Good morning. Read to the end for the strange tale of Treasury Secretary Steven Mnuchin’s Twitter feud with Axl Rose from Guns N’ Roses. Yes, really. (Was this email forwarded to you? Sign up here.)
Larry Fink says more pain is in store
The coronavirus pandemic has already cost corporate America dearly. And the BlackRock C.E.O. reportedly said on a private call recently that the worst was yet to come, Bloomberg’s Sridhar Natarajan reports.
Mr. Fink predicted more bankruptcies and higher taxes on a call with clients of a wealth advisory firm. He sees the U.S. corporate tax rate going to as high as 29 percent next year, from 21 percent now, to help pay for government rescue efforts. (He expects the individual rate to rise as well.)
• He thinks many companies will reopen with only half of their staff at the office, which could last for more than a year. And Americans may prove too afraid to take public transport or fly for a long time.
In other news about reopenings and rescues:
• President Trump has encouraged states to lift lockdown orders, but federal health and emergency management officials expressed worry that reopenings are happening too soon, Politico reports.
• Small businesses fear that their rescue loans might not be forgiven, The Times’s Alan Rappeport and Emily Flitter report. Borrowers took the money “assuming that it would be a grant, but it’s not,” said a banking lobbyist.
📞 Join us today at 11 a.m. Eastern for a DealBook Debrief call with Bret Stephens, the Times Opinion columnist. We will discuss the pandemic’s economic, geographic and political fault lines, and take your questions. R.S.V.P. here.
Today’s DealBook Briefing was written by Andrew Ross Sorkin in Connecticut and Michael J. de la Merced and Jason Karaian in London.
These unprecedented times, in one chart
When describing business conditions to investors this quarter, executives keep saying the same thing:
The use of “unprecedented” is, well, unprecedented. We’re not even halfway through the quarter, and already far more execs have used the “U-word” on earnings calls than ever before. The previous “unprecedented” spike, during the 2008 financial crisis, pales in comparison. (The data comes from a search of earnings call transcripts at companies with market caps of at least $5 billion via Sentieo.)
• The prize for the earnings call that was most without precedent goes to CME Group, the derivatives exchange operator, with a dozen mentions. “I think the entire organization really has done a fantastic job in terms of managing our expenses in this really unprecedented time and unprecedented amount of activity at the exchange,” John Pietrowicz, the company’s C.F.O., said at one point.
It’s not just corporate executives. Jay Van Bavel, a psychology professor at N.Y.U., recently spotted the “unprecedented” trend in Google searches, a reflection of the general public mood. (In Bloomberg Opinion, John Authers also offered a somewhat similar analysis to ours this morning, in an unprecedented coincidence.)
• Not that we would hold everyone to the same exacting standards as The Times, but this is the relevant entry in our “Manual of Style and Usage”:
unprecedented means for the first time. Do not modify the word with a term like very, rather or almost; either something is unprecedented or (far more likely) it is not. Use the term rarely, and only after verifying the history. Then carefully specify the aspect that qualifies.
A steep price for Sinclair’s ambitions
The Federal Communications Commission fined Sinclair Broadcasting a record $48 million yesterday. The penalty stems from Sinclair’s thwarted attempt to buy Tribune Media, a rival local TV station operator.
Sinclair bid $3.9 billion for Tribune in 2017 to create a local-TV colossus with 215 stations across the country. It would have given Sinclair, known for its conservative leanings, a way to challenge Fox News.
But the F.C.C. expressed unease about the deal in 2018, when its Trump-appointed chairman, Ajit Pai, said he had “serious concerns.” That position appeared to be a reversal from 2017, when Mr. Pai eased a cap on how many stations a broadcaster could own.
The F.C.C. fine “should serve as a cautionary tale to other licensees seeking commission approval of a transaction in the future,” Mr. Pai said in a statement.
Is it time for a universal basic income?
In 2017 and 2018, 2,000 jobless Finns were given 560 euros (about $600) a month, tax-free and with no strings attached. Finland called it the world’s first randomized nationwide experiment with a universal basic income. Yesterday, the nation delivered a full assessment of the experiment’s results.
Basic income recipients were happier but didn’t find jobs more readily than a control group of similarly unemployed workers who didn’t receive the free cash. The policy’s proponents say that this is encouraging because it dispels fears that people would work less if given the handouts. Recipients said that “they were more satisfied with their lives and experienced less mental strain, depression, sadness and loneliness,” according to the government.
• Finland decided not to expand the trial or institute a basic income and is instead weighing tweaks to its tax system to direct money to low-income citizens in a more targeted way.
The coronavirus crisis has renewed interest in the policy, which previously gained traction among those worried about automation destroying jobs. The former Democratic presidential candidate Andrew Yang, for example, proposed a $1,000-a-month “freedom dividend.” Since pandemic lockdowns put millions out of work, Congress earmarked $300 billion for one-time stimulus checks mailed directly to more than 150 million Americans.
“It was kind of avant-garde but has become mainstream,” Roope Mokke, a co-founder of the think tank Demos Helsinki and a longtime researcher of universal basic income policies, told Jason. “The pandemic has revealed the inequalities in society in a brutal way. This speaks to universal solutions. There needs to be some kind of stimulus that goes directly to people, not asset owners.”
E.U. faces ‘deepest economic recession in its history’
A grim set of economic forecasts in Europe have rattled the continent.
The European Union’s economy could shrink more than 7 percent this year, according to the European Commission’s latest assessment. That’s far worse than the 4.5 percent decline during the financial crisis in 2009.
• This risks “reigniting political divisions between a wealthier north and a poorer south, threatening to break the brittle balance between divergent nations with inextricably linked economies,” Matina Stevis-Gridneff and Jack Ewing of The Times write in their analysis.
Britain’s economy may be even worse, according to a report out today by the Bank of England. The central bank’s “illustrative scenario” expects a 14 percent fall in G.D.P. this year.
Welcome to the jungle, Steven Mnuchin
Here’s a sentence we never thought we’d write: The Treasury secretary is fighting with Axl Rose, the lead singer of Guns N’ Roses, on Twitter.
The musician derided Mr. Mnuchin with an epithet. The Treasury secretary shot back, “What have you done for the country lately? 🇺🇸” His tweet initially had the emoji of Liberia’s flag, but was deleted and resent with America’s. That got Mr. Rose going again: “My bad I didn’t get we’re hoping 2 emulate Liberia’s economic model but on the real unlike this admin I’m not responsible for 70k+ deaths n’ unlike u I don’t hold a fed gov position of responsibility 2 the American people n’ go on TV tellin them 2 travel the US during a pandemic.”
Not to be outdone, the Trump economic adviser Kevin Hassett and the acting chairman of the Council of Economic Advisers, Tomas J. Philipson, are feuding with other economists over a chart that the council posted to Twitter.
Related news: This week, Twitter announced a test of a feature that will prompt users to reconsider when they reply to a tweet with “offensive or hurtful language.”
The speed read
• Norwegian Cruise Lines raised more than $2 billion in equity and debt, which the company said would let it survive a year without any ships setting sail. (CNBC)
• John Malone’s Liberty Global agreed to merge its Virgin Media broadband provider with Telefonica’s O2 wireless carrier in a $38 billion deal. (FT)
Politics and policy
• Before becoming a U.S. senator, Kelly Loeffler received $9 million in stock and other awards in a lucrative parting gift from her former employer, the Intercontinental Exchange. (NYT)
• The chairs of Facebook’s new oversight council, which will decide which posts on the social network must be deleted, defended its independence. (NYT Opinion)
• Gov. Andrew Cuomo of New York appointed Eric Schmidt, the former Google C.E.O., and the Bill and Melinda Gates Foundation to “reimagine” the state’s economy and health care and school systems. (Recode)
Best of the rest
• Sorry, Google employees: You can’t expense food while you’re working from home. (CNBC)
• The boom in canned foods means a boom in cans, too. (NYT)
Thanks for reading! We’ll see you tomorrow.