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The push for electric vehicles may be killing sedans for good: Experts

Volkswagen

(NEW YORK) — Get your sedan while you still can.

The Toyota Avalon, Mazda 6 and Volkswagen Passat will soon join the fast-growing list of sedans sent to automotive exile. Americans' unyielding appetite for sport utility vehicles and trucks are certainly one reason. Another? Electric vehicles, some experts say.

"Sports cars and sedans were already on the edge of the cliff," Joe Wiesenfelder, executive editor at Cars.com, told ABC News. "EVs may be responsible for giving them the final shove."

Ford, Lincoln and Chrysler abandoned the sedan segment long ago. More automakers will likely follow.

"When automakers put their attention elsewhere, something is going to lose and it's usually the products that were already endangered," Wiesenfelder said. "Automakers are abandoning a shape -- not a need. Mid-size cars are now a subcompact SUV."

Stephanie Brinley, an analyst at IHS Markit, argued EVs are now the reason automakers are shunning sedans and canceling production of longtime models.

"Sedans and sports cars will continue to fall away for a bit longer," she wrote in a recent LinkedIn post. "It's sad to me that these types are both being squeezed by the need to invest in EVs and electrification."

Sales of SUVs and crossovers accounted for 51% of the U.S. market in 2020, up from 30.2% in 2020, according to Brinley. Sedan sales are in reverse: 22.6% in 2020 versus 46.2% in 2010.

"If we weren't struggling with the costs of [electric vehicle] transition, some sedans may be able to survive even at lower volumes," Brinley told ABC News. "EVs are capital-intensive and expensive. Product development money is going to EVs."

Rory Carroll, the editor-in-chief of Jalopnik, said automakers have one objective: To make money.

"If you're going to invest in something you won't take money away from products that are selling," he told ABC News. "Sports cars and sedans -- those are not selling right now. Automakers are in the business to sell cars."

Michael Tripp, vice president of vehicle marketing and communications at Toyota North America, defended the Avalon's 28-year production run, saying the large sedan had a "storied history" with 30,000 units sold annually. Its quagmire? SUVs.

"What's driving migration away from passenger cars isn't a government mandate or what automakers are doing -- it's customer tastes," Tripp told ABC News. "The [large sedan] segment is down 70% to 75% in the last four, five years. It has nothing to do with the Avalon's powertrain. It has to do with the segment."

The pandemic -- and not EVs -- likely accelerated the slide away from sedans, according to Autoweek editor Natalie Neff.

"Automakers have been steering away from that segment for a while," she told ABC News. "People haven't been buying sedans ... it's why Ford got out of the car building business a few years ago."

Plus, she added, "the practicality of a sedan is far less than a crossover. It's not like the sedan offers greater performance or fuel efficiency or utility."

More Americans are slowly starting to go electric. Brinley said battery-electric vehicle registrations totaled 2.4% of the U.S. market in the first six months of 2021 and 1.8% last year. IHS Markit predicts 32% of U.S. light vehicle sales to be BEVs by 2030.

"EVs have not been widely accepted on the market partly because their development has been focused on straight line performance," said Jalopnik's Carroll. "It's a cool trick but not a driving experience. My mom would be terrified to go that fast."

Ten years ago, few if any Americans were interested in EVs when General Motors launched the Bolt and Volt, Wiesenfelder said. But government policy and an industry-wide push are shoring up these billion-dollar bets.

"There is a gamble in abandoning future product plans for anything but EVs," Wiesenfelder admitted. "The last big push fizzled. It won't this time. More manufacturers are in the game."

Brinley is still convinced sedans have a place in the crowded automotive market. EVs may be trendy now, she said, but the stakes are high.

"For a lot of consumers, EVs are still a bit of a mystery. It will take time for adoption," she said. "It will be a very long transition despite the hype."

Copyright © 2021, ABC Audio. All rights reserved.


US enters deferred prosecution agreement with detained Huawei executive Weng Manzhou

Nadya So/iStock

(NEW YORK) -- Huawei Chief Financial Officer Meng Wanzhou entered into a deferred prosecution agreement with federal prosecutors in Brooklyn on Friday to resolve a sanctions violation case that has kept her detained in Canada since late 2018.

Meng appeared by video in Brooklyn federal court where Assistant U.S. Attorney David Kessler said the deferred prosecution agreement expires in December 2022, four years after her arrest by Canadian authorities at the request of the United States.

"If Ms. Meng complies with all of her obligations under the DPA, the government agrees to dismiss all the charges against her," Kessler said. "If Ms. Meng does not comply with her allegations she can be prosecuted."

Meng has been confined to her multimillion-dollar home in Vancouver, British Columbia, where she said in 2019 she'd taken up oil painting in order to pass the time.

In exchange for her entry into the deferred prosecution agreement, Kessler said the U.S. would tell the Canadians that Meng can be released and return to China.

"Have you reviewed the entire statement of facts with your United States legal counsel?" asked Judge Ann Donnelly.

"Yes," Meng replied through an interpreter.

"Is every statement in the statement of facts true and accurate?" Donnelly said.

"Yes," Meng said.

Huawei allegedly broke U.S. sanctions in 2017 by selling embargoed American equipment to Iran, according to prosecutors.

"In entering into the deferred prosecution agreement, Meng has taken responsibility for her principal role in perpetrating a scheme to defraud a global financial institution," acting U.S. Attorney Nicole Boeckmann said in a statement. "Her admissions in the statement of facts confirm that, while acting as the Chief Financial Officer for Huawei, Meng made multiple material misrepresentations to a senior executive of a financial institution regarding Huawei's business operations in Iran in an effort to preserve Huawei's banking relationship with the financial institution."

Just hours after Meng entered into the agreement, Canadian Prime Minister Justin Trudeau announced Friday night that two Canadians who were detained in China nearly three years ago in the wake of the Huawei executive's arrest are now on a plane home. One of them, Michael Spavor, was convinced and sentenced to 11 years for spying last month.

"These two men have gone through an unbelievably difficult ordeal," Trudeau said. "For the past thousand days, they have shown strength, perseverance, resilience and grace, and we are all inspired by that. I want to thank their families who've been there for them, supporting them in every way they could and supporting us in the work we've done to secure their release."

The prime minister did not mention Meng in the address, but did thank "our allies and international partners around the world" for helping to secure Spavor and Michael Kovrig's release.

"The U.S. Government stands with the international community in welcoming the decision by People’s Republic of China authorities to release Canadian citizens Michael Spavor and Michael Kovrig after more than two-and-a-half years of arbitrary detention," U.S. Secretary of State Antony Blinken said in a statement. "We are pleased that they are returning home to Canada."

Meng pleaded not guilty to charges of conspiracy to commit bank fraud, bank fraud, conspiracy to commit wire fraud and wire fraud, but stipulated to certain facts outlined by prosecutors who have accused her and the technology company founded by her father of stealing trade secrets and evading economic sanctions on Iran.

Resolution of the case may give Beijing cover domestically to re-engage with the United States. The case was widely seen as an opening salvo by the Trump administration in its approach to China.

Meng was arrested the same day former President Donald Trump and Chinese President Xi Jinping met face to face on the sidelines of 2018's G-20 in Argentina. Since then, the case has been on a list of demands the Chinese have presented to the U.S. at their recent bilateral meetings as a "show of sincerity" about a rapprochement.

"The company has been provided very little information regarding the charges and is not aware of any wrongdoing by Ms. Meng," Huawei said in a statement at the time of Meng's arrest. "Huawei complies with all applicable laws and regulations where it operates, including applicable export control and sanction laws and regulations of the U.N., U.S. and E.U."

Copyright © 2021, ABC Audio. All rights reserved.


EPA moves to reduce super-polluting greenhouse gases

LilliDay/iStock

(WASHINGTON) -- The Environmental Protection Agency announced a new rule Thursday to reduce super-polluting greenhouse gases commonly used in air conditioners and refrigerators as part of the cooling process.

This is a major leap forward in the Biden administration's plan to combat climate change despite the president's $3.5 trillion reconciliation package, which includes an overhaul on climate policy, facing broad opposition from Republicans in Congress.

These greenhouse gases, known as hydrofluorocarbons or HFCs, have an impact on warming the climate that is hundreds to thousands of times greater than the same amount of carbon dioxide, senior Biden administration officials said in a call with reporters Wednesday.

The rule creates a legal requirement for companies and manufacturers to reduce HFCs and was first proposed in May under the 2020 American Innovation and Manufacturing Act, or AIM. The AIM Act requires the EPA to phase down the production and consumption of HFCs, manage the gases and their substitutes as well as facilitate the transition to new greener technologies.

Included in the new rule is the creation of a climate protection program that will phase down the production and consumption of HFCs by 85% within the next 15 years.

It's expected the phase down will reduce emissions by the equivalent of 4.5 billion metric tons of carbon dioxide by 2050. According to the EPA officials, that's equal to nearly three years of emissions from the U.S. power sector.

Reducing HFCs is part of the Biden administration's efforts to reduce the effects of climate change while also generating jobs, a key sticking point of his climate policy initiatives.

"This actually reaffirms what President Biden always says when he thinks about climate, he thinks about jobs," EPA Administrator Michael Regan told reporters Wednesday. "Because this administration knows what's good for the environment is also good for the economy. Transitioning to safer alternatives and more energy-efficient cooling technologies is expected to generate more than $270 billion in cost savings and public health benefits by the year 2050."

The EPA estimated that by the end of next year, the annual net savings of reducing HFC emissions will be $1.7 billion.

The rule also establishes an allowance and trading program to reduce HFCs. In accordance with the AIM Act, companies need an allowance to produce or import any HFCs or HFC-related products. The agency will have the allocation amounts distributed to each company by Oct. 1, according to Joseph Goffman, EPA acting assistant administrator.

According to the EPA, along with five other agencies, it will work to prevent the illegal importation and production of HFCs in the U.S. by creating an interagency task force.

In the 1990s, the value of seizures of refrigerants at the U.S.-Mexico border were second only to marijuana, according to the advocacy group Environmental Investigation Agency.

Stephen Yurek, the president and CEO of the Air-Conditioning, Heating, and Refrigeration Institute, a policy group that represents the interests of manufacturers, said the institute has supported the rule since the beginning.

"It's great for U.S. industry which are the innovators of the new products. It's great for the economy for jobs and that, but it's also great for the environment," Yurek said. "It's a win-win for everybody."

Climate advocates welcome the rule as well and that the Biden administration is moving forward to fulfill the requirements of the AIM Act, but some said this is just a starting point.

"It's now imperative to adopt additional rules that ensure a swift transition to new technologies and full lifecycle management of these gases," Christina Starr, senior policy analyst at the Environmental Investigation Agency, said in a statement.

Danielle Wright, the executive director of the North American Sustainable Refrigeration Council, which works to promote the transition to natural refrigeration agents such as ammonia, said there is no doubt that this rule is an important first step.

But the key about the rule is that it is a phase down, not a phase out, she said. It does not create a cost-effective pathway for companies to transition to the gases that have the lowest impact on the climate: natural refrigerants. Switching to these alternative gases for refrigeration and cooling would be the equivalent of switching to electric cars, according to Wright.

"In order to make that an economically viable decision, you need really strong policy," Wright said. "And so this policy is not strong enough to create those economically viable market conditions. It's still an environmental win, but we're not going as far as we could," she said.

By finalizing this rule, the U.S. will be in line with key components of the Montreal Protocol's Kigali Amendment -- an international agreement aimed at reducing the production of HFCs.

However, the U.S. has not ratified the Kigali Amendment to officially join the treaty, and the White House has yet to send the amendment to the Senate for ratification.

When asked by reporters when the president would send the amendment to the Senate, national climate adviser Gina McCarthy said she did not have a date for when that will happen.

Nonetheless, the EPA is calling this rule a historic step towards reducing the effects of climate change by implementing pollution regulations across multiple industries.

"This is a very proud moment for the EPA, and more importantly for the American people," Regan said.

Copyright © 2021, ABC Audio. All rights reserved.


Boppy newborn lounger pillows recalled after eight infant deaths

U.S. Consumer Product Safety Commission

(BETHESDA, Md.) -- Over 3 million infant loungers made by Boppy, the popular maker of baby products, are being recalled after reports of eight infant deaths between 2015 and 2020, the Consumer Product Safety Commission (CPSC) announced Thursday.

Boppy is recalling its Boppy Original Newborn Loungers, Boppy Preferred Newborn Loungers and Pottery Barn Kids Boppy Newborn Loungers, according to the CPSC.

The eight infant deaths reportedly happened after infants were placed on their back, side or stomach and fell asleep on the lounger, according to the CPSC.

The infants reportedly suffocated and were found on their side or their stomach, the agency said.

The CPSC urged people to "immediately stop" using the recalled loungers.

"These types of incidents are heartbreaking," Acting Chairman Robert S. Adler, CPSC commissioner, said in a statement. "Loungers and pillow-like products are not safe for infant sleep, due to the risk of suffocation. Since we know that infants sleep so much of the time -- even in products not intended for sleep -- and since suffocation can happen so quickly, these Boppy lounger products are simply too risky to remain on the market."

In response to the recall, Boppy said it is "devastated to hear of these tragedies."

“Boppy is committed to doing everything possible to safeguard babies, including communicating the safe use of our products to parents and caregivers, and educating the public about the importance of following all warnings and instructions and the risks associated with unsafe sleep practices for infants," the company said in a statement. "The lounger was not marketed as an infant sleep product and includes warnings against unsupervised use.”

The recalled products were sold at retailers including Pottery Barn, Target, and Walmart and Amazon.com from January 2004 to today, according to the CPSC. The loungers retailed for between $30 and $44 and were "solid in a variety of colors and fashions."

Boppy also distributed about 35,000 of the recalled loungers in Canada, according to the CPSC.

Customers should contact The Boppy Company for a credit or refund, according to the CPSC.

The news of the recall follows a report from Consumer Reports earlier this month that found seven recent infant deaths were tied to nursing pillows and infant loungers made by Boppy,

It also comes one year after the CPSC issued a warning for caregivers about the risks of using pillow-like products for sleeping infants.

The 2020 warning from CPSC, which applied to all nursing pillows and baby loungers on the market, said infant deaths involving the products appeared to happen when "children are left on or near pillows, and the child rolls over, rolls off, or falls asleep."

The recall announced Thursday applies only to loungers made by Boppy, and does not include nursing pillows or all pillow-like products on the market.

Caregivers should always place infants to sleep on their backs on a firm, flat surface and should never add “blankets, pillows, padded crib bumpers, or other items to an infant’s sleeping environment,” according to both the CPSC and the American Academy of Pediatrics (AAP).

Copyright © 2021, ABC Audio. All rights reserved.


Toy shortages, supply chain among reasons to start holiday shopping now, experts say

MartinDimitrov/iStock

(NEW YORK) -- Every year, many of us talk about doing our holiday shopping early. But this year, you may want to get started sooner rather than later.

That's because experts are warning of possible shortages and delays on everything from toys to artificial Christmas trees due to COVID-related supply chain issues, as well as the record-breaking cargo surge reported by the Marine Exchange of Southern California.

"It's a problem from the loading docks in China all the way to the retailers loading docks in the United States," Steve Pasierb, president and CEO of The Toy Association, told ABC News. "The biggest part of it being ocean shipping being extraordinarily expensive and taking much longer than it ever has."

Retail analyst Hitha Herzog told ABC News "the global supply chain is quite fractured."

"We're seeing a shortage of product that was initially meant to be shipped over. And we're also seeing a delay in that product getting into stores," she said.

Ports in Southern California responsible for nearly half of all U.S. imports have hit record high numbers of container ships waiting to unload, according to the Los Angeles County Economic Development Corporation.

ABC News Los Angeles station KABC shared a glimpse from helicopter footage above the port of Long Beach where more than 100 ships are anchored off the coast, waiting to get to the docks.

The shipping problem has been compounded by labor shortages at said docks as well as limited warehouse space and trucking issues.

"Smaller retailers have really in the past relied on a very fast supply chain. What's different now is that the supply chain is limited and deliveries are also going to be limited," Herzog explained. "So while they certainly have the ability to deliver the product, the product is going to be delayed."

This has prompted some retailers to get proactive to make sure their shelves are stocked. Target shared in a blog that it chartered a container ship to make sure its merchandise arrives on time.

"We'll continue to partner with our vendors to tackle supply chain challenges together this season and beyond to ensure we can deliver for our guests," Target said in the post. Walmart and Home Depot have taken similar action.

Despite retailers' efforts, Pasierb recommends picking up stocking stuffers as soon as you can.

"Whatever becomes the hot toy of the season in the next month or two may not be there in huge quantities," Pasierb said. "It's really the holiday season now, from Labor Day into early October, it's some of the best shopping, the best selection."

And while online sales are expected to grow this year, you may want to be prepared to shop in brick-and-mortar stores, too, in order to find the best selection.

Copyright © 2021, ABC Audio. All rights reserved.


What to know about Evergande, the Chinese property developer dragging down global markets

CasPhotography/iStock

(NEW YORK) -- Debt issues plaguing Evergrande, one of China's largest real estate developers, have sent shock waves of anxiety throughout global financial markets.

The Dow Jones Industrial Average suffered its biggest single-day drop since July on Monday, and the index closed even lower Tuesday, with many analysts attributing the precipitous fall to the Evergrande saga emanating from the nation with the second-largest gross domestic product. Jitters related to Evergrande have also been linked to a slide in the cryptocurrency market, with Bitcoin trading 13% lower Tuesday evening compared to a week prior, as uncertainty drives investors away from riskier assets.

The Evergrande crisis has even been compared to the Lehman Brothers crash that is now synonymous with the onset of the Great Recession, though many economists have cautioned against panic and directly equating the two episodes. Still, there is a reason the embattled Chinese firm has become a household name on Main Street over the past few days, and Wall Street remains on high alert over what comes next as a repayment deadline looms on Thursday.

Here is what to know about the Evergrande debt crisis and its potential contagion to the global economy.

What is Evergrande?

Founded in 1996 in Guangzhou, Evergrande is one of the largest property development companies in China that specializes in building and selling residential apartments to the country's rapidly growing middle and upper class, as well as building shopping malls and other commercial real estate projects.

The company has grown quickly and developed businesses in other sectors -- including operating theme parks and manufacturing electric vehicles -- but its primary source of revenue remains in property development, according to Shang-Jin Wei, a professor of Chinese business and economy at Columbia University's Graduate School of Business.

The firm's success has made its chairman, Hui Ka Yan, worth about $7.34 billion, according to Bloomberg's real-time data. His net worth has fallen dramatically in recent months, however, as the company's stock value plunged. In July 2020, Bloomberg estimated his net worth at nearly $40 billion.

Evergrande's real estate arm owns more than 1,300 projects in more than 280 cities in China, according to its website. Evergrande Group says it employs 200,000 people total and its projects create more than 3.8 million jobs per year -- leading some to suggest it has "too big to fail" status. The firm states it has some $350 billion in assets.

What is the issue and why is it impacting global stock markets?

Essentially, Evergrande's rapid growth has been fueled in large part by borrowing. As demand in China's once-exploding housing market wanes, fears that Evergrande could default on its estimated $300 billion in liabilities have come to a head.

"The problem in a nutshell is property development companies tend to use a lot of debt to finance their operations, and in response to rising housing prices, the Chinese government has said for quite a few years that they want to find ways to restrain the demand and restrain the housing price increases," Wei, who formerly served as chief economist of the Asian Development Bank, told ABC News.

"Previous attempts by the government have not been very successful, and I guess Evergrande decided that the same will happen this time," Wei added. "So the last few years, while some of the property development companies have scaled down their operations, Evergrande was still charging ahead. And recently, a change in government policies has reduced demand for residential apartments quite a bit, so the company is having trouble selling apartments fast enough to meet their debt obligations."

Wei said that the commercial housing market in China largely did not exist before 1990, when most households lived in government-assigned apartments. China's meteoric economic growth since the '90s led to a boom in demand for housing, a wave Evergrande rode for years -- in some cases selling properties and using the funds to pay for construction costs before they were even built -- until recent policy changes by the Chinese Communist Party clamped down on such practices.

Evergrande borrowed from a combination of banks and non-bank financial institutions, and issued bonds to finance its recent endeavors, according to Wei.

"When the apartments are selling well that's not a problem for them, but anytime that apartment sales slow down, the company could run into trouble to meet its debt obligation and that's what we are seeing now," Wei said.

It's not immediately clear how much debt Evergrande has accrued because parts of the business are not publicly traded or required to disclose financial details, Wei said, but economists estimate its liabilities are around $300 billion. While it has assets such as land and under-construction apartment complexes, Wei said it's unclear if selling these could even generate enough liquidity to pay its debts.

"One of the reasons that stock markets reacted so strongly to that one firm's news is uncertainty, lack of clarity," Wei said. "So even though the $300 billion is the best guess, people are not exactly sure whether they undisclosed or under-disclosed the debt obligation."

Why now?

A deadline for Evergrande's debt payments looms this week. In a report released earlier this week, S&P Global Ratings warned that Evergrande is "on the brink of defaulting." The agency noted that the company is scheduled to make a number of interest payments on its public debt starting on Thursday, reiterating again that, "a default is likely."

For those paying close attention, the issues have been brewing for months. Evergrande's stock, listed on the Hong Kong exchange, has shed some 80% since the beginning of the year.

"Clearly people who invest in the company understand the company was undergoing financial difficulty and there's a chance that they couldn't meet their obligations," Wei said. Recent policy changes in China to rein in the housing market -- as well as corporate debt -- have also led to Evergrande's woes culminating in recent days.

While it is common for property developers to take on debt as part of their business model, S&P Global warned in its report that Evergrande's contracted sales have fallen more rapidly than other players in the sector -- in part because of its heavy use of of supplier commercial bills as a way to access capital. These commercial bills have a more rigid repayment date, according to S&P Global, and suppliers and contractors that have gone unpaid have filed suits against Evergrande that have ultimately resulted in halts in project construction.

"Financial institutions also appear to be quickly cutting Evergrande's financing, likely as a reaction to the frequent negative news about the borrower," the report states. "Without sufficient project financing, it makes even harder to sustain construction and salable resources. This is shutting down Evergrande's most important source of cash flow: contracted sales of its property projects."

Is this a 'Lehman Brothers moment'?

The concern for many in China and beyond is whether Evergrande's failure could have a spillover effect to other firms doing business with them as well as financial markets around the globe.

"China is the second-largest economy and second-largest importer of the world. If the Chinese economy is going south, it will reduce the demand of Chinese firms for other countries' products," Wei said. China's economy is also intertwined with many others in the region, he added, meaning a financial or banking crisis could easily have negative impacts beyond its borders.

"These are the reason for why the U.S. and elsewhere we've see our stock market respond to news about a Chinese company," he added. "Now is this response justified or is it an overreaction? That depends on two things -- one is does Evergrande actually constitute a systematic risk for the Chinese economy? And two is, if it does, can the Chinese government manage to contain the risk?"

S&P Global stated in its report that it does not expect "government actions to help Evergrande unless systemic stability is at risk."

"A government bailout would undermine the campaign to instill greater financial discipline in the property sector," the researchers stated. "Government support to prevent a default is only likely if contagion risks cause other large developers to fail."

The agency said it believes a hit to the financial system from Evergrande alone will be "manageable" and that Beijing's focus would be to "ease Evergrande through an orderly debt restructuring or bankruptcy process that maximizes the value of its substantial assets." Rather than a "bailout," it foresees the government facilitating negotiations to ensure individual investors and homebuyers are protected.

Tommy Wu, an economist with Oxford Economics, similarly stated in a Tuesday report, "While we think the government doesn't want to be seen as engineering a bail out, we expect it to step in to conduct a managed restructuring of the firm's debt to prevent disorderly debt recovery efforts, reduce systemic risk, and contain economic disruption."

If this restructuring plan works, Wu writes that they expect the implications for overall economic policy and outlook to "remain contained," though the property sector will likely remain tense for some time and some spillover into the wider financial sector is likely.

Brad McMillan, the chief investment officer for Commonwealth Financial Network, said Americans should not panic about a so-called "Lehman Brothers moment" just yet in a memo shared with ABC News on Tuesday.

"Despite the worry, so far this looks like a corporate bankruptcy and not something worse," McMillan said. "It's a big one, to be sure, but one that can be handled within the system. Bondholders will lose money, other companies will be affected, and life will move on. So far, that situation is what we see and not something bigger."

Even if it does evolve into something larger, McMillan noted that the Chinese government "has more money -- and more legal powers -- to contain the damage than the U.S. and western governments did back in 2008." Moreover, McMillan argues the Chinese financial system and the rest of the world are less integrated than in 2008, meaning the "contagion possibilities are simply more limited."

Ultimately, "the bus that you are watching is rarely the one that ends up hitting you," McMillan adds.

"Both the U.S. government and regulators, and U.S. banks and financial institutions, are very aware of the situation in China, and they are at least thinking about how to minimize the risks," he said. "That was not the case in 2008. Since this is not coming out of the blue, any damage will be contained -- and likely much less than is now feared."

Why is this impacting cryptocurrencies?

Cryptocurrencies have seen meteoric growth in recent years, and have emerged as especially popular among retail investors. Crypto markets have seen a dip in recent days amid the Evergrande headlines, but the digital currencies have also been notoriously volatile and prone to wide and seemingly sudden swings in prices.

"In opaque crises like the one now afflicting China's Evergrande real estate conglomerate, it's less 'what you know' than 'what you know you don't know' that drives financial volatility," Robert Hockett, a professor of law at Cornell University whose research focuses in part on financial and monetary law, told ABC News via email. "In these cases of opacity-fueled fear, assets described by the word 'crypto' can be expected to take the worst hits in the asset fire sales that accompany conflagration much as did those more euphemistically called 'subprime' 13 years ago."

Bitcoin, Ethereum and others are "accordingly finding themselves hardest hit right now -- even more than the more traditional speculative firms like Goldman," he added.

"They are, in effect, the new canaries in the current financial coal mine," Hockett said.

Copyright © 2021, ABC Audio. All rights reserved.


Elizabeth Holmes criminal trial dominated by allegations of deception and intimidation from those who worked for her

Chris Ryan/iStock

(NEW YORK) -- Just three weeks into the criminal trial of Elizabeth Holmes, jurors have already heard allegations of lies, deception and alleged intimidation from those who worked directly under her -- and the trial is expected to continue into December.

"I was scared that things would not go well," one former Theranos scientist, Surekha Gangakhedkar, told prosecutors when asked why she made copies of internal communications and documents before resigning from the company. "I was also worried that I would be blamed."

A full recap of last week's proceedings is available on today's episode of "The Dropout: Elizabeth Holmes on Trial" free on Apple Podcasts, Spotify, Amazon Music, or wherever you listen to podcasts.

Theranos was founded by Holmes in 2003. The company claimed to be developing blood testing technology that used only small droplets of blood.

Nearly two decades later, Holmes is defending herself against charges of wire fraud and conspiracy to commit wire fraud stemming from a "multi-million-dollar scheme to defraud investors, and a separate scheme to defraud doctors and patients," according to prosecutors.

Gangakhedkar and Erika Cheung, two former Theranos scientists, testified under oath last week. They both conveyed the same information to the jury: Theranos' Edison devices -- their blood testing machines -- rarely functioned properly.

Cheung told the court that Theranos would frequently cherry-pick data, deleting "any two data points that would not hit the metrics we needed." She added that in March of 2014, about one in every four Theranos tests failed.

Cheung was one of the whistleblowers who first leaked information about Theranos to the Wall Street Journal in 2015. ABC News interviewed Cheung in the first season of "The Dropout."

"Our quality controls were failing at one point ... what seemed [like] almost every day," Cheung told ABC News in 2019.

Gangakhedkar was the former manager of assay systems at Theranos and reported directly to Holmes. She told the jury that she didn't think Theranos' devices "were ready to be used for patient samples."

Prosecutors presented several emails from 2013, in which Gangakhedkar reported the results of numerous failed tests on the Edison devices to Holmes directly. At the time, Theranos testing centers had already gone live in some Walgreens stores.

When prosecutors asked Gangakhedkar where this pressure to move forward before Theranos was ready came from, she swiftly responded "from Ms. Holmes." Holmes' defense has only just begun to question Gangakhedkar and will continue Tuesday.

The court granted Gangakhedkar full criminal immunity before she took the witness stand. She told the court she took documents with her upon her departure from the company, despite her non-disclosure agreement, "to protect myself and to have as a record in the event issues came up in the future."

At the time Cheung was speaking with an investigative reporter in 2015, she believed she was being followed by people hired by Theranos. Soon after she started another job, she told jurors she was served a letter by an unknown individual at an address not many in her circle were aware of.

The jury was shown the letter, addressed from the firm Boies Schiller Flexner, and claimed she had disclosed Theranos' "trade secrets and other confidential information without authorization."

Recent Theranos financial documents made public via Holmes' trial show the company paid $150,000 to private investigators for a project titled "E. Cheung & T. Schultz project." Tyler Schultz was another Theranos whistleblower speaking with an investigative journalist at the time.

This week, Gangakhedkar will conclude her testimony.​​ Dan Edlin was once Theranos' senior project manager and one of many friends recruited to the company by Holmes' brother, Christian.

Holmes and her counsel did not respond to ABC News' repeated requests for comment.

Copyright © 2021, ABC Audio. All rights reserved.


McDonald's to make Happy Meal toys more sustainable by end of 2025

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(NEW YORK) -- From Snoopy and Power Rangers to Hot Wheels and Pokemon, McDonald's has long provided a jolt of joy with its kid-friendly toys inside the iconic Happy Meal. Now, the Golden Arches is making an earth-friendly move toward using sustainable materials in an effort to reduce plastic.

In the midst of Climate Week 2021, McDonald’s announced its goal that by the end of 2025, every toy in every Happy Meal sold around the world will be more sustainable and reduce conventional plastic by 90%, thus lowering demand on fossil fuel plastic production.

"Our next generation of customers care deeply about protecting the planet and what we can do to help make our business more sustainable," Jenny McColloch, McDonald’s chief sustainability officer said in a statement. "With this transition for our toys, we’re working closely with suppliers, families and play experts and engineers to introduce more sustainable, innovative designs and help drive demand for recycled materials, to keep McDonald’s communities and beyond smiling for generations to come."

McDonald's said some of its toys such as "fan-favorite movie characters that used to be plastic figurines may reappear as 3D figures that can be built and decorated." Other products such as mini board games with virgin fossil fuel-based plastic game pieces "may be swapped out in favor of accessories made from certified plant-derived or recycled materials."

The transition to making toys with more renewable, recycled or certified materials will result in an approximately 90% reduction in virgin fossil fuel-based plastic use, which is nearly equal to the population of Washington, D.C., eliminating plastics from their lives for a year.

The fast food chain's Happy Meal toy innovation efforts have been in motion since 2018 in other global markets including the U.K., Ireland and France, which McDonald's said has reduced virgin fossil fuel-based plastic by 30%.

"Sustainable material sourcing is a necessary strategy for mitigating the impact of supply chains on our ecosystems and climate, including the plastic waste crisis," said Sheila Bonini, the senior vice president of private sector engagement at World Wildlife Fund.

The lower demand for fossil fuel plastic will "instead create new markets for responsibly sourced renewable and recycled content," Bonini said. "McDonald's can engage its millions of daily customers around the world in the transition to a more sustainable, circular future."

The company will continue to work with other industry partners to innovate renewable materials that meet both play and safety standards and can help remove the remaining conventional plastics within the toy portfolio.

McDonald's was the first global restaurant company to set a science-based target to significantly reduce greenhouse gas emissions. Today, McDonald’s said it is on track to meet its 2030 targets, achieving an 8.5% reduction in the absolute emissions of restaurants and offices and a nearly 6% reduction in supply chain emissions intensity, compared to 2015.

The California-founded fast food restaurant also noted in Tuesday's press release that "by the end of 2020, McDonald’s was approximately 80% of the way to its goal to source all guest packaging from renewable, recyclable or certified sources by 2025."

McDonald's credited the achievements this year to cross-industry collaboration from suppliers, producers and franchisees as well as investments in renewable energy and its 2020 Responsible Sourcing Goals across beef, soy, coffee, fish, palm oil, packaging fiber and forests.

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Over 200 companies pledge net-zero emissions by 2040 as pressure on private sector mounts

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(NEW YORK) -- Nearly 90 new companies -- including multinational corporate giant Procter & Gamble, tech behemoth HP and cloud-computing titan Salesforce -- have signed onto the Climate Pledge, an Amazon-backed initiative that asks firms to commit to achieving net-zero carbon emissions by 2040.

Organizers of the Climate Pledge announced Monday a total of 86 new signatories, bringing the total number of companies involved to 201. The new commitments come as the United Nations General Assembly kicks off in New York City, with climate change talks expected to take center stage among the high-profile meeting of world leaders.

It also comes in the wake of a recent report from a U.N. panel -- that U.N. Secretary-General António Guterres called a "code red for humanity" -- warning of dire environmental consequences if immediate action is not taken to cut back greenhouse gas emissions.

ASOS, Nespresso and Selfridges are among some of the other household names who joined the pledge Monday. Altogether, pledge signatories employ more than 7 million employees across 26 industries in 21 countries.

"I believe that now, more than ever, companies like Amazon have an obligation to lead the fight for our planet," Andy Jassy, Amazon's CEO, said in a statement Monday.

"But, solving this challenge cannot be accomplished by one company; it requires all of us to act together, and it’s one of the reasons we’re so excited to announce that more than 200 businesses have joined us in signing The Climate Pledge -- a commitment to reach the goals of the Paris Agreement 10 years early," Jassy added.

David S. Taylor, Procter & Gamble's CEO and president, echoed Jassy's sentiments in a separate statement, saying that addressing climate change effectively, "requires collaboration across industries and credible science-based actions."

"P&G has made significant progress over the past decade and we know we must do more," Taylor added. "The task ahead is urgent, difficult, and much bigger than any single company can solve alone. P&G is proud to join The Climate Pledge as we work together to preserve our shared home for generations to come."

If all of the firms followed through on their promise, they would collectively mitigate some 1.98 billion metric tons of carbon emissions by 2040, according to an estimate from initiative organizers, or 5.4% of the current global annual emissions.

The firms have committed to measuring and reporting their greenhouse gas emissions on a regular basis, implement decarbonization strategies in line with the Paris Agreement's goalposts, and neutralize any remaining emissions with additional and quantifiable offsets.

A report issued last month by a U.N. panel that warned that the impacts of human-caused climate change are severe and widespread -- and that while there is still a chance to limit that warming, some impacts will continue to be felt for centuries.

The report from the U.N.'s Intergovernmental Panel on Climate Change called for "immediate, rapid and large-scale reductions in greenhouse gas emissions" in order to limit future warming to 2 degrees Celsius over pre-industrial levels, as is the goal of the Paris Agreement by 2050. The report also warned that unless greenhouse gas emissions are drastically reduced, the world will exceed 1.5 degrees of warming in the next 20 years.

When calling the report a "code red," U.N. Secretary-General António Guterres added that, "The alarm bells are deafening, and the evidence is irrefutable: greenhouse‑gas emissions from fossil-fuel burning and deforestation are choking our planet and putting billions of people at immediate risk."

Jeff Bezos, Amazon's then-CEO, announced the Climate Pledge and the company's plan to commit to net-zero carbon emissions by 2040 -- a decade ahead of the international Paris Agreement -- in 2019. At the time, Bezos said that if Amazon "can meet the Paris Agreement 10 years early, then any company can."

Christiana Figueres, the U.N.’s former climate chief and now founding partner of Global Optimism -- the advocacy group spearheading the Climate Pledge with Amazon -- said in a statement Monday that the IPCC report is the starkest warning yet that "the window of time to act decisively is narrowing."

"This wake-up call from science must be faced with courage and conviction," she added. "In this light, it’s encouraging that 86 more companies -- some of the largest household names in the world -- are now joining The Climate Pledge, committing to accelerate their actions to tackle climate change in a timely fashion, and playing their part in building a low-carbon economy."

The private sector has faced immense pressure from consumers and even shareholders in recent years to address climate change. "Industry" accounted for a whopping 23% of greenhouse gas emissions in 2019, according to the U.S. Environmental Protection Agency, behind only transportation (29%) and electricity production (25%) -- data some advocates say highlights the need for large-scale industry changes vs. putting the onus to tackle climate change solely on individuals.

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Statue of Bitcoin founder honors mysterious 'god' of cryptocurrency

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(BUDAPEST, Hungary) -- Cryptocurrency enthusiasts unveiled what they say is the world's first statue of mystery-shrouded Bitcoin creator Satoshi Nakamoto, at a park in Budapest, Hungary.

The expressionless, ultra-shiny bust is meant to represent "a general human figure, since we do not know the gender, race, age [or] height of the mysterious developer," the creators of the project wrote on a website set up for the statue's debut.

The creation of the monument to the digital currency legend was led by Andras Gyofi, the editor of a Hungarian cryptocurrency news site, as well as other key players in the Central European nation's digital currency space.

The statue features a hoodie-clad figure constructed of bronze, but the face features a special bronze-aluminum composite so "every visitor can see their own face when looking at Satoshi," the project organizers wrote. The art was the work of two Hungarian sculptors, Gergely Reka and Tamas Gilly, who decided to make the reflective face to represent a concept of "We are all Satoshi."

A global debate has ensued for years as to who the actual person or persons behind the iconic pseudonym is. Despite many people claiming to be Satoshi Nakamoto -- and a handful of others being called him by investigative reporters -- the actual original author of the whitepaper that launched Bitcoin in 2008 has not been identified.

Given Bitcoin's meteoric rise over the past decade or so -- a single bitcoin worth about $600 five years ago now is worth more than $47,000 -- Satoshi Nakamoto may have become a billionaire as cryptocurrency became more mainstream. Earlier this month, El Salvador became the first nation in the world to adopt Bitcoin as legal tender.

The mythic nature of the Bitcoin creator only seems to lend to his revered status among crypto evangelists.

A large crowd turned out to view the unveiling of the statue on Thursday in Graphisoft Park, a business park in Hungary's capital city. The statue is available for public viewing, free of charge.

The sculpture's creators look at Bitcoin as "much more" than just a cryptocurrency, and said they sought to honor the "very important legacy" of its creator.

"The underlying technology, blockchain that Satoshi Nakamoto introduced to the world, can truly make our life better," they wrote on their website. "Transparency, fairness, several other values in numerous fields, this is what blockchain truly means."

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SpaceX successfully launches first all-civilian flight into Earth's orbit

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(MERRITT ISLAND, Fla.) -- The first all-civilian flight to Earth's orbit successfully launched Wednesday.

The Falcon 9 rocket took off as scheduled at the start of the five-hour window for launch at 8:02 p.m. ET. It reached orbit about 12 minutes later.

The crew said goodbye to their families, suited up and were driven in Teslas to Kennedy Space Center's historic pad 39A Wednesday afternoon.

SpaceX's Inspiration4 mission is the third recent billionaire-backed space launch, but it's gone where neither Richard Branson nor Jeff Bezos could -- into orbit.

SpaceX tweeted at just before 11 p.m. that the crew had reached an orbit of 535 km, or about 363 miles, the farthest any civilian has traveled from Earth.

That is even further than the International Space Station, which orbits at 240 miles.

Commanding the mission is 38-year-old billionaire Jared Isaacman, an experienced pilot. He founded a payment process company called Shift4 Payments and purchased all four seats on the flight for an estimated $220 million.

Isaacman wants this launch to benefit St. Jude Children's Research Hospital. He has already donated $100 million to the cause.

One seat was reserved for 29-year-old St. Jude ambassador Hayley Arceneaux. Arceneaux is a bone cancer survivor and will be the youngest American to go to space as well as the first pediatric cancer survivor.

The third occupant will be Dr. Sian Proctor, 51, who said she has dreamed of going to space since she was a child. She burst into tears when she heard she was chosen as a member of the Inspiration4 mission.

She will become the fourth Black female American astronaut to travel into space.

The final crew member is Chris Sembroski, 41, an Iraq War veteran and engineer with Lockheed Martin, who won the final seat through a lottery that required a St. Jude donation to enter.

The four will orbit the Earth for three days with no set destination. They said they will conduct some science experiments while on board and auction off items in space for St. Jude.

There is always risk launching into space and coming home. While these passengers have been trained by SpaceX, they are not professional astronauts.

The SpaceX Crew Dragon will also be tested for the first time at this distance.

They cannot go much longer than three days without running low on fuel, food and water. And while past missions could make changes on the return because of bad weather on Earth due to astronauts on board, this ship won’t have quite as much flexibility.

After three days of orbiting Earth, they will prepare to splashdown in the Atlantic Ocean off the coast of Florida late Saturday or early Sunday.

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Walmart partnering with Ford, Argo AI to test self-driving delivery vehicles

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(NEW YORK) — Walmart on Wednesday announced plans to launch a new delivery service using self-driving vehicles in three U.S. cities, with autonomous test vehicles expected to hit the streets later this year.

The world's largest retailer is partnering with Ford and Argo AI, an autonomous vehicle tech firm headquartered in Pittsburgh, to launch the driverless delivery services in Miami, Washington, D.C., and Austin, Texas. The group said it expects to expand to other markets over time, and initial integration testing of the vehicles to begin within months.

The partnership comes as demand for delivery goods has been accelerated by the onset of the COVID-19 pandemic, and as Americans' intrigue in self-driving technology continues to make headlines and propel forward the emerging technology.

"This collaboration will further our mission to get products to the homes of our customers with unparalleled speed and ease, and in turn, will continue to pave the way for autonomous delivery," Tom Ward, senior vice president of last-mile delivery at Walmart U.S., said in a statement.

By working directly with Ford, Argo AI and Walmart will be able to implement the technology with vehicles at scale. As customer demand for next-day and same-day delivery in urban areas rises, both for groceries and other goods, the collaboration also will help the companies collect data on how customers respond to autonomous technology.

"Argo and Ford are aggressively preparing for large-scale autonomous vehicle operations across a broad footprint of U.S. cities," Scott Griffith, CEO of Ford Autonomous Vehicles & Mobility Businesses, added in a statement. "Pairing Walmart’s retail and e-commerce leadership with Argo and Ford’s self-driving operations across these multiple cities marks a significant step toward scaling a commercial goods delivery service."

As e-commerce booms in the U.S., many retailers are facing increased pressure to speed up delivery times in order to compete with behemoths like Amazon that offer same-day delivery in many urban areas. Meanwhile, firms like Tesla and its eccentric CEO Elon Musk have pushed self-driving technology mainstream in recent years, but controversies and investigations have delayed the large-scale adoption of autonomous vehicles despite Musk's past timelines for it.

Earlier this year, pizza delivery giant Domino's announced it was partnering with autonomous driving firm Nuro to launch driverless pizza delivery out of a store in Houston. Late last year, Alphabet Inc.'s Waymo launched self-driving ride-hailing services in parts of Phoenix to the public after some two years of testing.

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Citing human rights risks, UN calls for ban on certain AI tech until safeguards are set up

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(NEW YORK) — The United Nations Human Rights chief on Wednesday called for a moratorium on the sale of and use of artificial intelligence technology that poses human rights risks -- including the state use of facial recognition software -- until adequate safeguards are put in place.

The plea comes as artificial intelligence develops at a rapid clip, despite myriad concerns ranging from privacy to racial bias plaguing the emerging technology.

"Artificial intelligence can be a force for good, helping societies overcome some of the great challenges of our times. But AI technologies can have negative, even catastrophic, effects if they are used without sufficient regard to how they affect people’s human rights," U.N. High Commissioner for Human Rights Michelle Bachelet said in a statement Wednesday.

Bachelet's warnings accompany a report released by the U.N. Human Rights Office analyzing how artificial intelligence systems affect people's right to privacy -- as well as rights to health, education, freedom of movement and more.

"Artificial intelligence now reaches into almost every corner of our physical and mental lives and even emotional states," Bachelet added. "AI systems are used to determine who gets public services, decide who has a chance to be recruited for a job, and of course they affect what information people see and can share online."

The report warns of the dangers of implementing the technology without due diligence, citing cases of people being wrongly arrested because of flawed facial recognition tech or being denied social security benefits because of the mistakes made by these tools.

While the report did not cite specific software, it called for countries to ban any AI applications that "cannot be operated in compliance with international human rights law." More specifically, the report called for a moratorium on the use of remote biometric recognition technologies in public spaces -- at least until authorities can demonstrate compliance with privacy and data protection standards and the absence of discriminatory or accuracy issues.

The report also slammed the lack of transparency around the implementation of many AI systems, and how their reliance on large data sets can result in people's data being collected and analyzed in opaque ways as well as result in faulty or discriminatory decisions. The long-term storage of data and how it could be used in the future is also unknown and a cause for concern, according to the report.

"Given the rapid and continuous growth of AI, filling the immense accountability gap in how data is collected, stored, shared and used is one of the most urgent human rights questions we face," Bachelet said.

"We cannot afford to continue playing catch-up regarding AI -- allowing its use with limited or no boundaries or oversight, and dealing with the almost inevitable human rights consequences after the fact," Bachelet said, calling for immediate action to put "human rights guardrails on the use of AI."

Digital rights advocacy groups welcomed the recommendations from the international body, especially as many nations lag in implementing federal laws surrounding artificial intelligence.

Evan Greer, the director of the nonprofit advocacy group Fight for the Future, told ABC News that the report further proves the "existential threat" posed by this emerging technology.

"This report echoes the growing consensus among technology and human rights experts around the world: artificial intelligence powered surveillance systems like facial recognition pose an existential threat to the future [of] human liberty," Greer told ABC News. "Like nuclear or biological weapons, technology like this has such an enormous potential for harm that it cannot be effectively regulated, it must be banned."

"Facial recognition and other discriminatory uses of artificial intelligence can do immense harm whether they're deployed by governments or private entities like corporations," Greer added. "We agree with the UN report's conclusion: there should be an immediate, worldwide moratorium on the sale of facial recognition surveillance technology and other harmful AI systems."

Multiple studies have indicated that facial recognition technologies powered by artificial intelligence have the potential of racial bias and false negatives. Just last summer, a Black man in Michigan was wrongfully arrested and detained after facial recognition technology incorrectly identified him as a shoplifting suspect.

A sweeping 2019 study from the U.S. Department of Commerce’s National Institute of Standards and Technology found a majority of facial recognition software on the market had higher rates of false positive matches for Asian and Black faces compared to white faces. A separate 2019 study from the U.K. found that 81% of suspects flagged by the facial recognition technology used by London's Metropolitan Police force were innocent.

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As New Orleans jazz community weathers crisis upon crisis, music uplifts

Courtesy of Robin Barnes Casey

(NEW ORLEANS) — As Hurricane Ida wreaked havoc in New Orleans, it swept away a historic jazz landmark that Louis Armstrong once considered a second home.

"The message that boosting might soon be needed, if not justified by robust data and analysis, could adversely affect confidence in vaccines and undermine messaging about the value of primary vaccination," the officials wrote, backed by other worldwide organizations.

For their part, the Biden administration has emphasized that science will lead and federal regulators will have the final say -- and that their call to push out booster shots is motivated by wanting to "stay ahead" of the virus.

"You don't want to find yourself behind playing catch up," Dr. Anthony Fauci said when announcing the plan. "Better stay ahead of it than chasing after it.”

The Karnofsky Tailor Shop and Residence, which was built in 1913, collapsed after water pooled on its roof. According to the National Park Service, a young Armstrong worked for the family who owned the shop and loaned the future jazz legend money to buy his first cornet -- a brass instrument that resembles a small trumpet.

"That is another devastating blow to the community, so much history there [that] once again, a hurricane has come in and just kind of washed away," Kia Robinson, the director of programs and marketing at the New Orleans Jazz and Heritage Foundation, told ABC News.

Ida destroyed homes and businesses, knocked out power to more than 1 million residents and left at least 82 people dead. It hit Louisiana as a Category 4 hurricane on Aug. 29 -- almost exactly 16 years after Hurricane Katrina ravaged the city that is known as the birthplace of jazz.

'Insult to injury'

Before Ida, the jazz community was already reeling from the ongoing pandemic, which has shut down music venues, canceled shows and left many in the music community without an income or a lifeline.

"New Orleans is very much so a gig town, you know, people work performance to performance, gig to gig, so a lot of our musicians don't have a safety net," Robinson said.

When the pandemic hit in March 2020, Robin Barnes Casey, known as the Songbird of New Orleans, lost all of her bookings, and all of her international tours as a cultural ambassador to the city were canceled.

At the time, she and her husband, musician Pat Casey, who perform as the duo LoveBirds, had just become new parents to baby Riley.

"All of a sudden, everything we could do financially [to support our family] was just stopped," Barnes Casey said.

"It was definitely mentally, emotionally an exhausting time and then also being brand new parents, we had a challenge and a blessing," she added.

As COVID-19 vaccines became widely available this spring, some musicians were able to book some gigs again. But amid a surge in cases in Louisiana and the emergence of the delta variant, the city again had to take a step back.

Gov. John Bel Edwards reinstated the mask mandate in August, and large gatherings like the New Orleans Jazz and Heritage Festival, which was scheduled to run in October, were canceled again this year.

For New Orleans saxophonist Derek Douget, Ida has added “insult to injury.”

"COVID took away all the gigs, [and] then the hurricane comes in, not only taking the gigs or prospects of gigs away, but it's destroyed your property," Douget told ABC News as he helped his parents deal with hurricane damage to their home.

The Jazz Foundation of America deployed teams of volunteers to assess needs and provided financial assistance to thousands of musicians -- from direct payments to fulfilling need-based requests, most recently providing those who lost power during Ida with generators and fuel tanks.

"We have a long history, a long and painful one, of working with musicians in Louisiana and throughout the South during these natural disasters,”"Jazz Foundation of America executive director Joseph Petrucelli told ABC News.

The Jazz Foundation of America raised over $2 million for its COVID-19 relief fund, while the New Orleans Jazz and Heritage Foundation supported more than 2,500 in the Louisiana jazz community through grants.

"During 2020 we assisted more musicians and more families across the country than we did in any year previous," Petrucelli said. "This was because we're dealing with such widespread deprivation and devastation and loss of work that the need was really universal."

'We celebrate life'

When Katrina struck New Orleans in 2005, Barnes Casey was 17, and as she left her home in New Orleans amid the destruction, she found hope in music.

"Music has always been my salvation and my therapy and my happiness," she said. "I survived mentally through Katrina because I listened to music all the time.”

This is why, despite all of the roadblocks before them, the Caseys -- along with thousands of other musicians -- were determined to keep the music going, despite the pandemic and despite Ida, through uplifting virtual performances.

And according to Petrucelli, many were able to raise relief funds to support the music community through their efforts. "There's just been so much, so much goodwill and kindness," he said.

"It was such a blessing for us, because we were able to still do what we loved, we were able to still perform and make people happy," Barnes Casey said. "[Music] can make people mentally check out and think about the beauty of the world and forget the sorrows of the world.”

And the sorrows for the jazz community amid the pandemic have been immense. The human toll of the virus touched every corner of the jazz world as dozens of jazz musicians and producers died of COVID-19, including New Orleans jazz legend Ellis Marsalis.

For Douget, Marsalis' death in April 2020 was particularly painful.

Douget was a member of the Ellis Marsalis Quintet for 25 years and first met Marsalis when he was 17. He considered him a mentor and a friend.

"He was a true intellectual, just intellectually curious all the way to the end of his life. Losing him was devastating," Douget said. "He was like a father figure to me and to a lot of the musicians, particularly the ones that played in his band.”

Just last week, prominent New Orleans musician Bennie Pete, a founding member of the Hot 8 Brass Band, became the latest member of the city’s jazz community to die of COVID-19.

Even amid great loss, Barnes Casey said the resilient spirit of New Orleans and its music community continues to uplift.

"Despite that's all going on, [New Orleans] is such a unique place, because we celebrate life so much. We even, you know, we celebrate funerals, but it's more about celebrating the life that we're sending off," she said.

And in that spirit, Douget continues to teach the next generation of musicians, carrying on the legacy of greats like Marsalis who dedicated their lives to jazz education.

"They had a profound influence on my life," Douget said. "They showed me that, of course, learning your instrument and learning the craft, all that is important, but it's just as important to pass it along to the next generation of young people. And that's what their lives were about. That's what they did. And I tried to basically model my life on theirs."

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Remote workers spur housing boom in smaller US cities, drive up prices

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(NEW YORK) -- Travis and Emily Elwood never imagined that they would call Billings, Montana, home.

The couple moved here from Portland, Oregon, last year when the pandemic forced them to reevaluate their priorities.

“I think humans just… are creatures of habit,” Travis Elwood told “Nightline.” “The pandemic coming in and forcing a change, versus one that you volunteer for, really just shook things up and everybody's day-to-day lives and just kind of opened their eyes. [The massive change] broke off those chains and shackles [that] kind of held them in place.”

He and his wife are part of a great reshuffling taking place in the U.S. According to American real estate company Zillow, more than one in ten Americans have moved in the past year.

“For a long time, people have thought to move closer to cities because that's where jobs are and if you wanted to minimize your commute, you wanted to get as close as possible. Now, as a result of the pandemic, a lot of workers have been untethered from their offices. And so that means they can broaden their search horizons for real estate,” Danielle Hale, chief economist at realtor.com, told ABC News.

“They're looking for good value further away from those downtown cores. And that's led to home price increases,” she added.

The Elwoods had long talked about leaving Portland for a more affordable city.

“Rent for like a small apartment is quite astronomical. I mean, you're looking $1,700 to $1,900 a month for a two-bedroom apartment,” Travis Elwood said.

When his wife began working remotely, the change gave the couple financial security -- and they decided to take the plunge.

“We never in Portland would have been able to afford a house there, at least nothing like what we have now,” Emily Elwood said. “We were making pretty good money, but we just realized we were never going to buy there.”

Billings happened to have almost everything they were looking for.

“We wanted to change, so we wanted to make sure it wasn't just a side step from where we were and something that was different, provided us new or different opportunities than-than we originally had,” Travis Elwood said.

The Montana city is #1 on the Wall Street Journal and Realtor.com emerging housing markets index

“I think people are kind of waking up to what many of us here have known,” Bill Cole, the mayor of the city, told “Nightline.” “Covid reminded us that life is not all about jobs and money. It's about relationships, quality of life, and being part of a community. And Billings has those intangibles.”

Hale explained the Wall Street Journal /Realtor.com Emerging Housing Markets Index is designed to track real estate markets that are going to be attractive for investment.

“[It’s] looking at a lot of different data indicators on things like amenities and quality of life, like low commute times, things like decent wages and low unemployment rate,” Hale said. “That makes these areas well rounded places where you'd actually want to live. And if you invest in real estate in these markets, you can expect a good return.”

Rounding out the emerging markets index list is Coeur D’Alene, Idaho, and Fort Wayne, Indiana. These locales show that smaller, more affordable cities are becoming some of the most popular places to live in the country.

The Elwoods traded in their two-bedroom apartment for a four-bedroom house with a backyard for their two dogs.

“Our mortgage here is actually less than what we're paying and rents in Portland,” Emily Elwood said.

Her husband found a local job almost immediately. Billings has a population of less than 200,000 people, but its unemployment rate hovers around 3% -- lower than the national average of 5.2%.

“I had a handful of offers in my first week here, so within my second week of being in Montana, I had a job,” he said.

Husband and wife realtors Megan and Jason Wood sold the Elwoods their home.

“Living in Billings and living in south central Montana is all about being close to the mountains and having the access to the river and the desert and some of the other nice outdoor activities,” Jason Wood told “Nightline.”

Like many mid-sized cities, Billings is experiencing a pandemic real estate boom.

“Pre-pandemic in 2019, there was about three-and-a-half months worth of inventory sitting on the market. Today, we have about three weeks worth of inventory,” Megan Wood said.

Houses are flying off the market.

“Houses are moving very quickly here. So you have three, four or five days to get an offer in and get an offer accepted,” her husband said.

While still less expensive than many cities, prices are going up. The average single-family home price in Billings and the surrounding area was $376,248 in June, up almost 28% from a year earlier.

“Homes in Billings are definitely going above asking price at the moment,” Megan Wood told “Nightline.” “The median for the month of July, the median amount over the asking price was about 6% sales price versus the list price.”

It seems new homes can’t be built quickly enough to keep up with demand. Almost all the homes in the subdivision, which range from $350,000 to $700,000 are already sold.

“The demand for houses is very, very high this year. We're selling houses as soon as they're done or even before they're done,” Chad Wagenhals, Builder/Realtor at CDW Construction said. “We probably get a house framed and within the first two weeks, the house is sold. So if the house goes on the market, it's usually sold in two or three days, if not two or three hours.”

With remote work freeing many people from their daily commute, families looking to stretch their dollar and their square footage are being up the suburbs, too.

“It's crazy. It's absolutely crazy,” real estate agent Pat Davis said. She’s been selling homes in the New Jersey suburbs of New York City for 30 years. “We have a lot of young people coming in with children that are looking for these types of homes, starter homes, three bedrooms, looking for it to entertain their families and have them come out.”

Davis just listed a house in Montclair, New Jersey, for $639,000. The town has become a magnet for families who want to live in the suburbs but still have easy access to New York City. With its direct trains, highly rated schools and quaint downtown area, it has much of what home buyers are willing to pay top dollar for.“What we're seeing is a lot of families with young children, two and younger,” Pat Davis said.

Davis says the house went into contract for more than asking price, after just 13 days on the market.“We did a weekend open house on Saturday, Sunday. We had over 50 people come through,” Davis said.

Not everyone can afford this. The boom has locked out many first time buyers across the country, who are losing their dream homes to all-cash, above-ask offers.

“It's really tough to compete in a market like this,” Davis said. “If you're a first time home buyer and you don't have the down payment money, if you're using one of the products that's available for people that are first time home buyers, that don't have a lot of down payment money… They're just not able to compete in this marketplace.”

“On the flip side, the one thing that is a positive for first time buyers is that they tend to take out larger loans,” Hale said. “They're borrowing more money. And so low mortgage rates really help to benefit first time home buyers. But in today's competitive market, the biggest challenge for many is finding a home that's right for them and then winning the offer.

The Elwoods had to pay over asking price to close the deal on their house.

“We ended up having to put, you know, about $30,000 more or above the asking price. And even with that, we are one of 10 offers that came in,” Travis Elwood said. “So [that] really shows how crazy the house market has gotten over the last few months and so forth.”

But the couple says their new life in Billings makes it all worth it.

“I’d do it a hundred times over,” he added. “Thankfully, we've been blessed that it has come out in the best case.”

“It feels like home here,” Emily Elwood said.

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