FT : The lost belle époque of the restaurant

The lost belle époque of the restaurant
Ahead of us is a dining desert that could last a generation

The late Angeleno food critic Jonathan Gold once resolved to try every restaurant on Pico Boulevard, from downtown pupuseria to beach huts on the Pacific. So numerous were the stops that this intrepid glutton had to abandon the trail, defeated, near the mid-market vendors of Century City.

Whenever it is that life resumes, eating a course through Pico, or any urban tract, promises to be much shorter work than it was in his day. And far less interesting.

There is a null hypothesis in which the best things in life are ultimately unchanged by the pandemic. Sport returns in more or less familiar form. The Ice Age of dating thaws, probably with a vengeance. Light falls again on theatre stages and on our museums’ dormant paintings. As a housebound people stagger blinkingly into freedom, the travel industry rebounds at a ferocious rate.

The one pleasure for which it is hard to make a sanguine case just happens to be my most cherished. I fear we will look back on the pre-virus years as the unrecoverable belle époque of the restaurant. Ahead of us is a dining desert that could last a generation.

Barring a surge of masochism, fewer entrepreneurs are going to brave the economic risk of the restaurant trade. Those who do will meet fewer willing investors. A sector that is already defined by overcapacity and hair’s-breadth margins will have to get smaller. Logic implies that takings for those who survive could stabilise and grow. But it also implies a narrowing in consumer choice.

And, with that, a loss of globalism. Being able to eat like a Basque, a Laotian, an Israeli, all in one day, and often within one postcode, might come to seem as improbable as the passport-free travel of the era before the first world war does now.

Irregular or conservative restaurant-goers will not care, or even register the difference. But we every-nighters (I once passed a whole year in a flat without cutlery) must brace for a more parochial scene as chefs and proprietors play it safe. And, as in the fashion world, what goes on at the avant-garde ends up washing back into mass tastes. The deglobalisation of food would come to a kitchen near everyone.

I have feared for restaurants twice before — first after the financial crash of 2008, and then after Brexit — only to be confounded. In the end, dining choices were even better in, say, 2012 than in 2007, and in 2019 than in 2015. This time, though, it is not “just” a macroeconomic shock at work. It is an attack on the specific lifeblood of the restaurant trade: supply chains, entrepreneurial risk-appetite, the public’s openness to experimentation. The crisis seems almost scripted to do for this one sector.

Now look, I feel like Imelda Marcos here, cursing the loss of one sensual pleasure amid so much general suffering. A realist would stress the point that restaurants, like stand-up comedians, are oversupplied. Just as the market can only absorb so much confessional humour in pub basements, the demand was finite at the best of times for new iterations of Scandi-Nepalese concept tapas or whatever. What is happening is not fair, but some kind of shake-out might have been due anyway.

But if the lamps are going out in the trade for some time, its important social function will have to be done by some other institution. Restaurants provide the first wage that many people ever earn. They are the first and sometimes last asset that some poor immigrants acquire. And for those of us on the demand side, they can be landmarks in our own progress, from never visiting them before adulthood, to shy forays into chain eateries on our own nickel, to debt-incurring nights at cypress-wood sushi counters. A sentimental attachment to the industry might be unwarranted, but no less intense for that.

And if the crisis is a matter of life and death, then the lockdown has accentuated the things that make life worth living. I will see Arsenal again. I will board a plane. I will lose an hour in the Rothko Room of the museum down the road. I am just not sure I will taste the hamachi collar at Bestia or the blood orange at Relae or the Madeira broth at Clove Club.

>>> Smartphone forecast update: 2020 shipments to decline -10% on economic slowd

Smartphone forecast update: 2020 shipments to decline -10% on economic slowdown -- Cowen

Analyst Krish Sankar stated, "We are revising our Smartphone market Shipment forecast for CY20/21 owing to an expected economic slowdown in the wake of the COVID-19 virus. We now model for CY20/21 shipments to be -10% Y/Y and +4%, respectively, even with new 5G products ramping through the year. We expect 200M/330M 5G units in CY20/21, or 15%/24% of the tech mix...Given the uncertainties around smartphone demand as the COVID-19 virus continues to unfold in Europe and the US, we take a more cautious view on unit shipments for the remainder of 2020. Given the quarantines in China during C1Q and movement restrictions that are ongoing throughout the rest of the world going into C2Q, we expect an even deeper impact on mobile demand compared to the March Q. As such, we are modeling for Y/ Y unit trends to decline -10% in C1Q and -17% in C2Q. Overall, we are forecasting 2020 smartphone units to decline -10% Y/Y after 2019's -1.5% performance. We expect 5G units to still approach 200M for the year, which is at or modestly below the midpoint of forecasts by major 5G modem chip suppliers."

>>> US Early premarket gappers

Early premarket gappers

  • Gapping up:
    • FATE +23.4%, TSLA +13.5%, SVRA +11.8%, EBS +9.9%, NP +4.7%, SUN +3.8%, CAKE +3%, CODI +2.2%, BBBY +2.2%, INCY +2.2%, PLAY +2%, DVAX +1.4%, HIMX +1.4%, LEN +1.3%
  • Gapping down:
    • MIC -18.4%, CHWY -4.1%, FLWS -3.1%, SYRS -2.4%, MNRO -1.3%, LMT -0.7%, ETSY -0.7%

FT : Why America’s $1.3tn car-loan market cannot avoid a pile-up

Why America’s $1.3tn car-loan market cannot avoid a pile-up
An industry that survived the last crisis reasonably well is unlikely to do so again

Of all the sectors that escaped the 2008 financial crisis relatively unscathed, few caught more people by surprise than the auto lending industry. At the time, there were widespread expectations that the wave of defaults hitting the mortgage market would wash over the auto sector as well.

But cash-strapped borrowers continued to prioritise paying off their cars over their homes and credit cards. The logic seemed to be clear: you can sleep in your car, but you cannot drive your house to work. Now, however, the $1.3tn industry — about 60 per cent bigger than it was back then — is facing an entirely different set of threats.

Not only are millions of people being put out of work, but governments are calling for everyone to stay at home to limit the spread of coronavirus. That raises questions over whether borrowers will continue to put their cars above all else when money gets tight.

Another big difference between 2008 and now: this crisis is hitting harder for those on the lower ends of the credit spectrum. The great recession created a lot of economic strife for wealthy people, but today lower wage-earning “subprime” borrowers are bearing the brunt, with the restaurant, retail and service industries being decimated, said Rosemary Kelley, head of asset backed securities at Kroll.

Given that the subprime car market was showing signs of strain before the crisis — with millions of people falling behind on their payments last year — the pandemic may create the perfect storm that bearish investors have been waiting for.

“There were already cracks in the armour. Now, with coronavirus, it’s even more downward pressure,” said Joe Cioffi, chair of the insolvency and creditors’ rights practice at Davis & Gilbert, a law firm.

That means lenders and investors in asset-backed securities could be in danger.

ABS originators typically try to build portfolios that can withstand “astronomical” levels of default, said Mr Cioffi. But this time the problem is not loose underwriting or a lack of extra protections for the top-tier investors. “No one has forecast this kind of shock to the economy,” he said.

For subprime lenders, a market dominated by non-bank institutions, the biggest problem is liquidity, said Amy Martin, senior director at S&P Global Ratings. “Right now it is very difficult to access capital markets,” she said. “ABS markets are pretty much closed.”

So far this year, nearly $26bn of auto ABS securities have hit the market, according to Finsight, a data provider. But there has been no issuance at all for more than three weeks.

This means it will be important to keep an eye on issuers’ lines of credit, which can be yanked if delinquency rates, loss rates, payment extensions or other metrics start to breach certain triggers outlined in covenants.

“We have found that companies can remain in business for a while losing money, but they go out of business very quickly when they lose access to their warehouse lines of credit,” said Ms Martin.

Credit Acceptance Corp, one of the largest of the non-bank lenders, has six warehouse lines worth a total of $1.2bn, for example, according to its most recent annual report. Since the end of January the Southfield, Michigan-based company’s share price has been cut in half. But it is unlikely that it, or any other lenders, are at immediate risk of losing these lifelines, analysts say.

It may take a few weeks before problems start showing up on lenders’ reports to investors, said Giuliano Bologna, an analyst at BTIG. Most of the people laid off or out of work since the outbreak are still likely to receive pay cheques this month so the cycle of defaults has yet to really begin. “A lot of [lenders] are receiving calls from borrowers asking for relief,” he said. “But those are things that wouldn’t flow through to the data.”

The big variables now are how well the US government’s stimulus package works and how long the crisis lasts.

With companies such as Ally Financial and Santander Consumer USA offering forbearance to borrowers, it could buy enough time to stave off widespread defaults if the economy gets back on track quickly. However, such measures may just be kicking the can down the road.

Once forbearance expires, credit performance for these companies could “deteriorate rapidly, particularly if displaced workers are unable to secure employment and businesses cannot resume operations once the economy reopens,” Fitch analysts said in a research note this week.

Unless the government gives people enough money to keep up their payments for the entire crisis, losses are bound to start piling up, said Mr Cioffi of Davis & Gilbert.

“Within two months you will see the ‘sky is falling’ talk that no one wanted to do before,” he said. “Subprime auto was sick. Now it is likely going to be in triage.”

FT : The magic of Pushkin’s verse comes alive in a new translation

The magic of Pushkin’s verse comes alive in a new translation
How the Russian bard wrote many of his greatest works under lockdown in 1830

Alexander Pushkin thrived on confinement. At the start of his career, a friend’s elderly and obstinate valet once locked him into a room, saying he would release him only when he completed a narrative poem for which he had already been paid but had long been procrastinating over; once past his initial indignation, Pushkin duly got carried away and wrote all through the night.

Something similar — but on a grander scale — happened around 10 years later. In autumn 1830, Pushkin was confined by a cholera outbreak to the village of Boldino, his father’s remote country estate in southeastern Russia. Desperate to return to Moscow to marry, he wrote to his fiancée: “There are five quarantine zones between here and Moscow, and I would have to spend fourteen days in each. Do the maths and imagine what a foul mood I am in.”

Pushkin went on complaining bitterly but, with nothing else to do, he produced an astonishing number of masterpieces — short stories, short plays, lyric and narrative poems, and the last two chapters of his verse novel Eugene Onegin — in a mere three months.

Almost all Russians take it as read that Pushkin (1799-1837) is their greatest writer. To others this can seem puzzling: are Russians not aware of the greatness of Tolstoy and Dostoyevsky? Flaubert famously complained to Turgenev that Pushkin was “flat” — “il est plat, votre poète.” And this complaint is understandable — most translations of Pushkin fail. Apparent simplicity is far harder to reproduce than obvious complexity; Pushkin demands more of a translator than Dostoyevsky.

Today, however, we are more fortunate than Flaubert. After publishing the late Stanley Mitchell’s outstanding translation of Onegin in 2008, Penguin Classics have now published a comprehensive Selected Poetry, translated by Antony Wood. Both Mitchell and Wood — unlike previous translators — have been able to bring into English all the important aspects of the original: not only the paraphrasable content, but also Pushkin’s grace, wit and musicality.

The result is a more rounded picture of Pushkin — in many ways the most universal of poets. Russians see him as supremely Russian, yet he was receptive to other cultures, translating and adapting passages of Shakespeare, Dante, Walter Scott and many others. His poetry is full of thought, but his own beliefs never obtrude; almost every Russian literary and political movement — modernist or traditionalist, Communist or anti-Communist, democratic or authoritarian — has tried to claim him as their own.

In his later work, Pushkin treats dark, difficult material (obsessive madness, insoluble sociopolitical conflict) with grace and clarity. And he has written with unparalleled understanding about the vicious schisms brought about by every attempt to modernise Russian society. His perceptions are as applicable to the reforms of Mikhail Gorbachev, Boris Yeltsin and Vladimir Putin as to those introduced by Peter the Great.

These splits follow a similar pattern. Russia’s vastness impedes communications, breeding general social and cultural inertia; attempts at reform from above meet with resistance; the authorities then resort to force, alienating much of the population. In the 17th century, Patriarch Nikon’s attempts to reform Russian Orthodox ritual led to the first such split. In his historical novel The Captain’s Daughter, Pushkin writes sympathetically about Yemelyan Pugachev, the leader of a major peasant rebellion that drew much of its support from the breakaway sects known as “Old Believers”. At the same time, he vividly evokes the rebellion’s ghastly consequences. The novel’s most famous sentence is a prayer: “God spare us from the sight of Russian revolt — senseless, merciless Russian revolt.”

The next schism was occasioned by Peter the Great — a figure Pushkin returned to repeatedly throughout his life. In his narrative poem “Poltava”, Pushkin presents Peter as a warrior-hero, winning a decisive victory over the Swedish empire in 1709 and so ensuring Russia’s survival as a European power. The unfinished novel Peter the Great’s African contains witty accounts of the old nobility’s imaginative ways of circumventing Peter’s reforms. And in the mini-epic The Bronze Horseman, Peter is still oppressing Russians, even a century after his death. In the prologue we hear Peter say, on the banks of the Neva river:

From here we shall chastise the Swede.
Here we shall raise a citadel:
Our haughty neighbour shall take heed.
Here we have been ordained to hew
A window on to Europe

The poem is often seen as a study of the conflict between historical necessity and the rights of the individual. Anatoly Lunacharsky, the first Bolshevik commissar for enlightenment, insisted that Pushkin was on the side of Peter the Great and progress. The great Soviet prose writer Andrei Platonov retorted that the everyday values represented by Yevgeny, a minor civil servant, mattered no less to him. Without Yevgeny, he wrote, we would be left with “nothing but bronze [ . . .] and the Admiralty spire would turn into a candlestick beside the coffin of the now-destroyed poetic human soul”.

Platonov understood that Pushkin is — above all — a mediator. He defended the rights of the individual, yet understood the need for a powerful state. He was both a westerniser and a patriot. He wrote at a time of fierce linguistic controversies. Was it acceptable to “Frenchify” one’s Russian, or should a writer use the fossilised language known as Church Slavonic? Pushkin’s response was to make inspired use of every tone and register available to him. Similarly, his positive heroes — like Pyotr Grinyov, the young aristocrat befriended by Pugachev — are those able to move freely between different worlds.

To Russians, Pushkin’s heroes and heroines are enduring images, a part of everyday discourse. Now at last, anglophone readers, too, are in a position to appreciate Pushkin’s greatness. Just as Mitchell’s Onegin supersedes previous Onegins, so this Selected Poetry by Anthony Wood supersedes all previous translations of Pushkin’s other verse narratives. Wood’s The Bronze Horseman gives us Pushkin at his most tragic. Count Nulin, a witty parody of Shakespeare’s The Rape of Lucrece, shows him at his most light-hearted. The Tale of Tsar Saltan — one of Pushkin’s verse fairy tales — bounces along with delightful vitality. Even with the delicately musical short lyrics — still harder to translate — Wood’s success rate is remarkable.

More than any other Russian writer, Pushkin offers the hope of freedom and reconciliation. His life and work show us that one can be both patriotic and open-mindedly European, loyal to tradition yet receptive to the new. And his legendary “Boldino Autumn” tells us what inspiration can be released by unaccustomed and unwanted confinement.

FT : White House tried to force 3M to send masks from Singapore to US

White House tried to force 3M to send masks from Singapore to US
Trump invokes wartime powers act again to deal with coronavirus equipment shortages

The White House tried to force 3M to export masks to the US from its hub in Singapore as tensions with the Minnesota-based manufacturer spilled into the open in the midst of the coronavirus pandemic.

3M this week resisted demands by White House officials to send about 10m N95 respirator masks being produced in Singapore for markets in Asia to the US, according to a person with direct knowledge of the matter.

The company was reluctant to accept the White House request on legal and humanitarian grounds, as medical workers across the region would be deprived of protection, the person said.

3M executives did commit to exporting a similar number of masks to the US from a plant in China but that did not stop the White House from publicly attacking the company. Donald Trump also invoked Korean war-era powers under the Defense Production Act for the second time since the start of the outbreak. The latest effort would compel the company to sell its products to the US government if requested. 

“We hit 3M hard today after seeing what they were doing with their Masks. “P Act” all the way,” the US president wrote in a tweet on Thursday night. “Big surprise to many in government as to what they were doing — will have a big price to pay!”

Earlier in the day, Peter Navarro, the White House adviser on trade and manufacturing, had hinted at the rising tensions with the company. 

“To be frank, over the last several days we've had some issues, making sure that all of the production that 3M does around the world, enough of it is coming back here to the right places,” he said.

White House officials have also been attempting to persuade 3M to limit exports from US facilities to nearby countries, including Canada and Mexico, according to the person familiar with the matter.

The regional sales account for only one-10th of the masks 3M produces in the US but are in jeopardy because of the White House’s invocation of the DPA. The Federal Emergency Management Agency (Fema) is now allowed to use “any and all authority” to buy “the number of N95 respirators” it “determines to be appropriate” from 3M and its subsidiaries, according to the wording of the act. 

A Trump administration official with knowledge of the discussions declined to comment on specifics. But the person said there was “a tremendous amount of frustration” within the president’s coronavirus task force.

“The administration had worked very hard to ease some rules for 3M and other respirator manufacturers because those companies, 3M chief among them, had essentially promised that they would immediately be putting 35m N95s into the US marketplace. It became clear recently that wasn’t happening,” the official said. 

The move against 3M came on the same day Mr Trump invoked the DPA to force other companies to make ventilators for coronavirus patients. The president said it would help companies — including General Electric, Hill-Rom, Medtronic, ResMed, Royal Philips and Vyaire Medical — secure the supplies needed to make the ventilators.

“I am grateful to these and other domestic manufacturers for ramping up their production of ventilators during this difficult time,” Mr Trump said, adding that it would “save lives by removing obstacles in the supply chain that threaten the rapid production of ventilators”.

The president invoked the DPA late last month to compel General Motors to make ventilators, after criticising the carmaker for not doing enough to produce equipment.

Mr Trump had faced intense criticism for not invoking the DPA sooner as state governors had warned that more ventilators were needed to treat the rapid rise in patients.

The move against 3M came on the same day Mr Trump invoked the DPA to force other companies to make ventilators for coronavirus patients. The president said it would help companies — including General Electric, Hill-Rom, Medtronic, ResMed, Royal Philips and Vyaire Medical — secure the supplies needed to make the ventilators.

“I am grateful to these and other domestic manufacturers for ramping up their production of ventilators during this difficult time,” Mr Trump said, adding that it would “save lives by removing obstacles in the supply chain that threaten the rapid production of ventilators”.

The president invoked the DPA late last month to compel General Motors to make ventilators, after criticising the carmaker for not doing enough to produce equipment.

Mr Trump had faced intense criticism for not invoking the DPA sooner as state governors had warned that more ventilators were needed to treat the rapid rise in patients.

>>> Europe : Brokers Upgrades & Downgrades - 3nd of April 2020 V2 (+)

>>> Up
* Aena Raised to Hold at Ahorro Corporacion; PT 121.70 euros
* Akzo Nobel Raised to Buy at HSBC; PT 75 euros (Yest)
* Akzo Nobel Raised to Buy at Berenberg; PT 70 euros
* Atlantia Raised to Buy at BofA; PT 20 euros (Yest)
* Avanza Raised to Hold at SEB Equities; PT 90 kronor
* Avanza Raised to Buy at ABG; PT 98 kronor
* B&O Raised to Hold at Danske Bank Markets; PT 24 kroner (+)
* Bankia Raised to Buy at Jefferies; PT 1.20 euros
* Biotest Raised to Buy at Pareto Securities; PT 24.10 euros
* Boskalis Raised to Buy at ABN Amro Bank; PT 20 euros (+)
* Carlsberg Raised to Neutral at Goldman; PT 800 kroner (+)
* Close Brothers Raised to Buy at Investec; PT 1,110 pence (+)
* Colruyt Raised to Hold at HSBC; PT 48 euros
* Continental AG Raised to Buy at Pareto Securities; PT 80 euros (+)
* Derwent London Raised to Buy at Goldman; PT 4,174 pence
* Dometic Raised to Hold at Handelsbanken; PT 42 kronor
* Everest Re Raised to Outperform at KBW (Yest)
* Gjensidige Raised to Hold at SEB Equities; PT 173 kroner
* Industrivarden Raised to Buy at DNB Markets; PT 220 kronor
* Intesa Sanpaolo Raised to Hold from Underperform at Jefferies; PT 1.50 euros
* Jyske Raised to Hold at SEB Equities; PT 172 kroner (+)
* Latour Raised to Hold at DNB Markets; PT 140 kronor
* Lundbergforetagen Raised to Hold at DNB Markets; PT 400 kronor
* Merlin Raised to Neutral at Goldman; PT 7.70 euros
* Norma Raised to Buy at Baader Helvea; PT 28 euros
* Pets at Home Raised to Buy at HSBC; PT 270 pence
* Segro Raised to Buy at Goldman; PT 913 pence
* Siltronic Raised to Buy at Oddo BHF; PT 90 euros (Yest)
* Spar Nord Raised to Buy at SEB Equities; PT 45 kroner (+)
* SSP Raised to Buy at Stifel; PT 400 pence
* United Internet Raised to Buy at LBBW; PT 30 euros (+)

>>> Down
* Acerinox Cut to Neutral at BofA (Yest)
* Bankia Raised to Buy From Underperform by Jefferies (+)
* Daimler Cut to Reduce at Oddo BHF (+)
* DSV Panalpina Cut to Sell at Handelsbanken; PT 575 kroner
* Entra Cut to Neutral at Goldman; PT 129 kroner
* Europcar Cut to Neutral at Goldman; PT 1.60 euros
* GB Group Cut to Hold at Stifel; PT 565 pence (+)
* Johnson Matthey Cut to Hold at HSBC; PT 1,850 pence (Yest)
* Rolls-Royce Cut to Underperform at BofA; PT 240 pence (Yest)
* Rolls-Royce Cut to Neutral at UBS; PT 328 pence (Yest)
* Leoni PT Cut to 2 euros from 8 euros at Bankhaus Lampe (Yest)
* Melexis Cut to Reduce at Oddo BHF; PT 45 euros(Yest)
* Mol Cut to Neutral at Goldman; PT 2,200 forint
* National Grid Cut to Hold at Deutsche Bank; PT 910 pence (+)
* Nichols Cut to Hold at HSBC; PT 1,200 pence
* Nokian Renkaat Cut to Reduce at Oddo BHF (+)
* Red Electrica Cut to Hold at Deutsche Bank; PT 16.50 euros (+)
* Redrow Cut to Hold at Liberum; PT 390 pence (Yest)
* Salzgitter Cut to Underperform at BofA (Yest)
* Securitas PT Cut to 70 kronor from 85 kronor at Jefferies
* SocGen Cut to Sell at DZ Bank; PT 12 euros (+)
* Solvay Cut to Hold at MainFirst; PT 71 euros
* SpareBank 1 Nord Norge Raised to Buy at SEB Equities (+)
* Suez PT Cut to 7.50 euros from 9.50 euros at Deutsche Bank (+)

>>> PT Change


>>> Initiation
* ADO Properties Still Rated Hold at Hauck & Aufhaeuser
* Crayon Rated New Buy at Arctic Securities; PT 75 kroner (+)
* DSV Back to Sell at Handelsbanken After Brief Buy Stint (+)

>>> Call
* Accor’s ‘Aggressive’ Cost-Cutting Measures a Positive: Jefferies (+)
* Akzo Nobel Is at an Attractive Entry Point, Berenberg Says
* Beiersdorf Warning Not as Bad as Feared, Morgan Stanley Says (+)
* European Exchanges Resilient Even if Volatility Drops: Jefferies
* Carlsberg Well-Placed to Ride Out Coronavirus Impact: Jefferies
* Picture Not as Bad as Feared for S. European Banks: Jefferies
* Remy Warning Likely to Weigh on Stock, Citi Says; Watch Pernod
* Stagecoach Short-Term Risks Eased by Government Funding: RBC
* Sulzer Upgraded at ZKB as ‘Substantial’ Liquidity Seen Helping (+)