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Why didn't anyone tell me about that Kodak deal?
This is “Not Pretty, Not Rich,” a newsletter meant to keep you up to date on what’s happening in the world, and how you can position yourself to take advantage.
Onward and upward, it’s Friday, July 31.
In the news
Here are a few key news items that you should be aware of:
Stimulus measures have dried up. The extra $600 per-week benefit, paid by the federal government to the nation’s unemployed workers, has expired. It was a part of the CARES Act stimulus measures signed into law several months ago, and lawmakers are now looking at options to extend or otherwise institute a fix, which is needed as economic conditions aren’t improving as hoped.
We’re less than 100 days out from the election, and it’s already getting weird. Yesterday, the president floated the idea of postponing the election — something that’s not entirely surprising, but still pretty wild to actually see happen. He then promoted a pizza place in Long Island for some reason. Expect similar wild stories all the way until November.
Extremely ugly GDP numbers. The Commerce Department released the Q2 GDP figures yesterday, and they were historically bad: GDP shrank at an annual rate of 32.9% (remember, that’s annual, so if you divide it by 4 we see that the economy shrank 9.5% during Q2) due to the coronavirus outbreak. Again not entirely unexpected, but still pretty shocking to see.
Get rich or lie trying
Non-experts continue to promote dubious solutions to big problems. In order to earn a buck, I guess?
Many things bother me about the current state of the world, but this one really stuck with me: The continued push for unproven medical treatments by people with no medical background. Specifically, I’m referring to White House trade advisor Peter Navarro — an economist by trade — going on national television and promoting the use of the drug hydroxychloroquine for patients with the coronavirus.
This weird back and forth over hydroxychloroquine has been going on for months now, but the FDA has said that the drug is largely ineffective in treating patients fighting COVID-19. And yet, people like Navarro continue to come out and say we should be using it.
"I’m sitting on 63 million doses of hydroxychloroquine at the FEMA stockpile and that would save -- that's enough for 4 million Americans,” Navarro said to ABC’s George Stephanopoulos during an interview on Wednesday.
But this brings us back to the main question: Why? Why are people pushing for this one specific Malaria drug repeatedly despite there being little evidence that it’ll help anyone with COVID-19?
I don’t know why. But when a guy like Navarro says “I’m sitting on 63 million doses,” it sounds an awful lot like he’s saying he needs to move some inventory. I don’t know if he has a financial stake in this or not, but someone, somewhere does.
Kodak’s impressive ‘pivot’
Kodak — yes, that Kodak — went through a radical transformation this week
You may remember Kodak as a maker of cameras and camera film, both ancient technologies by today's standards, that may as well be associated with the Pilgrims. But Kodak still exists, and you can actually buy Kodak stock.
As of the beginning of the week, one share would set you back about $2.10. It’s a penny stock, at this point.
But then something happened: Kodak was granted a $765 million loan from the federal government to produce pharmaceutical ingredients. On that news, the stock skyrocketed. Shares topped out at around $60 at one point on Wednesday (all told, it was up about 1,200% in two days, but prices have since fallen), and the company is suddenly back in the spotlight.
To recap: Kodak, a camera film company, is now some sort of pharmaceutical company, and is getting hundreds of millions of dollars from the federal government out of nowhere to produce some stuff for the pharmaceutical industry. And people who held Kodak stock, for whatever reason, made a lot of money.
Strange, but strange things happen. It’s 2020, after all. Except that it looks like at least some people were in the know. Kodak shares actually started trading like hot cakes before the government loan deal was announced, as people started snapping up cheap shares that would soon, and quickly, appreciate. That appears to include Kodak’s CEO Jim Continenza, who apparently purchased almost 47,000 shares last month — which would’ve set him back around $104,000. But after the deal was announced, those shares would’ve been worth almost $1.9 million. His net worth would’ve increased by almost $80 million in all.
Of course, if you’re Continenza, you’d likely do the same thing. It doesn’t appear to count as insider trading. But man…I wish somebody would’ve told me what was about to go down.
I don’t know what exactly happened here, and we may never know. But this is one way that some people end up making a lot of money — by knowing the right things, and when to use that information to your advantage.
This week’s numbers and links
125°: The temperature in Baghdad, Iraq, a couple of days ago — a record high.
$1.7 billion: How much MacKenzie Bezos — Jeff Bezos’ ex-wife — has donated since her divorce in April 2019.
30%: Roughly the increase in the value of gold since the beginning of the year. Gold prices are flirting with breaking $2,000 per ounce for the first time ever.
150,000: The number of people confirmed to have been killed by the coronavirus in the U.S. so far.
4: Where Kansas City Chiefs quarterback Patrick Mahomes (widely considered to be the best player in the league) ranks among the top 100 players in the NFL, according to the NFL Network. It caused a stir.
30 million: The number of Americans who reported that they didn’t have enough to eat last week.
A neat explainer to help recalibrate your phone’s settings to use less data and energy.
We’re learning more about Stonehenge.
Until next time,