Table Stakes
No one asked for this virus so it’s difficult to point a finger at anyone to blame them for the outcomes.
Capital Thinking • Issue #592 • View online
This week Disney raised $11 billion with interest rates ranging from 1.7% to 3.8%:
That’s a 3.8% 40 year bond from a company that is experiencing a massive slowdown in their main business lines (movies, parks and ESPN).
This is basically a form of corporate inequality where the mega-cap corporations are able to tap the debt markets to stay afloat while many small and mid-sized businesses don’t have the ability to do so at such outrageously low rates.
Inequality Everywhere You Look
Ben Carlson | A Wealth of Common Sense:
Earlier this month GQ put out their annual list of best new restaurants in the country. One of the restaurants featured in this Gentlemen’s Quarterly guide was a place called Auburn in Los Angeles which they beautifully described as follows:
By contrast, I sighed inwardly as I stepped into Auburn, in West Hollywood, which greets you in the foyer all hushed and austere, draped in taupes and whites and beige, a symphony in sand. The last place I wanted to eat that night was a monastery.
The frost melts in the dining room, though, beneath the radiance of heating lamps that are the first tell that you are, in fact, partially outside.
Large cuts in the wood ceiling let in the night air while an acacia tree stretches to the sky through a hole in the center, as though you’re in a yurt.
If this is a monastery, you start to get the feeling, it’s some kind of pagan one.
There’s a similar vein of Midsommar savagery hidden beneath the smooth minimalist surface of Eric Bost’s food.
Is there a more goth-sounding dish than black cod in a “sauce of its bones”?
That was one of nine savory dishes and three desserts arranged in a grid on the menu when I visited. The notion is that you create your own “tasting menu” out of four, six, or eight of the courses, which seems like a long way to approximate a regular menu.
For all Bost’s creativity in dishes like smoky roasted persimmons atop a creamy pillow of milk curd, I’d be sorely tempted to order four portions of Époisses cheese, spooned at the table over sunchokes and seeds and exuding the funk of an imaginary Melrose Avenue barnyard.
You couldn’t pay for this type of publicity. In a normal world, I’m sure patrons would have been beating down the doors to try chef Eric Bost’s savory dishes.
Unfortunately, we don’t live in a normal world anymore.
Just days before GQ released their list, Bost made the decision to shutter Auburn just over a year after it opened.
Bost went on The Dave Chang Show this past week to discuss how difficult it was to come to this decision.
Even with a PPP small business loan, a number of CPAs told him there was no way they could make it work from a financial perspective with the uncertainty surrounding the restaurant industry.
It’s unfathomable how hard this industry is getting hit right now:
The gains in employment for food services and drinking establishments is now below where it was in January 1990 when the Federal Reserve first began tracking this data. And it’s not just restaurants.
The entire hospitality sector is feeling immense pain right now, with an unemployment rate fast approaching 40%:
This week Open Table estimated 1 in 4 restaurants in the United States will follow the same path as Auburn and fail to re-open.
It’s sad but true that this estimate may even be an understatement. Even as things “open up” again the rules, regulations and virus will make it nearly impossible for most restaurants to get back to full capacity.
It could take years.
Ben Carlson
*Featured post image Ben Carlson: A Wealth of Common Sense