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Apr 1, 2020

Analysis | The Cybersecurity 202: Coronavirus pandemic unleashes unprecedented number of online scams

By Joseph Marks



Pedestrian uses her phone while wearing a face mask in New York. (AP Photo/John Minchillo)
THE KEY
Coronavirus has inspired an unprecedented number of online scams targeting people and businesses – and researchers say the wave of attacks is just getting started. 
The massive volume of cybercriminal activity reflects the overwhelming scope of the pandemic, which has upended every aspect of daily life across the world — from how people seek medical information to how they work, socialize and shop for groceries. The mass uncertainty allows criminals to prey on broad swaths of the global population.
“Spammers and scam artists have never had an opportunity like this before,” said Stephanie “Snow” Carruthers, who leads a team focused on studying phishing at IBM's hacking research division.
“Covid-19 is the first event of its kind since the birth of the Internet. This global pandemic impacts so many different aspects of our lives including physical and financial safety, across geographies for an unpredictable time frame,” she said. And that’s “a perfect lure” for online criminals, she added.
Since at least Hurricane Katrina in 2005, online scammers have piggybacked off major news events to trick people into clicking links they shouldn't and downloading malicious software or sharing personal and credit card information with what they mistakenly believe are legitimate businesses. These days, phishing gangs that normally have a range of other campaigns are now focusing on coronavirus-related scams because the opportunities to profit are so great, experts say.
The figures are staggering. 
Consumer complaints in the United States related to the coronavirus have doubled in the past week to 7,800, according to the Federal Trade Commission
The explosion of scams includes robocalls, texts, and emails posing as government officials or businesses offering refunds for missed vacations or virus-testing kits. The average loss for a consumer duped by one of these scams is nearly $600, the agency reported, which adds up to nearly $5 million nationwide. 
Scammers have posed as legitimate businesses selling coronavirus treatments, charities funneling help to the infected and officials from the Centers for Disease Control and Prevention, the Small Business Administration and the World Health Organization, researchers said.
“The pandemic has led to an explosion of cybercrime, preying upon a population desperate for safety and reassurance,” concluded a report from digital security consulting group Interisle. The report was delivered yesterday to ICANN, an international body that manages many basic Internet functions.
The number of emails that used phony information about the virus to trick people into infecting their phones and computers has increased by 14,000 percent in just two weeks, according to a report from IBM’s X-Force research division.
Palo Alto Networks logged over 100,000 new potentially phony Web domains registered with words includingcovid,” “virus” and “corona” in their names, in just the past few weeks. And that doesn’t count phony sites that claim to sell protective gear such as masks and hand sanitizer.
An analysis of Google data by the firm AtlasVPN found a 350 percent spike over three months in phony websites related to the virus and designed to separate people from their money or personal information.
The Justice Department has taken notice, urging prosecutors to prioritize scammers selling phony medical equipment and snake- oil cures. The department brought its first criminal fraud case against such a scammer last week — a Southern California man who sold pills to an undercover agent that he claimed could prevent people becoming infected with the virus. He also falsely claimed that former basketball star Magic Johnson was on his board of directors.
But the vast majority of scammers are unlikely to face any consequences. And their scams probably are still proliferating, experts told me. 
Predictions about the long duration of the pandemic, expected to last at least several months, is also likely spurring phishing gangs to invest in developing more elaborate scams, such as posing as medical suppliers and conning hospitals and clinics into buying nonexistent goods from them, said Peter Cassidy, co-founder of the Anti-Phishing Working Group.
“That kind of business-to-business scam takes a lot more sophistication and patience, and this event gives them copious time to develop attacks like that,” he told me.
By contrast, during Hurricane Katrina, online scammers spent only a few weeks targeting people with phony warnings from government agencies and pleas from charities — hardly enough time to develop complex operations backed by legitimate-looking websites, Cassidy said.
The two big lessons, he said, are that cybercriminals will exploit any event they can make a buck off – and that consumers and businesses had better beware.
“It’s sad we have to be suspicious of our own impulse to act humanely and to aid public health, but that’s what they exploit," he told me. "[The virus] is just another story to [the scammers] and it’s a story that works. They’ll discard it the moment it stops working.”
You are reading The Cybersecurity 202, our must-read newsletter on cybersecurity policy news.
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PINGED, PATCHED, PWNED


Zoom CEO Eric Yuan attends the opening bell at Nasdaq as his company holds its IPO in New York. (Mark Lennihan/AP)
PINGED: Sen. Richard Blumenthal (D-Conn.) wants to know what videoconferencing company Zoom is doing about a rise in reports of hackers hijacking private meetings to share hateful language and illicit images, according to a letter to CEO Eric Yuan. The attacks, known as Zoombombing, have risen sharply as the company's software has surged in popularity during the pandemic.
The FBI also issued a bulletin about the attacks yesterday, citing several instances where cybercriminals have dropped in on virtual classrooms to share pornographic or hateful content, as my colleague Valerie Strauss reports.
Researchers have also raised numerous other security and privacy concerns about the videoconferencing service that Warner cited in his letter. For instance, the company's encryption may not be as strong as its marketing implies, Micah Lee and Yael Grauer report for the Intercept. The company also leaked the personal information of at least 1,000 users to other users who had the same personal email domain, Joseph Cox at Motherboard reported,
“The millions of Americans now unexpectedly attending school, celebrating birthdays, seeking medical help, and sharing evening drinks with friends over Zoom during the Coronavirus pandemic should not have to add privacy and cybersecurity fears to their ever-growing list of worries,” Blumenthal wrote.
Zoom Chief Marketing Officer Janine Pelosi said in a statement that the company condemns the behavior described in Blumenthal's letter. “Zoom takes its users’ privacy, security, and trust extremely seriously,” she said. “We appreciate Senator Blumenthal's engagement on these issues and look forward to discussing with his office.”

FPaid volunteers,help sort absentee ballots. (Rick Wood/Milwaukee Journal-Sentinel via AP)
PATCHED: Wisconsin, which is moving forward with its primary election next week, could be a test case for the supreme difficulties of voting during the pandemic, my colleague Amy Gardner reports.
Officials there have urged residents to vote by mail if they fear going to the polls, but advocates worry many voters will be unable to navigate the unfamiliar and complex process. Many polling places, meanwhile, will be shuttered or lack adequate staff, which could create a bevy of technical failures or security lapses.
“Wisconsin is the only one of the 11 states originally scheduled to hold contests in April that has not postponed or dramatically altered voting amid the pandemic,” Amy notes.
“We do not have the technical capacity to actually run a vote from home campaign in the state of Wisconsin, where every voter could actually get an absentee ballot, know how to vote that absentee ballot and participate in the election,” said Debra Cronmiller, executive director of the state chapter of the League of Women Voters, which is among the plaintiffs in three federal lawsuits that are seeking a variety of remedies, including postponing the elections.

The Huawei logo. (Fred Dufour/AFP/Getty Images)
PWNED: The U.S. government should expect retaliation from Beijing if it goes through with a proposal to further restrict the Chinese telecom Huawei's access to U.S. suppliers, the chairman of the company said.
“I think the Chinese government will not just stand by, watching Huawei be slaughtered,” Huawei Chairman Eric Xu said Tuesday, as reported by Dan Strumpf of the Wall Street Journal. “I believe the Chinese government may also take some countermeasures.”
The White House is mulling trying to weaken the Chinese tech giant by forcing its main chip suppliers to seek U.S.  approval before selling Huawei any technology made with equipment sourced from the United States.
The United States has already blacklisted Huawei from buying from U.S. companies directly and barred the company from building its next-generation 5G wireless networks over spying fears. Officials have also spent more than a year trying to convince foreign powers that they should ban Huawei from their emerging 5G networks but with limited success. Huawei has steadfastly denied aiding Beijing spying .

PRIVATE KEY


A Portland, Ore., Marriott. (Rick Bowmer/AP)
Hackers may have accessed the names, phone numbers, addresses and other personal information of approximately 5.2 million Marriott guests in a data breach, the company revealed yesterday, Dee-Ann Durbin at the Associated Press reports. It's the second major data breach to hit the hotel chain in less than two years. 
Marriott does not believe that the breach, which took place between January and February, involved guests’ credit card information, passport numbers or driver's licenses. The company says it disabled the accounts hackers used to access the information and is working with authorities.
Government investigators suspect an earlier breach at the hotel chain that affected up to 500 million guests may have been part of a Chinese espionage effort to gather massive troves of data about U.S. citizens, but the government never formally blamed China for the hack.
— More cybersecurity news from the private sector:

As brick and mortars close due to the novel coronavirus, thieves have increasingly targeted digital checkout.
Wired

Houseparty was swift to deny the reports and even go so far as to claim — without evidence — it was investigating indications that the “breach” was a “paid commercial smear to harm Houseparty,” offering a $1 million reward to whoever could prove its theory.
TechCrunch

PUBLIC KEY

Cybersecurity news from the public sector:

The inspector general issued a memorandum alerting officials of widespread problems in FISA applications.
Devlin Barrett and Ellen Nakashima

Virtual efforts by advocacy groups, states and the Census Bureau aim to encourage participation in the 2020 census by the millions of Americans who are typically hard to count.
Wall Street Journal

Speaker Nancy Pelosi (D-Calif.) and more than 50 state Democratic officials advocated strongly on Tuesday for Congress to give states more funding to support mail-in and absentee voting efforts as part of the next c
The Hill

CHAT ROOM

British Prime Minister Boris Johnson evidently didn't get the memo about Zoom. He tweeted out an image of a cabinet meeting hosted on the platform that included his meeting number. Journalist Kevin Collier points out the security risks:
I don't want to be the one to try it, but does anyone know what happens if you try to brute force a password-protected Zoom meeting?
— Kevin Collier (@kevincollier) March 31, 2020

ZERO DAYBOOK

  • CyberHub USA is hosting a free virual summit: Security During Social Distancing on Thursday. You can register here.

Market Insider | Biggest Moves Premarket: Stocks making the biggest moves in the premarket: Verizon, Xerox, Home Depot, Macy's & more

Peter Schacknow



Take a look at some of the biggest movers in the premarket:

Verizon (VZ) – Goldman Sachs added Verizon to its "Conviction Buy" list, saying it offers investors the most attractive combination of total return and risk, thanks to the stability of its wireless business.
Xerox (XRX) – Xerox dropped its $35 billion hostile bid for HP Inc. (HPQ), saying it was prioritizing its response to the outbreak over all other considerations. Xerox had planned to put up its own slate of directors for election to HP's board but has now dropped that effort as well.
Home Depot (HD) – The home improvement retailer will institute new safety measures in response to the outbreak, including earlier store closures and limiting the number of customers allowed into stores at one time. The company has also increased paid time off for hourly workers.
British American Tobacco (BTI) – The cigarette maker's US biotech unit – Kentucky BioProcessing – is developing a COVID-19 vaccine derived from tobacco leaves that is currently undergoing pre-clinical testing. The unit said it could produce between 1 million and 3 million doses per week starting in June.
Royal Bank of Scotland (RBS), HSBC (HSBC), Barclays (BCS) – These and other big U.K. banks canceled their dividends to shore up their balance sheets amid an expected increase in bad loans due to the virus outbreak.
Becton Dickinson (BDX) – The medical products maker and privately held diagnostics company BioMedomics will launch a test that can determine both current and past exposure to the coronavirus within minutes. Becton Dickinson said the tests will be distributed this month.
Macy's (M) – The retailer's stock is being removed from the S&P 500 index and will be placed in the S&P SmallCap 600 as of April 6. Macy's has a market cap of about $1.5 billion, the smallest in the S&P 500. Carrier Global, which will become a publicly traded company as of Friday following its spin-off from United Technologies (UTX), will replace Macy's in the S&P 500.
Caterpillar (CAT) – Caterpillar will withhold annual salary increases for executives, managers, and salaried employees, in an effort to hold down expenses amid the coronavirus outbreak. The heavy equipment maker will also not pay out bonuses to employees next year.
Quest Diagnostics (DGX) – Quest has pulled its previous financial guidance for 2020, as it tries to determine the impact of the coronavirus on its results. The medical lab operator said that even with a surge of COVID-19 testing, overall testing volume dropped more than 40% during the last two weeks of March.
Sysco Corp. (SYY) – Sysco is cutting out fresh food sales for its customers and focusing on frozen products, according to a report in the New York Post. The food distributor is also said to be cutting out Saturday deliveries, product returns, and guaranteed delivery times.
Papa John's Pizza (PZZA) – The restaurant chain's stock was upgraded to "buy" from "neutral" at MKM Partners, which said the pizza segment of the restaurant industry appears better positioned to deal with the current environment, given their delivery and digital infrastructure.

World News: What you need to know about the coronavirus right now

Reuters Editorial


(Reuters) - Here’s what you need to know about the coronavirus right now:
FILE PHOTO: People wearing protective face masks stand by cashes during the coronavirus disease (COVID-19) outbreak in Vienna, Austria April 1, 2020. REUTERS/Leonhard Foeger/File Photo

Europeans learn to love the mask
The ambivalence of some Western countries towards masks is being challenged by the coronavirus pandemic.
Until only a few weeks ago, the hygiene masks so prevalent on Asian streets could draw hostility towards their wearers in Europe. That is all changing, with more and more Europeans donning masks voluntarily and Austria due to require shoppers to wear basic face masks in supermarkets. One German city, Jena, is following suit and other countries such as the Czech Republic and Slovakia have similar stipulations.
In the United States, where the White House once discouraged Americans from wearing masks if they were not sick, Donald Trump has also started encouraging the practice - but said people should use scarves so as not to divert supplies from healthcare professionals.
The jury remains out on the protective benefits of masks: while the World Health Organization continues to stress they are of little value in protecting wearers in everyday situations, some experts advise that they can at least help prevent the wearer from infecting others.
(For an interactive graphic tracking the global spread, open tmsnrt.rs/3aIRuz7 in an external browser.)
Painful times ahead
In possibly his bleakest news conference yet, Trump warned Americans on Tuesday of a “painful” two weeks ahead in fighting the coronavirus, with a mounting U.S. death toll that could stretch into the hundreds of thousands even with strict social distancing measures.
The warning was accompanied by a sobering set of charts that showed potential for an enormous jump in deaths to a range of 100,000 to 240,000 people from the virus in the coming months - even assuming the current mitigation efforts are followed. Another chart showed as many as 2.2 million people were projected to die without such measures - the number that prompted Trump to ditch plans to get the U.S. economy moving again by Easter.
New cases remain stable in Italy
Despite a global spike in new reported cases, Italy remained stable at around 4,050 as of Tuesday, roughly in line with the day before, making it five days without a significant increase.
The country, which has seen the most deaths from the coronavirus, has extended its nationwide lockdown at least until the Easter season in April. On Tuesday, health officials there warned it was too soon to consider lifting the lockdown, saying a deceleration in new cases should not raise hopes that the crisis was near an end.
Goats invade deserted Welsh resort
A herd of Kashmir goats has invaded a Welsh seaside resort after the coronavirus lockdown left the streets deserted.
The animals, who normally roam free on a nearby headland jutting out into the Irish Sea, have instead wandered into Llandudno where they have spent the past three days feasting on garden hedges and flowers.
Town councilor Carol Marubbi said the goats don’t normally come into town unless the weather is bad. This time though, she said they probably realised something unusual was going on because there were so few people around.
“I think they’re probably feeling a bit lonely and they have come down to have a look around,” she told Reuters by telephone.
Compiled by Karishma Singh and Mark John; editing by Philippa Fletcher

US Politics: Trump Confronts a New Reality Before an Expected Wave of Disease and Death

By Peter Baker


News Analysis
Under the best-case scenario presented on Tuesday, more Americans will die from the coronavirus in the weeks and months to come than died in the Korean and Vietnam Wars combined.
Credit...Erin Schaff/The New York Times
Peter Baker
WASHINGTON — Five weeks ago, when there were 60 confirmed cases of the coronavirus in the United States, President Trump expressed little alarm. “This is a flu,” he said. “This is like a flu.” He was still likening it to an ordinary flu as late as Friday.
By Tuesday, however, with more than 187,000 recorded cases in the United States and more Americans having been killed by the virus than by the Sept. 11, 2001, attacks, the president’s assessment had rather drastically changed. “It’s not the flu,” he said. “It’s vicious.”
The grim-faced president who appeared in the White House briefing room for more than two hours on Tuesday evening beside charts showing death projections of hellacious proportions was coming to grips with a reality he had long refused to accept. At a minimum, the charts predicted that 100,000 to 240,000 Americans would die — and only if the nation abided by stringent social restrictions that would choke the economy and impoverish millions.
A crisis that Mr. Trump had repeatedly asserted was “under control” and hoped would “miraculously” disappear has come to consume his presidency, presenting him with a challenge that he seems only now to be seeing more clearly.
The numbers publicly outlined on Tuesday had forced him over the weekend to reverse his plan to reopen the country by Easter, but they were hardly new or surprising. Experts have been warning of a possibility like this for weeks. But more than ever before, Mr. Trump seemed to acknowledge them.
“I want every American to be prepared for the hard days that lie ahead,” the president said, the starkest such effort he has made to prepare the country for the expected wave of disease and death. “We’re going to go through a very tough two weeks.”
Afterward, he added: “We’re going to start seeing some real light at the end of the tunnel. But this is going to be a very painful — very, very painful — two weeks.”
Under the best-case scenario presented on Tuesday, Mr. Trump will see more Americans die from the coronavirus in the weeks and months to come than Presidents Harry S. Truman, Dwight D. Eisenhower, John F. Kennedy, Lyndon B. Johnson and Richard M. Nixon saw die in the Korean and Vietnam Wars combined.
The lowest estimate would claim nearly as many Americans as World War I under President Woodrow Wilson and 14 times as many Americans as Iraq and Afghanistan together under Presidents George W. Bush and Barack Obama.
That is a daunting realization for any president, one that left Mr. Trump now anticipating “the worst thing that the country has probably ever seen.”
A pandemic is not a war, of course. Mr. Trump did not choose to have a pandemic. But he will be judged on how he responded, and the reviews from many quarters have been scalding even as polls have shown rising public support. While he conceded the bleak picture more fully than before on Tuesday, he continued to rewrite the history of his handling of it.
Despite comparing it to the ordinary flu and saying for weeks that it would pass, the president insisted on Tuesday that he understood all along that it could be a killer of historic proportions. “I thought it could be,” he said. “I knew everything. I knew it could be horrible, and I knew it could be maybe good.”
Mr. Trump said he played down the seriousness of the threat because he chose to be positive. “I want to give people hope,” he said. “You know, I’m a cheerleader for the country.”
He said his friends in business were advising him not to react aggressively to the virus, presumably out of concern for what it could mean for the economy, which now faces certain recession.
“I’ve had many friends, businesspeople, people with great actually common sense — they said, ‘Why don’t we ride it out?’” Mr. Trump said without identifying them. “A lot of people have said, a lot of people have thought about it, ride it out, don’t do anything, just ride it out and think of it as the flu. But it’s not the flu. It’s vicious.”
The president said that whatever his critics say, he himself had not been riding it out, pointing again, as he often does, to his decision at the end of January to limit travel from China, where the first major outbreak occurred, a move that came as airlines were already cutting back flights on their own. Experts like Dr. Anthony S. Fauci, the director of the National Institute of Allergy and Infectious Diseases, have credited that decision with slowing the spread of the virus to the United States.
But Mr. Trump cites it as if it were the only action that was necessary when specialists said the benefit of the travel restrictions was limited because the United States did not use the time it bought to ramp up testing fast enough.
The president did not explain on Tuesday why testing was so slow, nor did he explain why he waited to recommend canceling large events, closing businesses and schools and limiting group gatherings until after governors began ordering it themselves. Nor did he explain why he publicly declared that the country could reopen as early as Easter, only to reverse himself days later, if he understood all along how bad the situation could get.
At the White House briefing on Tuesday, Dr. Fauci was asked whether the death toll could have been limited below the minimum 100,000 now forecast if social distancing guidelines had been put in place earlier. He said it depended on whether the virus had already arrived in the United States and spread further than was known early on.
“If there was virus there that we didn’t know about, then the answer to your question is probably yes,” he said. “Now, the only trouble with that is that whenever you come out and say something like that, it always becomes almost a sound bite that gets taken out of context.” Dr. Fauci added, “If there was virtually nothing there, then there’s nothing to mitigate.”
All of which is why public health experts have said that early widespread testing would have been so important. “In a perfect world, it would’ve been nice to know what was going on there,” Dr. Fauci told Jim Acosta of CNN, referring to the earliest outbreaks in Asia. “We didn’t, but I believe, Jim, that we acted very, very early in that.”
Mr. Trump asserted that had he not blocked many travelers from China, the United States would have most likely reached closer to the maximum projected death toll of up to 2.2 million. “When you look at it could have been 2.2 million people died and more if we did nothing, if we just did nothing,” he said, then he and the country “have done a great job.” In effect, he seemed to be setting up the argument that any death toll below that will be a validation of his handling of the crisis.
Whatever the eventual number will be, the pandemic of 2020 seems likely to rank with the deadliest of the past century. The worst came in 1918-20 and killed about 675,000 Americans, accounting for many of the deaths attributed to World War I. Another pandemic in 1957-58 killed about 116,000 in the United States, and one in 1968 killed about 100,000. The H1N1 virus in 2009, for which Mr. Trump has assailed Mr. Obama for his response, killed only 12,000.
Mr. Trump and his administration have stepped up efforts in recent weeks, expanding testing and seeking to work with governors to address shortages of ventilators, masks and other medical equipment. The president has dispatched medical ships and Army engineers to help, and after flirting with an early reopening, extended social distancing guidelines until the end of April.
For much of Tuesday’s marathon two-hour and 11-minute briefing, the longest single public appearance of his presidency, according to Factba.se, which monitors his activities, Mr. Trump took on a more somber manner as the scale of the fatalities seemed to sink in.
He jousted to some degree with Mr. Acosta and Yamiche Alcindor of “PBS NewsHour,” two of his favorite foils, but he was more restrained with them than usual and avoided some of the more incendiary language he often uses.
Yet he could not resist for long. By the time the briefing ended, he had lapsed back into complaints about the impeachment “hoax” and renewed attacks on critics like James B. Comey, the former F.B.I. director, and Mr. Comey’s onetime deputy, Andrew G. McCabe. “Did it divert my attention?” the president asked of the impeachment. “I think I’m getting A-pluses for the way I handled myself during a phony impeachment.”
Still, Mr. Trump, rarely a reflective person in public, mused about the human toll of the pandemic more than he had in the early weeks of the crisis because apparently it has hit his own circle. As he has in the past couple of days, he referred to an overwhelmed hospital in his childhood home of Queens and an unidentified friend he said had been hospitalized with the virus.
“When you send a friend to the hospital and you call up to find out how is he doing,” Mr. Trump said, “it happened to me where goes to the hospital, he says goodbye, sort of a tough guy, a little older, a little heavier than he’d like to be frankly and you call up the next day, how is he doing? And he’s in a coma. This is not the flu.”
  • Updated March 24, 2020
    • How does coronavirus spread?

      It seems to spread very easily from person to person, especially in homes, hospitals and other confined spaces. The pathogen can be carried on tiny respiratory droplets that fall as they are coughed or sneezed out. It may also be transmitted when we touch a contaminated surface and then touch our face.
    • What makes this outbreak so different?

      Unlike the flu, there is no known treatment or vaccine, and little is known about this particular virus so far. It seems to be more lethal than the flu, but the numbers are still uncertain. And it hits the elderly and those with underlying conditions — not just those with respiratory diseases — particularly hard.
    • What should I do if I feel sick?

      If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.
    • What if somebody in my family gets sick?

      If the family member doesn’t need hospitalization and can be cared for at home, you should help him or her with basic needs and monitor the symptoms, while also keeping as much distance as possible, according to guidelines issued by the C.D.C. If there’s space, the sick family member should stay in a separate room and use a separate bathroom. If masks are available, both the sick person and the caregiver should wear them when the caregiver enters the room. Make sure not to share any dishes or other household items and to regularly clean surfaces like counters, doorknobs, toilets and tables. Don’t forget to wash your hands frequently.
    • Should I wear a mask?

      Experts are divided on how much protection a regular surgical mask, or even a scarf, can provide for people who aren’t yet sick. The W.H.O. and C.D.C. say that unless you’re already sick, or caring for someone who is, wearing a face mask isn’t necessary. And stockpiling high-grade N95 masks will make it harder for nurses and other workers to access the resources they need. But researchers are also finding that there are more cases of asymptomatic transmission than were known early on in the pandemic. And a few experts say that masks could offer some protection in crowded places where it is not possible to stay 6 feet away from other people. Masks don’t replace hand-washing and social distancing.
    • Should I stock up on groceries?

      Plan two weeks of meals if possible. But people should not hoard food or supplies. Despite the empty shelves, the supply chain remains strong. And remember to wipe the handle of the grocery cart with a disinfecting wipe and wash your hands as soon as you get home.
    • Should I pull my money from the markets?

      That’s not a good idea. Even if you’re retired, having a balanced portfolio of stocks and bonds so that your money keeps up with inflation, or even grows, makes sense. But retirees may want to think about having enough cash set aside for a year’s worth of living expenses and big payments needed over the next five years.

DealBook: As Demand Surges, Supplying and Shipping Take on New Importance

Ellen Rosen



Short-term needs and shortages have brought “dramatic changes” to the inner workings of transporting goods by truck.
Credit...Andrew Hay/Reuters
This article is part of our continuing Fast Forward series, which examines technological, economic, social and cultural shifts that happen as businesses evolve.
The coronavirus outbreak has changed the nation’s dialogue by more than adding “social distancing” and “flattening the curve” to the lexicon.
Just a few weeks ago, many people would have been hard-pressed to talk about the nation’s supply chain. But with shortages of protective gear for medical workers and basics like toilet paper and hand sanitizer, the inner workings of transporting goods from manufacturers to consumers, medical professionals and other businesses suddenly has taken on new importance.
“Shippers are facing huge challenges to ensure that they have the tools and have capacity,” said Lily Shen, president and chief executive of Transfix, an online marketplace that connects companies with trucking services. And the truckers, she said, had enormous pressure as well because “they can’t work from home and are constantly on the road.”
While pricing agreements remain in place for planned production and delivery, the sudden rush of short-term needs has caused “dramatic changes,” said Anshu Prasad, co-founder and chief executive of New York-based Leaf Logistics, which seeks to create forward-looking pricing agreements for shipping by truck. But right now, “It’s a pretty intense time in our business,” he said.
Not surprisingly, prices are increasing to meet sudden demand, Ms. Shen said, since a national emergency was declared March 13. She said that because the U.S. shipping market was fragmented, with more than 18,000 combinations of routes, it was difficult to quantify across-the-board increases.
Apart from a limited supply of critical medical products like masks, gowns and ventilators, the lack of consumer products is vexing as well. According to Mr. Prasad, items like toilet paper have only a low margin per unit so retailers usually inventory a few weeks of typical demand. “When demand spikes unpredictably, it takes weeks for manufacturers to crank up production at multiples of the volumes they’re used to producing, and for retailers, transporters, etc., to deal with getting those products to the shelves and into homes.”
But there are additional problems, he said. Some manufacturing plants and warehouses are understaffed, so the truckers that went expecting a quick turnaround for loading “could wait as much as 15 hours for their cargo.” Pennsylvania briefly decided to close all of its rest stops in a move intended to protect travelers, but the closures also impeded long-haul shipping without roadside facilities, so some were later reopened. And there are driver shortages, compounded by the aging population of truck drivers, whom some deem to be more at risk to die from the virus than those who are younger.
Another aspect, Ms. Shen said, was that the impact of the health and safety of workers nationwide also was now a key factor. There is the looming possibility of factory closures and driver shortages, in addition to thinner ranks at the distribution centers.
Even when there are pricing agreements in place, a few isolated truckers try to capitalize on the volatile shipping market. “Last month, a carrier came and loaded the freight. But he then tried to extract a ransom,” saying that the agreed-to rate was unfair. Rather than negotiate, Mr. Prasad said, the manufacturer paid the additional amount but said it would never use that carrier again. While the contracts do provide for arbitration to resolve disputes, in this instance, Mr. Prasad said, the manufacturer opted to continue with the shipment rather than cause any delays.
Transfix and Leaf in the short term are working to track shipments to help carriers and shippers. Ms. Shen said that her company was trying to alleviate the “uncertainty of where products are.” In the long term, Ms. Shen and Mr. Prasad are trying to increase transparency in the market and digitize relationships that are often still conducted by phone and fax.
Even before the pandemic, the supply chain presented challenges for manufacturing and e-commerce entrepreneurs, said Laurie Yoler, a general partner with Playground Global, a Bay Area venture capital firm that has invested in Leaf. “The shipping of freight has been fragile in this country,” she said. “There’s a lot of room to improve reliability and stability.”
Both companies plan on pursuing growth even in the face of an uncertain market.
Ms. Shen joined Transfix two years ago as chief operating officer. She was promoted to president last year and, in March she became chief executive. It was trial by fire; on her third day as chief executive, “the entire company moved to working remotely,” a transition she described as “seamless.” That was fortunate because the shipping sector was anything but.
When the crisis subsides, she plans on focusing on increasing automation in the market. Longer-term demand for shipping is, she said, “still there.”
Leaf has a different approach in its platform that provides forward-looking pricing agreements so manufacturers and other shippers are not caught unaware in the costs of shipping. Mr. Prasad co-founded his company in 2017, after many years in the logistics sector, to imbue predictability into prices and terms and, in addition, to reduce the number of hours that trucks make return trips empty, after unloading cargo. While he said that the safety of his team was paramount, he was looking ahead to growing his business, including a new platform in which manufacturers or other shippers could trade their contracts as their needs changed.
No matter how immersed in logistics, both entrepreneurs have faced some personal surprises in the current climate. For Ms. Shen, it was the empty shelves at her local store when she finally had time to shop.
And expertise was no match for the challenges of pandemic-imposed home-schooling. Mr. Prasad has a teenager at home who understandably has work to do, and who, like many high school students, may not have done enough planning.
With store shelves reorganized to display only essentials, supplies are in short supply. As a result, Mr. Prasad said, “we just can’t get our hands on that hot glue gun needed to finish a fashion design project.”
  • Updated March 24, 2020
    • How does coronavirus spread?

      It seems to spread very easily from person to person, especially in homes, hospitals and other confined spaces. The pathogen can be carried on tiny respiratory droplets that fall as they are coughed or sneezed out. It may also be transmitted when we touch a contaminated surface and then touch our face.
    • What makes this outbreak so different?

      Unlike the flu, there is no known treatment or vaccine, and little is known about this particular virus so far. It seems to be more lethal than the flu, but the numbers are still uncertain. And it hits the elderly and those with underlying conditions — not just those with respiratory diseases — particularly hard.
    • What should I do if I feel sick?

      If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.
    • What if somebody in my family gets sick?

      If the family member doesn’t need hospitalization and can be cared for at home, you should help him or her with basic needs and monitor the symptoms, while also keeping as much distance as possible, according to guidelines issued by the C.D.C. If there’s space, the sick family member should stay in a separate room and use a separate bathroom. If masks are available, both the sick person and the caregiver should wear them when the caregiver enters the room. Make sure not to share any dishes or other household items and to regularly clean surfaces like counters, doorknobs, toilets and tables. Don’t forget to wash your hands frequently.
    • Should I wear a mask?

      Experts are divided on how much protection a regular surgical mask, or even a scarf, can provide for people who aren’t yet sick. The W.H.O. and C.D.C. say that unless you’re already sick, or caring for someone who is, wearing a face mask isn’t necessary. And stockpiling high-grade N95 masks will make it harder for nurses and other workers to access the resources they need. But researchers are also finding that there are more cases of asymptomatic transmission than were known early on in the pandemic. And a few experts say that masks could offer some protection in crowded places where it is not possible to stay 6 feet away from other people. Masks don’t replace hand-washing and social distancing.
    • Should I stock up on groceries?

      Plan two weeks of meals if possible. But people should not hoard food or supplies. Despite the empty shelves, the supply chain remains strong. And remember to wipe the handle of the grocery cart with a disinfecting wipe and wash your hands as soon as you get home.
    • Should I pull my money from the markets?

      That’s not a good idea. Even if you’re retired, having a balanced portfolio of stocks and bonds so that your money keeps up with inflation, or even grows, makes sense. But retirees may want to think about having enough cash set aside for a year’s worth of living expenses and big payments needed over the next five years.

UK Business Live: Markets slide as UK banks cancel dividends and factories slump - business live

Sarah Butler



Sarah Butler
M&S is offering retail staff who carry on working during coronavirus outbreak a 15% bonus.
It says that taking furlough is voluntary, so those with caring commitments or who are feeling more vulnerable are able to stay at home. Any staff member who is furloughed will do so on full pay.
Store staff also being offered personal plastic face shields which they say are better than masks as they can be easily cleaned and don’t need to be adjusted (which can lead to face touching.

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Economists are alarmed by today’s UK manufacturing PMI report. Here’s some reaction:

Jeremy Thomson Cook, Chief Economist at Equals:

“The UK manufacturing sector has essentially come to a standstill. The shuttering of businesses and the complete dissolution of supply chains means that the sector that accounts for around 1/7th of the UK economy is effectively closed for business. While new orders, as well as delivery times, can reverse quickly as businesses rebuild inventories, the worst decline in employment since July 2009 shows that a recovery will not be quite as instantaneous.”
“There is optimism amongst businesses that output will be higher in a year’s time, which the nation will certainly be hoping is the case.”

Seamus Nevin, Chief Economist at Make UK

“Today may be April Fool’s Day but this result is no joke. A PMI score of 47.8 amidst the ongoing Covid19 outbreak is a sign of just how hard manufacturers have been hit.
“Many firms have had to shut and lots of those that remain open have seen orders or output suffer. Others have switched to making products that are vital to the national attempt to stop the spread of the virus; a testament to why backing manufacturing is so important.
“At the start of this year manufacturing companies reported unprecedented optimism about investment and trade but that had all been swept away by current events. With estimates suggesting up to a fifth of smaller firms could go out of business in the next few months Coronavirus has highlighted the need to maintain and develop our domestic manufacturing base. The Chancellor has rightly intervened to help but even still costs are going up. A 6.2% increase in the national living wage came into effect this morning. With expectations of further restrictions and economic disruption to come Business optimism is that a record low and may continue to worsen in the months ahead”

Neil Birrell, Chief Investment Officer at Premier Miton.

“The economic data coming out of Europe this morning is not comforting, but that’s no surprise. Confidence about the future in Italy and Spain sank to levels not seen before, suggesting worse is to come.
The UK, France and Germany showed similar traits. Equity markets in Europe will be under pressure, compounded by the UK banking sector cancelling dividends.”

Frederik Ducrozet of Pictet Asset Management flags up that the headline PMI number is flattered by delivery problems:

Frederik Ducrozet (@fwred)
Forget about manufacturing PMI for a while indeed. Headline numbers are overstated due to explosion in delivery times. And when the outlook finally improves, shorter delivery times will weigh on the PMI. https://t.co/9GwKJE4JHq pic.twitter.com/2MA3ULsgNL
April 1, 2020

Details from the game CluedoC1BDR6 Details from the game Cluedo
Manufacturers of puzzles, board games and educational toys should be enjoying a surge in demand.
Sales has soared last month, as people try to enjoy home confinement as best they can (nothing passes the time like a spirited row over who biffed Dr Black in the lounge with the candlestick)
My colleague Sarah Butler reports:
Sales of boardgames and puzzles soared 240% during the lockdown as Brits turned to old favourites including Monopoly, Scrabble, Cluedo while stuck at home according to data from market research firm NPD Group.
Monopoly Classic was the best selling toy with card game Dobble at number three but Lego’s complex construction kits of cars such as a Bugatti and a Land Rover Defender were also among the top-selling toys suggesting that adults were also looking for entertainment to while away the hours.
As parents struggled to entertain kids with something at least partly educational, sales of art and craft gear nearly doubled with slime and dough kits on the shopping list while building set sales were up 59%.
UK toy sales
Photograph: NPD Group
Updated

Alarmingly, some UK companies are at risk of collapse because they cannot access the government’s emergency support measures.
My colleague Jasper Jolly explains:
Almost a fifth of small businesses are at risk of collapsing within the next month as they struggle to secure emergency cash meant to support them through the coronavirus lockdown, according to research by an accountancy network.
The chancellor, Rishi Sunak, has pledged unprecedented aid to companies to try to cushion the blow from much of the economy shutting down but businesses and politicians have raised concerns that there are gaps in the schemes.
Some 18% of small and medium-sized enterprises (SMEs) either probably or definitely will not be able to obtain additional cash from the government to survive for a four-week period, according to the Corporate Finance Network.
Its accountancy firm members estimated that almost a third of their 13,000 small-company clients from around the UK would be unable to acquire the cash needed to ride out an extended, three-month lockdown.....

Despite the government’s lockdown, some companies are still encouraging workers into the office.
And the unions aren’t happy, and are demanding much better protection for those who can’t work from home.
TUC general secretary Frances O’Grady fears that some are being exposed to unnecessary Covid-19 risk because their employers are not putting adequate safety measures in place.
The TUC is calling for:
  • Strong new rules from government on the safety measures employers should put in place
  • Every employer that expects workers to come in to work to complete a full formal risk assessment, following government guidance and with the involvement of their staff unions.
  • A new enforcement body, involving employers, unions and the Health and Safety Executive. This body would have the power to issue enforcement notices for immediate compliance and to shut down workplaces if employers fail to comply. Similar arrangements are already in place in Wales, Northern Ireland and Scotland.
  • Protection for workers who refuse to go to work during this period because they are genuinely afraid that they’re being put at avoidable Covid-19 risk

Sam Tombs of Pantheon Economics wins today’s Spotters Prize:
Samuel Tombs (@samueltombs)
Responses to Markit's manufacturing survey received after March 20, when schools were shut and the lockdown began, were unsurprisingly much weaker than those between March 12 and 20 (the dates for the flash reading), and point to a huge 7% slump in manufacturing output: pic.twitter.com/j3yjTDYVF6
April 1, 2020

March was grim for UK factories (and their counterparts around the world), but April will surely be worse.
Duncan Brock, Group Director at the Chartered Institute of Procurement & Supply, explains:
“With supply chains crumbling around the world, we can only expect a worsening outlook next month as increasingly necessary lockdown measures squeeze manufacturing production.
Only creative and agile thinking, new products and approaches will see the sector through the turbulence ahead.”

UK factories cut jobs at fastest rate since 2009

More bad news. UK factories are cutting jobs at the fastest rate since the great recession more than a decade ago.
Manufacturers have reported that production contracted sharply last month.
Output and new orders both fell at the fastest rate since July 2012. Factories also suffered transport delays and shortages of raw materials, due to global efforts to combat Covid-19.
Data firm Markit, which compiled the report, says bosses are their most pessimistic since their survey began 28 years ago.
The downturns in output and new orders were widespread, with contractions seen across the consumer, intermediate and investment goods sub-industries.
Manufacturers reported that disruption resulting from the COVID-19 outbreak, lower market confidence and company shutdowns had all contributed to the drops in production and new business. Business sentiment was also affected, falling to a series-record low.
With demand slumping at home, and abroad, many customers cancelled orders. And this has led to sharp job losses.
Markit says:
Employment fell for the eleventh time in the past 12 months in March, and at the fastest rate since July 2009. Where job losses were reported, these were linked to lower levels of production and new orders, in many cases due to the outbreak of COVID-19. Redundancies, workforce restructuring, natural wastage and only replacing essential positions all contributed to lower staff headcount.
This dragged Markit’s UK manufacturing PMI down to a three-month low of 47.8 (showing a contraction).
UK factory PMI
UK factory PMI Photograph: IHS Markit
Confusingly, the real picture is probably worse, as supplier delays and supply shortages boost the PMI (they normally indicate strong economic demand).
Updated

UK banks may have acted together last night, but they did so under duress.
City regulators effectively forced the banks to scrap dividends, to strengthen their finances.
As The Times puts it:
The co-ordinated action came after the Prudential Regulation Authority gave banks an 8pm deadline to agree to cancel dividend payments and share buybacks and to make a statement by 9pm. If they did not do so, the PRA warned that it could use its supervisory powers to force banks to comply.

Eurozone factories slash jobs as manufacturing output slumps

Newsflash: European factories had a torrid time in March, particularly in Italy, Greece and France.
Manufacturers have reported that output and new orders slumped last month, due to the impact of Covid-19 shutdowns, forcing a surge in job cuts.
This dragged the Eurozone manufacturing PMI (a survey of purchasing managers) down to just 44.5, from 49.2 in February.
Eurozone manufacturing PMI, March 2020
Photograph: IHS Markit
That’s shows a very sharp contraction (50=stagnation), and is the lowest reading since 2012. It’s also worse than last week’s ‘flash’ reading, showing that conditions worsened during last month.
Manufacturing output, new orders and exports all fell at the fastest rate since the spring of 2009 (when the global economy was in recession).
Markit adds that this forced many bosses to lay staff off:
Manufacturers also cut their employment levels over the month, with the net reduction in staffing numbers the sharpest recorded by the survey in over a decade. Job losses were especially acute in Austria, Germany and Ireland.
Eurozone manufacturing PMI
Photograph: Markit