Archive for ‘Rail transport’

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04/05/2020

Coronavirus: billionaire Warren Buffett’s prediction for America after Berkshire Hathaway’s US$50 billion loss

  • Buffett’s Berkshire posted a record quarterly net loss of nearly US$50 billion
  • Company sells entire stakes in US airlines, Buffett says ‘world has changed’
Warren Buffett speaks during the virtual Berkshire Hathaway annual shareholders meeting. Photo: Bloomberg
Warren Buffett speaks during the virtual Berkshire Hathaway annual shareholders meeting. Photo: Bloomberg

Billionaire investor Warren Buffett said Saturday he’s confident the US economy will bounce back from its pummelling by the coronavirus pandemic because “American magic has always prevailed”.

The 89-year-old made the sanguine prediction about the world’s largest economy as his holding company Berkshire Hathaway reported first-quarter net losses of nearly US$50 billion.

Buffett also announced Saturday that his company had sold all its stakes in four major US airlines last month, as the pandemic clobbered the travel industry.

“It turns out I was wrong,” he said of his acquisitions of 10 per cent stakes in American Airlines, Delta Air Lines, Southwest Airlines and United Airlines.

Berkshire Hathaway had paid US$7 billion to US$8 billion, and “we did not take out anything like that,” he said.

Between the purchases that took place over months, and the sale, “the airlines business I think changed in a very major way” and could no longer meet Berkshire criteria for profitability, he said.

Buffett’s announcement may further hurt airlines already pushed to the brink by coronavirus lockdown measures, now looking to the US government for US$25 billion in relief funds.

Berkshire Hathaway, based in Omaha, Nebraska, called its first-quarter setback “temporary” but said it could not reliably predict when its many businesses would return to normal or when consumers would resume their former buying habits.

Warren Buffett (left) and vice-chairman Charlie Munger at the annual Berkshire shareholder shopping day in Omaha, Nebraska in 2019. Photo: Reuters
Warren Buffett (left) and vice-chairman Charlie Munger at the annual Berkshire shareholder shopping day in Omaha, Nebraska in 2019. Photo: Reuters
“We’ve faced great problems in the past, haven’t faced this exact problem – in fact we haven’t really faced anything that quite resembles this problem,” Buffett said in a lengthy speech on the country’s economic history.

“But we faced tougher problems, and the American miracles, American magic has always prevailed and it will do so again.”

“We are now a better country, as well as an incredibly more wealthy country, than we were in 1789 … We got a long ways to go but we moved in the right direction,” he said, referencing the abolition of slavery and women’s suffrage.

Warren Buffett has traded his old flip phone for Apple’s iPhone

25 Feb 2020

“Never bet against America.”

Buffett is considered one of the savviest investors anywhere. His fortune of US$72 billion is the fourth-largest in the world, according to Forbes, and in normal years, the company’s annual gathering in Omaha is a high-point of the calendar for investors, a “Woodstock for capitalists”.

But the devastating economic impact of the pandemic has hit hard at Berkshire Hathaway’s wide range of investments, and the need for social distancing forced it to hold the annual meeting online.

Buffett addressed his shareholders in a live-stream flanked only by Gregory Abel, who is in charge of Berkshire’s non-insurance operations.

His business partner for six decades, 96-year-old Charlie Munger, did not appear.

China’s first-quarter GDP shrinks for the first time since 1976 as coronavirus cripples economy
Buffett, in a statement, played down his company’s bleak-looking net figure. He said a better measure of the company’s performance was its operating earnings, which exclude investments and are less subject to sharp fluctuations.
By that measure, Berkshire Hathaway saw growth to US$5.9 billion from US$5.55 billion a year earlier.
The brutal drop in the net – to a loss of US$49.75 billion from a profit last year of US$21.7 billion – resulted primarily from the virus-related decline in value of its broad investment portfolio, which ranges from energy to transport to insurance and technology.
Chinese cryptocurrency billionaire finally sits down to eat with Warren Buffett
7 Feb 2020

The annual meeting often has an almost carnival atmosphere, as thousands of fans and investors flock to Nebraska to hear from the celebrated “Oracle of Omaha”. Buffett, famous for his relatively modest lifestyle, turns 90 on August 30.

In documents filed Saturday, Berkshire noted that until mid-March many of its companies were posting “comparative revenue and earnings increases” over the same 2019 period.

Many of its companies – including in rail transport, energy production and some manufacturing and service businesses – are deemed essential and are able to continue working amid the far-reaching confinement orders.

But their turnover slowed considerably in April, the company statement said.

Moves taken by those companies such as employee furloughs, salary cuts and reductions, and capital spending reductions are “necessary actions” and “temporary,” it said.

Source: SCMP

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09/04/2020

Coronavirus: Why India cannot afford to lift its lockdown

India man during lockdownImage copyright GETTY IMAGES
Image caption More than a billion people have been staying at home during the lockdown

Will India extend its rigorous 21-day lockdown to slow the spread of coronavirus beyond its end date next week? By all accounts, yes.

On 24 March, India shut its $2.9 trillion economy, closing its businesses and issuing strict stay-at-home orders to more than a billion people. Air, road and rail transport systems were suspended.

Now, more than two months after the first case of Covid-19 was detected in the country, more than 5,000 people have tested positive and some 150 people have died. As testing has ramped up, the true picture is emerging. The virus is beginning to spread through dense communities and new clusters of infection are being reported every day. Lifting the lockdown could easily risk triggering a fresh wave of infections.

A harsh lockdown is certain to slow down the disease. Virologists I spoke to believe India is still at an early stage of the infection. The country still doesn’t have enough data on the transmissibility of the virus or even how many people could have been infected and recovered to develop adequate herd immunity. (It is slowly beginning finger prick blood tests to look at the presence of protective antibodies.)

More than 250 of India’s 700-odd districts have reported the infection. Reports say at least seven states have a third of all infections, and want the lockdown extended. Six states have reported clusters of rapidly growing infections – from the capital Delhi in the north to Maharashtra in the west and Tamil Nadu in the south.

Economic fallout

Not surprisingly, the lockdown is already hurting the economy. Many of the early hotspots are economic growth engines and contribute heavily in revenues to the exchequer. Mumbai, India’s financial capital and Maharashtra’s main city, accounts for more than a third of overall tax collection. The densely populated city has reported more than 500 cases and 45 deaths, and numbers are steadily rising. Authorities say the infection is now spreading through the community. Mumbai has made wearing face masks mandatory.

Testing in IndiaImage copyright GETTY IMAGES
Image caption India has ramped up testing during the lockdown

Many of these hotspot clusters are also thriving manufacturing bases. The spread of infection means that they will be under lockdown for a longer period of time.

The services industry, which generates almost half of India’s GDP, is also likely to remain shut for some more time. Construction, which employs a bulk of migrant workers, will remain similarly suspended. The unemployment rate may have already climbed to more than 20% after the lockdown, according to a report by the Center for Monitoring Indian Economy.

For the moment, economists say, the government will have to prioritise farming over everything else to ensure the livelihoods of millions and secure the country’s future food supplies.

Half of India’s labour force work on farms. The lockdown happened at a time when a bumper winter crop had to be harvested and sold, and the rain-fed summer crop had to be sowed. The immediate challenge is to harvest and market the first crop, and secure the second.

Moving trucks to pick up produce and take them to markets, with adequate social distancing and hand washing will be something the government will have to move on quickly.

“The immediate challenge is to ensure that rural India is not hit,” says Rathin Ray, an economist. “Realistically, a complete lockdown cannot be continuously maintained beyond early May. We don’t have a choice but to reopen gradually after that.”

Mumbai street signImage copyright GETTY IMAGES
Image caption India has been under a lockdown from 24 March

There is little doubt about that. For his part, SK Sarin, who heads a government advisory panel on combating the disease, says the lockdown can be only eased in a “graded manner in areas that are not hotspots” and that the hotspots remained cordoned off.

Like other affected countries, India will have to prepare itself for what Gabriel Leung, an infectious disease epidemiologist and dean of medicine at the University of Hong Kong, describes as several rounds of “suppress and lift” cycles.

During these periods “restrictions are applied and relaxed, applied again and relaxed again, in ways that can keep the pandemic under control but at an acceptable economic and social cost.”

Also, Dr Leung observes, “how best to do that will vary by country, depending on its means, tolerance for disruption and its people’s collective will. In all cases, however, the challenge essentially is a three-way tug of war between combating the disease, protecting the economy and keeping society at an even keel”.

It is now clear that shutdowns need to continue until transmission has slowed down markedly, and testing and health infrastructure has been scaled up to manage the outbreak.

Experts from the southern state of Kerala, a striking outlier that is containing the infection thanks to a transparent government and a robust public health system, say it isn’t time to lift the lockdown yet and have recommended a three-phase relaxation.

For most countries, easing the lockdown is a tricky policy choice. It sparks fears of triggering a fresh wave of infection and presents the inevitable trade-off between lives and livelihoods. French Prime Minister Edouard Phillipe, says relaxing the lockdown in his country is going to be “fearsomely complex”. In a crisis like this, according to his Dutch counterpart Mark Rutte, leaders have to “make 100% of the decisions with 50% of the knowledge, and bear the consequences.”

MumbaiImage copyright GETTY IMAGES
Image caption India’s financial capital, Mumbai, is emerging as a hotspot

It is going to be tougher for India with its vast size, densely packed population and enfeebled public health system. Also, no country in the world possibly has so much inter-state migration of casual workers, who are the backbone of the services and construction industries.

How will India manage to return these workers to their work places – factories, farms, building sites, shops – without a substantial easing of public transport at a time when crowded trains and buses can be a vector of transmission and easily neutralise the gains of the lockdown? Even allowing restricted mobility – allowing social distancing, temperature checks and passenger hygiene – would put considerable pressure on the public transport system.

The policy choices are fiendishly tough, and the answers are far from easy. India bungled the lockdown by not anticipating the exodus of millions of migrant workers from cities. The weeks ahead will tell whether the fleeing men, women and children carried the infection to their villages. The country simply cannot afford to make similar mistakes again while trying to relax the lockdown. Nitin Pai of The Takshashila Institution, a think tank, believes states should be left to decide on easing restrictions, and decisions “should be based on threat [of infection], which should be determined by extensive testing”.

This week Prime Minister Narendra Modi said that the “situation in the country is akin to a social emergency”. His government now needs make sure that the looming threat to the nation’s health and economic progress is tackled skilfully.

Source: The BBC

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20/03/2020

Coronavirus: Why is India testing so little?

A visitor wears a mask as a precautionary measure against Corona virus at the Volkswagen showcasing hall during the India Auto Expo 2020 in Greater Noida, India, 05 February 2020.Image copyright EPA
Image caption The world’s second-most populous country has reported about 182 infections

“We have a simple message to all countries – test, test, test,” World Health Organisation (WHO) head Tedros Adhanom Ghebreyesus told reporters in Geneva earlier this week.

He was alluding to the coronavirus outbreak, which has killed more than 10,000 people and infected nearly 250,000 in at least 159 countries.

“All countries should be able to test all suspected cases, they cannot fight this pandemic blindfolded,” he said.

With 182 reported infections and four deaths so far, is India taking this advice seriously? Is the world’s second-most populous country testing enough?

The jury is out on this one. India had tested some 14,175 people in 72 state-run labs as of Thursday evening – one of the lowest testing rates in the world. The reason: the country has limited testing. So, only people who have been in touch with an infected person or those who have travelled to high-risk countries, or health workers managing patients with severe respiratory disease and developing Covid-19 symptoms are eligible for testing.

Why is a densely populated country with more than a billion people testing so little? The official assumption is the disease has still not spread in the community. As early “evidence” health authorities say 826 samples collected from patients suffering from acute respiratory disease from 50 government hospitals across India between 1 and 15 March tested negative for coronavirus. Also, hospitals have not yet reported a spike in admissions of respiratory distress cases.

“It is reassuring that at the moment there is no evidence of community outbreak,” says Balram Bhargava, director of the Indian Council of Medical Research (ICMR). He believes Mr Ghebreyesus’s advice is “premature” for India, and it would only “create more fear, more paranoia and more hype”.

Media caption Dr Ramanan Laxminarayan: “India’s going to be the next hot spot for this epidemic”

But experts are not so sure.

Many of them believe India is also testing below scale because it fears that its under-resourced and uneven public health system could be swamped by patients. India could be buying time to stock up on testing kits and add isolation and hospital beds. “I know mass testing is not a solution, but our testing appears to be too limited. We need to quickly expand to restrict community transmission,” K Sujatha Rao, former federal health secretary and author of But Do We Care: India’s Health System, told me.

On the other hand, say virologists, random, on-demand testing will create panic and completely strain the feeble public health infrastructure. Increased and targeted “sentinel screening” of patients suffering from influenza and diagnoses in hospitals across the country can provide a better idea of whether there is community transmission, they say. “We need focused testing. We cannot do a China or Korea because we simply don’t have the capacity,” a senior virologist told me.

In many ways, it is all about India trying to battle a pandemic with limited resources. Experts talk about the country’s success in defeating polio, combating small pox, successfully controlling the spread of HIV/Aids, and more recently H1N1 with rigorous surveillance, sharp identification of vulnerable people, targeted intervention, and an early engagement with the private sector to prevent disease spread.

Yet, coronavirus is one of the deadliest transmissible viruses in recent history. Every day lost in effective response means the looming danger of a surge in infections. India spends a paltry 1.28% of its GDP on health care, and that may begin to bite if there’s a full-blown outbreak. Partial lockdowns in many cities – shutting schools, colleges, businesses and suspending some rail transport – proves that the government fears that community transmission of the virus might have begun.

A security guard (L) takes the temperature of a patron as a preventive measure against the COVID-19 novel coronavirus before he enters a Starbucks coffee shop in New Delhi on March 17, 2020Image copyright GETTY IMAGES
Image caption The official assumption is the disease has still not spread in the community

Bracing for the inevitable, India is scaling up testing. Officials say existing labs are able to provide results in six hours and each lab has the capacity to test 90 samples a day which can be doubled. Fifty more state labs are expected to begin testing samples by the end of the week, bringing the total number of testing facilities to 122. Authorities claim that together, the labs will be able to test 8,000 samples a day – a significant scaling up. In addition, the government is planning to allow around 50 private labs to start testing, but they will take up to 10 days to procure kits. (Testing at state-run labs is free, and it is unclear whether the private labs will charge.)

Two rapid testing labs, capable of doing 400 tests a day, are expected to be operational by the end of the week. India has also placed orders for a million test kits, and will be possibly asking the WHO for a million more.

“On testing, the government response has been proportionate, taking into account scope, need and capacity,” Henk Bekedam, WHO Representative to India told me. “We recognise that laboratory networks are expanding the scope and testing and they now include patients with severe acute respiratory infection and influenza-like illness detected through the surveillance system. It would also be important to look at ‘atypical pneumonia’ cases. If they are without any distinctive cause, then they need to be considered for testing.”

A doctor seen wearing protective suit to protect himself form coronavirus epidemic in the country, at RML Hospital on March 16, 2020 in New Delhi, IndiaImage copyright GETTY IMAGES
Image caption India could be buying time to stock up on testing kits and add isolation and hospital beds

The weeks and months ahead will show whether these steps have been enough. “We cannot say India has escaped community transmission,” Mr Bhargava says candidly. And if and when there is an explosion of infections and more sick people require hospitalisation, India will face formidable challenges.

India has eight doctors per 10,000 people compared to 41 in Italy and 71 in Korea. It has one state-run hospital for more than 55,000 people. (Private hospitals are out of reach for most people). The country has a poor culture of testing, and most people with flu symptoms do not go to doctors and instead try home remedies or go to pharmacies. There’s a scarcity of isolation beds, trained nursing staff and medics, and ventilators and intensive care beds.

India’s influenza cases peak during the monsoon season, and there is no reason why the coronavirus will not make a second coming, virologists say. “Given the way it is progressing in India, it seems it is about two weeks behind Spain and three weeks behind Italy. But that’s the number of known cases. And without sufficient testing and shutting down large gatherings, the numbers could be a lot worse,” Shruti Rajagopalan, economist and a Senior Research Fellow at the Mercatus Center at George Mason University, told me.

India’s traditional neglect of public healthcare will begin to bite if the disease spreads to its teeming small towns and villages. “This is a very unique and real public health challenge,” says Ms Rao. And it’s early days yet.

Source: The BBC

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