Danish Bank Robbers Quiet-Quit

Plus: Cineworld and AMC provide business melodrama off-screen ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

January 4, 2023

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Good morning.

Former New York Federal Reserve President William Dudley revealed himself to be the economy’s prodigal puppet master, telling Bloomberg on Tuesday that while a recession is likely “it’s going to be a Fed-induced recession and the Fed can end the recession by subsequently easing monetary policy.”

Well, Bill, tell that to shareholders in Apple and Tesla. The former saw the computer titan’s market cap fall below $2 trillion on Tuesday, erasing more than $1 trillion in value since January 2022. As for holders of stock in Elon Musk’s crown jewel, they saw their shares drop by double digits after the market digested its miss on delivered EVs, putting Tesla stock at its lowest level since August 2020. There must be something Dudley can do.

Morning Brief

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A cashless economy spells extinction for bank robbers.

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Having a hard time finding NyQuil? Us too.

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Cineworld and AMC tell different tales about their 2022 flirtation.

Money

Denmark Had No Bank Robberies In 2022

When asked why he robbed banks, Willy Horton famously quipped, “because that’s where the money is.” Well, Willy Horton wasn’t from Copenhagen.

Denmark recorded a grand total of zero bank robberies last year, according to data from industry group Finance Denmark, a feat that Bloomberg attributes to increasing cashlessness in the country, meaning many banks have got rid of cash services at their branches. Perhaps “This is a stickup” doesn’t sound nearly as menacing when followed by “now tap all your phones to this card reader.”

Heat Death

The disappearance of Danish bank robberies was not a sudden phenomenon, according to Finance Denmark’s data. The peak year for Danish bank robbers was 2002 with a total of 222 heists, but numbers have been steadily bottoming out for the last decade with only one theft recorded in 2021. Simultaneously Danish central bank data shows cash withdrawals have dropped 75% in the last six years, and in 2021 German neobank N26 listed fellow Nordic countries Sweden, Norway, and Finland as among the most cashless in the world.

This will be music to the ears of the EU, which has been trying to encourage its member states to embrace cashless economies. One major holdout has been Italy, whose citizens are the most cash-prone in Europe. New Prime Minister Giorgia Meloni said she would allow vendors to refuse digital transactions under €60 and raise the maximum cash withdrawal limit to €5,000. That policy was designed to play up to the Italian love of cash, a romance that might also be evident in the fact that as of 2007, 57% of all banks robbed in the Eurozone were Italian banks, and just last summer an Italian bank robber made headlines when he was trapped underground in Rome while attempting to tunnel into a vault. So it might come as a relief to Roman bank tellers that Meloni softened her pro-cash stance following political pressure from Brussels:

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The €60 proposal was scrapped after the European Commission warned Italy the policy contradicted advice to the country on countering tax evasion.

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Italy wants to make sure it receives billions in Euros from an EU Covid-19 recovery fund this year and needs to hit certain milestones to qualify.

Cash Counter: Although the EU sees digital transactions as a way to tighten financial enforcement, it’s not a panacea. The UK has also seen many banks shut their brick-and-mortar locations, and now the country’s cost of living crisis means more people are turning to cash as a budgeting tool but with reduced access. Brits aren’t the only ones struggling either, Head of Analysis and Policy at the Swedish central bank Gabriela Guibourg told The Financial Times in December: “We do get a lot of calls . . . saying, ‘how am I going to cope with this?’, especially from the very elderly.” Sadly, cash-free does not equal problem-free.

-Isobel Asher Hamilton

Pharmaceuticals

Swell of Colds, Flus, and Covid Juice OTC Drug Sales

(Photo Credit: Mike Mozart/Flickr)

A combination of flu, Covid, and respiratory viruses has created a miserable winter sickness cocktail with which the whole world can ring in the new year.

That’s good news for drug companies slinging over-the-counter cold medicine, but bad news for local pharmacy shelves increasingly barren of Theraflu, NyQuil, and Tylenol. The disappointment of flu sufferers unable to score meds is unlikely to be ameliorated by medical experts’ recent declaration that most decongestant remedies are totally useless.

Another Kind of Rising Rate

Globally, both Covid-19 and flu rates have surged in recent weeks, according to a report from the World Health Organization. In the US, the Centers for Disease Control has already identified 20 million cases of flu so far this season, a huge leap from last year’s estimated 9 million. Adding more germs to the pool are loosened Covid restrictions that made Christmas and New Year’s Eve shindigs breeding grounds for fevers, runny noses, and sore throats. Throw RSV into the mix and 2023 is starting off with a loud cough.

Haleon and Reckitt, the makers of Robitussin and Lemsip, respectively reported third-quarter sales growth and noted consumers were stocking up for the fourth quarter, too. Thanks (eyeroll) to a “strong and prolonged cold and flu season” Haleon’s respiratory drugs brought in $480 million in 2022’s third quarter, a 30% surge year-over-year. However, with those rising sales also come shortages:

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Parents are having a tough time finding children’s medicine. In the four-week period ending on Dec. 3, US cough medicine and throat spray sales rose 35% and 56%, respectively, year-over-year. Walgreens began limiting the sale of those medications soon after.

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The WHO recently reported severe shortages of antibiotics such as penicillin and amoxicillin around the world, highlighting an unstable supply chain.

Achoo! Before you down that next shot of Theraflu or pop another Benadryl, you might want to hear what doctors are saying. A coalition of medical experts is calling on the Food and Drug Administration to stop the sale of certain OTC congestion drugs after multiple studies found the medications’ main ingredient, phenylephrine, doesn’t actually clear stuffy noses. “Why give something if it has no benefit?” allergist Eli Meltzer told the Wall Street Journal. “It’s a waste of money.” This doesn’t mean resorting to TikTok’s favorite method of jamming garlic up your nose either.

-Griffin Kelly

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Media

Cineworld Says Deal With AMC is Not Just Dead, It Never Existed

It may not be Hulk vs. Wolverine, but the brawl between two of the world’s biggest cinema operators is not without melodrama.

Bankrupt British cinema operator Cineworld said on Tuesday that it has no plans to sell any of its assets individually and will instead pursue a deal for the entity as a whole. Cineworld also seemed to go out of its way to take a shot at its most likely buyer: longtime rival AMC Theatres.

Did They or Didn’t They?

Despite numerous media reports throughout the last few months of 2022 that AMC was exploring a partial purchase of Cineworld’s assets and a late December regulatory filing by AMC disclosing that it had pulled out of such negotiations, Cineworld claimed Tuesday that it had never held discussions with AMC about any sale of any theaters. A real pair of Real Housewives we have here.

The hot drama gets even messier. In December, AMC blamed Cineworld for not acting fast enough to complete the deal… that may or may not have ever been on the table. Some industry insiders speculated that AMC was merely kicking the tires publicly, and would have no competition to pick off prime locations in a Cineworld fire sale. Tuesday’s public shadefest indicates that any ongoing negotiations will be done at least partially through the media:

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While Cineworld’s hand might be strengthening a bit thanks to “Avatar: The Way of Water” crossing $1.44 billion in global box office receipts on Tuesday and providing 2023 with a bona fide blockbuster out of the gate, AMC’s stance that it can buy what it wants might be weaker than it has been in years.

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After gorging on meme stock momentum to create cash reserves (that it spent partly on literal gold mines) the company’s stock has plummeted more than 85% over the last 12 months, sapping the Kansas-based chain’s buying power, and putting CEO Adam Aron under the kind of scrutiny that apparently prompts stridently defensive tweetstorms like the one he unleashed on Sunday.

Can you wait a year? According to Gower Street Analytics, 2023’s global box should be 12% higher than 2022’s, but theater owners will likely have to wait until 2024 for cinema lovers to return to the big screen at pre-pandemic levels. Should the upcoming slate from Marvel and others create enough pop, the Cineworld vs AMC show might spill into yet another new year.

-Thornton McEnery

Extra Upside

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Oh Jeez: Michael Burry of ‘The Big Short’ fame cautions more inflation spikes.

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Dry January: Tito’s Vodka supports alcohol abstinence in a new ad campaign with Martha Stewart.

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