Numlock News: February 10, 2023 • Beyoncé, Beef Stew, Pappy van Winkle

Feb 10

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By Walt Hickey

Securities

On-paper stock losses are very advantageous to the ultra-wealthy, as they’re able to take on-paper losses and very efficiently turn them into fewer taxes. An obvious way to log on-paper losses is “wash sales,” where you sell shares in a company and then buy them again later that day in order to get some on-paper losses but pretty much maintain the same portfolio. It’s so obvious that it’s been forbidden since 1921. That said, wealth managers figured out a simple work-around, which is to sell one class of a company’s stock and then buy a different class of a company’s stock, like Goldman client Steve Ballmer did from 2014 to 2018 when his finance people were able to generate $579 million in tax losses without actually changing his investment portfolio in any meaningful way.

Paul Kiel and Jeff Ernsthausen, ProPublica

Cooking

The New York Times Company, a popular cooking app and puzzle app that occasionally dabbles in news, published over 700 recipes last year. Most of them failed to meet the best recipe they have in the catalog, Old Fashioned Beef Stew, which was first published in the paper in 1994 by a writer who has since passed away. It is the recipe against which all other recipes are judged: 19,000 reviews, a 5-star average, 24 million views since 2019, 6.7 million of them last year alone. When a new recipe outdoes it in a given week, it’s considered a hit.

Luke Winkie, Nieman Lab

Next Week, On Castle Swimmer

It’s never a particularly weird sign when scientists discover something extremely spooky and weird 4,000 meters below the surface of the ocean, and it was no different in 2015 when scientists found millions of dead red crabs in the Clarion-Clipperton Zone in the Pacific Ocean. Red crabs don’t live there — they’re supposed to be much closer to the surface in the pelagic zone — and given that they were found 1,500 kilometers offshore as well it was all rather weird. Scientists have no idea if it was a one-off coincidence related to perhaps an algae or disease, or if this is a recurring thing, but either way it’s evidence that there may be a lot more going on in the abyssal areas than people tend to think.

Fanni Szakal, Hakai Magazine

Partnerships

Ocean shipping is heavily consolidated, and in addition to gigantic shipping firms dominating the space, those firms go even further and forge alliances not unlike the code-sharing deals brokered in the airline industry. Three of those partnerships — Ocean Alliance, THE Alliance, and 2M — control 39 percent of global capacity, but a reshuffle may be on the horizon. The 2M alliance — made up of Maersk and Mediterranean Shipping Co. (MSC) — is breaking up in 2025, as the companies make two diverging bets on the future of the industry, with Maersk aiming for more diversified logistics and and MSC aiming for expansion on the seas and focusing on market share.

Greg Miller, FreightWaves and Mary Hui, Quartz

Love On Top

Ivy Park, Beyoncé’s fashion partnership with Adidas, saw sales decline by over 50 percent in 2022 to $40 million, the same year that Adidas had internally projected that the brand would sell $250 million in sales. According to documents seen by the Journal, Beyoncé gets about $20 million a year in compensation, though Ivy Park has been losing money for Adidas. The contract between the musician and Adidas will end after 2023, and the question has become whether or not it’s worth proceeding with the partnership. Adidas has had a rough year in general, as one of their other big partnerships was with Ye, previously known as Kanye West, who has recently become better known for other ideas.

Khadeeja Safdar, The Wall Street Journal

Pappy

Five executives at the Oregon Liquor and Cannabis Commission are under investigation amid allegations that for years they set aside rare bourbons for their own personal use, using their authority to pluck the booze out of public circulation in the state’s liquor stores. Pappy van Winkle’s 23-year-old whiskey sells at retail for $299.99 per bottle, but fans of the beverage will buy it on the secondary market for $2,000 to $4,000. The state of Oregon would hold lotteries for customers who wanted to buy the bottles at retail, which in 2021 had odds of winning of 1 in 5,373, that is unless you were a state liquor official willing to take the graft.

Noelle Crombie, The Oregonian/OregonLive

Nickel

Trafigura Group, a Swiss metals trader, attempted to buy several containers full of the metal nickel from companies like TMT Metals and UD Trading Group, only to find that the metal that arrived was not actually nickel. According to legal proceedings launched by the trader, it set Trafigura back $577 million during the most recent financial period. Metals are a fairly hilarious market in that this happens all the time: In 2014, a bunch of copper went missing in Qingdao in China and launched a bunch of lawsuits. Either way, they lost so much nickel that the global price of the metal jumped 6.4 percent on Thursday.

Joe Wallace, The Wall Street Journal

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