@ Testing Yellen’s limits 30 oom er @ How to thwarta tyrants B rg | @ Conventions are back! (Maybe) 44 June 20, 2022 @ ASIA EDITION Feeling Unwell? a SRR R RHODE EERE PAAPESPRPEREP ESP EE RESTS E PER EES iv 9 eee | aeees a Racing Towards New Beginnings When Sam Schmidt crashed his race car going over 200 mph, he was paralyzed from the shoulders down. Doctors believed he would never race again — not to mention walk. Today, with the help of Arrow Electronics, Sam is racing ina car he controls with his head. And he is walking in a smart exoskeleton suit. Sam proves the finish Line isn’t the end — it’s a new beginning. Find out more at arrow.com/goodwood AWNOW Five Years Out IVAN PISARENKO/AFP/GETTY IMAGES. Bloomberg Businessweek FEATURES June 20, 2022 <4 Zaandam passengers are transferred to another ship after a protracted lockdown The Hacktivists of Belarus Cyber dissidents are doing plenty to hobble Lukashenko’s government Remember Conventions? In Convention Centers? An architect tries to help bring industries together again ‘If No One Tells Me Anything, I’m Going to Jump Overboard!’ Panic and heroics as Covid stalks the Zaandam. An excerpt from Cabin Fever m@ CONTENTS Bloomberg Businessweek June 20, 2022 @ IN BRIEF 5 A big rate hike @ Yellowstone closes @ Jan. 6 @ OPINION 6 An underwhelming bipartisan gun bill, but it’s a start m AGENDA 6 G-7 summit @ Colombian elections @ London rail strike m@ REMARKS 8 Inflation has the masses jittery about everything else BUSINESS 12 ESPN spreads the hockey around—and reaps the bounty 14 Second childhoods are good news for toymakers TECHNOLOGY 16 Ethereum mines are closing. What happens to miners? 18 Lina Khan had better enact her antitrust FTC agenda fast 20 SpaceX and Viasat’s galactic satellite battle FINANCE 22 Stocks, bonds, and crypto dive. So do investors’ moods 24 Now that we're in bear territory, how do we cope? 26 Celsius suspends withdrawals, and the market shudders ECONOMICS 30 Janet Yellen and the White House are increasingly at odds 32 Why Mexico’s maternal mortality rate soared SOLUTIONS/ 34 Vv Hummingbirds find a friend in Rocio Meneses SUSTAINABILITY 36 Palm oil is back, as supply chain snags hit alternatives 37 In a Paris store, the opposite of planned obsolescence m@ PURSUITS 55 It’s immersive! Floor-to-ceiling Monet, Van Gogh, Kahlo... 58 Juneteenth beckons. Make it delicious 60 Harley’s electric offshoot sure doesn’t behave like an EV 62 Everyone wants to go camping—especially high earners 63 Logitech’s new mouse takes the ouch! out of your wrist BLAST THING 64 Podcasts are booming, but ad revenue isn’t all it could be How to Contact Bloomberg Businessweek EDITORIAL 212 617-8120 @ AD SALES 212 617-2900, 731 Lexington Ave. New York, NY 10022 @ EMAIL [email protected] @ FAX 212 617-9065 @ SUBSCRIPTION CUSTOMER SERVICE URL businessweekmag.com/service @ REPRINTS/PERMISSIONS 800 290-5460 x100 or email [email protected] @ Letters to the Editor can be sent by email, fax, or regular mail. They should include the sender’s address, phone number(s), and email address if available. Connections with the subject of the letter should be disclosed. We reserve the right to edit for sense, style, and space @ Follow us on social media » FACEBOOK facebook.com/ bloombergbusinessweek/ » TWITTER @BW > INSTAGRAM @businessweek @ COVER TRAIL How the cover gets made oO “This week’s cover is about—” “You check the markets yet? They’re...ugly.” “My God, I’m so exhausted already.” “Lousy 2022, amiright?” “Yeah, what happened to that whole ‘Roaring 20s’ thing?” “Oh, it’s roaring— like a bear!” “This year is just one crisis after another. At least the economy isn’t in a nosedive yet.” “It’s only June, plenty of time yet...” “Ugh. I’m gonna be sick.” “I've got just the thing.” Cover: Peter Dazeley/ Getty Images SOLUTIONS: PHOTOGRAPH BY JAKE NAUGHTON FOR BLOOMBERG BUSINESSWEEK Will the world always be this unpredictable ? Will my investments weather the storm? How can | be sure? For some of life’s questions, you’re not alone. Together we can find an answer. © UBS 2022. All rights reserved. ADVERTISEMENT Advantac (An ol Global Approval for a Sustainable Approach Bold reforms transforming the investor climate in Angola are winning recognition from leading financial institutions The progressive program of investment and reform implemented by the government of President Joao Lourenco is paying dividends. In September 2021, Moody’s Investors Service raised Angola’s credit rating for the first time, citing improved governance and debt metrics. Raising the country’s rating to B3, Moody’s praised its “strong governance” and particularly “the quality of the country’s executive and legislative institutions.” If any country out there has deserved a ratings upgrade, it is Angola. Simon Quijano-Evans, Chief Economist, Gemcorp Capital LLP Since Moody’s ratings upgrade, several major financial institutions have recognized Angola’s progress in creating a stable, sustainable environment for investment. At the end of 2021, the International Monetary Fund approved a $748 million disbursement to Angola. “The Angolan authorities’ prudent policies have contributed to strengthening stability and sustainability,” said Antoinette Sayeh, Acting Chair of the IMF’s executive board. Then in April, Angola’s plan to return to the Eurobond market was described as a “show of confidence” by Miguel Azevedo, Citigroup’s Head of Investment Banking, Middle East and Africa, who commented that the country had won “immense credibility” and made “notable progress” with its reform program. “If any country out there has deserved a ratings upgrade, it is Angola,” said Simon Quijano-Evans, Chief Economist at Gemcorp Capital LLP. “Rarely has one seen a country push ahead with reforms at the most difficult of times, helping secure future growth and stability.” President Lourengo’s reforms are diversifying Angola’s economy, reducing its dependency on oil and harnessing its vast natural resources. “We need to take greater advantage of the diversity and potential of our environmentally friendly energy sources,” says Antonio Henriques da Silva, Executive Chairman of AIPEX, Angola’s agency for private investment and export promotion. “We need to transform that potential into effective projects, which will enable us to grow.” J4AS8M The IMF’s most recent disbursement to Angola. A prime example of Angola’s sustainable energy program is the Lauca hydropower project, which harnesses the energy of the Kwanza River. Its capacity of more than 2,000 MW makes it the second-largest hydroelectric plant in Africa. By 2025, Angola plans to meet 66% of its power needs from hydropower. By committing itself to renewable energy sources, Angola is not only diversifying its economy but taking a leading role in the fight against climate change. The development of a 188 MW photovoltaic solar plant at Biopio in Benguela province is the largest project of its kind in sub- Saharan Africa. The Namibe region and Central Highlands have been identified as having significant potential for wind power, while in Malanje, cutting-edge technology is used to turn sugar cane and its fiber (known as ‘bagasse’) into three valuable products: sugar, ethanol and clean electricity. Speaking at the Bloomberg-sponsored Powering Southern Africa’s Recovery: Creating a Sustainable Future event in March, Da Silva explained Angola was prioritizing environmental, social and governance (ESG) standards in its plans to provide for future generations. “It’s not a sprint—it’s a marathon,” he said. y ‘ » AGENCY FOR PRIVATE INVESTMENT AND EXPORTS PROMOTION YELLOWSTONE: WILLIAM CAMPBELL/GETTY IMAGES. LOFGREN: CHIP SOMODEVILLA/GETTY IMAGES. BAG: GETTY IMAGES @ INBRIEF Bloomberg Businessweek By Benedikt Kammel @ The Fed raised rates by 0.75 of a percentage point on June 15. The Federal Open Market Committee said in a statement that it’s “strongly committed to returning inflation to its 2% objective.” A few hours earlier, the European Central Bank held an emergency meeting and promised to devise a new tool to curb market stress, after Italian bond prices surged to levels last seen in 2014. @ Globally, more than 537 million people have been infected by the coronavirus, and over 6.3m have died. Almost 12 billion vaccine doses have been given across 184 countries. After an increase in cases, Hong Kong is demanding that residents show a negative test result to enter bars and nightclubs until the end of June. @ War in Ukraine > Russia continued its assault on Sievierodonetsk, Ukraine's last major foothold in the eastern region of Luhansk. The regional governor said Russian troops now control 80% of the city. > Goldman Sachs and JPMorgan Chase say they'll no longer handle trades of Russian debt after the Biden administration announced it’s banning US investors from buying those assets. > Russia made almost $100 billion from energy exports in the first 100 days of the invasion. Germany and China, the biggest buyers of fossil fuels, spent about $13 billion each in the period, according to a report by the Center for Research on Energy and Clean Air. > President Volodymyr Zelenskiy pleaded for Ukraine's allies to accelerate deliveries of advanced weapons and reiterated that fighting will end only when all invading troops leave the country. > Amnesty International accused Russia of war crimes, saying Vladimir Putin's military has used cluster munitions and indiscriminate shelling in Kharkiv, Ukraine’s second-largest city. @ US stocks entered a bear market on June 13 when the S&P 500 index closed 22% below its Jan. 3 high. > 22 @ Disney was outbid by a group including Paramount Global and India’s Reliance Industries for the right to stream Indian Premier League cricket matches. As aresult, the company could lose as many as of its 138 million Disney+ subscribers, according to research by Media Partners Asia. > 13 @ Yellowstone National Park enacted its first summer closure in decades after heavy rains and a snow-melting heat wave caused record flooding in the Yellowstone River, washing out sections of highway and destroying a house. @ ‘Not only was there ‘the big lie, there was'thebig » — ripoft. Democratic Representative Zoe Lofgren, a member of the US House committee investigating the Jan. 6 insurrection, said Donald Trump and his allies raised $250 million to fight alleged election fraud but used the money for other purposes. @ Together, the nine nuclear powers—China, France, India, Israel, North Korea, Pakistan, Russia, the UK, and the US—have almost 13k warheads, according to the Sipri research institute. That’s marginally lower than a year ago, but the era of disarmament is set to end, and the risk of nuclear escalation is now greater than at any point since the end of the Cold War. @ Retail sales in the US fell in May for the first time in five months. i The value of overall retail purchases decreased 0.3% in May, Commerce Department figures showed on June 15. Excluding vehicles, which dropped 3.5%, sales rose 0.5% last month. As price pressures become more entrenched in the economy, spending will likely ebb because of either higher prices or higher interest rates. m@ BLOOMBERG OPINION June 20, 2022 A Bipartisan Effort on Gun Safety Shows Promise at Last For too long, a bipartisan, commonsense agreement to fix America’s broken gun laws has seemed out of reach. A new effort in Congress offers reasons for optimism. In the wake of multiple mass shootings this year— including the slaughter of 19 students and two teachers at an elementary school in Uvalde, Texas—Senators Chris Murphy (D-Conn.) and John Cornyn (R-Texas) have reached a tenta- tive agreement on the first significant national gun reform in many years. It won’t please everyone, of course. But there’s no doubt it represents progress. Although negotiations continue, the broad outlines are clear. Crucially, the framework would close the “boyfriend loophole,” ensuring that domestic violence records are more widely included in background checks. It would allow some sealed juvenile records to be available for similar purposes, while boosting penalties for crimes such as straw purchases and gun trafficking. It would also increase funding for men- tal health programs and for improving security at schools. Perhaps most important, it would create federal incen- tives for states to enact so-called red flag laws, which allow courts to temporarily ban individuals from purchasing or pos- sessing firearms if a judge determines that they’re a threat to themselves or others. Such laws are relatively new, and early evidence—and sound judgment-—suggests that they’re likely to be an effective tool in stopping mass shooters, most of whom exhibit clear warning signs before they kill. One study looked at 21 red flag orders issued against individuals in California who had made explicit shooting threats; no vio- lence was subsequently attributed to any of them. (Everytown for Gun Safety, which advocates gun reform measures, is backed by Michael Bloomberg, founder and majority owner of Bloomberg LP, which owns Bloomberg Businessweek.) It’s true that this effort falls short of the reforms that President Joe Biden outlined in a recent prime-time address, which included bans on assault weapons and high-capacity magazines and a repeal of gun manufacturers’ liability pro- tection. It also doesn’t go as far as a package passed by the House on June 8, which would (among other things) raise the minimum age for purchasing certain rifles to 21 from 18. And there’s no shortage of other reforms that could help impose sanity on US gun culture. But something is better than nothing, which is essentially what the country has gotten in the decade since 20 other chil- dren were murdered by a deranged gunman in Newtown, Conn. Many thought that slaughter would be a turning point— an act so horrifying that Americans would finally come to their senses on guns. Instead, a much-hyped reform effort in Congress failed within months of the shooting. About two- thirds of the relevant state laws passed from 2012 to 2018 actually loosened gun restrictions. Meanwhile, hundreds more people have been killed in mass shootings. That carnage should never become acceptable to Americans. Should this deal advance, it ought to be seen as a starting point for wider change. A more compre- hensive overhaul of background checks should be next. Strengthening concealed-carry permit requirements and secure-storage laws must remain a priority. So should extend- ing red flag measures to every state. Biden should also con- tinue to push to get a new director for the Bureau of Alcohol, Tobacco, Firearms, and Explosives in place. Although plenty of work remains, every step forward in Congress, however small, is welcome. The fight goes on. © For more commentary, go to bloomberg.com/opinion mi AGENDA > A Tricky Summit German Chancellor Olaf Scholz hosts the G-7 gathering at an opulent Bavarian mountain resort beginning June 26. There will be little time to take in the scenery, with pressing issues including Ukraine, inflation, and recession fears. > IATA holds the aviation industry’s annual general meeting on June 19-21 in Doha. After two years of coronavirus restrictions, airlines are heading into a busy summer season. > Colombia presidential election will take place on June 19. The runoff pits leftist Senator Gustavo Petro against Rodolfo Hernandez, a previously little-known independent. > The UK is bracing for travel disruptions on June 21, 23, and 25, when thousands of rail workers go on strike for better pay. It’s the network’s biggest dispute in 30 years. > Monthly inflation figures and producer prices for the UK on June 22 will probably show another uptick, exacerbating the cost- of-living crisis gripping the country. > SoftBank holds its annual shareholder meeting on June 24. CEO Masayoshi Son’s wagers on money-losing technology businesses led to a record loss for the company last year. > The Cannes Lions, the advertising industry's annual gathering, returns to the French Riviera June 20-24 after a two-year hiatus, with a special focus on sustainability. ILLUSTRATION BY MEGAN DU Time for a New Income Strategy? o™ "3 / Nasdaq 100 Covered Call ETF ) QYLD GIOBAI. A 1 (888) 493-8631 by Mirae Asset GLOBALXETFS.COM Beyond Ordinary Income QYLD writes covered call index options on the Nasdaq 100® Index. By selling covered call options, the fund limits its opportunity to profit from an increase in the price of the underlying index above the exercise price, but continues to bear the risk of a decline in the index. A liquid market may not exist for options held by the fund. While the fund receives premiums for writing the call options, the price it realizes from the exercise of an option could be substantially below the indices current market price. Carefully consider the Fund’s investment objectives, risk factors, charges [m] te and expenses before investing. This and additional information can be Teg Li * found in the Fund’s full or summary prospectus, which are available at " globalxetfs.com. Read the prospectus carefully before investing. eels Shares of ETFs are bought and sold at market price (not NAV) and are not individually vs A redeemed from the Fund. Brokerage commissions will reduce returns. Distributed by [m] SEI Investments Distribution Co. " M@ REMARKS You’re Mad, AndlIt’s Not Justinflation @ Price increases are one of many disturbances undermining our sense of well-being @ By James E. Ellis In a 1997 paper for the National Bureau of Economic Research titled Why Do People Dislike Inflation?, Nobel laureate Robert Shiller and a team of graduate assistants interviewed hun- dreds of people in the US, Germany, and Brazil. While few of those ordinary Joes knew much about the economic term in question, they were all uniformly against it. Even when one researcher told a survey respondent that inflation might help raise his wages, he remained steadfastly opposed. “I suspect that an important difference between economists and laymen is that, to some extent, we speak different languages,” wrote Harvard’s N. Gregory Mankiw in his review of Shiller’s project. That’s the problem with inflation, which Shiller’s research found to be the most-used economic term in all published news stories in the Nexis database (even ahead of ecospeak staples such as unemployment, productivity, and poverty). Rather than some precisely defined economic truth—say, the decline of a currency’s purchasing power over time, often with nominal income gains failing to keep place with price changes-—inflation is a much squishier concept for those of us who are more schooled in home economics than macro pol- icy. We’re not sure about how exactly supply shocks affect monetary policy, yet we innately understand that anything that erodes our living standards in a way that’s completely out of our control is something to fear. While an intense anxiety about robust price increases— something the US hasn’t seen in almost four decades-—is a big part of kitchen table conversations across the country right now, it’s not just inflation that’s unsettling people. A jarring string of events is raising fears that the underpinnings of mod- ern American life are crumbling. A pandemic that shows no sign of abating. Shortages of everything from new cars to baby formula. Mass shootings and unsafe schools. Plunging finan- cial markets. The Jan. 6 insurrection, stoked by an ex-president who continues to lie about the fairness of American elections. A Supreme Court poised to reverse women’s reproductive rights. And a war in Ukraine that could escalate into a nuclear conflict. All this turmoil has left many Americans with a nag- ging unease that harks back to the “malaise” that gripped the country during the Jimmy Carter era—when inflation last raged. “At this point, people have been primed with stimuli prac- tically to the breaking point,’ says George Loewenstein, a professor of economics and psychology at Carnegie Mellon University. “When people are in a state of fear, they become more afraid of everything. So people are right to be afraid about the economy, but their fears are amplified by all the other background risks they are, and have been, exposed to.” It’s tempting to look to the Carter era for clues about how hs. ese # Lad this will play out. Like today, the 1970s was rocked by oil shocks, price spirals, racial divisions, and foreign crises. But the situation in 2022 is different in significant ways. The year- end US unemployment rate ranged from a low of 4.9% toa high of 8.2% in the ’70s, while today’s 3.6% jobless rate is lower than it’s been in almost every month over the past 20 years. The inflation rate almost tripled during the ’70s, while the cur- rent explosion in US prices is less than two years old. And the nation faced long gasoline lines because of supply shortages in both 1973 and 1979; this year there’s plenty of fuel for those willing to pay an average of more than $5 a gallon. Why then are consumers so rattled? Perhaps Americans began to take price stability—and the sense of well-being it engenders-—for granted. The Federal Reserve has held its fed- eral funds rate near zero for 10 of the 13 years since the 2008 ALLSTAR PICTURE LIBRARY LTD./ALAMY STOCK