This was BIG news for foreign exchange markets and international relations. I don’t think much more has to be said, so I’ll let Forbes take over and give you the quick summary:
“After a tumultuous four-and-a-half years of back and forth between the UK and EU, a Brexit deal has been struck just days before Britain’s official separation from the bloc at the end of the year, laying out a future trade relationship between both parties and swerving what could have been an abrupt severance and uncertain future.
The deal, yet to be published and expected to encompass everything from travel rights and fair competition for businesses, to security cooperation and data protection, will come into force from January 1.
The deal caps off an 11-month transition period designed to hammer out a trade deal, after the UK left the EU on January 31.
UK lawmakers, currently on break for Christmas, are expected to vote on the [2,000-page]] deal on December 30, the day before transition period ends on December 31, while EU lawmakers will vote on the deal in the New Year—after it comes into effect.
There was an awful lot at stake, as both the UK and EU stood to suffer if the Brexit deal failed to go through:
“A no-deal Brexit would have had challenging implications for day-to-day things like travel and food prices too with immediate tariffs on goods at the border, while billions in EU funding for science and research, now in the spotlight thanks to the coronavirus pandemic, would have been at greater risk of disappearing.”
As you can imagine, this had profound implications on currency trading yesterday. Financial Times reports on the massive short-term gain made by the British Pound:
“[The British Pound] had traded near its highs of the year against the dollar on Thursday as expectations grew of a deal announcement. The currency rose 0.5% in early London trading to $1.3559 before easing slightly to close at $1.354.”
Both sides may have not gotten exactly what they wanted, but a compromise is ultimately better than nothing.
Hopefully, all of the nasty politics and last-minute panicking can finally be put aside. Hopefully, the UK can breathe a heavy sigh of relief and start worrying about their own problems (such as the rise of the new COVID-19 strain that’s 70% more transmissible).
And hopefully, the world is one step closer to being more peaceful.
What do YOU think about the Brexit deal going through at long last? Do you agree or disagree with it, and why? Reply to this newsletter and let us know where you stand!
Should the UK Be Worried About the New “B117” COVID-19 Mutation!?
As I mentioned in the introduction of today’s newsletter, the United Kingdom is in a state of complete disarray over the emergence of the COVID-19 “B117” mutation. The entire country is in its most restrictive lockdown conditions possible and several nations worldwide have blocked off their borders to UK travelers.
But Asia Times writer Jonathan Gornall argues that all of this panic is unnecessary, noting that the coronavirus has mutated over 3,600 times since December 2019:
“As things stand, there is no evidence whatsoever that this new strain of the virus causes a more severe form of the disease COVID-19, or leads to more hospitalizations, than any other strain that has emerged.
There is also no evidence that the new strain alters the body’s immune responses, which means it is just as vulnerable to the vaccines now coming on stream as any other variant of SARS-CoV-2.
B117 has not, in other words, mysteriously developed a way to beat the simple but effective precautions with which we are all now so wearily familiar – diligently washing hands, wearing masks in public, keeping our distance from others and avoiding gatherings of people outside our bubbles.”
In other words, the B117 mutation of COVID-19 is not more resistant to vaccines or deadlier in nature than the other thousands of mutations existence. With that said, B117 has done a good job of showing just how piss-poor the country’s response to the virus has been.
Will American Airlines’ Latest Expansion End Up Being a Disaster?
American Airlines recently announced several new routes between Fort Lauderdale, Florida and Boston, Los Angeles, and New York. For those of you who are deep in the US aviation industry, this is a territorial grab against their Florida-dominating competitor JetBlue Airways.
Yet as The Motley Fool points out, this latest expansion may be a move they will come to later regret:
“By the end of last quarter, the company had $47.5 billion of debt, pension, and lease liabilities, offset by just $8.3 billion of unrestricted cash and investments. American expects daily cash burn to average about $30 million in the fourth quarter, further weakening its balance sheet.
American’s Fort Lauderdale expansion is almost certainly doomed to ring up big losses. JetBlue gets better marks for customer service, has lower unit costs, and has dramatically higher market share in New York (especially at JFK) and Boston than American Airlines.
All of this adds up to a recipe for American Airlines to generate significantly lower unit revenue than JetBlue on its new Fort Lauderdale routes while incurring higher costs.”
To put all of this in simpler terms, American Airlines is NOT in a position where they can afford to lose more money from adding new flights to their route network. It’s only six additional trips, but American Airlines needs to start pinching pennies instead of aggressively spending what little liquidity they have left.
It’s like the old saying goes: “Revenge is like holding a hot piece of coal in your hand – the longer you hold on to it, the more it burns you.”
In an Unexpected Move, Hawaiian Airlines Also Expands Their Flight Roster
I can’t say if expanding is a bad financial move for every single airline. It may be the case that aggressively adding more flights is actually a smart move for some of them.
Perhaps it will work out for Hawaiian Airlines, who has added new nonstop flights to Honolulu from three major airports: Ontario, California, Austin, Texas, and Orlando, Florida.
CEO Peter Ingram spoke to CNBC recently and commented on this latest move:
“The reason it’s the time to announce three new routes is because… we’re very optimistic about 2021… These are places we’ve been looking at for a long time. They have good strong demand for Hawaii.
I’ve seen coverage on your air about how Austin is booming as a tech center these days, and we think that many of those people are going to want to travel to Hawaii… The same goes for Orlando, which has a growing population.
In a period where the depth of some of our traditional routes may not be what it was, it’s a good opportunity for us to look at broadening our network, and we see great opportunities from all of these, not just for next year but for the long term.”
Makes sense when you consider that all three cities are slated to become major tech hubs in this coming decade.
Several tech investors and high-profile companies are moving out of expensive cities and re-locating to greener pastures, with Austin arguably becoming the next “Silicon Valley” if this exodus continues on.
Furloughed Employees from Airlines Are Getting Their Jobs Back!
Regardless of how the negotiations around the $900 billion stimulus bill goes (as part of the $2.4 trillion package that includes government funding), US airlines will most definitely get their $15 billion in relief aid.
According to TravelPulse, this is good news for the disenfranchised employees:
“Part of the stipulations for accepting the aid was that American and United had to bring back more than 32,000 employees it furloughed on Sept. 30. The companies say the additional funds are enough to pay those workers through March 31, 2021.
United CEO Scott Kirby and President Brett Hart sent a letter to employees saying the airline will restore ‘temporary employment’ to workers who were previously employed with the carrier… American Airlines laid off 9,000 employees and not only is hiring them back but giving them retroactive pay.”
Keep in mind that this generosity only applies to full-time employees. It is not known if sub-contractors will be able to receive these same benefits and get their normal working hours aback.
But hey, good news is better than bad news!
Sarasota, Florida: The BEST Place in America to Retire!?
Every year, the “Best Places to Retire in the US” list is released by US News and World Report. It’s the must-read list for anybody nearing retirement age and seeking new grounds to live out the final years of their lives.
This year, Florida appears to be the hotspot for retirement, as just over half of the Top 25 rankings were occupied by one of their cities. And just look at the top four: Sarasota, Fort Myers, Port St. Lucie, and Naples (in that order). If you really want to have your mind blown, the top two cities were the same as the 2019 list!
Travel + Leisure reports with more details on why Sarasota took the #1 spot:
“Sarasota’s beaches, parks, cultural attractions, shops, and restaurants make it popular with visitors as well as residents.
The methodology used in the study factors in health care quality, retiree taxes, desirability, job market ratings, and a happiness measure, based on a public survey of individuals of retirement age and those nearing retirement age.
…Florida’s affordable homes, low taxes, and high ratings for happiness and desirability placed the state at the top of the list. Sarasota’s increases in desirability and job market scores enabled the city to edge out Fort Myers for the first place spot for 2020-2021.”
I’m curious to know: Would YOU retire in a Floridian city? Why or why not? Reply to this newsletter and let us know what you think is the best place to retire in America!