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Malaysia court postpones 1MDB trial involving ex-PM Najib Razak

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Najib Razak, Malaysia’s former prime minister, gestures as he leaves the Kuala Lumpur Courts Complex in Malaysia, on Thursday, Sept. 20, 2018.

Joshua Paul | Bloomberg | Getty Images

A Malaysian court on Monday postponed for a week the biggest of five trials linked to a multi-billion-dollar scam at state fund 1MDB and allegedly involving former prime minister Najib Razak.

Najib, who lost a general election last year, has been hit with 42 criminal charges of graft and money laundering at 1Malaysia Development Berhad (1MDB) and other state entities.

He has pleaded not guilty and says the charges are politically motivated.

The hearing will now begin next Monday to allow time for the completion of a previous trial that revolves around former 1MDB unit SRC International, a Kuala Lumpur High Court judge said.

“If you need more time, I can stand down or adjourn … but for now we will proceed on Monday and check again on (this) on Thursday,” Judge Collin Lawrence Sequerah said.

1MDB, founded by Najib in 2009, is being investigated in at least six countries. The U.S. Department of Justice says about $4.5 billion was misappropriated from the fund.

In the trial in Kuala Lumpur, Najib will have to fight 21 charges of money laundering and four of abuse of power for receiving illegal transfers of about 2.3 billion ringgit ($550.8 million) between 2011 and 2014.

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Queen Elizabeth to make rare address to nation over coronavirus

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Queen Elizabeth II

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Queen Elizabeth will make an extremely rare address to the nation on Sunday as Britain grapples with the increasingly deadly coronavirus outbreak.

The government has put Britain into a virtual lockdown, closing pubs, restaurants and nearly all shops, while banning social gatherings and ordering Britons to stay at home unless it is absolutely essential to venture out.

The measures are intended to stop the spread of the epidemic with officials saying on Friday the death toll in the United Kingdom among those who had tested positive for the virus had risen by 684 to 3,605, up 23% on the previous day.

“Her Majesty The Queen has recorded a special broadcast to the United Kingdom and the Commonwealth in relation to the coronavirus outbreak,” Buckingham Palace said in statement, without giving any details about its
content.

The address, which was recorded at Windsor Castle where the 93-year-old monarch is staying with her husband Prince Philip, will be broadcast at 1900 GMT on Sunday, it said.

Last month, the queen issued a written statement in which she said the royal family would play its part in rising to the challenge of the coronavirus outbreak.

“We know that many individuals and families across the United Kingdom, and around the world, are entering a period of great concern and uncertainty,” she said then.

“We are all being advised to change our normal routines and regular patterns of life for the greater good of the communities we live in and, in particular, to protect the most vulnerable within them.”

The queen rarely broadcasts to the nation apart from her annual televised Christmas Day message, usually to offer personal thanks or provide reassurance in times of crisis.

Royal experts said it would be only the fifth such televised address she had made during her 68 years on the throne.

The last was in 2012 following celebrations to mark her 60th year as queen which came a decade after the preceding broadcast which followed the death of her mother, the Queen Mother, in 2002 when she thanked Britons for their messages of condolence.

She also gave an address at the start of the Gulf War in 1991, and most famously, she delivered a somber live broadcast after the death of her daughter-in-law Princess Diana in a Paris car crash in 1997 amid a national outpouring of grief and criticism of the royal family’s response.

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Coronavirus may create a generation of supersavers who reshape economy

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A generation of risk-averse supersavers could emerge from the fallout of the coronavirus crisis and potentially reshape the economy, experts have said.

Morgan Housel, partner at venture capital firm Collaborative Fund and author of “The Psychology of Money,” said in a phone call that the coronavirus crisis would lead to “a generation of supersavers” who were wary of taking financial risks.

“When you’ve suddenly woken up to the reality that the world is much more fragile than you once believed, you just have a much lower appetite to take risks about the future than you’ve had before,” he told CNBC.

“I think it’s going to lead to a generation that is less interested in taking risk, and they won’t mind if they’re leaving opportunity on the table because they’re just more and more interested in their downside protection than they were before.”

The new strain of coronavirus, which was first reported in the Chinese city of Wuhan in late 2019, has so far infected a million people globally, with total deaths from the virus over 53,000. Fears about the extent and duration of the outbreak have also roiled global stock markets and prompted analysts around the world to warn that a deep recession is on the horizon.

The U.S. Labor Department reported Thursday that a record 6.6 million jobless claims had been filed last week — double the previous week’s number. Economists expect the numbers to continue surging amid the crisis.   

Housel speculated that the speed at which the crisis had taken hold of the economy would have “a profound impact on people’s ability to think about the future in an optimistic way.”

“Even if this crisis were to end tomorrow — and to be clear, it’s not going to — what we’ve gone through already has been severe enough to leave a generational impact,” he warned.

Economic impact

Although Housel said a societal move toward cash hoarding would likely hamper gross domestic product (GDP) growth, he claimed there would be an economic upside.

“It might lead to a system where we’re actually more capable of managing and absorbing future shocks than we are today,” he said. “Would it be to lower future growth? Probably, yes — but would it lead to a more robust, stronger society financially.”

Historically, deep economic shocks have often prompted a shift away from spending, with consumers preferring to save their cash amid uncertainty.

The proportion of Americans who prefer saving to spending rose significantly after the 2008 financial crisis, according to data compiled by Gallup. In its 2019 poll, over 60% of adults still said they would rather save than spend, which Gallup dubbed a “stark departure” from the years preceding the crisis.

As such, perhaps it’s no surprise that the coronavirus is already affecting spending habits; research published Tuesday by personal finance company Bankrate found that 52% of Americans had already cut their spending in response to the pandemic. 

Mark Hamrick, senior economic analyst at Bankrate, said it could be economically damaging if younger generations did indeed become more risk averse.

“One thing we saw from the financial crisis was people — particularly young people — tending to be under-invested in the stock market with their retirement savings, because they essentially didn’t trust the market,” he told CNBC in a phone call.

“Many of those people, particularly millennials, lost out on an opportunity to fund their retirements early at a time when they were in the best position to weather the inevitable market and economic cycles.”

The difference between Europe and the US

However, Paul Donovan, chief economist at UBS Global Wealth Management, told CNBC he was skeptical that the current crisis would dramatically alter consumer mindsets.

“The Great Depression changed behavior in America because it was so devastating for so long,” he said in a phone call. “This, of course, we hope is going to be a relatively short incident.”

Donovan also noted that there would be some variation in behavior between countries as governments had taken different policy action in response to the pandemic.

“Europe has essentially worked to prevent unemployment,” he said. “So when you think about the U.K., for example, or Denmark or France, they’ve introduced schemes aimed at keeping people employed, maybe on 80% or 70% wages, but you’ve still got a job.”

As such, people might not feel so insecure that they resort to “precautionary savings,” because the government stepped in.

However, Donovan stressed that there could be an increase in precautionary savings in the U.S., where the government response had been more focused on helping people who were unemployed, “without necessarily preventing the unemployment so effectively.”

“But to have higher savings you need to have a high enough income to be able to save,” Donovan added. “And unfortunately in the United States, the people who are most vulnerable to unemployment tend to be low-income people who are spending up to their limit. They don’t necessarily have the capacity to save, certainly not the capacity to increase saving.”

He said the key question would be what people did with the 25% of “lost” spending that would usually be used for services and products like haircuts, gasoline and eating out — all things effectively ruled out by lockdowns and self-isolation.

“Do you save that money, or do you think: ‘I can afford to upgrade the television that I was going to buy because I’ve not gone out to a restaurant or paid for gas for the car?'” he asked. “I suspect what you will probably see is upgrading.”

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Ford says Europe manufacturing to be suspended at least until May 4

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A worker fits a combustion engine to a Ford Focus automobile inside the Ford Motor Co. factory in Saarlouis, Germany, on Wednesday, Sept. 25, 2019.

Krisztian Bocsi/Bloomberg via Getty Images

Ford Motor Co on Friday extended the temporary suspension of vehicle and engine production at most of its European manufacturing sites to May 4. 

The automaker said last month that the suspension would last for a “number of weeks” depending on the intensity of the COVID-19 pandemic.

“Ford’s production restart plans depend heavily on the pandemic situation in the weeks ahead, national restrictions in operation at the time, supplier constraints and the ability of our dealer network to operate,” the company said in a statement.

The No. 2 U.S. automaker on Thursday posted a 12.5% fall in U.S. auto sales for the first quarter.

The company’s U.S. sales chief has said that once the crisis eases, some level of government stimulus will be needed to support car buyers in the face of an unprecedented decline in sales and rising claims for unemployment benefits.

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