Tag: finance

Above all things, Waffle House has made a reputation for itself as being reliable. The 24-hour diners, scattered mostly South of the Mason-Dixon line in the U.S. have become a staple for always being open and providing late-night (or early morning) eats for the kind of crowd that’s likely to drift into a diner at 2am on a random Wednesday night.

Now, as the country looks to try and figure out what a “re-opening” from the coronavirus pandemic could look like, one place they may want to turn is Waffle House, according to Bloomberg.

Waffle House surprised exactly no one when it was the first to take Georgia Governor Brian Kemp’s plans for re-opening to hear. The chain had closed 700 of its 2,000 locations is now preparing to see whether its customers come back. 

Njeri Boss, a spokeswoman for Waffle House, said: 

“We always have a contingency plan. We’re just going to have to adapt as we see whether customers return or not.”

And while Kemp drew the ire of many people by being one of the first to embrace re-opening his state, Waffle House gets a pass. Anyone who knows the chain isn’t going to be surprised that it’s opening back up as soon as possible.

Waffle House locations are known for their resiliency, with FEMA occasionally gauging how bad a storm is by whether or not Waffle House shuts down, now called – and we swear we are not making this up – the Waffle House Index.  

The index has three levels:

• GREEN: full menu – restaurant has power and damage is limited or no damage at all.

• YELLOW: limited menu – no power or only power from a generator, or food supplies may be low.

• RED: the restaurant is closed – indicating severe damage or severe flooding.

One customer from Georgia, while picking up takeout food and hearing about Waffle House re-opening for sit-down service, said: “Waffle House never closes — rain, hurricanes. I think my wife and I will go in first before the kids.”

Georgia’s plan for re-opening was drawn up by a 20 person team that includes Joe Rogers III, Waffle House’s current EVP. The chain had kept 1,250 of its restaurants open for take-out during the lockdown. About 400 locations across Georgia and Tennessee opened for sit-down service again this week. From the get-go, reception of the re-opening was slow:

Three people came into a suburban Atlanta unit for takeout orders over a span of an hour Monday morning, but no one sat down. Waffle House employees joked that customers may have been scared off by the horde of news crews gathered outside to record the scene. A couple miles away at another Waffle House, two people sat at the counter as another man unfurled a newspaper at a booth.

The diners are sanitizing common items, like the jukeboxes and tables, more frequently. They are also taking measures to keep people apart:

The staff placed plastic bags over the backs of four of the six stools at the front counter to keep people apart, while sealing off certain booths with red tape. The traditional place-mat menus with their lists of smothered hashbrowns, eggs and biscuits aren’t on tables anymore, though customers can get paper ones or request the plastic variety.

Boss concluded:

 “We weren’t expecting that we were going to be overwhelmed with customer demand right away. We knew it was going to take some time.”

Godspeed, Waffle House. Godspeed. 

Well… that puts an end to any ‘hopes’ that Hillary Clinton will run… again. ‘She’ appears to be ready to endorse Joe Biden…

A little hint about who the surprise guest will be for @JoeBiden‘s 3pm ET town hall today:

(She’s excited.) pic.twitter.com/iGHo6a6G1s

— Hillary Clinton (@HillaryClinton) April 28, 2020

And Obama’s boy is pleased…

Perhaps the former vice-president has forgotten who is running? Doesn’t he mean “She’s with me”?

Kiss of death? Who knows. But if you believe the polls (like Hillary did), Biden has this all wrapped up as he leads Trump nationwide.

But still, we wouldn’t be doing our journalistic duty if we didn’t discuss the latest ‘gaffe’ from the Democrat’s nominee…

I need to ask my wife first if I can have economic intercourse pic.twitter.com/X145xWg4qE

— Ramp Exotic (@RampCapitalLLC) April 28, 2020

Authored by Tsvetana Paraskova via OilPrice.com,

Oklahoma Governor Kevin Stitt called on U.S. President Donald Trump to declare the coronavirus pandemic an ‘Act of God’ to help oil firms in Oklahoma as they look to curtail or stop production until demand recovers.

In a letter sent to President Trump on Saturday, Governor Stitt asked the Administration to declare the pandemic an ‘act of God’, which, as per a U.S. code on oil pollution liability and compensation is “an unanticipated grave natural disaster or other natural phenomenon of an exceptional, inevitable, and irresistible character the effects of which could not have been prevented or avoided by the exercise of due care or foresight.”

Governor Stitt of Oklahoma wrote in his letter to President Trump that by declaring the COVID-19 pandemic an ‘Act of God’ or force majeure, the Administration would protect producers “from actions to cancel leases held by production as a result of production stoppage.”

“This will be a necessary step to encourage and support those operators who choose to stop production until demand returns and storage becomes readily available,” Gov. Stitt said.

“Over-production of oil continues to threaten the economy, posing many environmental threats to Oklahoma and other producing states with no demand and rapidly diminishing storage capacity,” the Governor noted.  

Oklahoma Corporation Commission, the oil regulator in the state, passed last week an emergency order allowing oil producers to keep their leases if they shut production due to the very low oil prices, collapsing demand, and storage shortage.

Oil producers in Oklahoma and across the entire U.S. oil patch are curtailing production amid the glut and regional prices in the single digits because of lack of storage amid crashing demand.

Continental Resources is said to have stopped drilling operations and shut in most of its wells in North Dakota, ConocoPhillips is curtailing some production in Canada and the U.S. until market conditions improve—and these are just a few examples of large companies responding to the gloomy market conditions.

Following two spectacular coupon auctions, with a surge in buyside demand for both the 2Y and 5Y Treasury auctions held on Monday, moments ago the Treasury sold $35BN in the week’s final coupon issuance in this truncated week, which priced at a yield of 0.525%, tailing the When Issued 0.524% by 0.1bps, if well below last month’s 0.68% and the lowest 5Y auction yield on record.

Unlike yesterday’s remarkable 2Y auction which saw the Bid to Cover surge to a 6 year high, the internals today were not nearly as pretty, with the BTC dropping to 2.565 from last month’s 2.758, although in fairness that was the highest ratio since Jan 2018 so it was hardly concerning. Indeed, the six auction average of 2.50 was below the April bid to cover.

Finally, and once again confounding Lloyd Blankfein, there was no shortage of foreign buyers, with Indirects taking down 66.45%, the most since November, and with the Direct takedown also rising from the 9.1% in March to 12.3%, Dealers were left with 21.3% of the auction, the lowest also since November.

Overall, this was a solid auction especially after today’s rally across the curve, and hardly indicative of buyers who are worried about digesting the record Treasury supply tsunami headed for the US as $4 trillion in total debt issuance this year means far higher bond auction sizes  arrive as soon as May, according to Goldman.

It looks like Nancy Pelosi will be forced to plow through ice cream from her the forseable future after House Democrats changed their minds on Tuesday about returning to Washington next week over fears about whether it’s safe to return to the Capitol during the COVID-19 pandemic.

“We will not be meeting next week,” House Majority Leader Steny Hoyer (D-MD) told reporters, adding “The House physician’s view was that there was a risk to members that was one he would not recommend taking.”

The House was originally slated to return next Monday, however the Capitol Physician warned that Washington D.C. has yet to ‘flatten the curve.’

Hoyer said that House leaders will instead wait to call members back to Washington when the next round of coronavirus relief legislation is ready for a vote. House members have gathered en masse in the Capitol twice in the last several weeks since the social distancing restrictions began to vote on bills to respond to the crisis, but only returned in session for a day at a time.

Hoyer acknowledged that it would be more “dangerous” for lawmakers to stay in Washington for extended amounts of time, like they typically do, than it is for members to be in the Capitol for a short period of time –The Hill

“So under those circumstances, we have decided that we will not come back next week but we will come back very soon to pass the [next] piece of legislation. And at that point in time, we will be asking members to return to Washington,” Hoyer added. 

Meanwhile, discussions are underway between Hoyer, House Minority Leader Kevin McCarthy (R-CA), and leaders of the Rules and Administration committees as to how lawmakers can conduct business virtually while maintaining social distancing.

“We are going to be working in the interim on trying to facilitate committees meeting in a real way, but virtually, and provisions for the House of the Representatives to meet if in fact members cannot come back because of the virus,” said Hoyer.

According to the report, the Senate will still reconvene on Monday according to Majority Leader Mitch McConnell (R-KY), who said on Monday that the upper chamber would “modify routines in ways that are smart and safe.”

Washington, D.C. remains under a stay-at-home order through at least May 15, along with many other states from which lawmakers would be traveling.

House officials established new safety protocols for the votes last week on an interim coronavirus relief bill to renew funds for the small business loan program and hospitals, as well as a measure to create a select committee to oversee the federal coronavirus response. The votes were staggered so that lawmakers voted in smaller groups based on alphabetical order.

Guidance from House officials that everyone wear face masks had mixed results. Most members of both parties wore masks, but some GOP lawmakers opted to forgo the advice. -The Hill

During a Monday conference call, Hoyer and House Speaker Nancy Pelosi (D-CA) told colleagues that they would proceed with a vote on allowing a form of remote voting – an idea which House Democratic leaders have warmed up to. 

Widespread severe thunderstorms are expected to develop on Tuesday from Texas to Wisconsin, unleashing damaging winds, torrential rain, hail, and the threat of tornadoes in some regions.

“An upper-level trough will dig southeastward from the northern Plains into the central Plains today. An associated mid-level jet will dive southeastward into the central Plains. The leading edge of the stronger mid-level flow associated with the jet will overspread a corridor of maximized low-level moisture located from northeast Texas north-northeastward into the Ozarks,” the National Weather Service (NWS) Storm Prediction Center reported on Tuesday morning. 

“Moisture advection ahead of the system, will increase surface dewpoints into the 60s F across most of Oklahoma, Arkansas and Missouri by afternoon. In response to surface heating, the moisture will contribute to moderate destabilization with MLCAPE values reaching the 2000 to 4000 J/kg range across parts of the moist sector. Thunderstorms are forecast to first initiate to the south of a surface low on the northern edge of the moist airmass in eastern Iowa around midday.” 

NWS said a “squall line” will develop by evening as the system moves “southward across southwest Missouri, western Arkansas and east-central Oklahoma.”

“Wind damage will be likely along the leading edge of the squall line. Wind gusts over 65 kt will be possible ahead of the faster moving parts of the squall line. A few tornadoes may also occur with rotating cells embedded in the line. A widespread wind damage threat should continue into parts of north-central and northeast Texas during the mid to late evening before a gradual weakening takes place due to overnight decreasing instability.” 

Fox News senior meteorologist Janice Dean said, “if you live across portions of the Plains states up towards the Midwest, you need to pay close attention to your local weather forecast as well as your watches and warnings, because we have another round of strong storms” for Tuesday. 

At least 60 million Americans will be threatened by severe storms throughout the day.

Dean says the system will shift into the Southeastern US on Wednesday. She said these are the same areas that have been rocked by storms in the last few weeks.

Stay safe…

Authored by Paul Joseph Watson via Summit News,

According to radio host Howard Stern, Trump supporters should gather for a large coronavirus rally, take disinfectant and “drop dead.”

The SiriusXM host made the remarks while taking a call from a Trump supporter who claimed the president was being “sarcastic” when he discussed using disinfectant to kill the novel coronavirus.

“What’s it going to take? I don’t get it,” Stern responded, noting that he reacted to Thursday’s Trump press conference by telling his wife, “I don’t think there is anyone left who will vote for him.”

Wow listen to what Howard Stern thinks about Trump supporters.

He says Trump should hold a big rally and have all of his followers essentially give eachother Coronavirus, drink disinfectant, and “drop dead”.

Who even jokes like this.

Sick. pic.twitter.com/8wkPBvwI6m

— Benny (@bennyjohnson) April 27, 2020

Stern then suggested that Trump supporters organize a massive protest during which they kill themselves by drinking disinfectant.

“Hold a big rally – say fuck this coronavirus – with all of his followers – and let them all hug each other and kiss each other and have a big rally…and all take disinfectant and all drop dead,” said Stern.

Trump had previously appeared on Stern’s show numerous times and the two were at least at one time friends, but Trump has not been back on since he ran for president.

*  *  *

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President Trump, on Tuesday, said he would be signing an executive order to address the meat supply aimed at Tyson Foods Inc.’s shuttered meatpacking plants that could disrupt the nation’s food supply chain in May.

The president did not elaborate much on the executive order but noted Tyson faces a “unique circumstance” in terms of its liability. When asked about the supply of meat in the country, President Trump said: “There’s plenty of supply.”

On Twitter, President Trump, on Tuesday morning, retweeted The Counter, a non-profit news organization focused on the nation’s food supply, that read: “First, there is no shortage of meat destined for the grocery store shelf. It might take stores longer than usual to restock certain products, due to supply chain disruptions. But we have many millions of pounds of meat in cold storage across the nation. 4/.” 

First, there is no shortage of meat destined for the grocery store shelf.

It might take stores longer than usual to restock certain products, due to supply chain disruptions. But we have many millions of pounds of meat in cold storage across the nation. 4/

— The Counter (@TheCounter) April 27, 2020

President Trump’s comments come as the starkest warning yet that high food prices could last for a long time, Tyson Foods warned in a full-page ad in the New York Times on Sunday that the “food supply chain is breaking.”

“As pork, beef and chicken plants are being forced to close, even for short periods of time, millions of pounds of meat will disappear from the supply chain,” wrote Tyson Chairman John Tyson, patriarch of the company’s founding family, in a Tyson Foods website post that also ran as a full-page ad in several newspapers. “The food supply chain is breaking.”

On Monday, we explained how food supply chains are being stressed across the country: 

News feeds in April have been inundated with food supply chain disruption stories due to coronavirus-related shutdowns. At least a third of US meatpacking facilities handling hogs have shifted offline this month, other plants that process cows and chickens have also shuttered operations, forcing farmers to cull herds and flocks. This is because each plant closure diminishes the ability for a farmer to sell animals at the market, leaves them with overcapacity issues similar to the turmoil facing the oil industry. Only unlike oil where pumped oil must be stored somewhere (as one can’t just dump it in the nearest river) even if that ends up costing producers money as we saw last Monday when oil prices turned negative for the first time ever, food producers have a simpler option: just killing their livestock.

We previously explained what this imbalance has created: crashing live cattle spot prices while finished meat prices are soaring, which doesn’t just affect farmers but also consumers simultaneously and could spark a shortage of meat at grocery stores as soon as the first week of May.  

Bloomberg’s map shows the latest closures of meatpacking plants: 

It appears our reports on meat shortages developing across the country could materialize in the next several weeks as President Trump is about to sign an executive order to address the issue.

Of all of the “oddities” to come out of Tesla over the last decade or so, the one thing the company was never stupid enough to do – amidst what appears to be a neverending flurry of lawsuits and legal problems – was drop its D&O insurance.

Directors and officers insurance is “liability insurance payable to the directors and officers of a company, or to the organization(s) itself, as indemnification (reimbursement) for losses or advancement of defense costs in the event an insured suffers such a loss as a result of a legal action brought for alleged wrongful acts in their capacity as directors and officers.”

D&O insurance is absolutely vital for any public company, but especially for a company that finds itself embroiled in far more controversy and litigation than others. Like a company where the CEO bails out his cousin’s failing solar company.

Or a company where the CEO openly and brazenly commits securities fraud on Twitter.

But alas, that is the path that Tesla has now taken, making it one of the only major public companies we can remember anytime recently that will go forward indemnified personally by its CEO, instead of carrying insurance. Tesla’s newly filed 10-K/A states:

Tesla determined not to renew its directors and officers liability insurance policy for the 2019-2020 year due to disproportionately high premiums quoted by insurance companies. Instead, Elon Musk agreed with Tesla to personally provide coverage substantially equivalent to such a policy for a one-year period, and the other members of the Board are third-party beneficiaries thereof.

The Board concluded that because such arrangement is governed by a binding agreement with Tesla as to which Mr. Musk does not have unilateral discretion to perform, and is intended to replace an ordinary course insurance policy, it would not impair the independent judgment of the other members of the Board.

There’s obviously a couple of odd conclusions we can draw from this:

• First, it appears that absolutely no one wants to be on the hook for insuring Tesla, at least at a price that’s reasonable. Just like car insurance, D&O insurance premiums rise depending on how much of a risk the insured is.
• Second, we have to ask why Tesla can’t pay these premiums regardless. Doesn’t the company have $6 billion in the bank and isn’t it generating cash consistently?
• Third, Elon Musk’s net worth is, by his own admissions, illiquid and tied to the price of Tesla stock. If the stock were to crater as the result of a liability, wouldn’t it serious infringe on Musk’s ability to providing all of his Directors and Officers with costly legal representation?

Finally, the craziest thing is that Tesla “determining” to drop its coverage comes at a point where the company’s legal issues appear to be escalating the most, according to numbers PlainSite pointed out as of January 2020:

Perhaps Musk is just feeling emboldened monetarily and has already accounted for a $750 million payday he has coming if the company’s market cap can stay over $100 billion for a couple more days. Recall, just yesterday we noted that Tesla laid off 300 janitors to save $2 million after Musk’s net worth had advanced $650 million in April. 

Regardless, why might D&O insurance be of extreme importance for Tesla in the future? 

“Such coverage can extend to defense costs arising out of criminal and regulatory investigations/trials as well; in fact, often civil and criminal actions are brought against directors/officers simultaneously. Intentional illegal acts, however, are typically not covered under D&O policies.”

 

40 year veteran of Wall Street and well-respected short seller Jim Chanos commented on Twitter:

In 40 years on Wall Street, I have never seen this before. The CEO is insuring the board for negligence.

In 40 years on Wall Street, I have never seen this before. The CEO is insuring the board for negligence. $TSLA pic.twitter.com/PBJe8IfuDe

— Diogenes (@WallStCynic) April 28, 2020

Authored by Mike Shedlock via MishTalk,

The Fed is robbing the middle class once again…

For the third time in 20 years, the Fed has targeted the middle class for the benefit of the wealthy.

Don’t believe Fed lies. Its bailout of risky debt including junk bonds helps investors, not employees. 

Once again, the Fed Punishes Prudence.

The Fed will deploy more than $1.45 trillion in support of investors in leveraged assets—more than double the size of the 2008 Troubled Asset Relief Program, and over $7,000 for each working-age American. That includes $750 billion to purchase recently downgraded junk bonds and bond exchange-traded funds—an unprecedented intervention in the private credit markets.

Pumping trillions of dollars into corporate credit and even high-yield debt will further distort markets already shaped by a decade of easy-money policies. This is no abstract concern. The result will be an acceleration of two economy-wide transfers of wealth: from the middle class to the affluent and from the cautious to the reckless.

The transfer from the middle class to the wealthy continues a trend begun in the wake of the 2007-09 financial crisis. 

But bankruptcies among highly leveraged businesses often pose surprisingly little risk to employment. More often than not, creditors choose to keep businesses staffed even when restructuring to retain value for the long-term. By preventing these bankruptcies, the Fed is doing more for equity holders and junior creditors than for employees.

Almost Spot On

Authors Sam Long and Alexander Synkov are almost spot on.

What did they get wrong?

This trend did not begin in the wake of the 2007-09 financial crisis.. Rather it’s been an ongoing process. 

Importantly, this is the third major acceleration in the process. 

1. The first major acceleration began in the wake of the dot-com bust when the Fed bailed out the lenders who made loans to worthless companies. Housing prices soared to the moon as the Fed stood by and watched. Bernanke denied there was a bubble. The transfer of wealth to the likes of companies like Countrywide Financial was massive.

2. The Second acceleration was in response to the bust. For the second time, the Fed held rates too low to long.  Asset prices went to the moon and speculation surpassed that of the housing bubble and the dot-com bubble.

3. This preposterous entry into Junk bonds and other bailouts is the third major acceleration and the Fed had to bend some rules to do so. Buying junk bonds is illegal under its actual mandate.

Pole Vaulting the Boundaries

Some claim the Fed pushed the boundaries by buying junk bonds.

I suggest When you take illegal actions and enter numerous uncharted territories on balance sheet expansion, junk bonds, and bond ETFs you are not “pushing” the boundaries, you are pole vaulting over them.

Too Big to Fail

Note my post earlier today: Carnival Deemed Too Big to Fail, Rescued by the Fed.

Carnival needed money. The Fed became the lender of last resort.

Carnival could easily file for bankruptcy reorganization and reschedule debt payments.  One of my friends commented “This is just a play to save the equity, who are Trump’s friends.” 

OK but why would the Fed do this? 

“Because he has appointed a ball-less group of wimps. It largely does what he wants. Particularly on a petty issue like this,” replied my friend.

The transfer of wealth from the middle class to the wealthy just accelerated.

What constitutes “too big to fail” keeps getting smaller and smaller. 

Why Rob the Middle Class?

Some may be wondering why the Fed has targeted the middle class. 

Because as Willie Sutton once replied when asked why he robbed banks, “Because that’s where the money is.” 

The poor do not have any assets or money left to setal. 

There Are No Temporary Measures, Just Permanent Lies

Under guise of virus support, the Fed Will Buy Junk Bonds, Lend to States to the tune of an additional $2.3 trillion in additional aid.

Dear Jerome Powell, please tell the truth. This is not virus support, it’s stock market support.

This new junk bond “tool” is now permanent.

Always remember, There Are No Temporary Measures, Just Permanent Lies.