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Red Lobster was America’s largest casual dining seafood chain, with almost 600 locations across the United States and Canada. Its bankruptcy was announced earlier this week.

The bankruptcy declaration insinuates that the chains equity owner who was also their biggest seafood supplier might have decided that their equity stake in the business was worthless, but that they could extract some extra value from the company before it declared bankruptcy by selling them a lot of extra shrimp, leading to the uneconomical "Endless Shrimp" deal at Red Lobster.

The decision to make the $20-dollar endless shrimp deal a permanent menu item is said to have led to an $11 million dollar loss.

The bankruptcy declaration says that “the Debtors are currently investigating the circumstances around these decisions.”

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Over a four-day period Japan is suspected to have carried out two interventions to support the yen at an estimated cost of $59 billion dollars.
The first intervention came after the yen fell below 160 to the dollar for the first time in 34 years. The second intervention came a few days later after Jerome Powell announced that a rate hike was unlikely to be the Fed’s next interest-rate move.

The simplest explanation for the declining yen is that it is entirely driven by Japanese interest rates being low relative to other developed markets. People take their money out of the yen which is yielding 0 and put it in dollar denominated bonds to earn 5% - leading to a decline in the yen, but my friend Manoj Pradhan at Talking Heads Macro argues that this is a lazy oversimplification and that the Yen and Japanese markets are possibly the most interesting story in macroeconomics today.

Manoj Pradhan on Twitter: https://x.com/ManojPradhanTHM

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Europe’s largest oil and gas company Shell was accused in an investigative report from Greenpeace Canada of selling millions of carbon credits tied to CO2 removal that never took place.

Let’s look at what Shell did, how carbon offsets work, and how environmentally beneficial they actually are.

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Derivatives For The Trading Floor: https://amzn.to/3cjsyPF
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The Société Générale Delta One Desk is back in the news after two traders were dismissed - accused of placing unauthorized risky options trades.
Kavish Kataria – one of the traders in question - attacked the banks leadership with a LinkedIn post on Thursday saying the “entire risk team and other bosses” were equally responsible for the trades and complaining that his bonus had been withheld.

The Delta One desk that Kataria worked on is the same trading desk where rogue SocGen trader Jérôme Kerviel caused a $5.2 billion dollar loss in a 2008 scandal that caused the US Federal Reserve to cut rates to stabilize markets.

SocGen told Bloomberg News earlier this week that two people based in Hong Kong had left last year — a trader and a team leader — after a “one-off trading incident, which didn’t generate any profit impact and led to appropriate mending measures”.

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Lina Khan's Federal Trade Commission is suing to block Tapestry's $8.5 billion acquisition of Capri Holdings, saying the deal would harm consumers by reducing competition and raising prices in the affordable luxury handbag sector.

Monday's lawsuit challenges the proposed deal that would have Tapestry controlling Coach, Kate Spade, Stuart Weitzman, Michael Kors, Versace and Jimmy Choo.

According to the FTC, the acquisition could have a negative impact on the millions of American shoppers who now benefit from the head-to-head rivalry between Tapestry and Capri, as well as on the roughly 33,000 workers employed by both companies worldwide.

Patrick's Books:
Statistics For The Trading Floor: https://amzn.to/3eerLA0
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Check out Eight Sleep and unlock $200 off using my link: https://www.eightsleep.com/boyle/

British stocks closed at an all-time high this week, but as exciting as a new all-time high might sound, the British stock market has been lagging US and European stocks since the Brexit referendum.
A recent report from Goldman Sachs says that the British economy is 5% smaller than it would have been had it remained in Europe.
The IMF last week listed the UK in its Fiscal Monitor publication as one of four large economies that “critically need to take policy action to address fundamental imbalances between spending and revenues”.
In this week's video we ask what has gone wrong in the UK, and can it all be pinned on Brexit?

Patrick's Books:
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Derivatives For The Trading Floor: https://amzn.to/3cjsyPF
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Papers Mentioned In The Video:
Dimson Marsh & Staunton Global Investment Returns Yearbook: https://www.ubs.com/global/en/investment-bank/in-focus/2024/global-investment-returns-yearbook.html
Broadberry & Irwin - Labor productivity In Britain & America During The 19th Century: https://www.nber.org/papers/w10364
Schroders - Six Charts on UK Equities: https://www.schroders.com/en-gb/uk/intermediary/insights/six-charts-that-show-just-how-cheap-uk-equities-are/
Rathbones - The Non Patriotic Case For UK Equities: https://www.rathbones.com/knowledge-and-insight/investment-update-non-patriotic-case-uk-equities
Meghan Greene - Markets must stop comparing the UK and the US: https://www.ft.com/content/13579c61-5e1f-48b5-bb4d-2dc787444fb3
Robert Armstrong - UK stocks are not all that cheap: https://www.ft.com/content/80d7f1de-dcb7-46c9-be5a-32b73c9c071e

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Saudi Arabia’s plan to build a 170km long, 500m tall, mirrored city in the desert, filled with 9 million people has been curtailed to 2.4km long.

According to Bloomberg, Saudi Arabia’s government had “scaled back its medium-term ambitions” for Neom, of which The Line is the most significant sub-project.

The Saudi government had hoped to have 9M residents living in The Line by 2030, but this has been scaled back to fewer than 300,000, according to the report.

The curtailment of plans comes as Saudi Arabia has not yet approved the 2024 budget for Neom, according to Bloomberg.

Patrick's Books:
Statistics For The Trading Floor: https://amzn.to/3eerLA0
Derivatives For The Trading Floor: https://amzn.to/3cjsyPF
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Sales growth of electric vehicles has slowed dramatically this year. Tesla delivered 20% fewer cars in the first quarter of 2024 than in the prior quarter, and BYD who was previously the world’s biggest EV maker saw sales decline more than 40% over the same period.
BYD’s EV sales were still up 13% when compared to the same quarter a year earlier, while Tesla’s sales were down 9%. Both companies have been slashing prices to stimulate demand.
While EV sales overall are still rising, they are rising at a slower rate than before. On top of that, the space has become more competitive as legacy automakers have introduced new EVs, and Chinese manufacturers have ramped up exports, overtaking Japan as the world's biggest vehicle exporter last year.
Apple, who spent a decade and ten billion dollars on research, decided in February to end their efforts to build an electric car. The Apple car would have likely cost over $100 thousand dollars and would have had lower profit margins than their core consumer electronics business. Apple’s stock price rose on the announcement that they were abandoning their EV project.

Patrick's Books:
Statistics For The Trading Floor: https://amzn.to/3eerLA0
Derivatives For The Trading Floor: https://amzn.to/3cjsyPF
Corporate Finance: https://amzn.to/3fn3rvC

Patreon Page: https://www.patreon.com/PatrickBoyleOnFinance
Buy Me a Coffee: https://buymeacoffee.com/patrickboyle

Visit our website: www.onfinance.org
Follow Patrick on Twitter Here: https://twitter.com/PatrickEBoyle
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Videos Mentioned:
James May: https://www.youtube.com/watch?v=vQY-VeA87cM&t=307s
Harry's Garage: https://youtu.be/nZysvgm2_Aw?si=AzvFLM2Ta56HgRxl

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