Hey there weekday warrior,
Today we’re getting into Moody’s hating on America, Trump vs. Walmart, and Novo Nordisk’s CEO is out. But first...
In the May 19, 2022, edition of The Water Coolest, we discussed Gabe Plotkin throwing in the towel. The main character in the meme stock drama got bent over and shown the 50 states in early 2021, thanks to his GameStop short position. Even after Melvin Capital got bailed out by Ken Griffin and Steve Cohen, Gabe got burned by the 2022 big tech bloodbath. Hence, his decision to return capital to investors and shutter his fund.
Since then, Gabe has done what all “disgraced” hedge fund managers do: run a family office. Oh, and he was part of the investment group that bought the Hornets from Michael Jordan.
Enjoy the next 4 minutes and 31 seconds of blue-chip news and commentary.
Keep on snapping necks and cashing checks,
Credit hating agency
"If every other rating agency jumped off a cliff, does that mean you would too?” - Moody’s mom
Moody’s credit rating agency has finally caved to peer pressure, joining its fellow (anti-American) credit haters in downgrading the sovereign credit rating of the greatest country in the world, the United States of America.
It was the last holdout among the major agencies in maintaining the highest credit rating for the land of the free and the home of crippling debt. Moody’s pinned its second-highest rating (Aa1) on America, which might as well be junk… because if you ain’t first, you’re last.
Y tho?
Moody’s analysts (who are about to find themselves on no-fly lists) said the “one-notch downgrade on our 21-notch rating scale reflects the increase over more than a decade in government debt and interest payment ratios to levels that are significantly higher than similarly rated sovereigns.”
Oh, and something about expecting “federal deficits to widen, reaching nearly 9% of GDP by 2035, up from 6.4% in 2024, driven mainly by increased interest payments on debt, rising entitlement spending and relatively low revenue generation.” And it appears that the folks over at Moody’s have been listening to a little too much Dave Ramsey…
What does it all mean?
Nothing really, if we’re being totally honest…
Moody’s had already warned the US was playing with fire and on the verge of a downgrade. And since the country, whose biggest export is freedom, has done little to stop the ballooning debt, the move wasn’t exactly unexpected. Translation: it was “priced in,” you guys.
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+ “Eat my shorts the tariffs.”
Walmart f*cked around. And now, it has found out. You see, last week it very publicly indicated that it planned to hike prices. The reason? The newly introduced tariffs courtesy of Donny Duties. Perhaps WMT missed the part where they’re paused?
Trump responded over the weekend, and it went exactly as you’d expect. He told Walmart (and China) to “EAT THE TARIFFS” and warned that Wally World’s customers will be watching.
+ So many millennials are going to be going through it in the coming years, trying to explain to their aging parents why their Cox cable bill is suddenly coming from Charter…
On Friday, news broke that Charter $CHTR ( ▼ 0.56% ) and Cox will merge as part of a deal that values Cox at a $34.5B enterprise value. And is it just me or does this kinda feel like when your grandpa decided to remarry at 87… everyone thinks it’s kinda pointless, but you’re just happy he found someone to spend his remaining days with.
Both companies (and the entire analog cable industry) have been struggling to stop subscribers from cutting the cord.
This is far from a done deal, though. Regulators will have to kick the tires... and analyze just what this means for all 600 people with a cable subscription. The good news is that it’s got a better shot than at any time during Lina Khan’s reign of terror at the FTC.
+ Novo Nordisk’s CEO is out after blowing the equivalent of a 28-3 lead in the weightloss drug game.
Despite Ozempic being to weight loss drugs what Kleenex is to tissues, the company has struggled with supply chain issues and is bleeding market share to Eli Lilly, whose drugs have proven more effective for fatties.
To put in perspective just how bad the fall from grace is… at one point, Novo Nordisk was the most valuable company in Europe, and its market cap was larger than its home country’s (Denmark) GDP. You hate to see it…
+ That Gawker money isn’t going to spend itself. Hulk Hogan’s Real American Beer company is reportedly considering a bid for Hooters’ intellectual property. And the European mind simply cannot process that sentence. You might recall that Hooters filed for bankruptcy earlier this year.
+ Wait… the Fed needs 24k employees just to keep interest rates high with no intention of lowering them? On Friday, J-Poww said in a memo that the Fed is planning to cut rates its headcount by 10%. Turns out no one is safe from DOGE…
+ US stocks “rose on Friday, notching weekly wins across the major averages after an easing in US-China trade tensions. Investors also eyed President Trump's sweeping tax and spending bill, which failed to clear a key hurdle Friday, as consumer confidence sank.” (Yahoo! Finance)
+ The 10-year yield “edged lower on Friday as investors weighed a disappointing consumer sentiment reading that showed heightened inflation fears.” (CNBC)
+ Oil “steadied Friday after sharp declines in the previous session, but were still on course for weekly gains after the surge at the start of the week as the U.S. and China agreed to temporarily lower soaring tariffs placed on each other.” (Reuters)
⏪ On Friday…
+ There wasn’t a lot going on…
⏩ Today we’re keeping an eye on…
+ ZIM reports before the bell
+ Trip.com reports after the bell
+ Coinbase will be added to the S&P 500 and Shopify will join the Nasdaq 100
+ Digital health company Hinge Health and ad software company MNTN are expected to price their IPOs
+ Microsoft will hold its annual Microsoft Build conference. CEO Satya Nadella will give the opening keynote on Microsoft's vision and AI strategy
+ JPMorgan Chase will hold its annual Investor Day
On Friday, I asked, “What was more fun?” (4 years of college or those first few years after college when you have some money and live with your friends)
54.4% of you said “4 (or more) years of college.”
Here’s what some of you guys had to say…
4 (or more) years of college: “The bubble of college life/campus is unbeatable. Can do almost anything with basically no responsibilities or drastic consequences.”
After college: “4 guys in NYC all of whom had access to firm tix to just about everything.”
4 (or more) years of college: “Only care in the world was smuggling the keg into the dorm”
After college: “It was an extension of college life with more money and more summer shore house rentals. ”
4 (or more) years of college: “Skipping class to drink: no major consequences Skipping work to drink: fired”
After college: “Damn this one is close. Flip a coin. Both great. ”
Here’s today’s question…
This might be the most important question to date. What’s the next bite?
Oh, and one more thing…
What did you think about today's newsletter?
Does this look like the face of a guy you should take financial advice from?
No, it’s the face of an individual who is financially irresponsible/dumb enough to be talked into spending money on a family photo shoot that he could have just done with his iPhone. So, act accordingly...
This is not financial advice. Nothing in this newsletter is an investment recommendation. All content is created for entertainment, educational, or informational purposes only. Do your own research, or do yourself a favor and hire a professional.