what the alternative ideas we can take in order to reach a deal that works for everyone.”
READ MORE: BlackRock-Argentina Feud Gets Heated and Sets Back Debt Talks
It remains to be seen how the Argentine government will react to the latest creditor suggestions. The new counteroffers call for better terms for bondholders than the government’s initial proposal, according to the people. There’s little time to waste: The country could officially fall into default on May 22, when about $500 million of interest payments come due.
A spokesman for the Economy Ministry declined to comment.
The U.K. economy shrank almost 6% in March as the nation went into lockdown, plunging into what may be its deepest recession in more than three centuries.
The sharp decline is only a small part of the damage of the restrictions to control the coronavirus, which were in place for all of April and look set to endure in some form for months to come. The measures heaped misery on an already tepid economy, with the Bank of England forecasting a staggering 25% contraction this quarter.
That highlights the monumental task the government faces in restarting the economy as it begins to take small steps toward easing the lockdown. It’s extended an aid program for workers, while the central bank will probably pump even more stimulus into the economy to keep the motor running.
The U.K. lockdown was imposed on March 23, meaning only about a week of the first quarter was affected. That was still enough for a 2% contraction in the three months, the worst since the financial crisis.
The damage in March was widespread, but the huge services sector took the brunt. Travel and tourism plunged 50%, while accommodation fell by 46% and air transport by 44%. Manufacturing and construction also contracted.
The economy has now failed to grow for three of the previous four quarters, after months of political and Brexit uncertainty meant the U.K. entered the latest crisis on a weak footing.
U.K. government bonds advanced on Wednesday, sending the yield on U.K. 2-year debt to a record low. The 10-year yield also declined.
In a sign of the scale of the latest challenge, Chancellor of the Exchequer Rishi Sunak on Tuesday extended wage subsidies for furloughed workers until the end of October at a cost of billions of pounds to the public purse.
The Telegraph newspaper reported a leaked Treasury assessment about the cost of the crisis to the government. The “base case” saw the deficit, forecast at 55 billion pounds ($68 billion) before the pandemic, rise to 337 billion pounds. The “worst case” scenario saw it hit 516 billion pounds.
What Our Economists Say:
“With the risks to the outlook firmly to the downside, we still expect the Bank of England to ease again next month.”
— Dan Hanson, U.K. economist. For the full REACT, click here
Meanwhile, the BOE, which has cut interest rates to 0.1% and restarted bond purchases, has indicated more easing could come as soon as next month. It expects a strong rebound in 2021 after a 14% slump this year but many analysts regard such a scenario as overly optimistic.
“It’s now very hard to imagine a rapid ‘V-shape’ recovery, and we don’t expect a return to pre-virus levels of activity until 2022 at the earliest,” said James Smith, an economist at ING.
Consumer spending, the engine of the economy, fell 1.7% in the first quarter, the largest drop since the financial crisis, and it’s set to fall further.
Separate reports Wednesday showed spending has collapsed further in recent weeks. The British Retail Consortium said its measure of sales fell 19.1% in April from a year earlier — the worst since records began in 1995 — while Barclaycard’s own gauge of transactions fell 36.5%.
U.K. High Frequency Data Dashboard
U.K. INSIGHT: Tracking the Recession – High Frequency Dashboard
After fighting to get the government’s case against him thrown out, former Trump aide Michael Flynn got his wish Thursday when U.S. prosecutors asked for the dismissal themselves. Now all he needs is for the judge to agree.
That isn’t guaranteed.
U.S. District Judge Emmet Sullivan has a number of options. He could accept the government’s request to end its prosecution of President Donald Trump’s former national security adviser, who pleaded guilty to lying to federal officers during the Russia investigation and then sought to withdraw his plea. In fact, that’s the likeliest outcome, according to legal scholars and former prosecutors who aren’t involved in the case.
“Judges only very rarely reject a prosecution request to drop the charges,” said Robert Weisberg, a professor at Stanford Law School.
But that doesn’t mean Sullivan will sign off on the about-face with the perfunctory stroke of a pen.
“At the very least, the judge may do some inquiring about what’s really going on here” to see if “there’s anything potentially unsavory about this,” Weisberg said.
And he could do a good deal more: Hold a full-blown hearing on the Justice Department’s decision to seek a dismissal. Appoint a lawyer as a “friend of the court” to help argue legal issues. Even, in an extraordinary act, refuse the dismissal request.
Sullivan is “not the type to accept what the government tells him so quickly,” said Joel Cohen, a lawyer at Stroock & Stroock & Lavan LLP who interviewed the judge for a book.
“I think he’s going to hold a hearing,” said Cohen, a defense attorney in New York for 35 years. The purpose would be “to see if there’s any political influence or bad faith in the government looking to dismiss the case,” Cohen said. “He could ask what was the attorney general’s role in the matter and what was the president’s involvement.”
Read More: DOJ Drops Flynn Case, Sparing Trump the Risk of a Pardon
In moving to dismiss, the U.S. said an internal review found that Flynn’s false statements to agents of the Federal Bureau of Investigation weren’t “material” to the probe into whether Russia interfered in the 2016 election. “The government cannot explain, much less prove to a jury beyond a reasonable doubt, how false statements are ‘material’ to an investigation that … seems to have been undertaken only to elicit those very false statements and thereby criminalize Mr. Flynn,” U.S. Attorney Timothy Shea said in a brief.
Sullivan may have a different view.
“There is still some judicial scrutiny, and it’s in the judge’s independent discretion whether to dismiss the case,” said Harry Sandick, a former federal prosecutor. “The judge could say there’s not a basis to grant the motion.”
The Supreme Court has held that a trial judge can’t deny the government’s request to dismiss its own prosecution as long as the decision isn’t “tainted with impropriety” or motivated by considerations contrary to the public interest, according to Sandick. In its brief, the government said federal rules give prosecutors wide discretion to decide whether to dismiss pending charges.
“This is a demanding standard, but there is an argument that the president’s many public statements ‘taint with impropriety’ the decision to seek dismissal, rendering the decision contrary to manifest public interest,” Sandick said.
Read More: Barr Unleashes Justice Department Turmoil Over Stone Case
Mimi Rocah, a former federal prosecutor in Manhattan, scoffed at the government’s conclusion that Flynn’s lies weren’t material.
It doesn’t pass “the laugh test,” said Rocah, who is running as a Democrat for district attorney in Westchester County, New York. “Materiality is broadly defined, and lying about talking to the Russian government when the investigation was about coordination between the Russian government and the campaign or administration is material.”
If Sullivan, a Bill Clinton appointee, declines to dismiss the case, the U.S. would almost certainly appeal. In the meantime, the judge could continue to decide any pending defense motions. If he ruled against Flynn, who twice admitted his guilt in court, the judge would proceed to sentencing, according to Sandick. Trump may also short-circuit it all and pardon Flynn.
But first Sullivan may want to plumb the government’s reasoning in dropping the charges and see how closely it hews to Flynn’s claims of “egregious government misconduct,” including deep-state machinations by biased FBI officials, said Robert Sanders, a retired U.S. Navy judge and an associate professor of criminal justice at the University of New Haven. The judge may want to probe whether prosecutors really reversed themselves over materiality.
“Is that agreement or disagreement consistent or inconsistent with the government’s stated rationale for its own motion?” Sanders said. “If the judge feels he is being played with by the parties, particularly the government, a bigger pushback is likely.”
Read More: Prosecutors Attack Flynn’s ‘Extraordinary Reversal’ on His Guilt
The Justice Department points to new evidence it says shows that federal agents set Flynn up to lie. On Thursday, Trump called him a “great warrior.”
Stanford’s Weisberg said the FBI’s actions weren’t unusual.
“That this was really rough behavior by the FBI is perfectly plausible,” but “that applies to zillions of cases” in which agents play hardball in a way that’s “not illegally coercive,” he said. “Sure, you can complain about this kind of action by the FBI. But to suddenly single out Flynn as the most sympathetic victim of this sort of thing is ridiculous.”
The next move is Sullivan’s, and in the end he may decide he’s heard enough.
“The judge can still say: Based on the information I already have from the guilty plea and anything else that’s already in the record, I’ll just decide the sentence,” Weisberg said.
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Small businesses that struggled to get loans from a government pandemic relief program still don’t know how much they may have to repay the money after the government missed a deadline to give specific guidance.
The U.S. Small Business Administration was supposed to clarify by April 26 how loans it approved under the Paycheck Protection Program — part of the Trump administration’s multitrillion-dollar coronavirus stimulus package — can be spent and still qualify to become grants.
Companies and lenders say they need more guidance on how to calculate the amount that’s eligible for forgiveness and what documentation is required to support the claims. That could leave small firms on the hook to repay loan proceeds they thought would be a grant. As a result, some business owners are holding onto the loans and may even return them, according to interviews with small business groups, lenders and borrowers.
The loans were designed as a lifeline for small firms, many of which were shuttered due to stay-at-home orders, have no revenue coming in, and may be forced to close for good. Time is short, since the funds must be spent within eight weeks after they’re received to qualify for forgiveness. Every day of uncertainty means making decisions is more difficult, the groups and business owners said.
“As soon as they got the money, they’re calling and saying, ‘OK, how do I spend this to make sure I get this forgiven, because I don’t want to mess this up,’” said Kimberly Rayer, a partner at Starfield & Smith in Pennsylvania, who advises lenders on SBA loan programs. “Borrowers are concerned, they would like to make sure that they don’t have to pay this money back.”
The uncertainty about how loans will be forgiven is just the latest stumbling block in the SBA’s chaotic effort to funnel about $670 billion to small firms across the country to counter the devastating effects of Covid-19 on their operations. The initiative was intended to keep them afloat and keep employees on payrolls to be ready to reopen.
The program provides loans of as much as $10 million to small businesses affected by the outbreak. The law says borrowers don’t have to repay the loans if the money is spent on payroll plus mortgage interest, rent and utilities. An initial rule issued by SBA and Treasury said 75% of the proceeds must be spent on payroll and 25% on the approved expenses. The amount forgiven is reduced if owners cut jobs or wages. Any amount that’s not forgiven must be repaid at 1% interest in two years, with the first payment deferred for six months.
Business owners don’t have enough guidance about how to spend the money to ensure they’ll avoid having to repay it, said Holly Wade, director of research and policy analysis for the National Federation of Independent Business. Questions include whether expenses incurred during the eight weeks but paid later would qualify. They’d also like more flexibility about how the proceeds can be used and still qualify for forgiveness. Small business and industry groups are lobbying Congress and the Trump administration for changes.
“There’s just many questions where we don’t have an answer, and small business owners are concerned,” Wade said.
Congress said in the legislation creating the program that the SBA was to issue guidance and regulations for loan forgiveness “not later than 30 days after the date of enactment of this act,” which would have been April 26. Almost a week on, the agency hasn’t said when it will issue the guidance and didn’t comment for this report.
For more: Trump’s Rural Base Fared Better Than Coastal Cities in SBA Loans
The program was designed to have banks disburse loans to small businesses that SBA would guarantee, to get money into the hands of those in need as quickly as possible. Lenders can apply to have the agency reimburse them for the portions of loans that are forgiven, starting seven weeks after money is disbursed.
Lenders also want more guidance because they make the initial assessment about loan forgiveness, said Paul Merski of the Independent Community Bankers of America. The SBA and Treasury should produce a calculator to help lenders and borrowers determine loan forgiveness and simplify the process, he said.
The rollout of the small business relief program last month had numerous problems. SBA’s lending platform was quickly overwhelmed, and guidance to borrowers and banks — which has changed dozens of times since it launched April 3 — sowed confusion and caused banks to hold back on processing applications initially.
Large firms and national chains swooped in, picking up millions of dollars in loans, leading the initial tranche of $349 billion to run out in just 13 days with many Mom-and-Pop businesses shut out. The program’s restart on April 27 with an additional $320 billion also was rocky.
James Cummings, who runs 22 Great Clips franchises across North Carolina, said he received a loan for his hair salons toward the end of April, but is holding on to it until he gets more details on how the forgiveness will work. He’s hoping that the government will allow more flexibility in how he spends it.
Cummings said he needs “be able to use this money when we reopen, or we’re literally going to have to pay it all back, every dime.”
The salon operator is among small business owners that are finding themselves caught in an additional bind: even with a loan, they can’t pay their employees as much as the workers could get from unemployment benefits, but they can’t use more of the money to cover other expenses while waiting to reopen.
Many restaurants and other small business owners also say eight weeks of federal coronavirus relief won’t be enough, especially if they’re not ready to reopen during that time. Industry groups including the National Restaurant Association are seeking a number of changes, including an extension of the period when owners can use the loan and have it forgiven.
Advocates also want more flexibility to the rule on how the proceeds can be spent, but Treasury Secretary Steven Mnuchin has defended the terms because the intent of the law was to keep workers employed.
Clara Osterhage, who owns hair salons in Ohio and other states, got her loan funds on April 26, but doesn’t know when she’ll be able to reopen and whether she can rehire workers. She said she needs more clarity about the rules and may end up having to return the money rather than having to repay with interest a two-year loan she can’t afford.
“It’s incredibly concerning,” Osterhage said. “I don’t know the rules of the game, and I have no control.”
Prime Minister Justin Trudeau said his government is banning more than 1,500 types of assault weapons after one of the deadliest mass shootings in Canada’s history.
It will now be illegal to buy, sell, import or use the military-grade guns in the country, effective immediately, Trudeau told reporters in Ottawa.
A 51-year-old man killed 22 people in a rampage in rural Nova Scotia on April 18 and 19. Thirteen of the victims were shot, while another nine died in fires. The gunman was shot and killed by police.
“Today we are closing the market for military-grade assault weapons in Canada,” Trudeau said. “These weapons were designed for one purpose and one purpose only: to kill the largest amount of people in the shortest amount of time. There is no use and no place for such weapons in Canada.”
Gun owners will have a two-year amnesty period to turn over their firearms in exchange for payment. Details of the buyback program need to be determined by Parliament, Trudeau added.
Trudeau said his government had planned to roll out the new laws in late March, a timetable that was derailed by the Covid-19 pandemic. His Liberal Party made stronger gun control part of its platform during October’s election campaign.
Recent polls suggest Canadians overwhelmingly support the policy. Nearly four in five support a ban on civilians owning assault-style weapons, according to new polling from the Angus Reid Institute.
The opposition Conservatives said they opposed the move. “Justin Trudeau is using the current pandemic and the immediate emotion of the horrific attack in Nova Scotia to push the Liberals’ ideological agenda and make major firearms policy changes. That is wrong,” Andrew Scheer, the party’s leader, said in an emailed statement.
British Prime Minister Boris Johnson, who is fighting the coronavirus, has been moved to intensive care as his symptoms have worsened. Fox News’ Greg Palkot with more.
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LONDON — Britain's government sought Wednesday to keep a grip on the country's response to the coronavirus pandemic as Prime Minister Boris Johnson started a third day in the intensive care unit of a London hospital being treated for COVID-19.
Foreign Secretary Dominic Raab chaired a meeting of the government's COVID-19 crisis committee while the number of virus-related deaths reported in the U.K. approached the levels seen in the worst-hit European nations, Italy and Spain.
UK'S JOHNSON SPENDS NIGHT IN ICU AFTER CORONAVIRUS SYMPTOMS WORSEN
The country's confirmed death toll reached 6,159 as of Tuesday, an increase of 786 from 24 hours earlier. That was the biggest daily leap to date, although the deaths reported Tuesday occurred over several days.
The virus has hit people from all walks of life — including Johnson, the first world leader known to have been diagnosed with COVID-19. The 55-year-old prime minister was admitted to St. Thomas' Hospital late Sunday with a fever and cough that persisted 10 days after he tested positive for the virus.