Patrick Byrne, the pro-Trump former Overstock CEO admits funneling cash to his ex-lover Maria Butina, the glamorous spy expected to be elected to Russia"s parliament

Maria Butina, a spy jailed and deported by the US, is standing for the Russia's parliament. Insider spoke to Patrick Byrne about their relationship. Former Overstock CEO Patrick Byrne (L) and Russian agent Maria Butina (R) Getty Images/AP Former Russian agent Maria Butina stood for a seat in Russia's parliamentary elections, last week. In 2018 Butina was jailed for acting as an unregistered foreign agent in the US. Butina recently received large sums of money from her ex-boyfriend Patrick Byrne, the former CEO of online retailer and Donald Trump supporter. See more stories on Insider's business page. Maria Butina, the Russian agent convicted and jailed for trying to infiltrate political organizations in the United States, is expected to be elected to the State Duma, the lower house of parliament in Russia, this week.The 32-year-old stood for President Vladimir Putin's ruling United Russia party as a list candidate in the rural region of Kirov Oblast, in last week's elections. United Russia is predicted to have a significant majority in the legislature following allegations of massive fraud by opponents, according to Reuters. With 99.9% of ballots counted, United Russia had won nearly 50% of the vote Central Election Commission, the news agency reported.It is the latest chapter in a political thriller of a life for the young Russian. She has played the role of the girlfriend to powerful men on the US Right and grabbed the headlines when she was arrested for spying. She was imprisoned before being deported to her homeland to a hero's welcome.The Russian agent arrived in the US in the guise of a guns-rights activist and focussed on the leadership of the National Rifle Association (NRA) to meet high-profile Republican politicians and set up a "back-channel" of communications with the Kremlin, according to reports.But Butina was arrested in July 2018 in Washington DC and accused by federal prosecutors of infiltrating powerful political circles at the direction of Russian officials.She pleaded guilty to conspiring to act as a foreign agent and was jailed for 18 months. Putin called the sentencing "an outrage." After her release in October 2019, she was deported back to Russia.'I have one weakness as a woman - I really like smart men' Maria Butina appears in a police booking photograph released by the Alexandria Sheriff's Office in Alexandria, Virginia, U.S. August 18, 2018. Alexandria Sheriff's Office/Handout via REUTERS/File Photo Insider can reveal that Butina has not severed all her connections with the US. She has received large sums of money in the last year from Patrick Byrne, 59, the former CEO of online furniture retailer and Donald Trump supporter and conspiracy theorist.When asked about the monetary gifts, Byrne told Insider, in an email: "I made a gift to Maria out of a desire to let her land on her feet and restart her life in Russia."Byrne and Butina had been in a romantic relationship, and Byrne later claimed that he had been passing information on his lover to the FBI.Federal prosecutors said that Butina traded sex-for-favors while networking in political circles in Washington DC.Butina formed a romantic relationship with Paul Erickson, 59, a longtime Republican strategist and guns-rights activist, who she met in Moscow in 2013 and with who she also lived for some time.In 2015, Butina emailed him about her plan to influence US policy towards Russia by making inroads with the GOP through the NRA, and Erickson responded with advice.Around this time, Butina also began a romantic relationship with Byrne.Butina said of Byrne, according to The New York Post: "I have one weakness as a woman - I really like smart men. That's my biggest weakness, and that I guess gets me in trouble all the time." Byrne later said he continued his relationship with Butina at the direction of the FBI. Butina once claimed that he tried to poison her in order to interrogate her while under the influence.Despite the apparent betrayal, a video made by jailed opposition leader Alexei Navalny's team revealed that Byrne gifted Butina tens of millions of Russian rubles in the last year, according to her asset disclosures.Recalling their unique relationship, Byrne told Insider the money he recently sent her was to make amends: "Because I felt badly for Maria, for the role I had played in helping the FBI set her up, and in the way I had misused her in my own designs."But, he added, the couple will never be reunited. "Maria and I know that we will never meet again, but it seemed like the right thing to do. When I performed this act of generosity I made sure it was done with full legality and notification to the proper authorities."Last month Russia's Communist Party called on election officials to reject Butina's candidacy on the grounds that she is the recipient of "foreign funding," specifically referring to Byrne's gifts.Insider could not reach Butina for comment.Butina was photographed with top GOP politicians at NRA events Maria Butina poses for a photo at a shooting range in Moscow, Russia on April 22, 2012. Pavel Ptitsin/AP Butina's foray into politics began in 2011, when she founded a Russian gun-rights group called Right to Bear Arms, and started working as a special assistant for former senator and current Central Bank official Alexander Torshin.Butina and Torshin formed close relationships with the NRA, regularly flying to the US to attend conferences and being named "life members" by the organization.In 2014 and 2015 Butina was photographed with senior Republican politicians at NRA events, including Louisiana Governor Bobby Jindal, former senator and presidential candidate Rick Santorum, and Wisconsin Governor Scott Walker.She also met Donald Trump Jr. at an NRA convention and asked Donald Trump a question about relations with Russia at an event.In 2016 she moved to the US on a student visa, at which point the FBI supposedly started monitoring her and eventually snared her as a spy.After serving her jail sentence, Butina returned to Moscow and took a job at the Russian state-funded television channel RT.In April 2021 Butina filmed a segment in which she visited Alexei Navalny in prison to report on the "exemplary" jail conditions and to counter the opposition leader's protests that he was being poorly treated.At the time Navalny was on a hunger strike after being denied medical treatment.This weekend's parliamentary elections in Russia have been widely described as lacking transparency and fairness after the Kremlin cracked down on political opposition and limited press freedom.Alexei Navalny had encouraged voters to vote tactically in order to beat United Russia candidates, as part of a movement called "smart voting."It remains to be seen what kind of politician the reinvented Butina will be, and what this next chapter will hold.In a recent campaign video Butina said she felt indebted to her country and her people after "everyone from the President to residents in the depths of Russia fought for my release.""I will be very glad to be useful to the Kirov region," she said.Correction: In the published article it originally stated that Maria Butina had been elected to the Russian Duma. It should have said she was a candidate.Read the original article on Business Insider.....»»

Category: topSource: businessinsider10 hr. 13 min. ago

Builders Make Headways in August Despite Bumps: 4 Fund Picks

Building permits and housing starts surged in August despite the constant bottlenecks faced by builders. The U.S. housing boom that began on the onset of the pandemic has hit several bottlenecks over the past months. After hitting a 15-year high in March, building starts slowed down drastically though it remains mostly above the pre-pandemic levels. On Sep 21, the U.S. Census Bureau and the U.S. Department of Housing and Urban Development jointly reported that homebuilding activities have surged in August despite shortage of land, labor and materials.Per the report, in August, building permits were at a seasonally adjusted annual rate of 1.728 million, surpassing the consensus estimate of 1.620 million and above the downwardly revised July’s figure of 1.630 million. Meanwhile, housing starts across the country were at a rate of 1.615 million, higher than the consensus estimate and July’s revised figure of 1.554 million.This 6% jump in building permits and 3.9% rise in housing starts also support the recent jump in homebuilder sentiment. The National Association of Home Builders/Wells Fargo Housing Market Index rose to 76 for the first time in three months as lumber prices eased and buyer demand grew.Builders are constantly facing hurdles in terms of affordability as they are forced to raise prices in order to meet construction costs. Additionally, single-family housing starts hit a snag for the second consecutive month in August, declining 2.8% as builders continued to struggle with shortages of materials and labor. Moreover, backlogs of construction, yet to be started, increased 3.7%, a record high, where single-family homes constructions near a 15-year high.Rising cost of lumber, especially softwood lumber, has been a challenge for builders. In fact, during spring, lumber price had reached more than $1,600 per thousand board feet. However, there has been a decline in cost which is around $400.Meanwhile, a historically-low mortgage rate has been supporting buyers. Per Freddie Mac’s report, the rate for the 30-year mortgage rate for the week ending Sep 16 came in at 2.86%. The rates have been around and under 3%.4 Fund PicksDespite the backlogs and shortage in land, material and labor, demand for homes is high and will continue to boost the U.S. housing space. Thus, we have shortlisted four Zacks Mutual Fund Rank #1 (Strong Buy) mutual funds, which have encouraging year-to-date (YTD) returns. Additionally, the minimum initial investment is within $5000. We expect these funds to outperform peers in the future.The question here is: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily the reasons for parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).Fidelity Real Estate Investment Portfolio FRESX fund aims for above-average income and long-term capital growth, which is consistent with reasonable investment risk. This non-diversified fund invests primarily in common stocks. The majority of FRESX’s assets are invested in securities of companies, principally engaged in the real estate industry and other real estate-related investments.This Zacks sector – Real Estate product has a history of positive total returns for more than 10 years. Specifically, FRESX has returned 11.4% and 7.6% over the past three and five years, respectively. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.FRESX has an annual expense ratio of 0.74% versus the category average of 1.08%.Fidelity Advisor Real Estate Income Fund Class A FRINX aims for higher-than-average income. As a secondary objective, the fund seeks capital growth. FRINX invests majority of its assets in common stocks of REITs as well as securities of companies principally engaged in the real estate industry and other real estate-related investments.This Zacks sector – Real Estate product has a history of positive total returns for more than 10 years. Specifically, FRINX has returned nearly 9% and 7.2% over the past three and five years, respectively. To see how this fund performed compared to its category, and other #1 and 2 Ranked Mutual Funds, please click here.FRINX has an annual expense ratio of 1.01% versus the category average of 1.08%.Neuberger Berman Real Estate Fund Class R6 NRREX aims for total return. Additionally, the fund gives importance to capital appreciation and current income. Majority of this non-diversified fund’s assets are invested in equity securities of real estate investment trusts and real estate companies.This Zacks sector – Real Estate product has a history of positive total returns for more than 10 years. Specifically, NRREX has returned 16.2% and 11.2% over the past three and five years, respectively. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.NRREX has an annual expense ratio of 0.76%, which is below the category average of 1.08%.MFS Global Real Estate Fund Class R6 MGLRX aims for total returns. The fund invests majority of assets in U.S. equity securities and foreign real estate-related investments of any size.This Zacks sector – Real Estate product has a history of positive total returns for more than 10 years. Specifically, MGLRX has returned 13.9% and 10.5% over the past three and five years, respectively. To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.MGLRX has an annual expense ratio of 0.90%, which is below the category average of 1.21%.Want key mutual fund info delivered straight to your inbox?Zacks' free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >> Infrastructure Stock Boom to Sweep America A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made. The only question is “Will you get into the right stocks early when their growth potential is greatest?” Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.Download FREE: How to Profit from Trillions on Spending for Infrastructure >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Get Your Free (FRESX): Fund Analysis Report Get Your Free (FRINX): Fund Analysis Report Get Your Free (MGLRX): Fund Analysis Report Get Your Free (NRREX): Fund Analysis Report To read this article on click here. Zacks Investment Research Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report.....»»

Category: topSource: zacksSep 22nd, 2021

Futures Bounce On Evergrande Reprieve With Fed Looming

Futures Bounce On Evergrande Reprieve With Fed Looming Despite today's looming hawkish FOMC meeting in which Powell is widely expected to unveil that tapering is set to begin as soon as November and where the Fed's dot plot may signal one rate hike in 2022, futures climbed as investor concerns over China's Evergrande eased after the property developer negotiated a domestic bond payment deal. Commodities rallied while the dollar was steady. Contracts on the S&P 500 and Nasdaq 100 flipped from losses to gains as China’s central bank boosted liquidity when it injected a gross 120BN in yuan, the most since January... ... and investors mulled a vaguely-worded statement from the troubled developer about an interest payment.  S&P 500 E-minis were up 23.0 points, or 0.53%, at 7:30 a.m. ET. Dow E-minis were up 199 points, or 0.60%, and Nasdaq 100 E-minis were up 44.00 points, or 0.29%. Among individual stocks, Fedex fell 5.8% after the delivery company cut its profit outlook on higher costs and stalled growth in shipments. Morgan Stanley says it sees the company’s 1Q issues getting “tougher from here.” Commodity-linked oil and metal stocks led gains in premarket trade, while a slight rise in Treasury yields supported major banks. However, most sectors were nursing steep losses in recent sessions. Here are some of the biggest U.S. movers: Adobe (ADBE US) down 3.1% after 3Q update disappointed the high expectations of investors, though the broader picture still looks solid, Morgan Stanley said in a note Freeport McMoRan (FCX US), Cleveland- Cliffs (CLF US), Alcoa (AA US) and U.S. Steel (X US) up 2%-3% premarket, following the path of global peers as iron ore prices in China rallied Aethlon Medical (AEMD US) and Exela Technologies (XELAU US) advance along with other retail traders’ favorites in the U.S. premarket session. Aethlon jumps 21%; Exela up 8.3% Other so-called meme stocks also rise: ContextLogic +1%; Clover Health +0.9%; Naked Brand +0.9%; AMC +0.5% ReWalk Robotics slumps 18% in U.S. premarket trading, a day after nearly doubling in value Stitch Fix (SFIX US) rises 15.7% in light volume after the personal styling company’s 4Q profit and sales blew past analysts’ expectations Hyatt Hotels (H US) seen opening lower after the company launches a seven-million-share stock offering Summit Therapeutics (SMMT US) shares fell as much as 17% in Tuesday extended trading after it said the FDA doesn’t agree with the change to the primary endpoint that has been implemented in the ongoing Phase III Ri-CoDIFy studies when combining the studies Marin Software (MRIN US) surged more than 75% Tuesday postmarket after signing a new revenue-sharing agreement with Google to develop its enterprise technology platforms and software products The S&P 500 had fallen for 10 of the past 12 sessions since hitting a record high, as fears of an Evergrande default exacerbated seasonally weak trends and saw investors pull out of stocks trading at lofty valuations. The Nasdaq fell the least among its peers in recent sessions, as investors pivoted back into big technology names that had proven resilient through the pandemic. Focus now turns to the Fed's decision, due at 2 p.m. ET where officials are expected to signal a start to scaling down monthly bond purchases (see our preview here).  The Fed meeting comes after a period of market volatility stoked by Evergrande’s woes. China’s wider property-sector curbs are also feeding into concerns about a slowdown in the economic recovery from the pandemic. “Chair Jerome Powell could hint at the tapering approaching shortly,” said Sébastien Barbé, a strategist at Credit Agricole CIB. “However, given the current uncertainty factors (China property market, Covid, pace of global slowdown), the Fed should remain cautious when it comes to withdrawing liquidity support.” Meanwhile, confirming what Ray Dalio said that the taper will just bring more QE, Governing Council member Madis Muller said the  European Central Bank may boost its regular asset purchases once the pandemic-era emergency stimulus comes to an end. “Dovish signals could unwind some of the greenback’s gains while offering relief to stock markets,” Han Tan, chief market analyst at Exinity Group, wrote in emailed comments. A “hawkish shift would jolt markets, potentially pushing Treasury yields and the dollar past the upper bound of recent ranges, while gold and equities would sell off hunting down the next levels of support.” China avoided a major selloff as trading resumed following a holiday, after the country’s central bank boosted its injection of short-term cash into the financial system. MSCI’s Asia-Pacific index declined for a third day, dragged lower by Japan. Stocks were also higher in Europe. Basic resources - which bounced from a seven month low - and energy were among the leading gainers in the Stoxx Europe 600 index as commodity prices steadied after Beijing moved to contain fears of a spiraling debt crisis. Entain Plc rose more than 7%, extending Tuesday’s gain as it confirmed it received a takeover proposal from DraftKings Inc. Peer Flutter Entertainment Plc climbed after settling a legal dispute.  Here are some of the biggest European movers today: Entain shares jump as much as 11% after DraftKings Inc. offered to acquire the U.K. gambling company for about $22.4 billion. Vivendi rises as much as 3.1% in Paris, after Tuesday’s spinoff of Universal Music Group. Legrand climbs as much as 2.1% after Exane BNP Paribas upgrades to outperform and raises PT to a Street-high of EU135. Orpea shares falls as much as 2.9%, after delivering 1H results that Jefferies (buy) says were a “touch” below consensus. Bechtle slides as much as 5.1% after Metzler downgrades to hold from buy, saying persistent supply chain problems seem to be weighing on growth. Sopra Steria drops as much as 4.1% after Stifel initiates coverage with a sell, citing caution on company’s M&A strategy Despite the Evergrande announcement, Asian stocks headed for their longest losing streak in more than a month amid continued China-related concerns, with traders also eying policy decisions from major central banks. The MSCI Asia Pacific Index dropped as much as 0.7% in its third day of declines, with TSMC and Keyence the biggest drags. China’s CSI 300 tumbled as much as 1.9% as the local market reopened following a two-day holiday. However, the gauge came off lows after an Evergrande unit said it will make a bond interest payment and as China’s central bank boosted liquidity.  Taiwan’s equity benchmark led losses in Asia on Wednesday, dragged by TSMC after a two-day holiday, while markets in Hong Kong and South Korea were closed. Key stock gauges in Australia, Indonesia and Vietnam rose “A liquidity injection from the People’s Bank of China accompanied the Evergrande announcement, which only served to bolster sentiment further,” according to DailyFX’s Thomas Westwater and Daniel Dubrovsky. “For now, it appears that market-wide contagion risk linked to a potential Evergrande collapse is off the table.” Japanese equities fell for a second day amid global concern over China’s real-estate sector, as the Bank of Japan held its key stimulus tools in place while flagging pressures on the economy. Electronics makers were the biggest drag on the Topix, which declined 1%. Daikin and Fanuc were the largest contributors to a 0.7% loss in the Nikkei 225. The BOJ had been expected to maintain its policy levers ahead of next week’s key ruling party election. Traders are keenly awaiting the Federal Reserve’s decision due later for clues on the U.S. central banks plan for tapering stimulus. “Markets for some time have been convinced that the BOJ has reached the end of the line on normalization and will remain in a holding pattern on policy until at least April 2023 when Governor Kuroda is scheduled to leave,” UOB economist Alvin Liew wrote in a note. “Attention for the BOJ will now likely shift to dealing with the long-term climate change issues.” In the despotic lockdown regime that is Australia, the S&P/ASX 200 index rose 0.3% to close at 7,296.90, reversing an early decline in a rally led by mining and energy stocks. Banks closed lower for the fourth day in a row. Champion Iron was among the top performers after it was upgraded at Citi. IAG was among the worst performers after an earthquake caused damage to buildings in Melbourne. In New Zealand, the S&P/NZX 50 index rose 0.3% to 13,215.80 In FX, commodity currencies rallied as concerns about China Evergrande Group’s debt troubles eased as China’s central bank boosted liquidity and investors reviewed a statement from the troubled developer about an interest payment. Overnight implied volatility on the pound climbed to the highest since March ahead of Bank of England’s meeting on Thursday. The British pound weakened after Business Secretary Kwasi Kwarteng warnedthat people should prepare for longer-term high energy prices amid a natural-gas shortage that sent power costs soaring. Several U.K. power firms have stopped taking in new clients as small energy suppliers struggle to meet their previous commitments to sell supplies at lower prices. Overnight volatility in the euro rises above 10% for the first time since July ahead of the Federal Reserve’s monetary policy decision announcement. The Aussie jumped as much as 0.5% as iron-ore prices rebounded. Spot surged through option-related selling at 0.7240 before topping out near 0.7265 strikes expiring Wednesday, according to Asia- based FX traders.  Elsewhere, the yen weakened and commodity-linked currencies such as the Australian dollar pushed higher. In rates, the dollar weakened against most of its Group-of-10 peers. Treasury futures were under modest pressure in early U.S. trading, leaving yields cheaper by ~1.5bp from belly to long-end of the curve. The 10-year yield was at ~1.336% steepening the 2s10s curve by ~1bp as the front-end was little changed. Improved risk appetite weighed; with stock futures have recovering much of Tuesday’s losses as Evergrande concerns subside. Focal point for Wednesday’s session is FOMC rate decision at 2pm ET.   FOMC is expected to suggest it will start scaling back asset purchases later this year, while its quarterly summary of economic projections reveals policy makers’ expectations for the fed funds target in coming years in the dot-plot update; eurodollar positions have emerged recently that anticipate a hawkish shift Bitcoin dropped briefly below $40,000 for the first time since August amid rising criticism from regulators, before rallying as the mood in global markets improved. In commodities, Iron ore halted its collapse and metals steadied. Oil advanced for a second day. Bitcoin slid below $40,000 for the first time since early August before rebounding back above $42,000.   To the day ahead now, and the main highlight will be the aforementioned Federal Reserve decision and Chair Powell’s subsequent press conference. Otherwise on the data side, we’ll get US existing home sales for August, and the European Commission’s advance consumer confidence reading for the Euro Area in September. Market Snapshot S&P 500 futures up 0.4% to 4,362.25 STOXX Europe 600 up 0.5% to 461.19 MXAP down 0.7% to 199.29 MXAPJ down 0.4% to 638.39 Nikkei down 0.7% to 29,639.40 Topix down 1.0% to 2,043.55 Hang Seng Index up 0.5% to 24,221.54 Shanghai Composite up 0.4% to 3,628.49 Sensex little changed at 59,046.84 Australia S&P/ASX 200 up 0.3% to 7,296.94 Kospi up 0.3% to 3,140.51 Brent Futures up 1.5% to $75.47/bbl Gold spot up 0.0% to $1,775.15 U.S. Dollar Index little changed at 93.26 German 10Y yield rose 0.6 bps to -0.319% Euro little changed at $1.1725 Top Overnight News from Bloomberg What would it take to knock the U.S. recovery off course and send Federal Reserve policy makers back to the drawing board? Not much — and there are plenty of candidates to deliver the blow The European Central Bank will discuss boosting its regular asset purchases once the pandemic-era emergency stimulus comes to an end, but any such increase is uncertain, Governing Council member Madis Muller said Investors seeking hints about how Beijing plans to deal with China Evergrande Group’s debt crisis are training their cross hairs on the central bank’s liquidity management A quick look at global markets courtesy of Newsquawk Asian equity markets traded mixed as caution lingered ahead of upcoming risk events including the FOMC, with participants also digesting the latest Evergrande developments and China’s return to the market from the Mid-Autumn Festival. ASX 200 (+0.3%) was positive with the index led higher by the energy sector after a rebound in oil prices and as tech also outperformed, but with gains capped by weakness in the largest-weighted financials sector including Westpac which was forced to scrap the sale of its Pacific businesses after failing to secure regulatory approval. Nikkei 225 (-0.7%) was subdued amid the lack of fireworks from the BoJ announcement to keep policy settings unchanged and ahead of the upcoming holiday closure with the index only briefly supported by favourable currency outflows. Shanghai Comp. (+0.4%) was initially pressured on return from the long-weekend and with Hong Kong markets closed, but pared losses with risk appetite supported by news that Evergrande’s main unit Hengda Real Estate will make coupon payments due tomorrow, although other sources noted this is referring to the onshore bond payments valued around USD 36mln and that there was no mention of the offshore bond payments valued at USD 83.5mln which are also due tomorrow. Meanwhile, the PBoC facilitated liquidity through a CNY 120bln injection and provided no surprises in keeping its 1-year and 5-year Loan Prime Rates unchanged for the 17th consecutive month at 3.85% and 4.65%, respectively. Finally, 10yr JGBs were flat amid the absence of any major surprises from the BoJ policy announcement and following the choppy trade in T-notes which were briefly pressured in a knee-jerk reaction to the news that Evergrande’s unit will satisfy its coupon obligations tomorrow, but then faded most of the losses as cautiousness prevailed. Top Asian News Gold Steady as Traders Await Outcome of Fed Policy Meeting Evergrande Filing on Yuan Bond Interest Leaves Analysts Guessing Singapore Category E COE Price Rises to Highest Since April 2014 Asian Stocks Fall for Third Day as Focus Turns to Central Banks European equities (Stoxx 600 +0.5%) trade on a firmer footing in the wake of an encouraging APAC handover. Focus overnight was on the return of Chinese participants from the Mid-Autumn Festival and news that Evergrande’s main unit, Hengda Real Estate will make coupon payments due tomorrow; however, we await indication as to whether they will meet Thursday’s offshore payment deadline as well. Furthermore, the PBoC facilitated liquidity through a CNY 120bln injection whilst keeping its 1-year and 5-year Loan Prime Rates unchanged (as expected). Note, despite gaining yesterday and today, thus far, the Stoxx 600 is still lower to the tune of 0.7% on the week. Stateside, futures are also trading on a firmer footing ahead of today’s FOMC policy announcement, at which, market participants will be eyeing any clues for when the taper will begin and digesting the latest dot plot forecasts. Furthermore, the US House voted to pass the bill to fund the government through to December 3rd and suspend the debt limit to end-2022, although this will likely be blocked by Senate Republicans. Back to Europe, sectors are mostly firmer with outperformance in Basic Resources and Oil & Gas amid upside in the metals and energy complex. Elsewhere, Travel & Leisure is faring well amid further upside in Entain (+6.1%) with the Co. noting it rejected an earlier approach from DraftKings at GBP 25/shr with the new offer standing at GBP 28/shr. Additionally for the sector, Flutter Entertainment (+4.1%) are trading higher after settling the legal dispute between the Co. and Commonwealth of Kentucky. Elsewhere, in terms of deal flow, Iliad announced that it is to acquire UPC Poland for around USD 1.8bln. Top European News Energy Cost Spike Gets on EU Ministers’ Green Deal Agenda Travel Startup HomeToGo Gains in Frankfurt Debut After SPAC Deal London Stock Exchange to Shut Down CurveGlobal Exchange EU Banks Expected to Add Capital for Climate Risk, EBA Says In FX, trade remains volatile as this week’s deluge of global Central Bank policy meetings continues to unfold amidst fluctuations in broad risk sentiment from relatively pronounced aversion at various stages to a measured and cautious pick-up in appetite more recently. Hence, the tide is currently turning in favour of activity, cyclical and commodity currencies, albeit tentatively in the run up to the Fed, with the Kiwi and Aussie trying to regroup on the 0.7000 handle and 0.7350 axis against their US counterpart, and the latter also striving to shrug off negative domestic impulses like a further decline below zero in Westpac’s leading index and an earthquake near Melbourne. Next up for Nzd/Usd and Aud/Usd, beyond the FOMC, trade data and preliminary PMIs respectively. DXY/CHF/EUR/CAD - Notwithstanding the overall improvement in market tone noted above, or another major change in mood and direction, the Dollar index appears to have found a base just ahead of 93.000 and ceiling a similar distance away from 93.500, as it meanders inside those extremes awaiting US existing home sales that are scheduled for release before the main Fed events (policy statement, SEP and post-meeting press conference from chair Powell). Indeed, the Franc, Euro and Loonie have all recoiled into tighter bands vs the Greenback, between 0.9250-26, 1.1739-17 and 1.2831-1.2770, but with the former still retaining an underlying bid more evident in the Eur/Chf cross that is consolidating under 1.0850 and will undoubtedly be acknowledged by the SNB tomorrow. Meanwhile, Eur/Usd has hardly reacted to latest ECB commentary from Muller underpinning that the APP is likely to be boosted once the PEPP envelope is closed, though Usd/Cad is eyeing a firm rebound in oil prices in conjunction with hefty option expiry interest at the 1.2750 strike (1.8 bn) that may prevent the headline pair from revisiting w-t-d lows not far beneath the half round number. GBP/JPY - The major laggards, as Sterling slips slightly further beneath 1.3650 against the Buck to a fresh weekly low and Eur/Gbp rebounds from circa 0.8574 to top 0.8600 on FOMC day and T-1 to super BoE Thursday. Elsewhere, the Yen has lost momentum after peaking around 109.12 and still not garnering sufficient impetus to test 109.00 via an unchanged BoJ in terms of all policy settings and guidance, as Governor Kuroda trotted out the no hesitation to loosen the reins if required line for the umpteenth time. However, Usd/Jpy is holding around 109.61 and some distance from 1.1 bn option expiries rolling off between 109.85-110.00 at the NY cut. SCANDI/EM - Brent’s revival to Usd 75.50+/brl from sub-Usd 73.50 only yesterday has given the Nok another fillip pending confirmation of a Norges Bank hike tomorrow, while the Zar has regained some poise with the aid of firmer than forecast SA headline and core CPI alongside a degree of retracement following Wednesday’s breakdown of talks on a pay deal for engineering workers that prompted the union to call a strike from early October. Similarly, the Cnh and Cny by default have regrouped amidst reports that the CCP is finalising details to restructure Evergrande into 3 separate entities under a plan that will see the Chinese Government take control. In commodities, WTI and Brent are firmer this morning though once again fresh newsflow for the complex has been relatively slim and largely consisting of gas-related commentary; as such, the benchmarks are taking their cue from the broader risk tone (see equity section). The improvement in sentiment today has brought WTI and Brent back in proximity to being unchanged on the week so far as a whole; however, the complex will be dictated directly by the EIA weekly inventory first and then indirectly, but perhaps more pertinently, by today’s FOMC. On the weekly inventories, last nights private release was a larger than expected draw for the headline and distillate components, though the Cushing draw was beneath expectations; for today, consensus is a headline draw pf 2.44mln. Moving to metals where the return of China has seen a resurgence for base metals with LME copper posting upside of nearly 3.0%, for instance. Albeit there is no fresh newsflow for the complex as such, so it remains to be seen how lasting this resurgence will be. Finally, spot gold and silver are firmer but with the magnitude once again favouring silver over the yellow metal. US Event Calendar 10am: Aug. Existing Home Sales MoM, est. -1.7%, prior 2.0% 2pm: Sept. FOMC Rate Decision (Lower Boun, est. 0%, prior 0% DB's Jim Reid concludes the overnight wrap All eyes firmly on China this morning as it reopens following a 2-day holiday. As expected the indices there have opened lower but the scale of the declines are being softened by the PBoC increasing its short term cash injections into the economy. They’ve added a net CNY 90bn into the system. On Evergrande, we’ve also seen some positive headlines as the property developers’ main unit Hengda Real Estate Group has said that it will make coupon payment for an onshore bond tomorrow. However, the exchange filing said that the interest payment “has been resolved via negotiations with bondholders off the clearing house”. This is all a bit vague and doesn’t mention the dollar bond at this stage. Meanwhile, Bloomberg has reported that Chinese authorities have begun to lay the groundwork for a potential restructuring that could be one of the country’s biggest, assembling accounting and legal experts to examine the finances of the group. All this follows news from Bloomberg yesterday that Evergrande missed interest payments that had been due on Monday to at least two banks. In terms of markets the CSI (-1.11%), Shanghai Comp (-0.29%) and Shenzhen Comp (-0.53%) are all lower but have pared back deeper losses from the open. We did a flash poll in the CoTD yesterday (link here) and after over 700 responses in a couple of hours we found only 8% who we thought Evergrande would still be impacting financial markets significantly in a month’s time. 24% thought it would be slightly impacting. The other 68% thought limited or no impact. So the world is relatively relaxed about contagion risk for now. The bigger risk might be the knock on impact of weaker Chinese growth. So that’s one to watch even if you’re sanguine on the systemic threat. Craig Nicol in my credit team did a good note yesterday (link here) looking at the contagion risk to the broader HY market. I thought he summed it up nicely as to why we all need to care one way or another in saying that “Evergrande is the largest corporate, in the largest sector, of the second largest economy in the world”. For context AT&T is the largest corporate borrower in the US market and VW the largest in Europe. Turning back to other Asian markets now and the Nikkei (-0.65%) is down but the Hang Seng (+0.51%) and Asx (+0.58%) are up. South Korean markets continue to remain closed for a holiday. Elsewhere, yields on 10y USTs are trading flattish while futures on the S&P 500 are up +0.10% and those on the Stoxx 50 are up +0.21%. Crude oil prices are also up c.+1% this morning. In other news, the Bank of Japan policy announcement overnight was a non-event as the central bank maintained its yield curve target while keeping the policy rate and asset purchases plan unchanged. The central bank also unveiled more details of its green lending program and said that it would immediately start accepting applications and would begin making the loans in December. The relatively calm Asian session follows a stabilisation in markets yesterday following their rout on Monday as investors looked forward to the outcome of the Fed’s meeting later today. That said, it was hardly a resounding performance, with the S&P 500 unable to hold on to its intraday gains and ending just worse than unchanged after the -1.70% decline the previous day as investors remained vigilant as to the array of risks that continue to pile up on the horizon. One of these is in US politics and legislators seem no closer to resolving the various issues surrounding a potential government shutdown at the end of the month, along with a potential debt ceiling crisis in October, which is another flashing alert on the dashboard for investors that’s further contributing to weaker sentiment right now. Looking ahead now, today’s main highlight will be the latest Federal Reserve decision along with Chair Powell’s subsequent press conference, with the policy decision out at 19:00 London time. Markets have been on edge for any clues about when the Fed might begin to taper asset purchases, but concern about tapering actually being announced at this meeting has dissipated over recent weeks, particularly after the most recent nonfarm payrolls in August came in at just +235k, and the monthly CPI print also came in beneath consensus expectations for the first time since November. In terms of what to expect, our US economists write in their preview (link here) that they see the statement adopting Chair Powell’s language that a reduction in the pace of asset purchases is appropriate “this year”, so long as the economy remains on track. They see Powell maintaining optionality about the exact timing of that announcement, but they think that the message will effectively be that the bar to pushing the announcement beyond November is relatively high in the absence of any material downside surprises. This meeting also sees the release of the FOMC’s latest economic projections and the dot plot, where they expect there’ll be an upward drift in the dots that raises the number of rate hikes in 2023 to 3, followed by another 3 increases in 2024. Back to yesterday, and as mentioned US equity markets fell for a second straight day after being unable to hold on to earlier gains, with the S&P 500 slightly lower (-0.08%). High-growth industries outperformed with biotech (+0.38%) and semiconductors (+0.18%) leading the NASDAQ (+0.22%) slightly higher, however the Dow Jones (-0.15%) also struggled. Europe saw a much stronger performance though as much of the US decline came after Europe had closed. The STOXX 600 gained +1.00% to erase most of Monday’s losses, with almost every sector in the index ending the day in positive territory. With risk sentiment improving for much of the day yesterday, US Treasuries sold off slightly and by the close of trade yields on 10yr Treasuries were up +1.2bps to 1.3226%, thanks to a +1.8bps increase in real yields. However, sovereign bonds in Europe told a different story as yields on 10yr bunds (-0.3bps), OATs (-0.3bps) and BTPs (-1.9bps) moved lower. Other safe havens including gold (+0.59%) and silver (+1.02%) also benefited, but this wasn’t reflected across commodities more broadly, with Bloomberg’s Commodity Spot Index (-0.30%) losing ground for a 4th consecutive session. Democratic Party leaders plan to vote on the Senate-approved $500bn bipartisan infrastructure bill next Monday, even with no resolution to the $3.5tr budget reconciliation measure that encompasses the remainder of the Biden Administration’s economic agenda. Democrats continue to work on the reconciliation measure but have turned their attention to the debt ceiling and government funding bills.Congress has fewer than two weeks before the current budget expires – on Oct 1 – to fund the government and raise the debt ceiling. Republicans yesterday noted that the Democrats could raise the ceiling on their own through the reconciliation process, with many saying that they would not be offering their support to any funding bill. Democrats continue to push for a bipartisan bill to raise the debt ceiling, pointing to their votes during the Trump administration. If Democrats are forced to tie the debt ceiling and funding bills to budget reconciliation, it could limit how much of the $3.5 trillion bill survives the last minute negotiations between progressives and moderates. More to come over the next 10 days. Staying on the US, there was an important announcement in President Biden’s speech at the UN General Assembly, as he said that he would work with Congress to double US funding to poorer nations to deal with climate change. That comes as UK Prime Minister Johnson (with the UK hosting the COP26 summit in less than 6 weeks’ time) has been lobbying other world leaders to find the $100bn per year that developed economies pledged by 2020 to support developing countries as they reduce their emissions and deal with climate change. In Germany, there are just 4 days to go now until the federal election, and a Forsa poll out yesterday showed a slight narrowing in the race, with the centre-left SPD remaining on 25%, but the CDU/CSU gained a point on last week to 22%, which puts them within the +/- 2.5 point margin of error. That narrowing has been seen in Politico’s Poll of Polls as well, with the race having tightened from a 5-point SPD lead over the CDU/CSU last week to a 3-point one now. Turning to the pandemic, Johnson & Johnson reported that their booster shot given 8 weeks after the first offered 100% protection against severe disease, 94% protection against symptomatic Covid in the US, and 75% against symptomatic Covid globally. Speaking of boosters, Bloomberg reported that the FDA was expected to decide as soon as today on a recommendation for Pfizer’s booster vaccine. That follows an FDA advisory panel rejecting a booster for all adults last Friday, restricting the recommendation to those over-65 and other high-risk categories. Staying with the US and vaccines, President Biden announced that the US was ordering 500mn doses of the Pfizer vaccine to be exported to the rest of the world. On the data front, there were some strong US housing releases for August, with housing starts up by an annualised 1.615m (vs. 1.55m expected), and building permits up by 1.728m (vs. 1.6m expected). Separately, the OECD released their Interim Economic Outlook, which saw them upgrade their inflation expectations for the G20 this year to +3.7% (up +0.2ppts from May) and for 2022 to +3.9% (up +0.5ppts from May). Their global growth forecast saw little change at +5.7% in 2021 (down a tenth) and +4.5% for 2022 (up a tenth). To the day ahead now, and the main highlight will be the aforementioned Federal Reserve decision and Chair Powell’s subsequent press conference. Otherwise on the data side, we’ll get US existing home sales for August, and the European Commission’s advance consumer confidence reading for the Euro Area in September. Tyler Durden Wed, 09/22/2021 - 08:05.....»»

Category: blogSource: zerohedgeSep 22nd, 2021

How Evergrande Became Too Big To Fail And Why Beijing Will Have To Bail It Out

How Evergrande Became Too Big To Fail And Why Beijing Will Have To Bail It Out While the world is obsessing with the fate of Evergrande, and more importantly when, or if, Beijing will bail it out, another just as interesting question is how did the company many call "China's Lehman" get to the point of no return and become a global systematic risk. For a fascinating look into how we got here, we turn our readers' attention to a recent article from Caixin titled "How Evergrande Could Turn Into ‘China’s Lehman Brothers'," and which provides one of the most comprehensive insights into why Beijing will have to, even if it is kicking and screaming, bail out Evergrande which, at its core, is just one giant shadow-banking black box whose time has finally run out. * * * For the past two months, hundreds of people have been gathering at the 43-floor Zhuoyue Houhai Center in Shenzhen, where China Evergrande Group’s headquarters occupy 20 floors. They held banners demanding repayment of overdue loans and financial products. Police with riot shields had to be on site to keep things under control. The demonstrators are construction workers at the property developer’s housing projects, suppliers providing construction materials and investors in the company’s wealth management products (WMPs). From paint suppliers to decoration and construction companies, Evergrande owes more than 800 billion yuan ($124 billion) due within one year, while it has only a 10th of that amount of cash on hand. As of the end of June, Evergrande had nearly 2 trillion yuan ($309 billion) of debts on its books, plus an unknown amount of off-books debt. The property giant is on the verge of a dramatic debt restructuring or even bankruptcy, many institutions believe. A bankruptcy would amount to a financial tsunami, or as some analysts put it, “China’s Lehman Brothers.” The venerable American investment bank’s 2008 collapse helped trigger a global financial crisis. Certainly Evergrande, one of China’s three biggest developers, has a giant footprint in China. Unfinished residential buildings at Evergrande Oasis, a housing complex developed by Evergrande Group, in Luoyang, China September 16, 2021 Its liabilities are equivalent to about 2% of China’s GDP. It has more than 200,000 employees, who themselves and many of their families have invested billions of yuan in the company’s WMPs. The company has more than 800 projects under construction, more than half of them halted due to its cash crunch. There are thousands of upstream and downstream companies that rely on Evergrande for business, creating more than 3.8 million jobs every year. Like many of China’s “too big to fail” conglomerates, Evergrande’s crisis has fueled speculation over whether the government will step in for a rescue. Several state-owned enterprises, including Shenzhen Talents Housing Group Co. Ltd. and Shenzhen Investment Ltd., both controlled by the Shenzhen State-owned Assets Supervision and Administration Commission (SASAC), are in talks with Evergrande on its Shenzhen projects, according to people close to the talks. But so far, no deals have been reached. In a statement last week, Evergrande denied rumors that it will go bankrupt. While the developer faces unprecedented difficulties, it is fulfilling its responsibilities and is doing everything possible to restore normal operations and protect the legitimate rights and interests of customers, according to a statement on its website. The company hired financial advisers to explore “all feasible solutions” to ease its cash crunch, warning that there’s no guarantee the company will meet its financial obligations. It has repeatedly signaled that it will sell equity and assets including but not limited to investment properties, hotels and other properties and attract investors to increase the equity of Evergrande and its affiliates. Growth on borrowed money Over the years, Evergrande has faced liquidity pressure several times, but every time it dodged the bullet. This time, the crisis of cash flow and trust is unprecedented. Evergrande shares in Hong Kong plummeted to a 10-year low. Its onshore bonds fell to what investors call defaulted bond level. All three global credit rating companies and one domestic rating company have downgraded Evergrande’s debt. For many years, Chinese developers were driven by the “three carriages” — high turnover, high gross profit and high leverage. Developers use borrowed money to acquire land, collect presale cash before projects even start, and then borrow more money to invest in new projects. In 2018, Evergrande reported record profit of 72 billion yuan, more than double the previous year’s net. But behind that, it spent more than 100 billion yuan a year on interest. Even in good years, the company usually had negative operating cash flow, with not enough cash on hand to cover short-term loans due within a year with and presale revenue not enough to pay suppliers. In addition to borrowing from banks, Evergrande also borrows from executives and employees. When developers seek funds from banks, lenders often require personal investments from the developers’ executives as a risk-control measure, a former employee at Evergrande’s asset management department told Caixin. “At times like this, Evergrande would have an internal fund-raising campaign,” the manager said. “Either the executives would pay out of their own pockets, or they would set a goal for each division.” One crowdfunding product issued to executives was called “Chaoshoubao,” which means “super return treasure.” In 2017, Evergrande tried to obtain project financing from state-owned China Citic Bank in Shenzhen, which required personal investment from Evergrande’s executives. The company then issued Chaoshoubao to employees, promising 25% annual interest and redemption of principal and interest within two years. The minimum investment was 3 million yuan. China Citic Bank eventually agreed to provide 40 billion yuan of acquisition funds to Evergrande. In 2020, Chen Xuying, former vice president of China Citic Bank and head of the bank’s Shenzhen branch from 2012 to 2018, was sentenced to 12 years in prison for accepting bribes after issuing loans. A senior executive at Evergrande said he personally invested 1.5 million yuan and mobilized his subordinates to invest 1.5 million yuan into Chaoshoubao. Some employees would even borrow money to invest in the product because the 25% return was much higher than loan rates. When the Chaoshoubao was due for redemption in 2019, the company asked employees who bought the product to agree to a one-year extension for repayment. Then in 2020, the company asked for another one-year extension. One investor said buyers received an annualized return of 4% to 5% in the last four years, far below the 25% promised return. When Evergrande’s cash flow crisis was exposed, the company chose to repay principal only to current executives. From late August to early September, the company repaid current executives and employees about 2 billion yuan but still owed 200 million yuan to former employees, including Ren Zeping, former chief economist of Evergrande who joined Soochow Securities Co. in March. Evergrande’s wealth division also sells WMPs to the public. Most of these WMPs offer a return of 5% to 10%, with a minimum investment of 100,000 yuan, the former employee at Evergrande’s asset management department said. As the return is higher than WMPs typically sold at banks, many of Evergrande’s employees bought them and persuaded their families and friends to invest, an employee said. Usually, a 20 million yuan WMP could be sold out within five days, the employee said. The company also sells WMPs to construction partners. Evergrande would require construction companies to buy WMPs whenever it needed to pay them, a former employee at Evergrande’s construction division told Caixin. “If the construction companies are owed 1 million or 2 million yuan, we would ask them to buy 100,000–200,000 yuan of WMPs, or about 10% of their receivables,” the former employee said. Although it was not mandatory for construction companies to buy WMPs, they often would do so for the sake of maintaining a good relationship with Evergrande, the former employee said. In addition, Evergrande property owners were also buyers of the company’s WMPs. About 40 billion yuan of the WMPs are now due. “It is difficult for Evergrande to make all of the repayments at once at this moment,” said Du Liang, general manager of Evergrande’s wealth division. Evergrande initially proposed to impose lengthy repayment delays, with investments of 100,000 yuan and above to be repaid in five years. After heated protests by investors, the company tweaked its plan last week, offering three options. Investors can accept cash installments, purchase Evergrande’s properties in any city at a discount, or waive investors’ payables on residential units they have purchased. Some investors opposed the “property for debt” option, as many projects of Evergrande have been halted and there is a risk of unfinished projects in the future. “The proposals are insincere,” a petition signed by some Guangdong investors said. “It’s like buying nonperforming assets with a premium.” The petition urged the government to freeze Evergrande’s accounts and assets and demanded cash repayment of all principal and interest. Some investors chose to accept the payment scheme proposed by Evergrande. They selected Evergrande projects located in hot cities in the hope of making up for losses by resale in the future. As Evergrande owed large amounts to construction companies, more than 500 of Evergrande’s 800-plus projects across the country are now halted. The company has at least several hundred thousand units that have been presold and not delivered. It needs at least 100 billion yuan to complete construction and deliver the units, Caixin learned. Whether and how to repay WMP investors or deliver housing is Evergrande’s dilemma. Debt to construction partners and suppliers In August, the construction company that was contracted to build Evergrande’s Taicang cultural tourism city in Nantong, Jiangsu province, announced the halt of the project due to bills unpaid by Evergrande. The company, Jiangsu Nantong Sanjian Construction Group Co. Ltd., said it put 500 million yuan of its own funds into the project and Evergrande paid it less than 290 million yuan. Sanjian has other construction contracts with Evergrande and its subsidiaries. As of September, Evergrande owes the Nantong company about 20 billion yuan. As of August 2020, Evergrande had 8,441 upstream and downstream companies it was working with. If the flow of Evergrande cash stops, the normal operation of these companies will be disrupted, and some would even face the risk of bankruptcy. In Ezhou, Hubei province, five of Evergrande’s projects have been halted for more than a month, and it owes contractors about 500 million yuan. “Housing delivery involves not only hundreds of thousands of families, but also local social stability,” a banker said. The housing authorities in Guangdong province are coordinating with Evergrande and its construction partners, trying to resume construction, the banker said. Evergrande relies heavily on commercial paper to pay construction partners and suppliers. Among payments it made to Sanjian, only 8% was in cash and the rest in commercial paper. Initially, the commercial paper borrowings were mostly six-month notes with annualized interest rates of 15%–16%. Now most carry interest rates of more than 20%. Holders of such commercial paper can sell the notes at a discount to raise cash. In 2017–18, the discount rate on Evergrande paper could reach 15%–20%. Since May 2021, the few Evergrande notes that could still be sold have been discounted as much as 55%, according to a person familiar with such transactions. For small and medium-sized suppliers, holding a large amount of overdue Evergrande notes is a burden too heavy to bear. In recent months, a number of suppliers sued Evergrande for breach of contract but often settled the cases. A lawyer who represented Evergrande in related cases told Caixin that many plaintiffs chose to negotiate with Evergrande while fighting in court. Evergrande also offered a “property for debt” option to its commercial paper holders. The company said it’s in talks with suppliers and construction contractors to delay payment or offset debt with properties. From July 1 to Aug. 27, Evergrande sold properties to suppliers and contractors to offset a total of 25 billion yuan of debt. Selling assets, but not land Meanwhile, Evergrande has been offloading its assets to raise cash. Its biggest assets are its land reserves. As of June 30, it had 778 land reserve projects with a total planned floor area of 214 million square meters and an original value of 456.8 billion yuan. Additionally, it has 146 urban redevelopment projects. In the past three months, Evergrande has been in talks with China Overseas Land and Investment Ltd., China Vanke Co. Ltd. and China Jinmao Holdings Group Ltd. for possible asset sales. Shenzhen and Guangzhou SASACs have arranged for several state-owned enterprises to conduct due diligence on Evergrande’s urban redevelopment projects, a person close to the matter said. Evergrande has approached every possible buyer in the market, the person said. However, no deals have been reached. Several real estate developers that have been in contact with Evergrande told Caixin that while some of Evergrande’s projects look good on the surface, there are complex creditors’ rights that make them difficult to dispose of. Some potential buyers have said they could consider a debt-assumption acquisition, but Evergrande was reluctant to sell at a loss, Caixin learned. At an emergency staff meeting Sept. 10, the wealth management general manager Du said in a speech that most of Evergrande’s land reserve is not for sale, reflecting the position of his boss, founder and Chairman Xu Jiayin. “In China, land reserves are the most valuable assets,” Du said. “This is Evergrande’s biggest asset and last resort. “For example, for a land parcel, Evergrande’s acquisition cost is 1 billion yuan, and the land itself is worth 2 billion yuan, but the buyer may only offer 300 million yuan,” Du said. “If we sold at a loss, we would have no capital to revive.” For his part, Xu maintained that Evergrande could repay all its debts and recover as long as it turns land into houses and sells them. But even if Evergrande can quickly sell its houses, the revenue would be far from enough to pay down debt. The chance that Evergrande won’t be able to pay interest due in the third quarter is 99.99%, estimated by a banker whose employer has billions of yuan of exposure to the company. As of the end of June, Evergrande had total assets of 2.38 trillion yuan and total liabilities of 1.97 trillion yuan. Of the nearly 2 trillion yuan of debt, interest-bearing debt was 571.7 billion yuan, down about 145 billion yuan from the end of 2020. The decrease in interest-bearing debt was mostly achieved by deferred payables to suppliers. In addition to the 571.7 billion yuan of interest-bearing debt on its books, it’s not a secret that developers like Evergrande have huge off-balance sheet debt. But the amount at Evergrande is not known. In the early stage of projects, developers need to invest a lot of money, which could significantly increase the debt on the balance sheet. Companies often place these debts off their balance sheet through a variety of means. After the pre-sale of the project, or even after the cash flow of the project turns positive, these debts would be consolidated into the balance sheet in the form of equity transfer, according to a property industry insider. For example, 40 billion yuan of acquisition funds Evergrande obtained from China Citic Bank were invested in multiple projects. Among them, 10.7 billion yuan was used by Shenzhen Liangyang Industrial Co. Ltd. to acquire Shenzhen Duoji Investment Co. Ltd. As Evergrande doesn’t have an equity relationship with the two companies, this item was not required to be consolidated into Evergrande’s financial statement. Evergrande used leveraged funds to acquire equities in 10 projects, and none of them were included in its financial statement, the prospectus of its Chaoshoubao shows. Evergrande has sold equity in subsidiaries to strategic investors and promised to buy back the stakes if certain milestones can’t be reached in the future. Such equity sales are actually a form of borrowing, too. In March, Evergrande sold a stake in its online home and car sales platform Fangchebao for HK$16.4 billion ($2.1 billion) in advance of a planned U.S. share sale by the unit. If the online sales unit doesn’t complete an initial public offering on Nasdaq or any other stock exchange within 12 months after the completion of the stake sale, the unit is required to repurchase the shares at a 15% premium. Evergrande’s hidden debts also include unpaid payments to acquire equities. Dozens of small property companies have sued Evergrande demanding cancellation of their equity sales agreements with the company because Evergrande failed to pay them. They are Evergrande’s partners in local development projects. Evergrande usually paid them 30% down for equities but declined to pay the rest even after the project was completed, according to the lawsuits. A plaintiff’s lawyer told Caixin that Evergrande’s project subsidiaries don’t want to go sour with local partners, but they have no money to pay as sales from the projects have been transferred to the parent company. A total of 49 of Evergrande’s wholly owned local subsidiaries have been sued since April, according to Tianyancha, a database of publicly available corporate information. Evergrande also owes land transfer fees to some local governments. Some 20 Evergrande affiliates have not yet made payments to the city government of Lanzhou, the capital of Northwest China’s Gansu province, according to a list of 41 such firms issued in July by the city’s natural resources department. A potential default by Evergrande could spread to markets outside China as it has huge, high-interest offshore bonds. Some of its offshore bonds carry interest rates as high as 15%, a person close to the Hong Kong capital market said. UBS estimates that $19 billion of Evergrande’s liabilities are made up of outstanding offshore bonds. Evergrande has been frantically selling properties at discounts this year. In late May, it offered certain homebuyers 30% to 40% off if they paid entirely in cash. In the first half, the company reported 356 billion yuan of contracted sales, slightly higher than 349 billion yuan for the same period last year. Average selling prices in the first six months declined 11.2%. Meanwhile, payables increased 14.7% to 951 billion yuan, and sales and marketing expenses increased 30% to 17.8 billion yuan. In response to the market environment, the company increased sales commissions and marketing expenses, the company said. Compared with its competitors, Evergrande has higher capital and human costs but lower selling prices, an industry participant said. “How can it make money?” the person said. The developer reported a 29% slide in profit for the first half. Its 10.5 billion yuan of profit mainly reflected an 18.5 billion yuan gain from the sale of some shares and marked-to-market holding in internet unit Henten Networks. It reported a loss in its core property business of 4 billion yuan. Evergrande’s extremely high debt ratio, high financing cost and repeated delays in payments to suppliers, partners and local government show that its liquidity has always been tight, but on the other hand, the fact that it has survived years under this model indicates that it has always been able to generate money, a veteran investor said. Now everyone is watching whether it can dodge the bullet once again. Tyler Durden Mon, 09/20/2021 - 22:00.....»»

Category: blogSource: zerohedgeSep 21st, 2021

The father of captured journalist Roman Protasevich said he looked forced and beaten up in his video confession from Belarus

Belarusian authorities on Sunday diverted a Ryanair plane and arrested Roman Protasevich, an outspoken.....»»

Category: topSource: businessinsiderMay 25th, 2021

Telecom Stock Roundup: AT&T Halves HBO Max Price, Verizon 5G for Air Force & More

While AT&T (T) is presently offering HBO MAX at $7.49 per month for six months in a limited promotional deal till Sep 26, Verizon (VZ) will provide 5G mobility service to seven Air Force Reserve Command installations. Over the past five trading days, U.S. telecom stocks continued to mirror the broader benchmark equity indices in a similar trend as the prior week and witnessed a gradual downtrend due to an apparent policy paralysis despite the best intentions of the government to spur a healthy growth momentum. The final passage of the $1.2 trillion infrastructure bill by the House appears to be stuck in a potential stalemate, as several progressive Democrats want the bill to be tied to the larger $3.5 trillion budget reconciliation bill that is facing massive backlash from both Republicans and Democrats. This even forced President Biden to personally meet the dissident groups to seek an early resolution, although it reportedly failed to broker a compromise despite some ‘productive’ discussions. The infusion of federal funds to improve broadband infrastructure for greater access and deeper penetration in the underserved domestic markets is the need of the hour to bridge the digital divide. However, the uncertainty over the much sought-after infrastructure bill that focuses on affordability and low-cost service option has hard hit the industry.In order to stimulate broadband growth across the country, the U.S. Treasury Department has issued fresh guidelines as to how states should allocate money from the $10 billion Capital Projects Fund created as part of the American Rescue Plan Act of 2021. The instruction set encourages states to prioritize investments in fiber-optic connectivity and developing related infrastructure for the future broadband needs of the communities. It also urges states to pursue projects involving broadband networks either owned or affiliated to the government, non-profit or co-operatives in order to serve larger communities with less pressure on profit-making initiatives.   Meanwhile, China-based Hytera – a supplier of radio equipment to emergency first responders – said in a submission to the FCC that it has been unfairly targeted by the government and argued that its radio equipment do not pose any security risk as they do not use broadband connectivity. It urged the FCC to specify which of its equipment are deemed to be potential threats in order to avoid being hit across its entire business. The developments assume significance as the government is reportedly aiming to ease diplomatic relations with Beijing that have worsened over recent times to improve bilateral trade, as several restrictions and economic sanctions were hurting operations of domestic firms.    Regarding company-specific news, business tweaks, portfolio enhancements, a strategic tie-up, and product launch primarily took the center stage over the past five trading days.Recap of the Week’s Most Important Stories1.    Over the past few months, AT&T Inc. T has taken several strategic decisions to focus more on its customer-centric business model. One of these was the decision to phase out HBO and HBO Max subscriptions through Amazon Prime Video Channels of, Inc., as it aimed to develop direct-to-consumer relationships. As HBO subscriptions officially went off the air from Amazon Prime on Sep 15, AT&T apparently lost about 5 million U.S. subscribers who had signed through Amazon. The company is now aiming to woo back these customers and attract newer ones as well through a discounted price offering as the streaming wars heat up.HBO Max subscription was originally priced at $14.99 per month. AT&T is presently offering this streaming service at $7.49 per month for six months in a limited promotional deal till Sep 26. The disruptive pricing is lower than the Prime video membership of $8.99 per month, plus taxes and is likely to be a lucrative offer for both existing and new customers. The offer, however, is available to only U.S. customers as AT&T expects to register healthy growth in HBO Max subscribers in international markets.      2.     Verizon Communications Inc. VZ recently secured a prime contract from the U.S. Department of Defense for an undisclosed amount to provide 5G mobility service to seven Air Force Reserve Command installations. The deal underscores the trust and reliability enjoyed by the carrier as it continues to support the digital transformation initiatives of the federal government.Verizon Public sector, the unit dedicated to serving various public sector entities, has been entrusted to deliver 5G Ultra Wideband service in California, Florida, Massachusetts, New York, Ohio, Pennsylvania, and Texas Air Force bases. This includes the deployment of c-band radios at outdoor locations at the facilities to improve signal bandwidth at higher speed and lower latency.3.     ADTRAN, Inc. ADTN recently announced that it has secured multiple partnerships with service providers to deploy its highly scalable fiber access network in the rural regions of the U.K. The Huntsville, AL-based company has collaborated with Alncom, Wildanet, and Netomnia.The alliances will bridge the digital divide on the back of a cost-effective fiber-to-the-home network, thereby delivering exceptional broadband experiences to customers, particularly based in the underserved areas of the European country.4.    Viasat, Inc. VSAT has secured two research contracts from the U.S. Department of Defense (“DoD”) to evaluate the potential and feasibility of 5G connectivity in the battlefield. The Carlsbad, CA-based company has been working with DoD to address challenging communications issues across multiple network domains. The research contracts, which will be conducted over a span of three years, were awarded through the Information Warfare Research Project. These contracts are part of the $600 million 5G research program that was announced last year by DoD. The initiative aims to assess how the fifth-generation technology can boost warfighting capabilities.  5.    Viavi Solutions Inc. VIAV recently announced that it has augmented the capabilities of its Xgig 5P16 platform. It now supports multi-user functionality and analyzer bifurcation for multiple users and simultaneous tests on a single platform. The Xgig 5P16 Exerciser platform enables real-time analysis of Peripheral Component Interconnect Express or PCIe 5.0 data traffic at all layers of the stack.VIAVI Xgig 5P16 Analyzer is specifically designed to modernize data traffic analysis while addressing the growing demands of AI and IoT with enhanced capabilities. The device is reckoned to be the first-of-its-kind solution in the market. The latest move highlights Viavi’s commitment to drive the influence of bandwidth-intensive computing services globally on the back of its technology prowess.Price PerformanceThe following table shows the price movement of some of the major telecom stocks over the past week and six months.Image Source: Zacks Investment ResearchIn the past five trading days, T-Mobile was the only stock that gained 0.5%, while Bandwidth declined the most with its stock falling 6.5%.Over the past six months, Motorola has been the best performer with its stock appreciating 24.3%, while Bandwidth declined the most with its stock falling 17.2%.Over the past six months, the Zacks Telecommunications Services industry has gained 7.5% and the S&P 500 has rallied 12.7%.Image Source: Zacks Investment ResearchWhat’s Next in the Telecom Space?In addition to 5G deployments and product launches, all eyes will remain glued to how the administration implements key policy changes to safeguard the interests of the industry and address the bottlenecks to spur growth. More Stock News: This Is Bigger than the iPhone! It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 77 billion devices by 2025, creating a $1.3 trillion market. Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 4 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2022.Click here for the 4 trades >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report ADTRAN, Inc. (ADTN): Free Stock Analysis Report AT&T Inc. (T): Free Stock Analysis Report Verizon Communications Inc. (VZ): Free Stock Analysis Report Viasat Inc. (VSAT): Free Stock Analysis Report Viavi Solutions Inc. (VIAV): Free Stock Analysis Report To read this article on click here. Zacks Investment Research.....»»

Category: topSource: zacks2 hr. 45 min. ago

The top affiliate programs that influencers use to recommend products

The top creator economy news of the week includes an inside look at TikTok's workplace culture and the top affiliate-marketing programs. Tori Dunlap. Tori Dunlap Hi, this is Amanda Perelli and welcome back to Insider Influencers, our weekly rundown on the business of influencers, creators, and social-media platforms. Sign up for the newsletter here.In this week's edition:The top affiliate-marketing programs for influencersAn inside look at TikTok's six workplace principlesHow sliding into DMs can lead to a sponsorship dealMeet the chef who went from laid-off to TikTok starAnd more, including a breakdown of how much YouTubers earn a month for their videos and how a TikTok creator made over six figures from her e-commerce shopSend tips to or DM me on Twitter at @arperelli. Rakuten Advertising; Share A Sale; LTK; MagicLinks; Samantha Lee/Insider The top affiliate-marketing programs for influencers Swipe ups, stickers, links in bio. We've all seen affiliate marketing at work.The commission-based model is one of the most straightforward and accessible ways that influencers can start earning money: share a trackable link to a product or service, and make a percentage of sales.Sydney Bradley and I highlighted the top affiliate-marketing networks used by influencers in 2021.Here's a look at a few of the programs that made the cut thanks to high commission rates, access to top brands, and robust interfaces and tools: The Amazon Influencer Program stands out for allowing creators to partner with the world's largest retailer and access a wide suite of tools. LTK (previously and rewardStyle) gives influencers a customized URL and an in-app page called an "LTK Shop," where they can compile a shopping list of their affiliate links for followers. MagicLinks offers the ability to conduct affiliate marketing through text message.Here's the full list of the top programs catering to influencers. TikTok; Samantha Lee/Insider Inside TikTok: How ByteDance's culture principles are used to reward and reprimandEvery tech startup has its own culture, and we got an inside look at TikTok's. Employees at the video app must abide by a set of six workplace principles - dubbed "ByteStyles" - written by its parent company ByteDance.The company rules are often fairly broad, like "be grounded and courageous" and "be open and humble." Internally, staffers use ByteStyles as a way to call out what the company deems good or bad performance during employee evaluations, my colleague Dan Whateley wrote.While adhering to ByteStyles can lead to gifts or awards, not following the cultural tenets can lead to discipline.Their open-ended nature can be frustrating when applied to specific work situations, according to four current and former TikTok employees. Sometimes ByteStyles are used as catch-all warnings to employees about behavior that the company didn't like."'That's not ByteStyles!' is like so general, but thrown around [when] anyone kind of does stuff the other person doesn't like," a current TikTok employee told Insider.Read more about the principles and how they impact TikTok's culture.Here's what else you need to know this week:What's trending We tried a personal training session at Dogpound LA - where TikTok stars Addison Rae, Josh Richards, and Bryce Hall sweat it out.A 40-year-old lipstick is selling out after it became TikTok's latest obsession.TikTok is turning decade-old books into bestsellers.Creator earnings An inside look at the media kits of YouTube, Instagram, and TikTok stars.YouTube stars break down how much they make per month on the platform. How TikTok helped a cotton candy maker earn $165,000 in sales in six months.Marketing movesInfluencer agency Digital Brand Architects hired Ernest B. James as SVP of special projects.Snap has made three new hires on the talent partnerships team: Julie Bogaert, Racquel Douglas, and Emily McDonnell.ICM agent Chris Sawtelle is leaving the firm to become co-president of TikTok star Josh Richards' CrossCheck Holdings. Tori Dunlap. Tori Dunlap Read the Instagram DM templates one influencer uses to land brand dealsPersonal-finance influencer Tori Dunlap has 1.7 million TikTok followers and earns thousands of dollars promoting companies like Credit Karma and Four Seasons.Her tip for scoring those brand deals? Slide into the DMs. She landed her first paid deal last year after reaching out to Personal Capital, a personal wealth management company, over Instagram DM.I spoke with Dunlap who shared templates for other influencers to use and said not to fear rejection."Just because they said no now, doesn't mean that's no forever. I have 2 million followers and I still get 'no' a lot," Dunlap, who is 26, told Insider.Check out the exact DM templates Dunlap uses to score paid deals, here. Poppy O'Toole trained in a Michelin-starred kitchen before pivoting to become a social media chef. Louise Hagger How a chef went from laid-off to TikTok starFor Insider's as-told-to essay series, 27-year-old Michelin-trained chef Poppy O'Toole shared how she became a social-media creator. She started filming TikToks of easy-to-follow recipes during the first UK lockdown in March 2020, after she'd been let go from her job as a chef in London.Now, she says she's surpassed her old salary and has a cookbook in the works.Read her essay on how TikTok turned her career around.Chart of the week: The Influencer Marketing Factory released a creator economy report, with insights from executives at Patreon, Koji, and Jellysmack. In the chart above, influencers share which platform is the most lucrative.Check out the full report here. Screen shot of #plantbased on TikTok TikTok hashtag of the week: Every week, we highlight a top trending hashtag on TikTok, according to data provided by Kyra IQ.This week's hashtag: #plantbasedPercentage uptick over the last 7 days: 8,520%The latest viral hashtag is centered around popular plant-based recipes, like a recreation of Gordon Ramsay's vegan bacon recipe, which is made with tofu and has 1.2 million views. Theo Wargo/Getty Images What else we're reading and watching:Disney is looking to create breakout TikTok and Instagram stars (Garett Sloane, from Ad Age)The Met Gala invited nearly double the amount of content creators this year (Alexa Tietjen, from WWD)Creators Colin and Samir uploaded a 2-hour interview with YouTube star MrBeast. Watch here.Subscribe to the newsletter here.And before you go, check out the top trending songs on TikTok this week to add to your playlist. The data was collected by UTA IQ, the research, analytics, and digital strategy division of United Talent Agency. UTA IQ Subscribe to the newsletter here.Read the original article on Business Insider.....»»

Category: topSource: businessinsider5 hr. 29 min. ago

FedEx says it"s rerouting more than 600,000 packages a day because it can"t find enough staff to process them

A FedEx hub in Portland, Oregon, was down 35% of the staff it needed to handle normal volume, and was diverting a quarter of packages, the COO said. After the earning call, FedEx stock fell to its lowest in a year. FedEx FedEx is rerouting more than 600,000 business packages a day, its president said Tuesday. It can't find enough workers to process them at some sites, Raj Subramaniam said. FedEx estimated that the labor shortage cost it around $450 million in the quarter. See more stories on Insider's business page. FedEx is rerouting more than 600,000 business packages each day because it doesn't have enough staff to process them, FedEx president and COO Raj Subramaniam said.The labor shortage was the company's "biggest issue" and the "key driver" of its lower-than-expected results, he said at the company's earning call Tuesday. It cut its yearly outlook, causing FedEx stock to tumble to its lowest in a year.Subramaniam said that the labor shortage, which is hitting multiple US industries, had cost FedEx an estimated $450 million in the quarter ended August 31 because of wage rises and inefficiencies. Most of this came from FedEx Ground, the company's service that ships packages to businesses, he said."The competition for talent particularly for our frontline workers have driven wage rates higher and pay premiums higher," he said.The company spent around $7.8 billion on employee salaries and benefits in the quarter, up 13% from the same period last year. Earlier this month it announced plans to hire an additional 90,000 workers for the peak season.Subramaniam said that FedEx Ground's hub in Portland, Oregon, was down about 35% of the staff it needed to handle its normal volume. As a result, staff were diverting about a quarter of packages because the parcels "simply cannot be processed efficiently to meet our service standards," he said.The company was rerouting some packages, which made delivery routes longer and forced FedEx to pay more to third-party delivery companies, he said."Across the FedEx Ground network there are more than 600,000 packages a day being rerouted," Subramaniam told investors. Supply Chain Dive first reported on the comment.FedEx Ground handled an average of 9.3 million packages a day in the quarter."Overcoming these staffing and retention challenges are our utmost priority as they not only affect our cost structures and operational efficiency, but are also having a negative impact on service levels," Subramaniam said.Other companies have changed their operations to deal with a lack of available staff, too. Restaurants have been closing earlier or shutting their dining rooms, employers are relying on friends and family or turning to automation, and a high school in Boston even hired a party bus with a stripper pole because it couldn't find enough bus drivers.Some businesses have said that people don't want to work anymore, in some cases blaming it on unemployment benefits. But workers say they're quitting their jobs in search of better pay, benefits, and working conditions.Expanded Coverage Module: what-is-the-labor-shortage-and-how-long-will-it-lastRead the original article on Business Insider.....»»

Category: topSource: businessinsider5 hr. 29 min. ago

Record Shattered (Again): 73 Container Ships Stuck Waiting Off California

Record Shattered (Again): 73 Container Ships Stuck Waiting Off California By Greg Miller of FreightWaves, The number of container ships at anchor or drifting in San Pedro Bay off the ports of Los Angeles and Long Beach has blown through all previous records. The latest peak: There were an all-time-high 73 container ships in the queue in San Pedro Bay on Sunday, according to the Marine Exchange of Southern California (the tally inched back to 69 on Tuesday). Of the ships offshore Sunday, 36 were forced to drift because anchorages were full. Theoretically, the numbers — already surreally high — could go even higher than this. While designated anchorages are limited, the space for ships to safely drift offshore is not. “There’s lots of ocean for drifting — there’s no limit,” Capt. Kip Loutit, executive director of the Marine Exchange of Southern California, told American Shipper. “Our usual VTS [Vessel Traffic Service] area is a 25-mile radius from Point Fermin by the entrance to Los Angeles, which gives a 50-mile diameter to drift ships. We could easily expand to a 40-mile radius, because we track them within that radius for air-quality reasons. That would give us an 80-mile diameter to drift ships,” said Loutit. Limits on land The Southern California gateway is acting like the narrow tube on a funnel: Ocean volumes pour in from Asia and can only flow out at a certain velocity due to terminal limitations as well as limitations of warehouses, trucking and rail beyond the terminal. When the flow into the top of the funnel is too great, as it is now, it creates an overflow in the form of ships at anchor or adrift. This offshore ship queue is equivalent to a massive floating warehouse for containerized imports whose size is only limited by liner shipping capacity and U.S. consumer demand. How constrained is the flow? Port of Los Angeles Executive Director Gene Seroka said during a press conference on Wednesday that container dwell time in the terminal “has reached its peak since the surge began” and is now six days, worsening from 5.3 days last month. On-dock rail dwell time is 11.7 days, not far below the peak of 13.4. Street dwell time (outside the terminal) “is 8.5 days, nearing the all-time high” of 8.8 days, said Seroka. It has worsened from 8.3 days a month ago. Marine Exchange data reveals the constraints of the Los Angeles/Long Beach port complex. Since congestion began, the total number of container ships either at anchor or at berth has risen and fallen — it was an all-time-high 100 on Sunday, more than five times pre-COVID levels. But one stat has remained remarkably consistent: The number of container ships at Los Angeles/Long Beach berths has remained in a tight band of around 27-31 per day — that is what the land side can handle, the tube of the metaphorical funnel. Throughout 2021, all ship arrivals over that threshold have overflowed into the anchorages and drift areas. Chart: American Shipper based on data from Marine Exchange of Southern California. Data bi-monthly Jan 2019-Nov 2020; daily Dec 2020-present More ships deployed in trans-Pacific Meanwhile, at the wider open end at the top of the funnel — the drift area radius outside the port — a much higher number of ships is flooding into Southern California than ever before. Seroka noted that of the 84 ships his port handled in August, 11 were “extra loaders” — ships that are not part of a scheduled service. “And in addition to the extra loaders we’ve seen from incumbent carriers, there are no less than 10 newcomers [new services] to the trade,” he added. According to Alphaliner, deployed trans-Pacific capacity is up 30% year on year. Asked by American Shipper whether ports or terminals could proactively stem inbound flows to provide more breathing room, Seroka replied: “Slowing down these ships is something we thought about in the early days of the surge, to try to give us a little bit more time in between to get ready for the next ships. But if you start looking at slowing down these ships, it’s going to back up the vessel supply chain even further and make schedules an even deeper concern for liner companies.” In other words, no. Imports down year on year The higher the number of ships waiting offshore, the bigger the queue and the longer it takes for a vessel to get a berth. On Tuesday, the average wait time to reach a berth in Los Angeles (30-day rolling average) rose to an all-time high of nine days. That, in turn, delays imports. Back in August 2020, when import demand surged post-lockdowns, there were almost no ships at anchor off Southern California. This August, there was an average of 36 ships at anchor per day, according to Marine Exchange data. The port of Los Angeles handled 485,672 twenty-foot equivalent units of imports in August — down 5.9% year on year. Chart: American Shipper based on data from Port of Los Angeles As Seroka pointed out, on the last day of August, 26 ships were at anchor waiting for berths in Los Angeles. These ships had 205,000 TEUs of cargo on board, which was pushed into this month (just as delayed cargo from this month will be pushed into October). Total throughput for the port was 954,377 TEUs in August, down 0.8% year on year due to the decline in imports and a 23% plunge in loaded exports, offset by a 17% surge in outbound empty containers. The port expects volumes to pull back from August’s level over the next two months, to 930,000 TEUs in September and 950,000 TEUs in October. It expects full-year throughput of 10.8 million TEUs. More blank sailings ahead What could stem the tide of cargo arriving in Southern California and cap the size of the floating warehouse? When congestion peaked earlier this year, in the first quarter, it led to a large number of “blanked” (canceled) sailings in the second quarter. Ships stuck at anchor in San Pedro Bay could not get back to Asia in time, forcing carriers to cancel voyages. Those cancellations helped pare California anchorage totals in May and early June. Carriers are yet again blanking sailings as a result of escalating congestion in Southern California. But this time, the number of ships at anchor and drifting has much more room to run before the network reaches its limit. Not only are there more services and extra loaders, but carriers also have an incentive to blank sailings in other markets instead and redeploy ships into the trans-Pacific, where they can earn more money by topping off rates with premium charges. According to Lars Jensen, CEO of consultancy Vespucci Maritime, “If we continue to see extremely strong demand specifically on the trans-Pacific, carriers may elect to blank a few Asia-Europe sailings and instead temporarily let a few of those vessels make a trip across the Pacific before coming back to Asia and re-phasing into the Asia-Europe network.” According to Alphaliner, ships are already being pulled from the Asia-Middle East and Asia-Red Sea lanes to make more money elsewhere. Alphaliner reported that up to 50% of Asia-Middle East services are now being blanked because vessels have been redeployed to trades like the trans-Pacific “where spot freight rates are at historic highs.” Tyler Durden Wed, 09/22/2021 - 14:38.....»»

Category: blogSource: zerohedgeSep 22nd, 2021

Akari Therapeutics Reports Second Quarter 2021 Financial Results and Highlights Recent Clinical Progress

Currently opening sites for Phase III study of nomacopan in bullous pemphigoid (BP). Phase III study of nomacopan in severe pediatric hematopoietic stem cell transplant-related thrombotic microangiopathy (HSCT-TMA) open for enrollment. Evaluating the potential for long-acting PAS-nomacopan as a treatment for dry age-related macular degeneration (AMD). Collaborating with clinical partners to explore potential for treating exacerbations in severe lung diseases where inhaled nomacopan can be potentially delivered directly to the lung. Active pipeline exploring treatment of head trauma with nomacopan and the development of votucalis, a new anti-histamine biopharmaceutical with a similar structure to nomacopan. NEW YORK and LONDON, Sept. 22, 2021 (GLOBE NEWSWIRE) -- Akari Therapeutics, Plc (NASDAQ:AKTX), a late-stage biopharmaceutical company focused on innovative therapeutics to treat orphan autoimmune and inflammatory diseases where complement (C5) and/or leukotriene (LTB4) systems are implicated, today announced its financial results for the second quarter of 2021, as well as recent clinical progress. Akari's two lead programs, in BP and HSCT-TMA, are in Phase III clinical development and have been granted both Orphan Drug and Fast Track designations by the U.S. Food and Drug Administration (FDA). The Company also has earlier stage programs with nomacopan addressing ophthalmology and pulmonary diseases. "We have made progress with our clinical pipeline since the beginning of 2021, and have two orphan disease programs in Phase III clinical development," said Clive Richardson, Chief Executive Officer of Akari Therapeutics. "In parallel we are actively exploring partnering opportunities for disease areas such as those for the eye and the lung, using different routes of administration for nomacopan." Clinical highlights Phase III clinical trial in patients with bullous pemphigoid BP is a severe autoimmune blistering disease of the elderly with no specific approved treatments. The Company is opening sites for a Phase III study of nomacopan for the treatment of BP. The FDA and the European Medicines Agency (EMA) have granted Orphan Drug Designation for nomacopan for the treatment of BP, and the FDA has granted Fast Track designation to nomacopan in BP. Miles Nunn, Ph.D., Chief Scientific Officer of Akari Therapeutics, and Sanjeev Khindri, M.D., Medical Director of Akari Therapeutics, recently presented a poster at the 2021 International Pemphigus & Pemphigoid Foundation (IPPF) Scientific Symposium which outlines the design of the Company's Phase III planned pivotal study of nomacopan in patients with moderate to severe BP. The Company is considering additional opportunities to expand into other dermatological conditions where both complement C5 activation and LTB4 are believed to have key roles in driving the disease pathology including hidradenitis suppurativa (HS) and other pemphigoids. Phase III clinical trial in patients with HSCT-TMA HSCT-TMA is a severe disease in pediatric patients with an estimated 80% mortality rate and no approved treatments. Phase III study in pediatric HSCT-TMA is open for enrollment at sites in the U.S. and Europe, subject to the ongoing impact of COVID-19 related restrictions. Akari has FDA Fast Track and Orphan Drug Designations for pediatric HSCT-TMA patients. Success in pediatric HSCT-TMA would provide opportunities to expand into adult HSCT-TMA and related TMA-like diseases where complement and LTB4 are believed to have important roles such as atypical hemolytic uremic syndrome, systemic lupus erythematosus and anti-phospholipid syndrome. Long term data Our first PNH patient has now been treated with nomacopan for over five years. Over 35 cumulative patient years of long-term treatment data shows the drug is well tolerated with a marked clinical effect such that 79% of formerly transfusion dependent patients became transfusion independent. OTHER CLINICAL PROGRAMS Akari Therapeutics is also pursuing other earlier stage programs that are primarily focused on large disease areas with high unmet need. For these programs we are using alternative formulations of nomacopan (topical, nebulized or long acting), which provides an opportunity for separate partnering options. Ophthalmology program Ongoing PK studies with PAS-nomacopan, an engineered form of nomacopan with an extended half-life, to estimate injection interval in the back of the eye are ongoing, with data expected by the end of 2021. Recent publications (Eskandarpour et al 2020 and 2021) support a potential therapeutic role for PAS-nomacopan in sight threatening retinal diseases given its inhibition of both complement and VEGF via LTB4. This unique combination may be particularly relevant to dry AMD where complement is a key treatment target and VEGF inhibition may prevent the risk of conversion to wet AMD where VEGF inhibitors are the primary treatment. A recent publication (Sanchez-Tabernero et al 2021) highlights that nomacopan delivered topically in Part A of a Phase I/II study in patients with atopic keratoconjunctivitis had a positive safety profile and was well tolerated. Part B of the study confirmed these findings. The Company is currently exploring options for a Phase II study in the front of the eye. To maximize the potential of nomacopan in the ophthalmology setting, Akari is exploring opportunities to collaborate with partners to accelerate the development of these ophthalmology programs. Lung program Learning from the viral induced mechanisms of COVID-19 pneumonia that involve terminal complement pathway and LTB4 dysregulations we are exploring the development of nomacopan in severe asthma to reduce the use of systemic steroids, and hospital admissions.  This remains an area of unmet medical need where respiratory viral infection still triggers life threatening exacerbations across a range of inflammatory lung conditions. Proposed publication of the Akari sponsored observational study and role of nomacopan in COVID-19 patients is in preparation. Initiation of further studies is subject to optimizing patient selection to align with the findings of the review. Trauma The role of both C5 and LTB4 has been implicated in trauma and Akari is exploring both blast injury and hemorrhagic shock with the USAISR. In addition, a separate new collaborative study in traumatic brain injury and subarachnoid hemorrhage is being initiated. Histamine inhibitor Votucalis is a new histamine inhibitor with a similar structure to nomacopan but a distinct and unique mode of action by binding directly to histamine and thereby preventing the activation of all four histamine G-protein coupled receptors. Ongoing work in collaboration with Durham and Newcastle Universities in the UK is focused on using votucalis to expand the Company's existing dermatology franchise in atopic dermatitis and pain management. In both cases initial skin penetration data indicates a potential opportunity for topical delivery. Second Quarter 2021 Financial Results As of June 30, 2021, the Company had cash of approximately $3.8 million, compared to cash of approximately $14.1 million at December 31, 2020. Following the end of the second quarter, Akari closed a private placement of approximately $12.3 million in gross proceeds by issuing approximately 7.9 million ADSs. Furthermore, Akari received approximately $3 million in annual R&D tax credits from the UK tax authorities. In June 2020, Akari entered into a securities purchase agreement with Aspire Capital Fund, LLC (Aspire Capital) whereby Aspire Capital is committed to purchase up to an aggregate of $30.0 million of the Company's ADSs. During the six months ended June 30, 2021, the Company sold to Aspire Capital ordinary shares for gross proceeds of $2.0 million. As of June 30, 2021, $22.0 million of the original purchase commitment remains available. Research and development expenses for the second quarter 2021 were approximately $2.2 million, as compared to approximately $3.0 million in the same quarter the prior year. This decrease in expenses was primarily due to lower expenses incurred for clinical trials during the year. General and administrative expenses for the second quarter 2021 were approximately $2.1 million, as compared to approximately $2.9 million in the same quarter the prior year. The decrease was primarily due to a one-time non-cash financing expense related to the 2020 Purchase Agreement with Aspire Capital. For the second quarter 2021, total other expense was approximately $16,000 as compared to total other expense of approximately $1.5 million in the second quarter of 2020. This change was primarily due to the accounting reclassification of warrant liabilities to shareholders' equity as of December 2020. Net loss for the second quarter 2021 was approximately $4.3 million, as compared to approximately $7.4 million for the period of 2020. This decrease was primarily due to the aforementioned lower research and development expenses as well as lower total other expense. About Akari Therapeutics Akari is a biopharmaceutical company focused on developing inhibitors of acute and chronic inflammation, specifically for the treatment of rare and orphan diseases, in particular those where the complement (C5) or leukotriene (LTB4) systems, or both complement and leukotrienes together, play a primary role in disease progression. Akari's lead drug candidate, nomacopan (formerly known as Coversin), is a C5 complement inhibitor that also independently and specifically inhibits leukotriene B4 (LTB4) activity. Nomacopan is currently being clinically evaluated in four areas: bullous pemphigoid (BP), thrombotic microangiopathy (TMA), as well as programs in the eye and lung. Cautionary Note Regarding Forward-Looking Statements Certain statements in this press release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. You should not place undue reliance upon the Company's forward-looking statements. Except as required by law, the Company undertakes No obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this press release. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that the plans, intentions, expectations or strategies will be attained or achieved. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control. Such risks and uncertainties for our company include, but are not limited to: needs for additional capital to fund our operations, our ability to continue as a going concern; uncertainties of cash flows and inability to meet working capital needs; an inability or delay in obtaining required regulatory approvals for Nomacopan and any other product candidates, which may result in unexpected cost expenditures; our ability to obtain orphan drug designation in additional indications; risks inherent in drug development in general; uncertainties in obtaining successful clinical results for Nomacopan and any other product candidates and unexpected costs that may result therefrom; difficulties enrolling patients in our clinical trials; our ability to enter into collaborative, licensing, and other commercial relationships and on terms commercially reasonable to us; failure to realize any value of nomacopan and any other product candidates developed and being developed in light of inherent risks and difficulties involved in successfully bringing product candidates to market; inability to develop new product candidates and support existing product candidates; the approval by the U.S. Food and Drug Administration (FDA) and European Medicines Agency (EMA) and any other similar foreign regulatory authorities of other competing or superior products brought to market; risks resulting from unforeseen side effects; risk that the market for nomacopan may not be as large as expected; risks associated with the impact of the COVID-19 pandemic; inability to obtain, maintain and enforce patents and other intellectual property rights or the unexpected costs associated with such enforcement or litigation; inability to obtain and maintain commercial manufacturing arrangements with third party manufacturers or establish commercial scale manufacturing capabilities; the inability to timely source adequate supply of our active pharmaceutical ingredients from third party manufacturers on whom the company depends; unexpected cost increases and pricing pressures and risks and other risk factors detailed in our public filings with the U.S. Securities and Exchange Commission (SEC), including our most recently filed Annual Report on Form 20-F filed with the SEC. Except as otherwise noted, these forward-looking statements speak only as of the date of this press release and we undertake no obligation to update or revise any of these statements to reflect events or circumstances occurring after this press release. We caution investors not to place considerable reliance on the forward-looking statements contained in this press release.     AKARI THERAPEUTICS, Plc   CONDENSED CONSOLIDATED BALANCE SHEETSAs of June 30, 2021 and December 31, 2020(in U.S. dollars, except share data)                    .....»»

Category: earningsSource: benzingaSep 22nd, 2021

Air Force commandos are preparing for war with Russia or China by rethinking what a "runway" really is

The threat from long-range weapons has the Air Force looking to disperse its forces, and special operators have been crucial to those operations. An A-10 takes off on a highway in Alpena, Michigan, August 5, 2021. US Air Force/Master Sgt. Scott Thompson The US military is preparing for a potential conflict for a capable adversary, namely Russia and China. Part of that preparation is finding ways to distribute forces so they can keep operating if fighting starts. For the Air Force, that means using new airfields, and its special operators have been crucial to that. See more stories on Insider's business page. In a conflict with a near-peer power, such as China and Russia, the US military would be challenged by the size of its rivals' arsenal and the range of their weapons.China is now seen as the US's "pacing threat," and the sheer scale of its manpower and arsenal demand prudent distribution of forces to avoid a nightmare scenario in which one strike takes out a large number of troops or weapons.So the Air Force has been training to disperse its forces to non-traditional and sometimes improvised airfields. Air Force special-operations forces have been crucial to that preparation.America's Air Commandos US Air Force pararescuemen board a US Army CH-47F helicopter after an exercise at Bagram Airfield in Afghanistan, March 14, 2018. US Air Force/Tech. Sgt. Gregory Brook As the air component of US Special Operations Command, Air Force Special Operations Command provides air transport; close air support; precision strike; and intelligence, surveillance, global access, and reconnaissance capabilities to special-operations units.AFSOC also oversees highly skilled battlefield commandos who get attached to other special-operations teams, merging air and ground power.These battlefield commandos work in four main career fields: Pararescuemen, who are elite medics and personnel recovery experts; Combat Controllers, who coordinate airfield operations and close air support; Tactical Air Control Party airmen, commandos who specialize in calling in airstrikes; and Special Reconnaissance operators, the newest career field that specializes in reconnaissance and intelligence gathering.Although they are an important part of SOCOM, Air Commandos are often overlooked because they support other special-operations units. Combat Controllers and Pararescuemen are often attached Navy SEAL platoons or Army Special Forces detachments. They do operate on their own teams but not as often.AFSOC is equally active in the air, however. It operates several rotary- and fixed-wing platforms, such as the MC-130 Commando II transport plane, the AC-130 Spooky gunship, the CV-22 Osprey tilt-rotor aircraft, and the MQ-9 Reaper drone.Winds of Change A C-146A Wolfhound prepares to land on a highway in Alpena, Michigan, August 5, 2021. US Air Force/Master Sgt. Scott Thompson Air Commandos recently conducted a unique exercise that reflects the shift in thinking about military operations.During exercise Northern Strike 21 in northern Michigan in early August, Air Commandos facilitated the first landing of a modern aircraft on a US public highway. The goal was to prepare pilots and commandos for impromptu operations in austere locations.During the exercise, Air Commandos practiced infiltrating and securing the highway and then setting it up to function as an airfield.A-10 and C-146A aircraft then landed and took off from the roadway. In a real-world scenario, especially during expeditionary operations, the highway-turned-airfield would ideally be close to the front lines to provide quick and accurate logistical and close air support for conventional and special-operations troops."We're working on agile combat employment concepts, which basically makes the force more flexible, more maneuverable, and creates challenges for our adversaries in different environments," Lt. Col. Jeff Falcone, the Air Commando in charge of the exercise, said in a press release."It also increases the survivability of US forces as we're able to move around to more unpredictable locations to resupply, refuel, or anything else we may need," Falcone added.Besides the Combat Controllers who conducted air traffic control, Pararescuemen were on standby to provide medical attention to forces at and near the highway, as they would be during a real operation. An A-10 lands on a highway in Alpena, Michigan, August 5, 2021. US Air Force/Master Sgt. Scott Thompson The US military isn't the only one who trains for such contingencies. Taiwan's military operates aircraft on a specially designed public highway as part of exercises simulating defense against a Chinese invasion.During such an invasion, China's military would already know where Taiwan's military and civilian airports are and target them accordingly. Conducting air operations in non-traditional, austere environments makes it harder for an enemy to target your aircraft.Airfield operations Combat Controllers' "the bread and butter," a former Combat Controller told Insider."People often mistakenly think that our only job is to sit by the SF [Army Special Forces] or [Navy] SEAL ground force commander and call in airstrikes on bad guys, but actually that is a very small portion of our job," the former controller said, adding that not all combat controllers are qualified as joint terminal attack controllers, which allows them to call in airstrikes"A primary aspect of our job is airfield ops - identify, assess, mark, and operate airfields, often in austere environments. We are the first in to establish the conditions for follow-on forces. It takes years of training to get to that place," the former Combat Controller added.This exercise in Michigan showed that AFSOC is adapting to the new challenges of great-power competition.Lt. Gen. James Slife, AFSOC's commander, acknowledged earlier this year that Air Commandos need to adapt and evolve in order to remain relevant, calling the current period an "inflection point" for the command.ACE and FARP F-35s wait to refuel from a C-130J during Agile Combat Employment training at Northwest Field on Guam, February 16, 2021. US Air Force/Senior Airman Jonathan Valdes Montijo For example, in a war with China, instead of relying on an F-35 group - two squadrons with roughly 50 aircraft - to operate from a large island, the Air Force would deploy a single squadron or even a half-squadron to a smaller island.Agile Combat Employment, or ACE, and Forward Arming and Refueling Points, or FARP, are not entirely new operations, but AFSOC has investment in them more as tensions have risen with Russia and China.ACE seeks to enable larger, operational-level air forces to function in smaller, tactical-level units in the event of a near-peer conflict. By doing that, the Air Force makes it harder for adversaries to target its aircraft and personnel.ACE operations also make it a more unpredictable and thus more effective force. Special-operations airmen refuel an F-22 from an MC-130J during Forward Area Refueling Point training in Alaska, January 30, 2020. US Air Force/Staff Sgt. Ridge Shan F-35s conducted just such an exercise earlier this year, deploying from their main base in Alaska to the main US base in Guam, from which they redeployed to an austere airfield on the small island nation of Palau for refueling.FARP goes hand-in-hand with ACE. Aircraft need to be refueled and rearmed wherever they are, especially if they have to deploy to remote, austere bases on short notice.The "Nightstalkers" of the US Army's 160th Special Operations Aviation Regiment and the US special-operations community as a whole have used FARP for decades to support operations in unfriendly territory or behind enemy lines. In early 2020, Special Tactics Airmen practiced refueling fighter jets in the extreme cold of Alaska for the first time.Stavros Atlamazoglou is a defense journalist specializing in special operations, a Hellenic Army veteran (national service with the 575th Marine Battalion and Army HQ), and a Johns Hopkins University graduate.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderSep 21st, 2021

The 20 most popular books of all time, according to Goodreads members

Goodreads is the world's largest platform for readers to rate and review books. Here are the 20 most popular books of all time, ranked by Goodreads. When you buy through our links, Insider may earn an affiliate commission. Learn more. According to Goodreads, some of the most popular books of all time include "The Great Gatsby," "Pride & Prejudice," and "The Hunger Games." Amazon; Rachel Mendelson/Insider Goodreads is the world's largest platform for readers to rate and review books. Below are the 20 most popular books of all time, ranked by Goodreads members. Want more books? Check out the most popular books of 2021, based on Goodreads. Goodreads is the world's largest site for readers to rate and review their favorite books and authors, track their reading, participate in challenges, and discover new book recommendations. No matter what you like to read, you can find it on Goodreads along with tons of fellow readers who love the same books. With millions of ratings and community reviews, readers are encouraged to share their opinions to help others determine their next read. We used the number of ratings of each book to determine the most popular books amongst Goodreads members, so whether you're curious if your favorite book made the list or are looking for a new read with millions of recommendations, here are the top 20 most popular books on Goodreads. The 20 most popular books of all time on Goodreads: "Harry Potter and the Sorcerer's Stone" by J.K. Rowling Bookshop "Harry Potter and the Sorcerer's Stone" by J.K. Rowling, available on Amazon and Bookshop, from $6.98With nearly 8 million ratings, "Harry Potter and the Sorcerer's Stone" is the most popular book of all time on Goodreads and has sold over 120 million copies. In this first book of the "Harry Potter" series, readers meet a young orphan boy who learns he's a wizard and begins his magical training at Hogwarts, a special school for witches and wizards. "The Hunger Games" by Suzanne Collins Bookshop "The Hunger Games" by Suzanne Collins, available on Amazon and Bookshop, from $11.69With almost 7 million ratings on Goodreads, "The Hunger Games" is the first book in a young adult dystopian series where the country is divided up into districts that annually select one boy and one girl to fight to the death in a highly publicized arena. When Katniss's little sister is chosen for the games, she volunteers in her sister's place and immediately begins training before entering the deadly arena. "Twilight" by Stephenie Meyer Bookshop "Twilight" by Stephenie Meyer, available on Amazon and Bookshop, from $10.16"Twilight" is an iconic young adult vampire romance novel about a high school girl named Bella who falls in love with a mysterious boy named Edward and quickly finds out he's a vampire. As the threat of a nearby nomadic vampire looms, Bella chooses to be with Edward and discovers the secrets of his world, despite the nearly constant risks to her life.  "To Kill A Mockingbird" by Harper Lee Bookshop "To Kill A Mockingbird" by Harper Lee, available on Amazon and Bookshop, from $7.19"To Kill A Mockingbird" is an American classic from 1960, a Pulitzer Prize winner, and frequently voted as one of the best books of the 20th century. It's about a young girl named Scout who's growing up in a time of racial division, amplified as her lawyer father defends an innocent Black man wrongly accused of a horrible crime.  "The Great Gatsby" by F. Scott Fitzgerald Bookshop "The Great Gatsby" by F. Scott Fitzgerald, available on Amazon and Bookshop, from $5.97First published in 1925, "The Great Gatsby" is a classic Jazz Age novel about millionaire Jay Gatsby and his love for Daisy Buchanan. Narrated by Gatsby's neighbor, Nick Carraway, the novel follows Gatsby's shady business dealings, extravagant parties, and pursuit of Daisy's affection.  "The Fault in Our Stars" by John Green Bookshop "The Fault in Our Stars" by John Green, available on Amazon and Bookshop, from $6.10In this absolute tear-jerker, Hazel is battling a terminal cancer diagnosis, offered a few extra years by a miracle medical advancement. In her cancer support group, she meets Augustus Waters and they immediately begin to fall for each other in this tragic and beautiful young adult love story.  "1984" by George Orwell Bookshop "1984" by George Orwell, available on Amazon and Bookshop, from $7.48In this novel predicting a dystopian future from its original publication in 1949, Winston Smith is living in a totalitarian world defined by strict mass surveillance and inundating propaganda. Winston works at the Ministry of Truth, rewriting history to fit the government's narrative, and can't help but wonder what the world was truly like before the revolution.  "Pride and Prejudice" by Jane Austen Bookshop "Pride and Prejudice" by Jane Austen, available on Amazon and Bookshop, from $5.47"Pride and Prejudice" is an 1813 romantic classic about Elizabeth Bennet, a young woman who is pressured to marry a wealthy man in order to provide for her family. She meets the brooding Mr. Darcy, with whom she begins a witty but civilized sparring banter as they slowly fall for each other in this novel about the influences of class and the importance of being true to yourself.  "Divergent" by Veronica Roth Bookshop "Divergent" by Veronica Roth, available on Amazon and Bookshop, from $8.46In the dystopian science fiction world of "Divergent," all 16-year-olds must devote themselves to one of five factions in society, each dedicated to a virtue. Beatrice Prior is torn between staying with her family and being true to herself, so she makes a daring and shocking decision, thrusting her into an intense initiation and transformation while keeping a potentially deadly secret and discovering the growing conflict within her seemingly flawless society.  "Harry Potter and the Prisoner of Azkaban" by J.K. Rowling Bookshop "Harry Potter and the Prisoner of Azkaban" by J.K. Rowling, available on Amazon and Bookshop, from $8.78When a murderer named Sirius Black escapes the wizarding world's highest security prison, rumor says he's headed to kill Harry since the dark Lord Voldemort's downfall was his as well. Even with the soulless prison guards searching the castle for Sirius, danger seems to follow Harry at every turn.  "The Hobbit" by J.R.R. Tolkien Bookshop "The Hobbit" by J.R.R. Tolkien, available on Amazon and Bookshop, from $14.37This fantastical classic introduces readers to magical Middle-Earth where Bilbo Baggins, a hobbit, sets out on a quest to win a treasure guarded by a dragon. Initially written for the author's children, this adventure novel is a prequel to the epic "Lord of the Rings" series and is a charming favorite with over three million ratings and 1.6 million five-star reviews on Goodreads.   "Harry Potter and the Deathly Hallows" by J.K. Rowling Bookshop "Harry Potter and the Deathly Hallows" by J.K. Rowling, available on Amazon and Bookshop, from $9.98In the final book of the "Harry Potter" series, Harry and his two best friends are on a cross-country journey to find the final answers that will help them defeat the dark wizard Lord Voldemort. Cumulating in an epic and devastating battle at Hogwarts, this intense novel closes the fantastical series with a shocking and emotional resolution.  "Animal Farm" by George Orwell Bookshop "Animal Farm" by George Orwell, available on Amazon and Bookshop, from $7.48"Animal Farm" is a classic satirical novel about a group of mistreated farm animals who rebel against the human farmer to take over the farm and attempt to create a system where all animals are free and equal. But when the community is betrayed and collapses under a single dictator, the animals' hopes for equality diminish.  "The Diary of a Young Girl" by Anne Frank Bookshop "The Diary of a Young Girl" by Anne Frank, available on Amazon and Bookshop, from $7.35Written by Anne Frank during the Nazi occupation of Holland, this diary is a firsthand, nonfiction account of the two years Anne and her family spent hiding in a secret annex of an old office building. With thoughtful insight and emotional impressions of the time, Anne's diary is a testament to her courage during the final years of her life.  "Harry Potter and the Chamber of Secrets" by J.K. Rowling Bookshop "Harry Potter and the Chamber of Secrets" by J.K. Rowling, available on Amazon and Bookshop, from $6.98Before returning to Hogwarts for his second year of school, Harry receives an ominous message of the danger that awaits him if he's to return. Needing to escape his dreadful aunt and uncle, Harry ignores the warning and happily returns to school — until students begin to turn to stone and a strange voice in the wall means Harry might be the only one who can save them. "The Catcher in the Rye" by J.D. Salinger Bookshop "The Catcher in the Rye" by J.D. Salinger, available on Amazon and Bookshop, from $5.21"The Catcher in the Rye" is a young adult classic about a 16-year-old boy named Holden Caulfield and his three-day adventure through New York City. Heavily impacted by his experiences, Holden is an example of teenage rebellion as he navigates complex feelings about innocence, connection, and loss.  "Harry Potter and the Goblet of Fire" by J.K. Rowling Bookshop "Harry Potter and the Goblet of Fire" by J.K. Rowling, available on Amazon and Bookshop, from $6.92In this fourth book of the "Harry Potter" series, Hogwarts is one of three schools participating in a Triwizard Tournament where one representative witch or wizard from each school must complete three extremely challenging tasks. When Harry's name is picked in addition to the three competitors, he must compete in the tournament, despite not knowing how he was entered.  "Angels & Demons" by Dan Brown Bookshop "Angels & Demons" by Dan Brown, available on Amazon and Bookshop, from $16.20"Angels & Demons" is the first book in the "DaVinci Code" series, a thrilling mystery novel where readers meet world-renowned symbologist Robert Langdon as he's called to help explain the mysterious symbols left seared into the chest of a murdered physicist. His research takes him through an intense investigation that leads him towards a deadly vendetta from the Illuminati.  "The Girl with the Dragon Tattoo" by Stieg Larsson Bookshop "The Girl with the Dragon Tattoo" by Stieg Larsson, available on Amazon and Bookshop, from $9.19In this international psychological thriller, Henrik Vanger is a billionaire whose niece disappeared over 40 years ago. Still searching for answers, he hires Mikal Blomkvist, a renowned journalist who recently lost a libel lawsuit, along with Lisbeth Salander, a mysterious but brilliant computer hacker. As the duo digs deeper into the investigation, they uncover a complex weave of family and financial secrets in this captivating Swedish thriller.  "Catching Fire" by Suzanne Collins Bookshop "Catching Fire" by Suzanne Collins, available on Amazon and Bookshop, from $7.98The second book in the "Hunger Games" saga follows Katniss and her public love interest, Peeta, after their historic arena win. Though they should be celebrating, rumors of a growing rebellion infuriate the Capitol and threaten their safety in this fast-paced, science-fiction sequel. Read the original article on Business Insider.....»»

Category: topSource: businessinsiderSep 21st, 2021

"Many People Will Be Arrested" - Evergrande Lured Retail Investors Into Billions Of "Wealth Management Products" With Gucci Bags, Dyson Air Purifiers

"Many People Will Be Arrested" - Evergrande Lured Retail Investors Into Billions Of "Wealth Management Products" With Gucci Bags, Dyson Air Purifiers In our post detailing how Evergrande became a "too big to fail" anchor of China's shadow banking system, we noted that a key missing piece in the company's funding was selling wealth management products  - i.e., unregulated "shadow banking" products - to outside investors, as well as its own employees and their families, promising returns up to 13%. It is these WMP investors that are currently besieging the company's offices across the country in hopes of getting some of their principal back, and which include everyone from paint suppliers to decoration and construction companies. To them, Evergrande owes more than 800 billion yuan ($124 billion) due within one year, while it has only a 10th of that amount of cash on hand. It will have even less once the now officially defaulted company makes priority payments to its banks and creditors. Expanding on this striking funding source, Reuters today writes that lured by the promise of yields as high as 12, "tens of thousands of investors bought wealth management products" through China Evergrande, a transaction which was softened by gifts such as Dyson air purifiers and Gucci bags, not to mention the guarantee of China’s top-selling developer, a guarantee which we now know was worthless. And now, many investors fear they may never get their investments back after the cash-strapped property developer recently stopped repaying some investors and set off global alarm bells over its massive debt. Some have been protesting at Evergrande offices, refusing to accept the company’s plan to provide payment with discounted apartments, offices, stores and parking units, which it began to implement on Saturday. “I bought from the property managers after seeing the ad in the elevator, as I trusted Evergrande for being a Fortune Global 500 company,” said the owner of an Evergrande property in the conglomerate’s home province of Guangdong surnamed Du. “It’s immoral of Evergrande not to pay my hard-earned money back,” said the investor, who had put 650,000 yuan ($100,533) into Evergrande wealth management products (WMPs) last year at an interest rate of more than 7%. That investor is about to learn that in addition to return, there is also risk, a concept almost forgotten in today's world where central banks and authoritarian governments do everything to preserve the "wealth effect" and avoid social unrest resulting from stock price crashes. According to a sales manager of Evergrande Wealth, launched in 2016 as a peer-to-peer (P2) online lending platform that originally was used to fund its property project, more than 80,000 people – including employees, their families and friends as well as owners of Evergrande properties - bought WMPs that raised more than 100 billion yuan in the past five years. Of these investments, some 40 billion yuan are still outstanding, and will likely never be repaid. Last week, Evergrande revealed that even Ding Yumei, the wife of billionaire founder Hui Ka Yan, had bought $3 million of the company’s investment products in a show of support. As the FT adds, Evergrande financial advisers marketed the products widely, including to homeowners in its apartment blocks, while its managers persuaded subordinates to invest, the executives of Evergrande’s wealth management division said. The publication adds that one executive - who spoke during a meeting with angry investors who went to the company’s Shenzhen headquarters to try to get their money back - suggested the products were too high risk for ordinary retail investors and should not have been offered to them. Of course, it is way too late now. "My parents put the bulk of their savings, which is Rmb200,000 and not a lot by Evergrande’s standard, into its [wealth management products],” said the daughter of one investor who asked to be identified by her surname Xu. She said an Evergrande financial adviser stationed in an apartment tower built by the company in central China had persuaded her mother to invest. “They wouldn’t have trusted Evergrande’s wealth products had they not bought the developer’s apartment,” she said. “All they wanted was to ease the financial pressure from buying expensive cancer drugs [for Xu’s mother], nothing else.” Last week, Xu was one of hundreds of people who travelled to Evergrande’s Shenzhen headquarters in hopes of recovering their investment. One investor named Rosy Chen and her husband, an Evergrande employee, invested Rmb100,000 this year in a product with an advertised 11.5 per cent annual return on the urging of one of his superiors. The cash went to “supplement” the working capital of a company called Hubei Gangdun Materials, according to the investment contract. Hundreds of home buyers, retail investors and Evergrande contractors converged on the property group’s Shenzhen headquarters last week seeking repayment. Photo: AFP/Getty “At first we waited, but when we saw we were among the only families in the whole [Evergrande] division not to buy in, we decided to invest too,” said Chen. “We believed Evergrande wouldn’t cheat its own employees.” Remarkably, this hit to Chinese investors and resulting social unrest, comes as a time when China's Xi has launched a renewed pursuit of core Marxism with his "Common prosperity" initiative, which also coincides with China’s years-long effort to deleverage its economy, which has pushed companies to resort to off-balance sheet investments in search of funding. It's why we said recently that what is happening to Evergrande is a symptom of China's great deleveraging campaign, which however for a country with 350% debt/GDP is doomed to fail. The funniest thing about the whole Evergrande fiasco is that it's due to China pretending it can reduce its debt without a crash. Guys, ain't happening: at least the US accepts this and has adopted the idiocy that is MMT to justify perpetual debt increase until it all blows up — zerohedge (@zerohedge) September 20, 2021 Incidentally China has only itself to blame for the Evergrande crisis. Having allowed unprecedented debt growth for much of the past decade, last year Beijing capped debt levels of property developers last year as part of its "three red lines" policy which limited how much debt growth various tiers of developers can engage in. As a result, the most indebted players like Evergrande - feeling even more pressure to find new sources of capital to ease mounting liquidity stress - ended up moving to the unregulated "shadow banking" market, and turned to employees, suppliers and clients for cash through commercial paper, trust and wealth management products. Evergrande Wealth started to sell WMPs to individuals in 2019 after a regulatory crackdown led to a collapse of the P2P lending sector, said the sales manager and another Evergrande employee who bought the WMPs. To attract investors, the sales manager offered gifts such as Dyson air purifiers and Gucci handbags to each person who bought more than 3 million yuan of WMPs during a Christmas promotion last year. A product leaflet provided by the sales manager seen by Reuters showed the WMPs are categorized as fixed-income products suitable for “conservative investors seeking steady returns”. It was anything but. In an interview with local media, one Evergrande financial adviser said the products were a type of “supply chain finance”. While the money from retail investors may in years past have gone to its suppliers, the Evergrande executives in Shenzhen receiving retail investors said this was no longer the case. Asked about Hubei Gangdun, one of the executives of Evergrande’s wealth management division said that it was just a shell company. “Proceeds from the WMPs have been used to bridge various funding gaps faced by the parent company,” the executive said. “There is no need to thoroughly examine where the money actually went. “Some WMP proceeds were used to repay previous products but sales plummeted, making it difficult for the business model to continue,” he admitted. "Many people . . . might be arrested for financial fraud if investors don’t get paid off,” he said. “Our products were not for everyone. But our grassroots salespeople didn’t consider this when making their sales pitches and they targeted everyone in order to meet their own sales targets.” Translation: Evergrande used not just Ponzi instruments, but unregulated Ponzi instruments, which are now worth nothing. In two products sold last November, a construction company in Qingdao was looking to raise up to 10 million yuan with annualized yield of 7% in one and 20 million yuan with yields ranging from 7.8% to 9.5%, depending on the investment size, in another. Minimum investments were 100,000 yuan and 300,000 yuan, respectively. According to the sale manager, to make its products especially attractive, Evergrande offered additional yield up to 1.8% to certain investors, which would push returns to above 11% for a 12-month investment, an interest rate which in a world of zero rates, indicates funding stress if nothing else. Proceeds were to be used for Qingdao Lvye International Construction Co’s working capital, the documents showed. Repayment would either come from the issuer’s income or from Evergrande Internet Information Service (Shenzhen) Co, a subsidiary that runs Evergrande Wealth and promises to cover the principal and interest if an issuer fails to repay, the prospectus said. The sales manager said the Qingdao company was working on Evergrande projects and would use the payment from Evergrande upon completion to repay investors. “It’s a de-facto Evergrande product,” he said. Other highly leveraged Chinese conglomerates including HNA Group, which declared bankruptcy early this year, and China Baoneng have used similar products. It was the overreliance of China's giant conglomerates on shadow banking - among others - that prompted us back all the way back in 2018 to predict that after HNA and Anbang, Evergrande would fail next. Anbang first, then HNA, Evergrande and Dalian Wanda — zerohedge (@zerohedge) February 23, 2018 Earlier this week, Evergrande said that six senior executives would face “severe punishment” for securing early redemptions on investment products after retail investors were told that they would not be repaid on time. Another big question is whether Evergrande ever included the 40 billion yuan of WMPs among the liabilities on its balance sheet; as the FT notes, the answer "remains unclear." “We expect part of it should be included in the total liabilities . . . however, there was no detailed disclosure in its financial statement, so it is difficult to verify,” said Cedric Lai, a senior credit analyst at Moody’s Investors Service. Nigel Stevenson of GMT Research agreed it was unclear how Evergrande accounted for the WMPs. “Once the lid is lifted on its financials, it’s possible more horrors will be discovered,” he said. In a petition to various government bodies, a group of WMP investors in Guangdong accused Evergrande of inappropriately using money that should have gone to the issuers to fund its own projects, and not sufficiently disclosing the risks. They also complained that they were misled by the stature of its chairman, Hui Ka-yan, noting that he was seated prominently during a 2019 celebration of the 70th anniversary of the founding of the People’s Republic of China. “The investors trusted Evergrande and bought Evergrande’s WMPs out of our love for and faith in the Party and government,” they wrote. Tyler Durden Tue, 09/21/2021 - 11:10.....»»

Category: blogSource: zerohedgeSep 21st, 2021

Why the Fate of Troubled Property Developer Evergrande Group Is Posing a Huge Headache for China

One analyst calls it “the biggest test that China's financial system has faced in years” When Chinese home-buyer Zhiwei decided to purchase a luxury apartment at a development named Australia Villas back in 1997, it was billed as the apex of affluence. Located outside China’s southern megacity Guangzhou, the sprawling complex was to have 292 buildings, including a gymnasium, spa, cinemas, and a private school. Boutiques and restaurants would dot its 2,000 acres, sales staff said. Impressed, Zhiwei stumped up $21,000—a huge sum 24 years ago, when the average annual disposable income in China was less than $650. But things quickly went awry. The developer went bust in 2001 leaving most homes unfinished. Buyers with means swallowed the loss, but those without anywhere else to go, like Zhiwei, to go were forced to move into the concrete shells of their unfinished homes, living without gas, electricity and, in some cases, even windows. [time-brightcove not-tgx=”true”] “The whole area is thick with weeds, you can sometimes see snakes slithering on the sidewalk, and outdoors we are savaged by swarms of mosquitoes,” says Zhiwei, who asked to use a pseudonym for fear of jeopardizing ongoing negotiations with the developer and local government. “As the houses are unfinished, we can’t even get [approval] to sell them.” Read more: Why ‘Common Prosperity’ Is Alarming China’s Billionaires Two decades on, many people still live amid the vine-entangled, mildewed structures, planting vegetable gardens and rearing chickens on what were supposed to be ornamental lawns. More than 2,000 homeowners like Zhiwei are still waiting compensation. “After fighting for our rights for more than 20 years, many owners are getting old, and even the youngest have been retired for several years,” she says. And yet this cautionary tale has had no impact China’s gangbusters real estate market, which today remains the world’s biggest. In the year ending June 2020, about $1.4 trillion was invested in Chinese housing, even allowing for a fleeting dip due to the pandemic. That dwarfs the $900 billion invested in real estate at the peak of the U.S. property boom of the 2000s. Today, real estate makes up 29% China’s GDP. But alarm bells rang this week, with the news that the world’s most indebted real estate developer, Evergrande, is struggling to make loan payments on its more than $300 billion in liabilities—a sum roughly equivalent to the public debt of Portugal. On Tuesday the firm, based in the southern city of Shenzhen, said it was under “tremendous pressure” and warned there was no guarantee that it would be able “to meet its financial obligations.” That was crushing news for the roughly 1.5 million people who have put deposits on Evergrande homes that have yet to be built. NOEL CELIS/AFP via Getty Images Police officers survey people gathering at the Evergrande headquarters in Shenzhen, China on Sept. 16, 2021, as the Chinese property giant said it was facing “unprecedented difficulties” but denied rumors that it was about to go under. What impact could Evergrande have on China’s financial system? Fearing a fate like Zhiwei’s, scores of furious protesters besieged Evergrande’s headquarters this week in a show of public discontent not usually tolerated under China’s strongman, President Xi Jinping. Some even shared photos online of the family graves of Evergrande founder Hui Ka Yan, located at his ancestral home in the central province of Henan, exhorting people to go and vandalize them. Analysts are concerned. “Evergrande’s collapse would be the biggest test that China’s financial system has faced in years,” Mark Williams, chief Asia economist at Capital Economics, wrote in a Sept. 9 briefing note. Not only would a collapse be catastrophic for investor confidence, it would also reflect poorly on the ruling Chinese Communist Party (CCP). Under President Xi Jinping, the CCP has sought to rein in excessive wealth, reduce market risks and lower income inequality through a new campaign for “common prosperity.” But Evergrande—one of China’s largest corporations—is a problem that has worsened under Xi’s watch. The burning question is whether he will allow Evergrande to fail, potentially unleashing ripples of financial turmoil and further protests. At the very least, “Financial issues at the group are likely to cause contagion effect in the banking sector,” Angus Lam, a senior economist at IHS Markit, tells TIME by email. Read more: What the Crackdown on China’s Big Tech Firms Is Really About Yue Yuejin, research director for the E-House China research institute, says that unless there is social unrest “simply bailing out the enterprise wholesale will not happen.” But “there may be possible interventions such as the introduction of strategic investors or active coordination of asset sales.” It’s precipitous fall for Evergrande, which until recently was China’s second largest developer with nearly 900 competed commercial, residential and infrastructure projects. It had grown extremely bloated, swelling to some 200,000 staff as it made a bizarre array of loss-making forays into bottled water, electric vehicles and other sectors. It also invested hundreds of millions of dollars in its own soccer team. Hui, who founded the firm in 1997, was listed as China’s third-richest man by Forbes last year, but his wealth has plummeted in recent months. Evergrande’s shares have nosedived 81% since the beginning of the year, with the current crisis prompted after a series of downgrades of its bonds. Investors are growing increasingly jittery that a collapse could spread to other property developers, revealing systemic vulnerabilities. Each year, China builds about 15 million new homes—over five times those in America and Europe combined—yet a quarter of the current stock already lies empty, with forests of unoccupied tower blocks ringing many second and third-tier cities. In 2021, Chinese developers were exposed to more than $100 billion in bond repayments, while 10% of outstanding bank loans to non-financial clients globally have been made in China’s property sector. According to court filings, 228 real estate firms went bust in China during the first half of 2020 alone. Liu Junfeng/VCG via Getty Images)YICHANG, CHINA – SEPTEMBER 14: The construction site of an Evergrande housing complex is pictured on September 14, 2021 in Yichang, Hubei Province, China. Is Evergrande’s collapse inevitable? The crisis does not stand to be anything like as bad as America’s 2008 sub-prime mortgage crisis. A key feature of China’s property market is that many buyers pay the full price upfront rather than relying on mortgages. Of course, buyers may now be much less likely to trust real estate firms with such large sums, but defaults shouldn’t lead to the snowballing effect that the U.S. experienced. There are also some positives when it comes to China’s housing market. Whereas affluent Chinese once wanted to invest overseas, they now see China as a safer bet than foreign nations still in the grip of the coronavirus. Demand for new homes in good locations is so high prospective buyers must enter lotteries for the right to purchase one, with odds at some sought-after developments as low as 1 in 60. Social attitudes also place a strong emphasis on home ownership, with 81% of Chinese believing that buying a home is a must before marriage. Read more: How China’s Digital Currency Could Challenge the Dollar But the next few days will be critical. Evergrande has quarterly debt interest payments due Monday and bond interest payments Thursday as well as various suppliers waiting. Instead of cash, a $34 million debt to a paint supplier is reportedly being repaid by apartments in housing complexes that won’t be finished until 2024. Such wheeling and dealing is hardly sustainable. Evergrande “always had a reputation for creative financing,” says Dinny McMahon, an analyst on China’s real estate market for the Trivium China analysis group. Many ordinary Chinese are now wondering if they will pay the price. Around 78% of the wealth of urban Chinese is in residential property, versus just 35% for Americans, who prefer to invest in financial instruments and pensions. Were Chinese home prices to drop significantly in the wake of the Evergrande affair, it would shrink the primary assets of the world’s largest middle class, sending shudders around the globe. Says McMahon: “Hedge funds a decade ago were telling me it’s only a matter of time before Evergrande topples over.”.....»»

Category: topSource: timeSep 21st, 2021

Cracker Barrel Reports Fourth Quarter And Full Year Fiscal 2021 Results And Declares Quarterly Dividend

LEBANON, Tenn., Sept. 21, 2021 /PRNewswire/ -- Cracker Barrel Old Country Store, Inc. ("Cracker Barrel" or the "Company") (Nasdaq: CBRL) today reported its financial results for the fourth quarter of fiscal 2021 ended July 30, 2021. Fourth Quarter Fiscal 2021 Highlights Total revenue in the fourth quarter of $784.4 million was approximately flat compared to the fourth quarter of fiscal 2019 total revenue of $787.1 million. Compared to the fourth quarter of fiscal 20191, comparable store restaurant sales decreased 6.8% and comparable store retail sales increased 18.2%. Comparable store off-premise restaurant sales grew 108.6% compared to the fourth quarter of 20191 and represented approximately 19% of restaurant sales. GAAP operating income in the fourth quarter was $62.7 million, or 8.0% of total revenue, and adjusted2 operating income was $65.9 million, or 8.4% of total revenue. GAAP net income was $36.4 million, or 4.6% of total revenue. EBITDA was $93.5 million, or 11.9% of total revenue, which represented a 30 basis point sequential improvement compared to fiscal 2021 third quarter EBITDA margin. GAAP earnings per diluted share were $1.53, and adjusted2 earnings per diluted share were $2.25. The Company announced that its Board of Directors declared a regular quarterly dividend of $1.30 per share and authorized share repurchases up to $100 million of the Company's outstanding common stock. Commenting on the fourth quarter results, Cracker Barrel President and Chief Executive Officer Sandra B. Cochran said, "Despite the well-known headwinds that the industry continues to face with respect to staffing, commodity and wage inflation, and the resurgence of the pandemic, we were pleased that our fourth quarter profitability continued to trend positively from the third quarter and that our off-premise sales, retail business, and Maple Street Biscuit Company concept continued to outperform.  In addition to these strengths, our impressive field and home office support teams delivered on multiple fronts throughout the year, including cost-savings, the introduction of our new dinner menu and the continued roll-out of beer and wine to our stores, and helped ensure our continued recovery in 2021.  I'm confident that these and other initiatives position us well for 2022 despite the uncertain environment." Fourth Quarter Fiscal 2021 Results RevenueThe Company reported total revenue of $784.4 million for the fourth quarter of fiscal 2021, representing an increase of 58.4% compared to the fourth quarter of fiscal 2020, and a decrease of 0.3% compared to the fourth quarter of 2019.   Cracker Barrel comparable store restaurant and retail sales compared to the fourth quarter of fiscal 20191 and versus the fourth quarter of fiscal 2020 were as follows: Versus FY19Comparable Period1 Versus FY20 Comparable Period Fourth Quarter Ended7/30/21 Fourth Quarter Ended7/30/21 Comparable restaurant sales -6.8% 53.5% Comparable retail sales 18.2% 74.8% Operating IncomeGAAP operating income in the fourth quarter was $62.7 million, or 8.0% of total revenue. Excluding the approximately $3.2 million in non-cash amortization related to the gains on the previously disclosed sale and leaseback transactions adjusted2 operating income for the fourth quarter was $65.9 million, or 8.4% of total revenue. Net Income, EBITDA and Earnings per Diluted Share GAAP net income in the fourth quarter was $36.4 million, or 4.6% of total revenue, and EBITDA was $93.5 million, or 11.9% of total revenue. GAAP earnings per diluted share were $1.53, and adjusted2 earnings per diluted share were $2.25. Convertible Debt OfferingAs previously disclosed, during the fourth quarter the Company completed the private offering of $300 million of 0.625% convertible senior notes due 2026, which generated net proceeds of approximately $291 million. The Company used approximately $30 million net, of the proceeds to fund the cost of entering into certain convertible note hedging transactions to minimize the risk of potential future dilution from the offering. The remainder of the proceeds were used to pay down debt under the Company's revolving credit facility. The Company ended the fourth quarter with approximately $327 million in total debt. The Company also paid approximately $18 million to terminate the interest rate swaps that it had been using to hedge interest rate risk on the debt outstanding under the Company's revolving credit facility. We anticipate this action will result in savings on interest expense over the next two years. In connection with the offering, the Company also repurchased $35 million of its common stock. Quarterly Dividend and Share Repurchase AuthorizationThe Company's Board of Directors declared a quarterly dividend to common shareholders of $1.30 per share, payable on November 9, 2021 to shareholders of record on October 22, 2021. This dividend represents a return to the Company's pre-pandemic quarterly dividend level. Additionally, the Board of Directors authorized share repurchases up to $100 million of the Company's outstanding common stock. Fiscal 2021 ResultsRevenueThe Company reported total revenue of $2.81 billion for fiscal 2021, representing an increase of 11.8% compared to fiscal 2020 and a decrease of 8.2% compared to fiscal 2019. Comparable store restaurant sales for fiscal 2021 increased 8.4% compared to fiscal 2020, including a 5.3% increase in store traffic and a 3.1% increase in average check. Comparable store retail sales for fiscal 2021 increased 20.9% compared to fiscal 2020. Operating IncomeGAAP operating income in fiscal 2021 was $366.7 million, or 13.0% of total revenue, compared to $103.6 million, or 4.1% of total revenue, in fiscal 2020. Adjusted2 operating income for fiscal 2021 was $166.8 million. Net Income, EBITDA and Earnings per Diluted Share GAAP net income was $254.5 million, or 9.0% of total revenue, and EBITDA was $488.0 million, or 17.3% of total revenue, in fiscal 2021. Adjusted2 EBITDA was $275.4 million, or 9.8% of total revenue. GAAP earnings per diluted share were $10.71, and adjusted2 earnings per diluted share were $5.14. Fiscal 2022 OutlookAs a result of the ongoing business impact and significant uncertainty created by the COVID-19 pandemic, including the nationwide increase in infections and responsive public health restrictions brought about by the rise of the "Delta variant" of the virus, the Company is not providing its customary annual earnings guidance for fiscal 2022 at this time. For the full fiscal year 2022, the Company expects: Commodity and wage inflation in the mid-to-high single digits; Capital expenditures of approximately $120 million; An effective tax rate of approximately 18%; and The opening of three new Cracker Barrel locations and 15 new Maple Street Biscuit Company locations. The Company reminds investors that its outlook for fiscal 2022 reflects a number of assumptions, many of which are outside the Company's control.  1 For the purpose of comparing to fiscal 2019, comparable stores are defined as restaurants open a full 30 months before the beginning of the applicable period.2 For Non-GAAP reconciliations, please refer to the Reconciliation of GAAP-basis operating results to non-GAAP operating results section of this release. Fiscal 2021 Fourth Quarter Conference CallAs previously announced, the live broadcast of Cracker Barrel's quarterly conference call will be available to the public on-line at today beginning at 11:00 a.m. (ET). The on-line replay will be available at 2:00 p.m. (ET) and continue through October 5, 2021. About Cracker Barrel Old Country Store®Cracker Barrel Old Country Store, Inc. (NASDAQ:CBRL) provides a caring and friendly home-away-from-home experience while offering guests high-quality homestyle food to enjoy in-store or to-go and unique shopping — all at a fair price. Established in 1969 in Lebanon, Tenn., Cracker Barrel and its affiliates operate more than 660 company-owned Cracker Barrel Old Country Store® locations in 45 states and own the fast-casual Maple Street Biscuit Company. For more information about the Company, visit CBRL-F Except for specific historical information, certain of the matters discussed in this press release may express or imply projections of revenues or expenditures, statements of plans and objectives or future operations or statements of future economic performance. These, and similar statements are forward-looking statements concerning matters that involve risks, uncertainties and other factors which may cause the actual performance of Cracker Barrel Old Country Store, Inc. and its subsidiaries to differ materially from those expressed or implied by this discussion. All forward-looking information is subject to completion of our financial procedures for Q4 FY 2021 and is provided pursuant to the safe harbor established under the Private Securities Litigation Reform Act of 1995 and should be evaluated in the context of these factors. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "trends," "assumptions," "target," "guidance," "outlook," "opportunity," "future," "plans," "goals," "objectives," "expectations," "near-term," "long-term," "projection," "may," "will," "would," "could," "expect," "intend," "estimate," "anticipate," "believe," "potential," "regular," "should," "projects," "forecasts," or "continue" (or the negative or other derivatives of each of these terms) or similar terminology and include the expected effects of COVID-19 on our business, financial condition and results of operations and of operational improvement initiatives, such as new menu items and retail offerings. Factors which could materially affect actual results include, but are not limited to: risks and uncertainties associated with the COVID-19 pandemic, including the duration of the COVID-19 pandemic and its ultimate impact on our business, levels of consumer confidence in the safety of dine-in restaurants, restrictions (including occupancy restrictions) imposed by governmental authorities, the effectiveness of cost saving measures undertaken throughout our operations, disruptions to our operations as a result of the spread of COVID-19 in our workforce, and our level of indebtedness, or constraints on our expenditures, ability to service our debt obligations or make cash distributions to our shareholders or cash management generally, brought on by additional borrowing necessitated by the COVID-19 pandemic; general or regional economic weakness, business and societal conditions, and weather on sales and customer travel; discretionary income or personal expenditure activity of our customers; information technology-related incidents, including data privacy and information security breaches, whether as a result of infrastructure failures, employee or vendor errors, or actions of third parties; our ability to identify, acquire and sell successful new lines of retail merchandise and new menu items at our restaurants; our ability to sustain or the effects of plans intended to improve operational or marketing execution and performance; uncertain performance of acquired businesses, strategic investments and other initiatives that we may pursue now or in the future; changes in or implementation of additional governmental or regulatory rules, regulations and interpretations affecting tax, wage and hour matters, health and safety, pensions, insurance or other undeterminable areas; the effects of plans intended to promote or protect our brands and products; commodity price increases; the ability of and cost to us to recruit, train, and retain qualified hourly and management employees; the effects of increased competition at our locations on sales and on labor recruiting, cost, and retention; workers' compensation, group health and utility price changes; consumer behavior based on negative publicity or changes in consumer health or dietary trends or safety aspects of our food or products or those of the restaurant industry in general, including concerns about outbreaks of infectious disease, as well as the possible effects of such events on the price or availability of ingredients used in our restaurants; the effects of our indebtedness, including under our credit facility and our convertible senior notes, and associated restrictions on our financial and operating flexibility and ability to execute or pursue our operating plans and objectives; changes in interest rates, increases in borrowed capital or capital market conditions affecting our financing costs and ability to refinance all or portions of our indebtedness; the effects of dilution of our existing stockholders' ownership interest that may ensue from any conversions of our convertible senior notes or the related warrants issued in connection with our convertible note hedging transactions; the effects of business trends on the outlook for individual restaurant locations and the effect on the carrying value of those locations; our ability to retain key personnel; the availability and cost of suitable sites for restaurant development and our ability to identify those sites; our ability to enter successfully into new geographic markets that may be less familiar to us; changes in land, building materials and construction costs; the actual results of pending, future or threatened litigation or governmental investigations and the costs and effects of negative publicity or our ability to manage the impact of social media associated with these activities; economic or psychological effects of natural disasters or unforeseen events such as terrorist acts, social unrest or war and the military or government responses to such events; disruptions to our restaurant or retail supply chain, including as a result of COVID-19; changes in foreign exchange rates affecting our future retail inventory purchases; the impact of activist shareholders; our reliance on limited distribution facilities and certain significant vendors; implementation of new or changes in interpretation of existing accounting principles generally accepted in the United States of America ("GAAP"); and other factors described from time to time in our filings with the Securities and Exchange Commission, press releases, and other communications. Any forward-looking statement made by us herein, or elsewhere, speaks only as of the date on which made. We expressly disclaim any intent, obligation or undertaking to update or revise any forward-looking statements made herein to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based.   CRACKER BARREL OLD COUNTRY STORE, INC. CONDENSED CONSOLIDATED INCOME STATEMENT (Unaudited) (In thousands, except share and per share amounts, percentages and ratios)    Fourth Quarter Ended   Twelve Months Ended Percentage Percentage 7/30/21 7/31/20 Change 7/30/21 7/31/20 Change Total revenue $784,405 $495,065 58% $2,821,444 $2,522,792 12% Cost of goods sold, exclusive of depreciation and rent 235,754 150,778 56 865,261 779,937 11 Labor and other related expenses 268,702 187,785 43 983,120 924,994 6 Other store operating expenses 180,333 141,267 28 676,301 614,733 10 General and administrative expenses 36,948 40,950 (10) 147,825 146,975 1 Gain on sale and leaseback transactions 0 (69,954) (100) (217,722) (69,954) 211 Impairment 0 4,160 (100) 0 22,496 (100) Operating income 62,668 40,079 56 366,659 103,611 254 Interest expense 24,964 9,944 151 56,108 22,327 151 Income before income taxes 37,704 30,135 25 310,551 81,284 282 Provision for income taxes (income tax benefit) 1,341 5,069 (74) 56,038 (28,683) 295 Loss from unconsolidated subsidiary 0 0 0 (142,442) Net income (loss) $36,363 $25,066 45.....»»

Category: earningsSource: benzingaSep 21st, 2021

Victor Davis Hanson: The Afghanistization Of America

Victor Davis Hanson: The Afghanistization Of America Authored by Victor Davis Hanson via, The United States should be at its pinnacle of strength. It still produces more goods and services than any other nation—China included, which has a population over four times as large. Its fuel and food industries are globally preeminent, as are its graduate science, computer, engineering, medical, and technology university programs. Its constitution is the oldest of current free nations. And the U.S. military is by far the best funded in the world. And yet something has gone terribly wrong within America, from the southern border to Afghanistan.  The inexplicable in Afghanistan—surrendering Bagram Air Base in the middle of the night, abandoning tens of billions of dollars of military equipment to the Taliban, and forsaking both trapped Americans and loyalist Afghans—has now become the new Biden model of inattention and incompetence.  Or to put it another way, when we seek to implant our culture abroad, do we instead come to emulate what we are trying to change? COVID Chaos Take COVID-19. Joe Biden in 2020 (along with Kamala Harris) trashed Trump’s impending Operation Warp Speed vaccinations. Then, after inauguration, Biden falsely claimed no one had been vaccinated until his ascension (in fact, 1million a day were being vaccinated before he assumed office). Then again, Biden claimed ad nauseam that he didn’t believe in mandates to force the new and largely experimental vaccinations on the public. Then, once more, he promised that they were so effective and so many Americans had received vaccines that by July 4 the country would return to a virtual pre-COVID normality.  Then came the delta variant and his self-created disaster in Afghanistan.  To divert his attention away from the Afghan morass, Biden weirdly focused on an equally confused new presidential COVID-19 mandate, seeking to subject federal employees, soldiers, and employees of larger firms to mandatory vaccinations—right as the contagious delta variant seemed to be slowly tapering off, given the millions who have either been vaxxed, have developed natural immunity, or both. Consider other paradoxes. American citizens must be vaccinated, but not the forecasted 2 million noncitizens expected to cross the southern border illegally into the United States over the current fiscal year. Soldiers who bravely helped more than 100,000 Afghan refugees escape must be vaccinated, but not the unvetted foreign nationals from a premodern country? Scientists now are convinced naturally acquired COVID-19 immunity from a previous infection likely provides longer and better protection than does any of the current vaccinations.  Yet those who suffered COVID-19, and now have antibodies and other natural defenses, must likewise be vaccinated. That anomaly raises the obvious logical absurdities: will those with vaccinations—in reciprocal fashion—be forced to be exposed to the virus to obtain additional and superior natural immunity, given the Biden logic of the need for both acquired and vaccinated immunity?  Tribal Lands  We have Afghanistanized the border as well, turning the United States into a pre-state whose badlands borders are absolutely porous and fluid. There is no audit of newcomers, no vaccinations required, no COVID-19 tests—none of the requirements that millions of citizens must meet either entering the United States or working at their jobs. Our Bagram abandonment is matched by abruptly abandoning the border wall in mid-course.  Yet where the barrier exists, there is some order; where Joe Biden abandoned the wall, there is a veritable stampede of illegal migration.  October 7, 2019. Mark Wilson/Getty Images Coups, Juntas and Such Third-World countries suffer military coups when unelected top brass and caudillos often insidiously take control of the country’s governance in slow-motion fashion. The latest Bob Woodward “I heard,” “they say,” and “sources reveal” mythography now claims that General Mark Milley, chairman of the Joint Chiefs, discussed separating an elected commander-in-chief from control of the military. Woodward and co-author Robert Costa also assert that Milley promised his Chinese Communist military counterpart that he would tip off the People’s Liberation Army of any planned U.S. aggressive action—an odd paranoia when Donald Trump, of the last five presidents, has proved the most reluctant to send U.S. troops into harm’s way.  If that bizarre assertion is true, Milley himself might have essentially risked starting a war by eroding U.S. deterrence in apprising an enemy of perceived internal instability inside the executive branch, and the lack of a unified command. (So, Woodward wrote: “‘General Li, I want to assure you that the American government is stable, and everything is going to be okay,’ Milley said. ‘We are not going to attack or conduct any kinetic operations against you.’ Milley then added, ‘If we’re going to attack, I’m going to call you ahead of time. It’s not going to be a surprise.’”) More germanely, when Milley called in senior officers and laid down his own operational directives concerning nuclear weapons, he was clearly violating the law as established and strengthened in 1947, 1953, and 1986 that clearly states the Joint Chiefs are advisors to the president and are not in the chain of command and are to be bypassed, at least operationally, by the president. The commander in chief sets policy. And if it requires the use of force, he directs the secretary of defense to relay presidential orders to the relevant theater commanders. Milley had no authority to discuss changing nuclear procedures, much less to convey a smear to an enemy that his commander in chief was non compos mentis. Milley has been reduced to a caricature of a caricature right out of “Dr. Strangelove”—and is himself a danger to national security. After Milley’s summer 2020 virtue-signaling “apology” for alleged presidential photo-op misbehavior (found to be completely false by the interior department’s inspector general); after leaked news reports that Milley considered resignation (promises, promises) to signal his anger at Trump in summer 2020; after his dismissal of the 120 days of rioting, 28 deaths, 14,000 arrests, and $2 billion in damage as mere “penny packet protests”; after his “white rage” blathering before Congress; after the collapse of the U.S. military command in Kabul; and after his premature and hasty assessment of a U.S. drone strike that killed 10 innocent civilians as “righteous,” Woodward’s sensationalism may not sound as impossible as his usual fare.  Milley should either deny the Woodward charges and demand a real apology or resign immediately. He has violated the law governing the chain of command, misused his office of chairman of the Joint Chiefs, politicized the military, proved inept in his military judgment and advice, and may well have committed a felony in revealing to a hostile military leader that the United States was, in his opinion, in a crisis mode.  Yet, Milley did not act in isolation. Where did this low-bar Pentagon coup talk originate? And who are those responsible for creating a culture in which unelected current and retired military officers, sworn to uphold the constitutional order and the law of civilian control of the military, believe that they can arbitrarily declare an elected president either incompetent or criminal—and thus subject to their own renegade sort of freelancing justice? As a footnote, remember that after little more than a week of the Trump presidency, Rosa Brooks, an Obama-era Pentagon appointee, published in Foreign Policy various ways to remove the newly inaugurated president. Among those mentioned was a military coup, in which top officers were to collude to obstruct a presidential order, on the basis of their own perceptions of a lack of presidential rectitude or competence.  We note additionally that over a dozen high-ranking retired generals and admirals have serially violated the uniform code of military justice in demonizing publicly their commander in chief with the worst sort of smears and slanders. And they have done so with complete exemption and in mockery of the very code they have sworn to abide.  Two retired army officers, colonels John Nagl and Paul Yingling, on the eve of the 2020 election, urged Milley to order U.S. army forces to remove Trump from office if in their opinion he obstructed the results of the election—superseding in effect a president’s elected powers as well as those constitutional checks and balances of the legislative and judicial branches upon him.  We know that these were all partisan and not principled concerns about an alleged non compos mentis president, because none of these same outspoken “Seven Days in May” generals have similarly violated the military code by negatively commenting publicly on the current dangerous cognitive decline of Joe Biden and the real national security dangers of his impairment, as evidenced by the disastrous skedaddle from Afghanistan and often inability to speak coherently or remember key names and places. In short, is our new freelancing and partisan military also in the process of becoming Afghanized—too many of its leadership electively appealing to pseudo-higher principles to contextualize violating the Constitution of the United States and, sadly, too many trying to reflect the general woke landscape of the corporate board to which so many have retired? Like tribal warlords, our top brass simply do as they please, and then message to us “so what are you going to do about it?” Achin, Afghanistan, 2011. John Moore/Getty Images The Constitution as Construct How paradoxical that the United States has sent teams of constitutional specialists to Iraq and Afghanistan to help tribal societies to draft legal, ordered, and sustainable Western consensual government charters that are not subject to the whims of particular tribes and parties. Yet America itself is descending in the exact opposite direction.  Suddenly in 2021 America, if ancient consensual rules, customs, and constitutional mandates do not facilitate and advance the progressive project, then by all means they must end—by a mere one vote in the Senate. It is as if the centuries of our history, the Constitution, and the logic of the founders were analogous to a shouting match among a squabbling Taliban tribal council of elders. Junk the 233-year-old Electoral College and the constitutional directive to the states to assume primary responsibilities in establishing voting procedures in national elections. End the 180-year-old Senate filibuster. Do away with the now bothersome 150-year nine-justice Supreme Court. And scrap the 60-year-old tradition of a 50-state union.   Impeachment was intended by the founders as a rare reset of the executive branch in extremis. Now it is to be a pro formaattack on the president in his first term by the opposite party as soon as it gains control of the House—without a special counsel, without witnesses and cross-examinations, without any specific high crimes and misdemeanors or bribery and treason charges. And why not from now on impeach a president twice within a year—or try him in the Senate when he is out of office as a private citizen?  When private citizen Joe Biden is retired from the presidency, will his political enemies dig up his sketchy IRS records alleging that he never paid income taxes on the “big guy’s” “10 percent” of the income from the Hunter Biden money machine? American Tribes  We may think virtue-signaling pride flags, gender studies, and George Floyd murals in Kabul remind the world of our postmodern sophistication. Yet, in truth, we are becoming far more like Afghanistan in the current tribalization of America—where tribal, racial, and ethnic loyalties are now essential to an American’s primary identity and loyalty—than we were ever able to make Afghanistan like us. When we read leftist heartthrob Ibram X. Kendi’s endorsement of overt racial discrimination or academic and media obsessions with a supposed near-satanic “whiteness,” or the current fixations on skin color and first loyalties to those who share superficial racial affinities, then we are not much different from the Afghan tribalists. We in America apparently have decided the warring badlands of the Pashtuns, Tajiks, Hazaras, and Uzbeks have their advantages over a racially blind, consensual republic. They are the model to us, not us of the now-discredited melting pot to them. How sad in our blinkered arrogance that we go across the globe to the tribal Third World to teach the impoverished a supposedly preferrable culture and politics, while at home we are doing our best to become a Third-World country of incompetency, constitutional erosion, a fractious and politicized military elite, and racially and ethnically obsessed warring tribes.  Tyler Durden Mon, 09/20/2021 - 23:40.....»»

Category: blogSource: zerohedgeSep 21st, 2021

Russia is the only country to support Belarus after it intercepted a plane and detained a dissident. Experts have questioned whether Putin was involved.

Roman Protasevich was arrested on Sunday after a plane carrying him to Lithuania was forced to land in Belarus. A .....»»

Category: worldSource: nytMay 25th, 2021

A 17-year-old girl was arrested after allegedly stealing a $2 million plane and driving it into an airport building in California

ABC30 A 17-year-old was arrested over the unsuccessful theft of a $2 million private plane, whic.....»»

Category: topSource: businessinsiderDec 19th, 2019

Upset by porn and ‘immoral content,’ a man planted pipe bombs outside cellphone stores, FBI says

Federal authorities arrested a 75-year-old Michigan man who they say was motivated by unhappiness about “immoral content” on phones, including pornography and cursing......»»

Category: topSource: washpost2 min. ago

Chamath Palihapitiya among SPAC sponsors asked by senators about potential conflicts of interest

The senators said industry insiders can "take advantage of ordinary investors" such as making "overly optimistic statements about target companies." Senator Elizabeth Warren (D-MA) and Founder and CEO of Social Capital, Chamath Palihapitiya. Michael Kovac/Getty Images for Vanity Fair (Palihapitiya) and Evelyn Hockstein-Pool/Getty Images (Warren) Chamath Palihapitiya and other SPAC sponsors were asked about potential conflicts of interest. The letters pointed to the alleged "range of maneuvers - some of them downright astonishing to the uninitiated." The senators said they expect a response by October 8. Sign up here for our daily newsletter, 10 Things Before the Opening Bell. Chamath Palihapitiya, once dubbed the "SPAC King," and five other blank-check company sponsors were asked by Senator Elizabeth Warren and three other Democratic legislators about conflicts of interest and business practices that disadvantage retail investors.The letters pointed to the alleged "range of maneuvers - some of them downright astonishing to the uninitiated - to win even when investors lose." "We seek information about your use of SPACs in order to understand what sort of Congressional or regulatory action may be necessary to better protect investors and market integrity and ensure a fair, orderly, and efficient marketplace," the letters added. Warren as well as Sens. Sherrod Brown, Tina Smith, and Chris Van Hollen sent identical individual letters dated September 22 to Palihapitiya, co-founder and CEO of The Social+Capital Partnership; Michael Klein, founder of M. Klein & Associates; Stephen Girsky, managing partner at VectoIQ; Tilman Fertitta, chairman and CEO of Fertitta Entertainment; Howard Lutnick, chairman and CEO of Cantor Fitzgerald; and David Hamamoto, CEO and chairman of DiamondHead Holdings.The senators said they expect a response by October 8.SPACs, or special purpose acquisition companies, are shell companies that list with the aim of merging with private companies and taking them public. Several major companies such as Virgin Galactic and DraftKings have debuted via SPACs. Touted as a faster and cheaper alternative for companies to go public compared to the traditional IPO, they have garnered support from Wall Street heavyweights as well as pop icons and professional athletes. But they also require fewer disclosures than IPOs do.SPACs, which have been around for decades, rocketed to prominence last year with the trend accelerating in 2021. Year-to-date SPAC issuance has far outpaced full-year 2020 totals."This meteoric rise is concerning," the letters said. "The SPAC process often appears to be structured to exploit retail investors to the benefit of large institutional investors such as hedge funds, venture capital insiders, and investment banks."The senators said industry insiders can "take advantage of ordinary investors throughout this process," such as making "overly optimistic statements about target companies" - something not allowed in a traditional IPO route."Statements by SPAC sponsors to convince shareholders to vote in favor of a merger may not have to meet the same disclosure standards," the senators added.The concerns raised by the lawmakers aren't the first time authorities have questioned the process of SPACs. The US Securities and Exchange Commission, under then Acting Chair Allison Herren Lee, began an inquiry in March into Wall Street's blank-check company craze by seeking voluntary information.And current Chair Gary Gensler said in July the SEC was investigating major banks over conflicts of interest in the SPAC deal-making process that exploded in the past year.Other controversies seem to follow SPACs. In August, billionaire hedge fund manager Bill Ackman's blank check firm, Pershing Square Tontine Holdings, was sued by former SEC Commissioner Robert Jackson and Yale law professor John Morley for not operating as a SPAC.Read the original article on Business Insider.....»»

Category: worldSource: nyt1 hr. 13 min. ago