Dow(INDU)futures were last up 130 points, or 0.4%, reversing course from a 0.8% tumble earlier.
S&P 500(INX) futures were last up 0.5%, while Nasdaq(COMP) futures were up 0.4%.
US markets are coming off of their worst week since October. The volatility hinged on a handful of trends, including fears from analysts about whether the massive short-squeeze in GameStop and other Reddit favorites are beginning to curtail liquidity in other parts of the market as investors unwind positions.
There are other factors, too. Earnings season is in full swing. There are also questions about whether President Joe Biden's proposed $1.9 trillion stimulus package can actually get passed, along with uncertainty over the coronavirus vaccine rollout.
Major regional benchmarks in Asia moved higher, too. Hong Kong's Hang Seng(HSI) was last up 2.1%, while South Korea's Kospi(KOSPI) rose 2.4%. Japan's Nikkei(N225) gained 1.4% and Australia's S&P/ASX 200 added 0.8%.
China's Shanghai Composite(SHCOMP) was last up 0.2%, struggling to gain traction throughout the day. The country's manufacturing activity expanded in January, a closely watched private survey showed Monday — albeit at the slowest pace in seven months. Recent survey data from the Chinese government showed similar slow growth in manufacturing and services activity. It's a sign that recent coronavirus outbreaks in the country may be hampering the recovery of the world's second largest economy, though not by enough to derail it entirely.
Silver producers, meanwhile, jumped in Asia as futures for the precious metal surged to touch five-month highs. China Silver Group soared nearly 30% in Hong Kong, for example. Chinese silver futures also jumped nearly 9% in Shanghai.
An Atlanta City Council member says the city is nearing an agreement that will let the state permanently close part of a street that runs between the state Capitol and a legislative office building to enhance security.
Council member Michael Bond tells WAGA-TV that in exchange for the city agreeing to let the state close a block of Mitchell Street, the state will finance sidewalk and safety improvements along a state-owned road on the northwest side of Atlanta.
The block of Mitchell Street that runs between the Capitol and the Coverdale Legislative Office Building has been closed for years during sessions of the General Assembly, in part because there is heavy pedestrian traffic back and forth. But state officials have had a request pending for years that the city give up the block so the street can be permanently closed to enhance security.
“It is vulnerable,” said Bond, who as a councilman works at Atlanta City Hall, which is diagonally across Mitchell Street from the Capitol.
The focus on security has been renewed in recent months, following racial injustice protests over the summer that sometimes met an aggressive police response at the Capitol, and since the Jan. 6 riot at the U.S. Capitol. Gov. Brian Kemp and other officials agreed to spend $5 million in safety improvements after the summer, in part because the Republican governor has kept a detachment of National Guard soldiers activated to provide security at the cost of at least $200,000 a month.
Workers now are digging a trench to build the foundation for the 8-foot metal fence, which will have spikes on top. Security has been even tighter since Jan. 6, with a lane of Martin Luther King Jr. Drive blocked off on the north side of the state Capitol where aides to the governor formerly met, and state troopers with assault rifles patrolling the grounds.
Bond said the state Department of Transportation has agreed to make sidewalk and safety improvements to state-owned Donald L Hollowell Parkway, formerly known as Bankhead Highway, on the city’s northwest side.
“We are going to get three-and-a-half miles of safety improvements,” Bond said. “It’s a good deal for that northwest community and makes the Capitol safer downtown.”
Harry Macqueen’s Supernova opened in 330 theaters this weekend, bringing some warmth to the specialty box office space. The Bleecker Street drama starring Colin Firth and Stanely Tucci is garnering tons of awards season buzz and has added some fuel to the specialty fire that has been struggling to stay afloat for almost a year. With day and date release becoming more popular and release strategies always changing, Supernova put coins in its piggy bank as the specialty box office attempts to figure out the standard when it comes to what is a “successful opening weekend” in Covid times.
Supernova opened in 330 theaters this weekend to an estimated $98,670 with an average of $299. The film is garnering acclaim and with Firth and Tucci as its leads, the drama checks the appropriate boxes when it comes to an awards season film.
Neon’s documentary short Apollo 11: Quarantine — a title that is certainly appropriate for the times we live in — hit select IMAX theaters and took in an estimated $11K with a $195 per-theater average. This is noteworthy considering it is a docu short. Also opening this weekend is IFC Films horror The Nightwhich banked an estimated $11K.
In its second weekend, IFC’s No Man’s Land crossed $100K in its cume while awards season hopeful Our Friend from Gravitas Ventures added $135K to its box office til, bringing its cume to $446,060.
NEW RELEASES
Apollo 11: Quarantine (Neon) Week 1 [55 Theaters] Weekend $11,000; Average $195
The Night (IFC Films) Week 1 [33 Theaters] Weekend $11,000; Average $321
Mario Ojito of the non-profit organization Street Racing Made Safe has seen firsthand the kinds of fatal consequences illegal street racing can bring. And he is determined to get as many racers off the streets as he can. Ojito lost his father to a motorcycle crash when his dad was just 36 years old, and he nearly lost his best friend to a similar accident at a car meet. The SRMS founder used to be a street racer himself and realized how many racers resulted in tragedy; he founded SRMS in 2011 to promote his mission to provide a safe and legal alternative to illegal street racing.
Originally, Ojito hosted drag racing grudge matches at Palm Beach International Raceway; after a corporate takeover he moved SRMS’ operations to a track in Homestead, two hours away, and switched over to autocross events. It's much like a track day hosted all over the country, but with an educational element and Ojito's message behind it: get off the street and get your speed fix here, legally.
Street Racing Made Safe/Mario Ojito
Right now, Ojito's cause may have excellent timing. Numerous news and law enforcement reports indicate illegal street racing has gotten worse over the past year as the pandemic has emptied the highways. Cities like New York, Los Angeles, Albuquerque, Dallas and more have reported big spikes in street racing since lockdowns started, and tragic outcomes often follow.
Giving people an outlet that is not on public streets is something that other cities like the Atlanta area are actively considering as well, because not only is it illegal, it’s ridiculously dangerous for anyone who happens to be in the racers’ path. Ojito says that SRMS is the only national 501(c)(3) nonprofit solution to illegal street racing, and he has hosted over 300 events to draw racers to the track to get their speed fix, safely away from innocent bystanders.
To register for an event, participants pay $75 on the SRMS site (co-drivers pay $25 to ride along) and the gates open at 7 a.m. for tech inspections and setup. Cars are registered in a variety of classes and each race is overseen by a small army of volunteers who are committed to the cause. When SRMS swapped out drag racing for autocross, Ojito added more educational elements of the program, underscored by processes designed to keep drivers safer overall. Every meet requires a drivers’ meeting before racing, and helmets are required as well as tires that have at least 50 percent tread. Then the teens get to ride with experienced autocross drivers to better understand safe driving techniques. Kids under 18 get to participate for free, and young adults over 18 pay $75.
Street Racing Made Safe/Mario Ojito
SRMS is insured for all events, and spectators must be a certain distance from the track. Every racer has to wear a helmet, and convertibles are permitted as long as they’re equipped with a roll cage. On top of all of that, each vehicle goes through a thorough tech inspection.
Today, SRMS runs a meet every other month for about 300 cars; Ojito says each event is designed for people to have fun and get a lot of seat time. At the last event, one driver squeezed in an astonishing 28 runs in 8 hours. New COVID-19 standards require that all staff, competitors, and spectators must have a mask, groups must maintain a 6-foot distance between them, and upon entry, each person has to confirm they are not experiencing any symptoms of COVID-19.
While he may not be able to stop all of the carnage that too often results from street racing, Ojito believes that maybe he can provide enthusiasts a safe and legal alternative to taking to the highways—and hopefully save some lives in the process.
Rushdan Abdallah’s videos on YouTube have been viewed by the millions and offer an up-close glimpse of car culture in Southern California: getting caught in the middle of a police chase, sampling new vehicle models, and street racing with other drivers as the camera rolls (the odometer blurred).
But in December, Abdallah’s page — with more than 220,000 subscribers — abruptly went dormant. After weeks without new videos, Abdallah said he “had to make an update” and revealed what was going on: Police had recently arrived at his Lake Forest residence with a search warrant.
“They just showed up one morning, knocked on the door and towed both cars away,” Abdallah said. Two fellow YouTubers also had their homes raided by police, he said.
“I’m in tears. I haven’t had my cars for over 100 days, and that’s insane to think about,” he said, adding, “I love my channel, I love my cars, and I love sharing the videos with you.”
The criminal investigation into Abdallah became clearer this week when the Irvine Police Department arrested the 26-year-old and four others and charged them with conspiracy to participate in illegal street races across Orange County.
Prosecutors say the men have held races through Irvine, Tustin, Lake Forest and Foothill Ranch, predominantly on the 241 and 261 tollways — racing at speeds up to 160 miles per hour.
“No one driving on our roads should suddenly find themselves in the middle of what equates to a NASCAR race being raced by amateurs who are not trained or skilled enough to drive vehicles being pushed to their mechanical limits,” said Orange County Dist. Atty. Todd Spitzer in a statement.
“Street racing is irresponsible,” he said, “it’s dangerous, and it shows a complete disregard for the lives of everyone involved including the participants, the spectators, and the innocent bystanders.”
Neither Abdallah nor the defense attorney listed in court records, Randy Sarmiento, responded to messages seeking comment. Abdallah was released on $20,000 bail, and a judge ordered him this week not to drive. His next court appearance is in April.
Street racing has been a growing concern among law enforcement and community members. This summer, street racing led to the death of an Orange County Register editor, and so-called “street takeovers” this fall in Costa Mesa and Anaheim left one man dead and two injured. A Los Angeles Times investigation found 179 people had died in speed contests in L.A. County from 2000 to 2017.
In the case of the YouTubers, the investigation by Irvine police into the coordinated street racing took about six months, beginning around Jan. 31, 2020, when prosecutors allege that Abdallah and Sean Stuart, 36, raced each other through Orange County.
In the the following months, Abdallah allegedly met with two La Verne residents, Aaron Hamed Waseeq and Daniel Rodriguez, as well as Saeid Lachin, a Fullerton resident, for illicit races on the two toll roads.
Abdallah, Waseeq and Rodriguez each posted videos of their driving exploits to their YouTube pages. Prosecutors said Abdallah also asked his viewers to provide competitors for street races.
For Abdallah, such videos were a source of popularity and income.
“A lot of people don’t understand that you can make a very good living off of YouTube, if you know how to monetize your channel properly,” he said in a February 2020 clip. He said that a channel of his size generated “anywhere from $10,000 to $50,000 per month” in revenue, which he said he used for his cars and filming equipment.
“Content is key on YouTube,” he said.
The district attorney’s office said Abdallah’s alleged participation in the illegal street racing occurred while he was already out on bail on charges that he evaded police during a November 2019 pursuit.
If convicted of the six felonies and 12 misdemeanor counts against him, he faces more than eight years in prison.
Waseeq, Lachin and Rodriguez were each charged with two felony conspiracy charges in connection with the street races as well as additional misdemeanors alleging reckless driving and abetting a street race. If convicted, each faces up to three years and eight months in prison.
Stuart, who was charged with one felony count of conspiracy to engage in a speeding contest and two misdemeanor counts, faces up to three years in prison.
The last video that Abdallah posted to his channel, Rush Shift, was on Christmas Eve.
He was at a gas station fueling a red Corvette C8 and then visited two fellow YouTubers who were charged this week. He promised at the time, “They’re making a comeback.”
Sen. Elizabeth Warren speaks during a Sept. 9, 2020 news conference on Capitol Hill. | AP Photo/Jacquelyn Martin
Sen. Elizabeth Warren on Sunday said the GameStop saga is just the latest “ringing of the bell” that there are problems on Wall Street — ones the Securities and Exchange Commission needs to fix.
The Massachusetts Democrat likened today’s stock market to a casino, where she said big-money players are manipulating the markets through measures like pump-and-dump and stock buybacks to inflate stock prices.
“We need a market that is transparent, that is level and that’s open to individual investors. It’s time for the SEC to get off their duffs and do their jobs,” Warren said on CNN’s “State of the Union.”
Warren blamed Reagan-era SEC changes that she said allowed companies to purchase their own stock and manipulate stock prices. She said the SEC has some pending rules on stock manipulation but needs to examine the role companies and hedge funds are playing in the markets.
“Then, they need to put the rules in place to stop it and grow a backbone to enforce those rules,” she said.
The chaos surrounding the trading of GameStop stock has rattled Washington, triggering intense scrutiny of Wall Street, particularly the brokers and hedge funds at the center of the mess. The trading app Robinhood, which has millions of small, often young investors, enraged lawmakers on both sides of the aisle last week when it shut down purchases of GameStop stock for a day, sending share plunging down.
Asked on ABC's "This Week" to respond to Robinhood's move, Sen. Bernie Sanders (I-Vt.) reiterated his view that Wall Street's business model is "fraud," suggesting the government take a hard look at "illegal activities and outrageous behavior" of hedge funds and other Wall Street players.
The chaos overwhelming Robinhood and other trading platforms is connected to surges in more than a dozen stocks, which appear to be in part driven by users of the social media website Reddit — whose users say they were eager to punish hedge funds that were betting on further declines in struggling companies like GameStop. GameStop's stock rose 68 percent on Friday, rebounding from Thursday's drop.
It's still unclear who all the players are in these trades, Warren said Sunday, and whether there's “big money on both sides.”
“That’s why we need an SEC investigation,” she said.
Last week, you may have seen the headlines about something truly whacked out going on in the stock market – about GameStop, this ailing chain of retail stores that sell video games. For no discernible business reason, its stock shot up hundreds of percent in a matter of days.
Correspondent David Pogue explains what happened:
You know the formula for making money on the stock market: Buy low, sell high. But it's also possible to make money when a stock goes down. This is called "shorting" a stock; you are betting that the company's stock will fall. It's a little complicated, but the basics go something like this:
When the stock is high, you borrow shares from your brokerage, and then you sell them.
Now, of course technically you still owe those shares to your brokerage, so you wait for the price of the stock to go down, and then you buy them back for much less money. You return the shares to your brokerage – and you've just made money!
Unless of course the price of the stock went up in the meantime. In that case, you're in trouble.
Wall Street doesn't like GameStop much. After all, who's buying video games in a physical store anymore? So, the hedge funds had shorted GameStop – betting against it.
And last week, they met their match.
At Reddit.com, traders on the WallStreetBets forum were encouraging each other to push shares higher.
Jaime Rogozinski started WallStreetBets in 2012, as a place where amateur investors could talk about quick stock bets. They tend to be snarky, funny, a little reckless.
"People wanna take risks and they wanna make some money," Rogozinski said. "They're not looking at it as, 'I'm gonna lose my money.' They see this as, 'I'm purchasing the possibility of making money with a non-refundable ticket.'"
So last week, a funny thing happened: these amateur investors on WallStreetBets began to buy up GameStop stock, driving its price up, and egging each other on. This stock that cost $6 a share only four months ago hit $469 at one point last week.
CBS News
"It went bananas," said CBS News business analyst Jill Schlesinger. "More than 130% on a single day. You don't see things like that on Wall Street,"
She's witnessed how the big brokerage houses refer to mom-and-pop, individual investors, also known as retail investors: "Behind closed doors, they'd call the retail investors the dumb money. And they'd call the institutions, the hedge funds, the private equity people, that was the smart money. The interesting part of this story is that the cost of trading is so low, executing a trade is so easy, that you can all of a sudden harness the power of the 'dumb money' to go up against the 'smart money.'"
Now remember: All those big New York hedge funds had to buy GameStop shares from the market in order to return it, and all the buying they did ended up driving the price even higher.
Pretty soon, some of the Reddit investors had made millions on paper-and the hedge funds were in desperate trouble. One of them, Melvin Capital, had to borrow almost $3 billion to cover its GameStop short.
The internet went crazy. The little guy had beaten the fat cats.
Rogozinski said, "There was this sense of, 'Hoo wow, look what we've done. We just knocked over a huge hedge fund. And we're just a bunch of no-nothings, amateurs! Feels good to have one of these guys get knocked out.'"
By the way, it wasn't just GameStop; something similar is going on with other lame-duck companies like the movie chain AMC and Blackberry.
The SEC is investigating, and the story is still unraveling.
But some aspects of this tale, Schlesinger said, won't change a bit: "For as long as I've been in this business, there are two dominant forces: There is fear, and there is greed. And there is nothing that will legislate that or regulate that away."
Business leaders want their employees to have a say in helping decide who will steer New York City’s economic recovery as its new mayor.
After years of dealing with a mayor hostile to business, New York’s corporate leaders had hoped that the city’s next mayor would be different.
Yet several of the leading Democratic candidates have backed positions unpopular to many in the business sector: raising taxes on the wealthy, cutting the police budget, a targeted guaranteed income program.
So in January, some 100,000 employees at major corporations across New York City got a message from their bosses: If they wanted a say in who runs the city after Mayor Bill de Blasio leaves office, they had best hop to it.
The emails used slightly different language, but the theme was the same: With term-limits law guaranteeing a new mayor next year, the business community should participate in helping New York City, the economic and cultural capital of the country, choose who leads its recovery efforts.
“February 14 is the last day when registered voters can declare or change their party affiliation before the primary on June 22,” William E. Ford, the chairman and chief executive of the investment firm General Atlantic, wrote in a Jan. 21 email. “You can do this online HERE,” he added.
Mr. Ford is co-chairman of the Partnership for New York City, a business-backed civic group that is urging its 320 members to send similar emails to all 700,000 of their employees based in New York City in the next couple of weeks.
The emails, which have been sent at firms as varied as Goldman Sachs, Neuberger Berman, Hearst and Interpublic, were carefully nonpartisan. But given that Democrats far outnumber Republicans among registered voters, the Democratic primary is likely to decide the race.
This is the first time the partnership has engaged in this sort of effort. Kathryn Wylde, who runs the partnership, said that since rules prohibit many bankers and private equity managers from making local campaign contributions, “getting out the vote is the only way that the private sector can have a voice in public policy decisions.”
“This is all about broadening the primary voter base — remember 80 percent of Queens residents supported Amazon HQ, but the handful of zealots drove them out of town,” she said, referring to a poll commissioned by Amazon. “If more New Yorkers get to the polls, we will have a far more balanced political scene.”
The move may be a subtle example of corporate leaders again trying to influence the Democratic mayoral primary. Already, Stephen M. Ross, the developer of Hudson Yards, and James Dolan, the head of Madison Square Garden, have seeded independent expenditure groups intended to influence the 2021 elections.
“The partnership has never been shy about their political advocacy on behalf of the wealthiest New Yorkers — so any attempt to say this is innocent voter education is laughable,” said Monica Klein, a progressive political consultant.
In late 2019 and early 2020 — just months before the pandemic descended on New York City, killing more than 27,000 people and upending the economy — the Partnership for New York City surveyed nearly 14,000 of its members’ employees, nearly 70 percent of whom lived in the five boroughs.
A plurality believed the city was headed in the wrong direction under Mayor de Blasio. They listed mass transit, homelessness and poverty as top concerns. More than 60 percent reported regularly voting in local and statewide elections — far higher than the roughly 22 percent of registered New York City Democrats — nearly 700,000 in total — who voted in the 2013 mayoral primary, the most recent with no incumbent running.
Even so, business leaders believe their employees can do better.
On Jan. 25, David Solomon, the chief executive of Goldman Sachs and a resident of the Soho neighborhood of Manhattan, emailed his New York City employees to alert them of the June 22 primary, the Feb. 14 deadline to declare party affiliation, and the May 28 deadline to register to vote in a primary election.
David Solomon, chief executive of Goldman Sachs, wrote that this was a “crucial time for the city,” and that his employees’ voices should be heard.Jeenah Moon for The New York Times
Under New York’s closed primary system, voters must register with a political party by Valentine’s Day to be eligible to participate in that party’s primary.
“This is a crucial time for the city: New Yorkers all want to see the vibrant community they call home thrive once again, and I know that many of our people feel passionately, as you did last November, about ensuring that your voice is heard as part of the democratic process,” Mr. Solomon wrote to his company’s nearly 5,200 employees in New York City.
Mr. Solomon, who has contributed to both Republican and Democratic candidates on the federal level, declined further comment.
But his refrain was echoed by business leaders across the city. Many offered their employees paid time off to vote.
“We can all agree, now is a crucial moment for New York City, and we need to elect a strong leader,” Michael Roth, the chairman of Interpublic, the marketing firm, wrote in a Jan. 14 email.
Kenneth Sherrill, a professor emeritus of political science at Hunter College, argued that the business leaders’ effort, if successful, could help swing both the Democratic and Republican mayoral primaries toward the center. In recent years, the city’s once-moderate Republican Party has become dominated by supporters of Donald Trump, the former president.
“Many of the policies of the Trump administration and of the Freedom Caucus and the extreme right of the Republican Party are bad for business, bad for the financial industry,” Professor Sherrill said. “And they should be interested in making sure that the Republican nominee is not a Trumpite.”
George Walker, the chief executive of Neuberger Berman and a lifelong Republican, supported the Republicans Kelly Loeffler and David Perdue in the Georgia Senate races, but said he had also raised money for President Biden.
A Greenwich Village resident, Mr. Walker said this was the first time his firm had engaged in a get-out-the-vote effort for a mayoral election, and that it was driven by the crises facing New York City. He spoke by phone from his Midtown office, above a Sixth Avenue that was almost entirely free of traffic. His children are attending school remotely. Several of his employees are working from their second homes in Florida and want to permanently relocate there.
He said the company was being “super careful” to be nonpartisan in its voter outreach efforts, but that people would still see “ghosts” where they did not exist.
“People will see this as big business trying to play the role that corporate C.E.O.s may have played 50 years ago, but this is about supporting our troops,” Mr. Walker said. “That’s where it begins and ends.”
Jordan Belfort, the former stockbroker and convicted felon, weighed in Saturday night on last week’s GameStop-WallStreetBets-Robinhood saga.
Belfort, whose rise and fall on Wall Street was documented in the 2013 Martin Scorsese movie, "The Wolf of Wall Street," starring Leonardo DiCaprio, shared his observations during an appearance on Fox News’ "Watters' World," with host Jesse Watters.
Watters asserted that moves by Wall Street giants to convince retail trading platforms like Robinhood to halt trading on puny stocks like GameStop -- that "average Joe" investors had sent soaring via the Reddit community WallStreetBets-- was likely illegal.
"I think it goes beyond that," Belfort agreed – and warned the implications could be fatal for Robinhood.
"When I first saw it happen … when I really investigated what happened," he said, "they broke a tremendous amount of laws …
"I think Robinhood’s out of business because the amount of lawsuits they’re gonna get right now, from every single person on both sides of it … They’ll say, ‘Wait, I couldn’t buy what I wanted to buy,’ or ‘I was forced to sell’ -- They’re done, Robinhood."
"Someone needs to go to jail, it’s true," he continued. "At first I wasn’t that upset but last night I saw that the shorts were still short and … It’s about time that the little guy gave it to Wall Street. It’s so gratifying to see. I’m still in shock of it actually happening."
"It’s about time that the little guy gave it to Wall Street. It’s so gratifying to see."
— Jordan Belfort
Watters then asserted that Wall Street pros had been served a dose of their own medicine and didn’t like it – and retaliated by moving to "crush" the "little guy" investors who made some money.
Belfort again agreed, noting how quickly the retail trading platforms had been shut down.
"They shut down these platforms for the little guy like the way Parler got shut down," he said, comparing the situation to that of a social media site that was popular with conservatives.
"Now, how about this one?" Belfort continued. "Google eliminated 100,000 negative reviews off of Robinhood. … I can’t believe the things that are being allowed to happen right now and it’s almost like Big Tech has impunity, Wall Street has had impunity."
"I can’t believe the things that are being allowed to happen right now and it’s almost like Big Tech has impunity, Wall Street has had impunity."
— Jordan Belfort
Regardless of how things play out in the days and weeks ahead, Belfort issued a clear warning to any novice investors who may be thinking about trying to make some fast cash.
"Please be careful," he cautioned, "because at a certain point in time the party’s gonna end for these stocks and they’re gonna drop precipitously -- and unless you’re careful you’re gonna lose a ton of money."
He added one last observation as well.
"Until someone goes to jail for this," he said of last week’s market maneuvers, "it’s gonna keep happening again and again."
Erik Muendel wants the new ESP Tea and Coffee to be what the old Killer E.S.P. should have been.
The coffee shop at 1012 King Street was a beloved, hip hangout spot in Old Town featuring sorbet, pie and espresso, that latter from which the bistro derived its name. Behind the scenes, however, its controversial owner Rob Shelton clashed with staff who alleged inappropriate behavior toward women and minors working at the shop. The conflict culminated with the entire staff quitting in early 2020 followed by the replacement staff quitting just months later.
Muendel, a local tech entrepreneur, was one of those customers who was a fan of the coffee shop but was disheartened by last year’s revelations. He’s taken over the space and the equipment and looks to reopen to the public on Monday, Feb. 1.
“There was a little fanbase, myself included, so that’s why I got involved,” Muendel said.
Landlord Ian McGrath confirmed that Shelton has left the business entirely, and said that the shop will maintain its boho vibe.
Now, Muendel said the challenge is to create the kind of coffee shop those who were regulars at the old place wanted it to be. It starts with a minor name change.
“I worked with the name to get something that was familiar but different,” Muendel said. “It was something I loved when I first started going there; I thought it was a cool name before I realized it stood for ‘espresso, sorbet, and pie.'”
The new name is ESP Tea and Coffee with a third-eye motif to represent paranormal “extrasensory perception.”
“I personally have a passion for tea,” said Muendel. “I loved the selection at Killer E.S.P. but I specialize in a special kind of tea from the Hunan Province of China called Pu-erh.”
Pu-erh, as Muendel explains it, is a type of fermented tea that comes in a cake form rather than loose leafs. ESP will be an exclusive provider of Pu-erh tea in the region, selling both the cakes and offering mini-cakes for single servings. Like wine, Muendel said Pu-erh is aged and fermented, with a bold taste and varying notes of flavor.
“It’s very high end, very exclusive, and there’s no shop in the Metro area that sells it,” Muendel said.
Almost nowhere: Blueduck Tavern in D.C. (1201 24th Street NW) also has pu-erh tea on the menu, as does Ching Ching Cha — as of 2018 at least..
The old Killer E.S.P. tea selection will be narrowed down to around 30 loose leaf teas and six Pu-erh options.
Along with the rebooted tea selection comes a return of some of the old staff.
“I was a long time customer and I got to know many of the managers and baristas over the years,” Muendel said. “[Contacting them] was one of the first things I wanted to do. I’ve run several small businesses in Old Town but I’ve never done restaurant/retail. It’s a new space for me, so it was important to get connected with past employees in the leadership position.”
Two former Killer E.S.P employees will work as the new general and assistant manager.
“I’ve put a lot of trust in them and am learning a lot from them,” Muendel said.
Muendel is planning to do a soft opening for the new cafe starting on Monday, Feb. 1.
“I’m excited to reconnect with the community,” Muendel said. “I’ve kept the core interior pretty similar, so it will be pretty familiar. It will almost feel like a parallel dimension, familiar but different and cool.”
Director Marilyn Agrelo traces the first two decades of 'Sesame Street' in a feature-length documentary that will air on HBO.
It never fails: Every few months Sesame Street does something progressive — introducing an autistic character, acknowledging COVID-19 as a serious issue, teaching empathy — and a certain subset of social media is up in arms about how their beloved childhood favorite has "gone woke," or something. It's in those moments that I like to post the 1972 clip of Jesse Jackson, then boasting an afro and a shiny medallion around his neck, leading a diverse group of children in a call-and-response recitation of "I Am — Somebody."
The Jesse Jackson clip features prominently in Marilyn Agrelo's Street Gang: How We Got to Sesame Street, a very solid if somewhat tip-of-the-iceberg documentary premiering at Sundance ahead of a spring theatrical launch and HBO premiere.
It would be fair to feel like this is a topic that has received adequate retrospective treatment over the years, including in Being Elmo: A Puppeteer's Journey, a Sundance sensation a decade ago, and the similarly puppet-centric doc Muppet Guys Talking, directed by Frank Oz. In retrospect, those films fit in nicely as complementary pieces to Agrelo's doc, which takes Michael Davis' bestseller of the same name as its inspiration. Street Gang: How We Got to Sesame Street is designed as an overview, specifically an overview of the first two decades of Sesame Street, one that invites rather than precludes more focused examinations in the future.
Buoyed to a tremendous degree by the participation of series creators Joan Ganz Cooney and Lloyd Morrisett, spry legends in their 90s, Street Gang traces the earliest origins of the Children's Television Workshop and the then-revolutionary aspirations to use television — and specifically the visual language of commercial television — as a teaching tool for kids. But let's be more precise than that, because the initial goal was to use this nascent show as a teaching tool for inner-city kids — and namely, minority kids. There was never a second in the history of the beloved show in which progressive values and diverse, ideological message-building weren't the absolute core building blocks of its DNA.
In somewhat dry, but still fascinating step-by-step fashion, the documentary explains how myriad crucial elements came together, from unsung heroes like Sharon Lerner, the show's initial research and curriculum coordinator, to amply sung heroes like Jim Henson, represented here by Lisa and Brian Henson. Many key behind-the-scenes figures are alive and eager to tell their stories — folks like longtime head writer Norman Stiles or musical parody savant Christopher Cerf — but others have passed on, so Agrelo makes sure to feature two of legendary director Jon Stone's daughters (one of whom even appeared on the show as a wee child) and memories from Nick Raposo, son of series composer Joe Raposo. Henson, Stone and Raposo are also featured in a wealth of behind-the-scenes footage and period interviews, consistently enlightening and in some instances utterly hilarious.
The in-front-of-the-camera team is fully represented as well. The era of Sesame Street depicted in Street Gang is my generation's sweet spot, and it's hard to imagine any viewer of a certain age not literally clapping for interviews with actors like Sonia "Maria" Manzano, Emilio "Luis" Delgado and Bob "Bob" McGrath. Caroll Spinney was interviewed before his death in 2019 and tracks key pieces of Big Bird's development, and there are great stories from Fran Brill, who answered Henson's initial call for female puppeteers when it became clear that having an all-male group manipulating the various synthetic characters wouldn't fly.
The first half of the doc is methodical and lacking in any sort of formal whimsy, which, given the subject matter, certainly would have been organic. Agrelo lets the interview subjects cover the information and the clips — which are triggering in the best way possible if you were raised on the show — deliver the energy. I wasn't always sure as to the rhyme or reason for which certain details get explored and others skipped over. The vintage sketch with puppet executives debating possible titles for the show or the clip with Kermit's explanation for the title feel new, but it's slightly odd that the theme song and opening credits go completely unaddressed.
I'm sure the filmmakers know as well as anybody that this material could just as easily have filled a longform miniseries in this media landscape. You have to anticipate and accept that for every one of your questions that gets answered here — for every breakdown of Big Bird's journey from ungainly dumb sidekick to lovable, childlike centerpiece — there are at least twice as many questions that go unexplored and characters whose arcs go untraced.
The approach of the first half is bloodless enough that I wondered if Street Gang would hit my tear ducts at all. I need not have worried. The home stretch is one gut-punch after another, especially with the one-two combination of the deaths of Mr. Hooper and Jim Henson. So don't fret if you think Street Gang is being too analytical, because the sobbing will come. And it isn't just sadness. Agrelo smartly saved a lot of the funniest outtakes and most happily emotional sequences, like the montage of small kids interacting with the various puppets, for the last 30 minutes as well.
If 107 minutes is maybe insufficient for something as important and layered as Sesame Street, that likely won't keep viewers from being satisfied. They'll just have to make a few more documentaries about this seminal show.
Venue: Sundance Film Festival (Premieres) Production Companys: HBO Documentary Films, Screen Media Director: Marilyn Agrelo Producers: Trevor Crafts, Ellen Scherer Crafts, Lisa Diamond Executive producers: Seth Needle, Mike Messina, David Nagelberg, Brian O'Shea, Nat McCormick, Matthew Helderman, Luke Taylor, Mark Myers, Heather Kenyon, Nancy Abraham, Lisa Heller Cinematographer: Luke Geissbühler Editor: Ben Gold 107 minutes
It has been a wild week for the stock market, with amateur traders from Reddit’s r/WallStreetBets subreddit battling traditional investors. The past several days have been full of massive swings in stocks like GameStop and AMC and app-fueled drama that’s sparked a larger debate over the nature of Wall Street as a whole.
But if you were hoping to kick back this weekend, relax, and enjoy a classic business movie about shark-like investors and over-confident Wall Street executives, you’re probably out of luck. Nearly every major finance film isn’t available to stream right now in the US (at least, not at the time of publication of this article), thanks to the capricious nature of the streaming marketplace, the increasingly fragmented libraries of studios, and the byzantine licensing deals that regulate what you can stream and where.
This week’s short stock drama have you hankering for The Big Short? You won’t find it on Netflix, Hulu, or HBO Max. Right now, you can stream it with ads on Crackle, of all services. Paramount (which distributed the film) might be saving it for Paramount Plus, which is set to launch in March, but that won’t do you any good this weekend. Instead, your only option is to buy or rent it — which, it seems, many people are doing, given that the film has shot to the No. 3 spot on iTunes.
Maybe the ups and downs of the stock market reminded you more of Martin Scorsese’s The Wolf of Wall Street, chronicling the rise and fall of investor Jordan Belfort. But the Paramount film is nowhere to be found on any streaming platform. So unless you’re willing to pony up some actual cash to buy or rent the film (which, like The Big Short, is shooting up rental charts), you won’t be enjoying Leonardo DiCaprio’s profanity-fueled chest-thumping either. The same applies to 2000’s Boiler Room, which is also absent from any streaming service.
20th Century Fox’s Wall Street is — predictably — not on Disney Plus to stream, but it’s also not available on Hulu or any other service. If you are looking for a financial film to watch this weekend, though, the sequel, Wall Street: Money Never Sleeps, is on Amazon Prime. There’s also Margin Call, which is streaming on Peacock (for now).
But the dearth of classic Wall Street films isn’t a unique issue. It’s one that streaming services have been grappling with in recent years, as big players like Netflix and Hulu have been less encompassing and streaming services have focused more on building up libraries of original content. There was a similar issue during the early days of the COVID-19 pandemic, when millions of viewers looking to watch Steven Soderbergh’s 2011 film Contagion were frustrated that the film wasn’t available to stream anywhere.
The fact that iconic Wall Street films will similarly miss the big moment around ambitious investors and skeevy short selling is indicative of a bigger problem with streaming in 2021, one that will likely continue to get worse as more and more studios continue to reclaim their content for their own services.
Then again, it’s almost fitting that the only way to watch The Wolf of Wall Street or The Big Short this weekend is to pay a little extra cash back into the big financial machine.
Robinhood pitched itself to investors as the antithesis of Wall Street. It didn’t say that it also entirely relies on Wall Street. This past week, the two realities collided.
The online trading app Robinhood became a cultural phenomenon and a Silicon Valley darling with a promise to wrest the stock market away from Wall Street’s traditional gatekeepers and “let the people trade” — making it as easy to put millions of dollars at risk as it is to summon an Uber.
This past week, in the middle of a market frenzy pitting amateur traders against hedge fund bigwigs, that veneer began to chip. As it turned out, Robinhood was at the mercy of the very industry it had vowed to upend.
The frenzy morphed into a crisis when legions of armchair investors on Robinhood, who had been buying up options and shares of GameStop, a video game retailer, enlarged those bets and also began making big trades in other stocks, including AMC Entertainment.
As the trading mania grew, the financial system’s risk reduction mechanisms — managed by obscure entities at the center of the stock market called clearinghouses — kicked in on Thursday, forcing Robinhood to find emergency cash to continue to be able to trade. It had to stop customers from buying a number of heavily traded stocks and draw on a more than $500 million bank line of credit. On Thursday night, the company also took an emergency infusion of more than $1 billion from its existing investors.
A high-flying start-up suddenly looked a lot like an overwhelmed, creaky company.
“From a marketing standpoint they position themselves as new, innovative, cool,” said Peter Weiler, the co-chief executive of the brokerage and trading firm Abel Noser. “What I think everyone is missing is, when you peel the onion back they are just a heavily regulated business.”
Robinhood’s distress follows a familiar narrative: A Silicon Valley company that promised to disrupt an industry ends up being overcome by the forces it unleashed and has to be reined in by regulators, or in this case, the industry it promised to change. Its arc is not all that different from Facebook and Google, which changed the ways in which billions of people socialize and search for information, but are now caught in the cross hairs of lawmakers and an angry public.
“They were trying to change the rules of the road without understanding how the road was paved and without any respect for the existing guard rails,” said Chris Nagy, a former trading executive at TD Ameritrade and the co-founder of the Healthy Markets Association, a nonprofit that seeks to educate market participants. “It ended up creating risk for their customers and systemic risk for the market more broadly.”
The fiasco will almost certainly have consequences for the company. The Securities and Exchange Commission said on Friday that it would closely review any actions that may “disadvantage investors or otherwise unduly inhibit their ability to trade certain securities.” Lawmakers on both sides of the aisle called for hearings over complaints that customers were shut out of trades.
After Robinhood limited some trading on Thursday and the price of the stock plunged, furious users flooded online app stores with vitriolic reviews, with some accusing Robinhood of doing the bidding of Wall Street. Others sued the company for the losses they sustained. Robinhood’s continuing vulnerability, even after raising $1 billion, became clear on Friday when it restricted trading in more than 50 stocks.
“It was not because we wanted to stop people from buying these stocks,” Robinhood said in a blog post on Friday night. Rather, the start-up said, it restricted buying in volatile stocks so that it could “comfortably” meet deposit requirements imposed by its clearinghouses, which it noted had increased tenfold during the week.
None of this seems to be slowing down its growth. Even as Robinhood’s actions angered existing customers, it was winning new ones. The app was downloaded more than 177,000 times on Thursday, twice the daily download rate over the previous week, according to Apptopia, a data provider, and it had 2.7 million daily active users on its mobile app that day, its highest ever. That’s more than its rivals — Schwab, TD Ameritrade, E*Trade, Fidelity and Webull — combined.
All Growth, Few Guardrails
The Robinhood app.Amy Lombard for The New York Times
Controversy is not new for Robinhood.
The two Stanford classmates who created the company in 2013 said from the beginning that their focus was on “democratizing finance” by making trading available to anyone. To do so, the Menlo Park, Calif., company has repeatedly employed a classic Silicon Valley formula of user-friendly software, brash marketing and a disregard for existing rules and institutions.
Online brokers had traditionally charged around $10 for every trade, but Robinhood said that customers of its phone app could trade for free. The move drew in hordes of young investors.
In building its business, the company disregarded academic research showing how frequent, frictionless trading generally does not lead to good financial outcomes for investors. The risks to customers became clear last summer when a 20-year-old college student’s suicide note blamed a six-figure trading loss for his death.
Robinhood also popularized options trading among novices. An option is generally cheaper than buying a stock outright, but has the potential to lead to much bigger and faster gains and losses, which is why regulators and brokers have traditionally restricted trading in these financial contracts to more sophisticated traders.
Robinhood’s marketing, meanwhile, papered over the fact that its business model, and the free trading, were paid for by selling customer’s orders to Wall Street firms in a system known as “payment for order flow.” Big trading firms like Citadel Securities and Virtu Financial give Robinhood a small fee each time they buy or sell for its customers, typically a fraction of a penny per share. These trading firms make money, in turn, by pocketing the difference, known as the “spread,” between the buy and sell price on any given stock trade, and the more trades they handle, the greater their potential revenue. Many other online brokers rely on a similar system, but Robinhood has negotiated to collect significantly more for each trade than other online brokers, The Times has found.
The mismatch between Robinhood’s marketing and the underlying mechanics led to a $65 million fine from the S.E.C. last month. The agency said that Robinhood had misled customers about how it was paid by Wall Street firms for passing along customer trades.
Robinhood has also run afoul of regulators as it rushed to release new products. In December 2018, the company said it would offer a checking and savings account that would be insured by the Securities Investor Protection Corporation, or S.I.P.C., which protects investors when a brokerage firm fails.
But S.I.P.C.’s then-chief executive said he hadn’t heard about Robinhood’s plan, and he pointed out that the S.I.P.C. doesn’t protect plain-vanilla savings accounts — that would be the job of the Federal Deposit Insurance Corporation. It took almost a year for Robinhood to reintroduce the product, saying in a blog post that it “made mistakes” with its earlier announcement.
“They went in trying to make big splashes and they often had to get reeled back in,” said Scott Smith, a brokerage analyst at the financial firm Cerulli Associates.
The Clash With Wall Street
A small protest was held on Thursday in front of the New York Stock Exchange after Robinhood curbed trading in GameStop.Gabriela Bhaskar for The New York Times
Robinhood’s ambitions and amateurism collided in recent weeks as small investors, many of them on a mission to challenge the dominance of Wall Street, used its free trades to push up the stock of GameStop and other companies. Rampant speculation on options contracts helped drive the rise of GameStop’s shares from about $20 on Jan. 12 to nearly $500 on Thursday — a rally that forced Robinhood to hit the brakes on its own customers.
One institution that tripped up Robinhood this past week is a clearinghouse called the Depository Trust & Clearing Corporation. Owned by its member financial institutions including Robinhood, the D.T.C.C. clears and settles most stock trading, essentially making sure that the money and the shares end up in the right hands. (Options trades are cleared by another entity.)
But the D.T.C.C.’s role is more than just clerical. Clearinghouses are supposed to help insulate a particular market from extreme risks, by making sure that if a single financial player goes broke, it doesn’t create contagion. To do its job, the D.T.C.C. requires its members to keep a cushion of cash that can be put toward stabilizing the system if needed. And when stocks are swinging wildly or there’s a flurry of trading, the size of the cushion it demands from each member — known as a margin call — can grow on short notice.
That’s what happened on Thursday morning. The D.T.C.C. notified its member firms that the total cushion, which was then $26 billion, needed to grow to $33.5 billion — within hours. Because Robinhood customers were responsible for so much trading, they were responsible for footing a significant portion of the bill.
The D.T.C.C.’s demand is not negotiable. A firm that can’t meet its margin call is effectively out of the stock trading business because D.T.C.C. won’t clear its trades any more. “If you can’t clear a trade, you can’t trade a trade,” said Robert Greifeld, the former chief executive of Nasdaq and current chairman of Virtu Financial. “You’re off the island. You’re banished.”
For veteran players like Citadel Securities and JPMorgan Chase, generating additional hundreds of millions of dollars on short notice was not a problem. But for a start-up like Robinhood, it was a mad scramble.
While it cobbled together the needed cash from its credit line and investors, Robinhood limited customers from buying GameStop, AMC and other shares. Allowing its investors to sell these volatile stocks — but not buy them — reduced its risk level and helped it meet requirements for additional cash, Robinhood said in its blog post.
Ultimately, the company succeeded in pulling together roughly $1 billion from some of its existing investors, including the venture firms Sequoia Capital and Ribbit Capital. As a sweetener, Robinhood issued special shares to those investors that will give them a better deal when the company goes public, as early as this year.
But the quick deal left more than one observer scratching their heads.
“How does an online broker find itself in need of an overnight infusion of a billion dollars?” asked Roger McNamee, a longtime investor who co-founded the private-equity firm Elevation Partners. “There’s something about this that says somebody is really scared about what’s going on.”
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