*in a Spiderman costume* It it Wednesday my dudes!
U.S. to Block Chinese Airline Flights to and From U.S.
The US plans to block Chinese airlines from flying passengers to and from the US by June 16, saying China has failed to approve US airlines from conducting passenger service to China.
Some US airlines have sought to resume service to China this month, after suspending flying there earlier this year as the coronavirus pandemic took hold. The US Department of Transportation said Wednesday that the Civil Aviation Administration of China hasn’t approved requests by US airlines to resume flights. It accused China of violating an agreement between the two countries (uh-oh!)
What happened? Chinese carriers continued to fly passengers between the US and China even after the US carriers had stopped flying in February and March. Currently 4 Chinese airlines operate scheduled passenger flights between the two countries. Sounds like people are going to be FaceTiming their loved ones more often starting mid-June.
Unemployment Fraud Spreads Across U.S. as Coronavirus Boosts Claims
You don’t say? Paying people $600/week will definitely cause some fraudulent claims – let’s learn more.
States across the country are being hit by unemployement-benefit fraud that could amount to billions of lost dollars, reflecting the vulnerabilities that workers and governments face in the midst of historically high levels of jobless claims related to COVID-19.
Recently, states including North Dakota, Maine, and Pennsylvania have said that detected cases or attempts of unemployment fraud is largest tied to identify theft. The surge in more than 40M unemployment claims since mid-March is only one way these states have been vulnerable to identify theft – the other is the way states have been implementing a new federal program to process unemployment claims from independent contractors and self-employed.
The Inspector General for the US Labor Department said at least $26 Billion in unemployement insurance payments could be wasted during the pandemic – that’s insane!
AMC Theater Chain Raises Doubt on Ability to Stay in Business
I actually made a video about this company on my TikTok the other week and how there were rumors of an Amazon buyout. Kind of crazy to think that just 10 years ago movie theaters were all the rage, and now they’re barely keeping their heads above water. High fixed costs will do that to you!
AMC said in a regulatory filing on Wednesday that its cash balance as of April 30 was $718.3M, enough to fund its expected resumption of operations in the summer or later. But it warned its liquidity would depend on when its operations can fully resume, as well as the timing of movie releases and its ability to generate revenue. “The easing of government restrictions wouldn’t immediately solve the problem” said AMC.
The theater industry was already struggling with high fixed costs, mounting debt and stagnating attendance as in-home streaming options thrived during the pandemic. And with lockdowns, it’s unclear when, and if, customers will feel comfortable returning to cinemas. AMC is expected to post a loss of -$2.42 billion for the first three months of the year compared to a -$130.2 million loss Q1 2019.
I’m bearish. I haven’t been in a movie theater in years. For all of you REIT investors out there, be sure your REIT doesn’t own movie theaters.
Investors Channel Over $150 Billion Into Coronavirus Bonds
Tons of companies have raised billions and billions by selling bonds since February at fantastic rates – there aren’t set rules on what constitutes a “COVID-19 bond” making it the latest example of investments with broad claims and murky definitions that have drawn large pools of money in recent years.
The debt has also proven particularly attractive to investors who are interested in socially responsible investing, and who value environmental, social, and governance practices. The COVID-19 bonds have attracted more money this year than bonds linked to sustainability projects, a corners of the debt market that has received a lot of attention due to growing interest in climate-change issues.
Sustainability bonds, a broad term encompassing securities that raise capital for environmentally-friendly or for social-impact projects, drew $116.8 billion from investors by the end of May, according to BNP Paribas.
Are you all investing in this manner? Do you care about the companies you invest in from a social standpoint? Let me know in the comments below.