Chipotle has the Pandemic all Wrapped Up
COVID-19 Initial Impact Report
Chipotle Mexican Grill Inc.
NYSE: CMG
Analyst Note
Updated Nov 12, 2020
COVID-19 Net Benefit Score: -1.46
Financial Stress Test Ratings:
Free Cash Flow: D-
Interest Coverage: A
Summary
Chipotle is a chain of well over 2,000 fast casual restaurants specializing in tacos and Mission-style burritos that are located primarily in the U.S. and also Canada and Europe (namely the U.K., Germany and France). Founded in 1993 by Steve Ells, he was a line cook in San Francisco and it was there that he observed the popularity of taco stands and burritos in the Mission District (hence the name Mission-style). The first restaurant opened near the campus of the University of Denver and a further 15 more opened in that state within 5 years before eventually expanding across the country, aided in no small part by McDonald’s making an initial minority investment in the Company in 1998 (and by 2005 the burger giant’s investment had grown to 90%, basically meaning that it owned Chipotle). Yet, just one year later in 2006, McDonald’s decided to get out of the Chipotle business and sell all its shares of Chipotle back to the chain for reasons including wanting to focus on its core business. Since then Chipotle has had to endure various challenges such as facing strong competition from other fast casual chains trying to replicate the Chipotle model, but more harmfully dealing with the fallout of data breaches in which customer credit card payment information was stolen, as well as multiple issues with food safety that involved E. Coli, norovirus, salmonella, and even hepatitis outbreaks. However, despite these tribulations, today Chipotle ranks 12th on the Restaurant Business and Technomic report (which McDonalds tops), only falling behind Taco Bell in the Mexican food category.
Market Data
Financial Data Stated in Thousands
Share
Price
1254.80
Market
Capitalization
35,022,723
Net
Debt
2,397,752
Total
Debt
3,003,374
Cash &
Equivalents
605,622
Enterprise
Value
37,420,475
Basic Shares
O/S
27,911.00
Stock Chart
Chipotle has the Pandemic all Wrapped Up
Chipotle Mexican Grill Inc. (“Chipotle” or “the Company”) restaurants traditionally have aimed to provide an atmosphere of a casual, sit-down dining experience, and that’s something that’s been greatly affected by the Covid-19 pandemic where dining rooms across the globe have been forced to close and only reopen again but under tighter government controls and restrictions. However, Chipotle has invested digitally over the last several years, allowing it to pivot its business to greater effect, namely in taking advantage of the increasing WFH/SAH trends, especially when their typical target demographic of 18 – 29 year olds are arguably the most tech-savvy and online-oriented, so turning to technology first and foremost in order to satisfy their hunger pangs with popular, cheap and quick food offerings that Chipotle provides in abundance.
The Company’s balance sheet is solid, with several ratios pointing to its ability to service debt obligations quite comfortably, even though it has little to no debt to even speak of. This bodes well for Chipotle in its ability to research and develop other avenues that aim to regain its lost revenue but without compromising on paying for key operating expenses along the way. Ultimately, Chipotle is able to service its hungry consumers now and into the future, embracing the ‘new normal’ a lot better than many of its food service competitors and peers.
➤ Key Factors: Chipotle’s digital presence is strong and is looking to grow ever stronger, which marks it out as a minor example of a bricks-and-mortar restaurant chain that has successfully navigated the varying impacts to its dining-in locations via closure and/or restricted access. Yet being in the food service sector means unavoidable additional costs associated with increased health and safety regulations.
➤ Financial Stress Test: The Company is in a reasonably good position financially, having focused on reducing non-essential controllable costs and judiciously spending on return generating projects to preserve its liquidity (having added hundreds of millions of dollars worth of liquidity from tax deferrals in the first quarter of 2020 as well as untapped credit facility in the second quarter).
Chipotle Pandemic Impact Factors Review
NXTanalytic considers 7 factors and 30 specific indications that we believe will impact companies during and after the Covid-19 pandemic. These factors include: Online Business Profiles; Dealing with Consumers In Person; Effect of Increased Health Regulations; Supply Chain Risks; Changes and Disruption in Tourism, Travel and Hospitality; Increased Demand for Health Care and Health Safety; WFH and SAH.
COVID-19 Factor Analysis
Net
Benefit
NEGATIVE
Total Regression
Score
-1.46
Covid-19
Risk Rate
-9.0
Covid-19
Benefit Rate
7.54
Pandemic Impact Factor Analysis
Chipotle is traditionally not an online company but has nonetheless succeeded in being profitable via its digital presence, such that in continuing to invest in technology the Company can only benefit further from the ever-growing WFH/SAH trends that prefer the fast-casual (yet still quality) food options that Chipotle offers (aided by establishing key partnerships with companies such as Grubhub and Uber Eats to help deliver its product to more and more people).
The Company is also finding new ways to connect with customers through initiatives like its rewards programs and modernizing drive-thru lanes using mobile order service (called “Chipotlanes”), thus growing its bottom line with lean margins and well-run operations in the process.
Relevant Factors
➤ In Person Businesses, Crowds & Groups: Chipotle has a significant number of brick-and-mortar assets spread throughout North America and Western Europe and so the pandemic has inevitably impacted its operating expenses, notably in the form of closure costs. Despite advancements made to their online presence it is still going to have to work hard and prove itself beyond its sit-down and dine-out traditional business model label. Certainly, it will be a long time before revenues rebound to levels they once were (especially as the expected 2nd and even 3rd pandemic waves serve to repeatedly disrupt restaurant operations overall).
➤ Increased Health Regulations: With radical changes happening and continuing to happen in the food industry in order to protect the integrity of the supply in response to increasing health safety regulations the costs involved will have to be carried by companies like Chipotle, which will undoubtedly disrupt its cash flows by way of suppressing them. Also, until a vaccine is broadly distributed and global restrictions are greatly eased, the industry as a whole will not be able to return to full normal, and that particular time frame is going to be counted in terms of years, not months.
➤ Online Presence: Chipotle has made great strides in developing its digital business (way before the pandemic first hit) and continuing to grow it (for instance, it announced that its Complete Customization Chipotle app feature will allow users to make any ingredient light, standard or extra), and with the added benefits of having its targeted Gen Y and Z generation consumers be the ones leading the way in the delivery marketplace, plus, being a QSR in terms of providing cheap and cheerful menu items that this demographic likes and demands, it all equates to an uptick in digital sales.
➤ Supply Chain: The Company’s restaurants are found both nationally and internationally, namely the U.S., Canada, U.K., Germany and France. Although all of these countries have relatively strong healthcare systems and high food standards, nonetheless there is added global supply chain risk pressure with the further possibility of needing to reorganize supply chains at some point, thus increasing operating costs. Adding more complexity is the Company’s achievement of moving to only non-GMO ingredients for its U.S. restaurants; while a ‘good thing’ from a ESG perspective, it still serves to potentially create more roadblocks (for instance, there were supply problems in early 2020 when a pork supplier wasn’t complying with its animal welfare standards).
Pandemic Factor Screening and Scoring
NXTanalytic research is based on the thesis that consumer and business behaviour and practices will be changed significantly as a result of the pandemic and its aftermath. We have developed a group of seven major factors that we believe indicate whether a company has an increased risk or reward profile.
We approach our analysis in the context of three time periods:
1. Near term effect of the pandemic
2. A Resulting Recession/Bear Market
3. Longer Term Psychological Effects: Changes in consumer and business behavior and practices as a result of the pandemic.
Scoring and Rating for Factor Exposure
We objectively score businesses based on positive and negative factors and how significantly they may be affected by each applicable factor. Our model generates a total regression score by generating a coefficient of the risk and reward scores given to the company by an experienced analyst.
We generate a Total Regression Score, a Covid-19 Risk Rate and a Covid-19 Benefit Rate.
➤ Online Businesses: Due to social distancing and lockdowns and Work From Home, businesses that operate online, or produce the tools for companies to adapt to more demand for online services should experience a surge in demand due to the coronavirus, Covid-19 outbreak. Consumers will more rapidly move online across many categories. Trends already in place will accelerate. Companies whose businesses are online or are rapidly moving online are better prepared to serve the market while those based on bricks and mortar are more likely to be challenged.
➤ Dealing with Consumers In Person: Businesses that deal with large numbers of people in close proximity to each other will be negatively affected long term. Regardless of how long the pandemic will continue, its psychological, economic and financial effects, have inevitably altered the perception of risk from exposure to large group settings. Consumers are going to avoid gathering in large groups – particularly individuals over 60. We believe consumers will be fearful of the virus and we are assuming that even when the rate of infection has slowed through social distancing and other “curve flattening” efforts, the virus will be a threat for more than a year or until widespread vaccination has taken place. Even after vaccination efforts minimize the immediate threat consumer behavior will be changed long term and concern over future pandemics will be heightened for many years.
➤ Increased Health Regulations and Restrictions: Restrictions on travel and trade as a result of the pandemic are likely to remain in place for months or years and public health regulations will become stricter and more widespread. It’s highly probable that enhanced screening, permit and visa requirements, reductions in ease of travel and transport of goods will be impacted or implemented. Governments, in an effort to restore consumer confidence, will enforce new regulations designed to protect consumers from the current pandemic and future pandemics will overshoot and result in impairing businesses who rely on international supply chains, movement of large numbers of people, or are otherwise perceived as presenting a high risk of infection to consumers.
➤ Supply Chain and Cross Border Risks: The fact the virus can remain alive for many days on inanimate objects and surfaces is a good example of a pending supply chain issue. Perishable product supply chains designed to move items from producer to consumer in days could be significantly impacted. Overall we believe that businesses that ship goods internationally or rely on global supply chains are at risk of business interruption as the pandemic circulates globally. Further, companies with long international supply chains in countries with poor healthcare systems will likely be pressured to replace suppliers and build new supply chains closer to home markets in order to avoid new border restrictions and the potential of localized lockdowns put in place to handle future outbreaks.
➤ Travel, Tourism, Hospitality and Entertainment: The most obviously impacted sectors are businesses on the front line of day to day consumer interaction. Restaurants, coffee shops, event venues, bars, pubs, hotels, resorts, etc could experience a prolonged or permanent change in consumer demand or be required to spend significantly on technologies and services designed to mitigate consumer concerns over health risks. Consumers will likely continue to avoid contact with crowds or reduce visits to brick and mortar hospitality and entertainment focused businesses. Companies in these sectors will need to change business practices and deploy technologies and systems designed to protect customers – many of these do not exist yet or are expensive.
➤ Work From Home and Stay At Home: The most obvious winners are companies who enable consumer cocooning or Work From Home (WFH) and Stay at Home (SAH) behaviour. As these social and business trends become entrenched, demand for a range of new solutions for managing a distributed workforce will provide existing platform companies and new entrants with opportunities to grow market share and fill demand. Companies not offering WFH opportunities will suffer, compromising their ability to attract the best employees. The delivery economy, pioneered by the likes of Amazon.com and any company that focuses on in home exercise, consumer electronics, home entertainment and ecommerce are well positioned to profit from a long term trend towards SAH behaviour. The trend towards non-brick and mortar retail, will accelerate.
➤ Health, Medicine & Safety: Companies focused on the health and safety of consumers and crowds will be positioned to assist businesses who will require new and robust health security solutions in order to attract customers. Heightened focus on health and virus risks will likely spur expenditures on antiviral medications and treatments, vaccines, screening systems and devices, rapid testing, containment and quarantine solutions and services, and telemedicine. Demand for antimicrobial or antiviral materials or other “bio tech materials” and products is likely to be strong in a post pandemic world.
Financial Stress Test
FINANCIAL RATIOS RATINGS
Excellent
Strong
Satisfactory
Poor
Low Quality
High Risk
Free Cash Flow: C
FINANCIAL RATIOS RATINGS
Excellent
Strong
Satisfactory
Poor
Low Quality
High Risk
Interest Coverage: C+
Financial Ratios
FYE –
Dec. 31st
2020 Q2
Financial
Leverage
3.15 X
Debt-to-
Capital
0.64 X
Debt-to-
Assets
0.56 X
Debt-to-
Equity
1.76 X
EBIT/
Interest
7.93 X
EV/
FCF
268.29 X
NXTanalytic reviews a series of financial measures designed to provide a snapshot of the company’s financial health and ability to deal with the challenges or opportunities created by the pandemic, the recession and post pandemic economic environment.
EV/FCF Ratio (when CFFO is 90% of actual): D-
EV/FCF Ratio (when CFFO is 80% of actual): D-
EV/FCF Ratio (when CFFO is 70% of actual): D-
NXTanalytic completes a simple cash flow stress test by reducing Cash Flow From Operations by three levels: a 10%, 20% and 30% reduction. We then rate the EV/FCF ratio. We use the EV/FCF ratio to assess the total valuation of the company in relation to its ability to generate cash flows as a measure of a company’s ability to service its debts from cash flow.
Our opinion
Chipotle entered the first quarter of 2020 in a strong financial position (with $909.2 million in cash, restricted cash, and short-term investments as of March 31, 2020), with other notable highlights including revenue increasing to $1.4 billion (an increase of 7.8% compared with the same quarter in 2019), driven by a 3.3% increase in comparable restaurant sales, and digital sales growing 80.8% year over year to $371.8 million (the Company’s highest ever quarterly level), representing 26.3% of sales. This indicates Chipotle had effectively moved swiftly towards driving investments into digital and delivery, designed to reduce friction while increasing convenient access. This included reprioritizing marketing efforts by offering free delivery from March 15 til at least early May, shifting media spend from live sports to more online and streaming platforms and announcing a national delivery partnership with Uber Eats. As a result, digital sales for the month of March grew 102.6% year over year and represented 37.6% of sales.
Into the second quarter and Chipotle continued to maintain its strong financial position (with an increased $934.6 million in cash, short-term investments and restricted cash, along with a $600 million untapped credit facility). Digital sales continued to grow 216.3% year over year to $829.3 million (breaking the Company’s highest ever quarterly level from the previous quarter), representing 60.7% of sales. Chipotle stated that it had raised its digital awareness further via advertising, new delivery partnerships with Uber Eats and Grubhub, as well as expanding its digital capabilities into Canada to attract new customers. Notably, partnering with all the major third-party delivery aggregators had led to an increase in orders, a reduction in delivery time and cancellations and an improvement in overall customer ratings. While its revenue remained at $1.4 billion (though was a decrease of 4.8% compared to the same quarter of 2019 and included a decline of 9.8% in comparable restaurant sales), cadence of monthly comparable restaurant sales during the quarter had markedly improved month-to-month (i.e. April at -24.4%, May at -7.0% and June at +2.0%). Also, comparable restaurant sales in July had continued to improve and were up 6.4% month to date including about a 1.4% positive impact from the July 4th weekend and about a 2.7% negative impact due to under-performing restaurants in the Northeast and international markets, as well as restaurant closures due to Covid-19.
In having reasonable enough financials overall, Chipotle is worthy of investment interest but with the caveat that its current stock price is well over 2.5 times that of its mid-March pandemic low, meaning there is a need to question its valuation. Furthermore, as of mid-September, shares were up 53% year to date, extending the rally that has seen the stock gain over 300% in the past three years. The trailing price-to-earnings ratio was also a very high 141, which would be considered excessive by most traditional measures. However, that premium also shows great confidence in the company’s future, of there being confidence in building new locations, of developing new order fulfillment methods and in finding new ways to connect with diners. In attesting that it has enough cash to sustain itself if the recovery takes longer than expected, making additional adjustments as needed, in the long-term Chipotle is indicative of a relatively safe bet of an investment despite the somewhat volatile nature of the industry it operates in.
Stress Test Highlights
➤ Debt-to-Assets: Chipotle has a good debt-to-assets ratio at 0.56 X to show it has a solid balance sheet along with the rest of its leverage ratios at suitably low values (arguably, the debt-to-equity ratio at 1.76 X is suggestive of the Company being slightly more leveraged by debt than is ideal).
➤ Interest Coverage: An interest coverage ratio at 7.93 X translates to the Company having very stable revenues from which it can comfortably continue to pay its interest expenses on outstanding debt.
➤ EV/FCF: Chipotle has a very high Enterprise Value-to-Free Cash Flow ratio at 268.29 X, strongly suggesting it is a company that is overvalued (and its current share price is reflective of the stock not being at any discernible discount). Also, a theoretical decrease in the Company’s Cash Flow From Operations (CFFO), from actual down to 70% of actual, doesn’t change/worsen the D- grading, so while still ‘poor’, nonetheless, the Company expects to generate positive cash flow for the rest of the year based on the trend of comparable restaurant sales continuing to improve.
Financial Stress Test Analysis
NXTanalytic completes a financial analysis of each company using data taken from the most recently audited financial statements. Our goal is to provide a snapshot of a company’s financial condition and ability to survive a prolonged period of reduced growth, and/or finance growth or restructuring to take advantage of new opportunities.
Cash Flows as a Focus of Screening
Debt Servicing
➤ Interest Coverage Ratio = EBIT / Interest Expense: A powerful measurement of the ‘survivability’ of a corporation. It reflects the ability of a company to pay interest on the outstanding debt and is thus an important assessment of short-term solvency. If the ratio is underneath 1.0 X, this means that the company cannot currently cover interest charges on its debt from current operational income. This could mean that the company is funding itself through the sale of assets or further financing; which are unsustainable. The higher the ratio, the higher probability to survive in the future financial hardship.
Free Cash Flow Valuation
➤ Interest Coverage Ratio = EBIT / Interest Expense: A powerful measurement of the ‘survivability’ of a corporation. It reflects the ability of a company to pay interest on its outstanding debt and is thus an important assessment of short-term solvency. If the ratio is underneath 1.0 X, it indicates the company cannot currently cover interest charges on its debt from operational income. This could mean that the company is funding itself through the sale of assets or further financing; which are unsustainable measures. The higher the ratio, the higher the company’s ability to survive financial hardship.
➤ EV/FCF Ratio = Enterprise Value / Free Cash Flow: Based on our debt servicing thesis we primarily value companies based on their cash flows. We rely on the EV/FCF ratio to assess the total valuation of the company in relation to its ability to generate cash flows. Enterprise Value is the value of the entire company, both its debt and traded equity. When this is divided by its Free Cash Flow we see how much we are paying to buy that cash flow. The lower the ratio the cheaper it is to “buy” the cash flows of the company.
Leverage Ratios
Debt ratios are classic balance sheet health measuring tools used to indicate potential risks to future financing ability (ie. violating debt covenants) or as a barometer of the defensive position of the company if cash flows are ever an issue. They are long-term solvency metrics and reflect the degree to which the company is financing its operation through debt versus equity. If a company has poor leverage ratios (too much debt), it might need to aggressively finance its growth through debt and as a result require more and more cash flow from operations to adequately service its debt. Our view is that companies with less debt are more likely to be able to withstand challenges or fund opportunities created by the pandemic.
➤ Financial Leverage Ratio = Total Debt / Total Equity: The Financial Leverage Ratio is a measure of the degree to which a company is financing its operations through debt. More specifically, it reflects the ability of shareholder equity to cover all outstanding debts in the event of a business downturn.
➤ Debt-to-Capital Ratio = Total Debt / (Total Debt + Total Shareholder’s Equity): The Debt-to-Capital ratio measures the amount of financial leverage in a company. This tells us whether a company is prone to using debt financing or equity financing. A company with a high Debt-to-Capital ratio, compared to a general or industry average, may be impared due to the cost of servicing debt and therefore increasing its default risk.
➤ Debt-to-Equity Ratio = Total Debt / Total Shareholder’s Equity: A high Debt-to-Equity ratio generally indicates that a company has been aggressive in financing its growth with debt. This can result in volatile earnings as a result of additional interest expense. If the company’s interest expense grows too high, it may increase the company’s chances of a default or bankruptcy.
➤ Debt-to-Assets Ratio = Total Debt / Total Assets: The Debt-to-Assets ratio shows the degree to which a company has used debt to finance its assets. This ratio can be used to evaluate whether a company has enough assets to meet its debt obligations. A ratio greater than 1 indicates that the entire company’s assets are worth less than its debt.
CONFLICT OWNERSHIP RELATED DISCLOSURES
Does the Analyst or any member of the Analyst’s household have a financial interest in the securities of the subject issuer?
No
Does the Analyst or household member serve as a Director or Officer or Advisory Board Member of the issuer?
No
Does NXTanalytic or the Analyst have any actual material conflicts of interest with the issuer?
No
Does NXTanalytic and/or one or more entities affiliated with NXTanalytic beneficially own common shares (or any other class of common equity securities) of this issuer which constitutes more than 1% of the presently issued and outstanding shares of the issuer?
No
Has the Analyst had an onsite visit with the Issuer within the last 12 months?
No
Has the Analyst been compensated for travel expenses incurred as a result of an onsite visit with the Issuer within the last 12 months?
No
Has the Analyst received any compensation from the subject company in the past 12 months?
No
U.K. DISCLOSURES
This research report was prepared by NXTanalytic Inc., which is not a member of the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund. NXTANALYTIC IS NOT SUBJECT TO U.K. RULES WITH REGARD TO THE PREPARATION OF RESEARCH REPORTS AND THE INDEPENDENCE OF ANALYSTS. The contents hereof are intended solely for the use of, and may only be issued or passed onto persons with which NXTanalytic has given consent. This report does not constitute advice, an offer to sell or the solicitation of an offer to buy any of the securities discussed herein.
CANADIAN & U.S. DISCLOSURES
This research report was prepared by NXTanalytic, which is not a registrant nor is it a member of the Investment Industry Regulatory Organization of Canada. This report does not constitute advice, an offer to sell or the solicitation of an offer to buy any of the securities discussed herein. NXTanalytic is not a registered broker-dealer in the United States or any country. The firm that prepared this report may not be subject to U.S. rules regarding the preparation of research reports and the independence of research analysts.
INFORMATION & INTELLECTUAL PROPERTY
All information used in the publication of this report has been compiled from publicly available sources that NXTanalytic believes to be reliable. The opinions, estimates, and projections contained in this report are those of NXTanalytic Inc. (“NXT”) as of the date hereof and are subject to change without notice. NXT makes every effort to ensure that the contents have been compiled or derived from sources believed to be reliable and that contain information and opinions that are accurate and complete; however, NXT makes no representation or warranty, express or implied, in respect thereof, takes no responsibility for any errors and omissions which may be contained herein and accepts no liability whatsoever for any loss arising from any use of or reliance on this report or its contents. Information may be available to NXT that is not herein. This report is provided, for informational purposes only and does not constitute advice, an offer or solicitation to buy or sell any securities discussed herein in any jurisdiction. Its research is not an offer to sell or solicitation to buy any securities at any time now, or in the future. Neither NXT nor any person employed by NXTanalytic accepts any liability whatsoever for any direct or indirect loss resulting from any use of its research or information it contains. This report may not be reproduced, distributed, or published without any the written expressed permission of NXTanalytic Inc. and/or its principals.
©2020, NXTanalytic. All rights reserved.
Uncategorized
Comments on February Employment Report
The headline jobs number in the February employment report was above expectations; however, December and January payrolls were revised down by 167,000 combined. The participation rate was unchanged, the employment population ratio decreased, and the …
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Prime (25 to 54 Years Old) Participation
Since the overall participation rate is impacted by both cyclical (recession) and demographic (aging population, younger people staying in school) reasons, here is the employment-population ratio for the key working age group: 25 to 54 years old.
The 25 to 54 years old participation rate increased in February to 83.5% from 83.3% in January, and the 25 to 54 employment population ratio increased to 80.7% from 80.6% the previous month.
Average Hourly Wages
The graph shows the nominal year-over-year change in "Average Hourly Earnings" for all private employees from the Current Employment Statistics (CES). Wage growth has trended down after peaking at 5.9% YoY in March 2022 and was at 4.3% YoY in February.
Part Time for Economic Reasons
From the BLS report:"The number of people employed part time for economic reasons, at 4.4 million, changed little in February. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs."The number of persons working part time for economic reasons decreased in February to 4.36 million from 4.42 million in February. This is slightly above pre-pandemic levels.
These workers are included in the alternate measure of labor underutilization (U-6) that increased to 7.3% from 7.2% in the previous month. This is down from the record high in April 2020 of 23.0% and up from the lowest level on record (seasonally adjusted) in December 2022 (6.5%). (This series started in 1994). This measure is above the 7.0% level in February 2020 (pre-pandemic).
Unemployed over 26 Weeks
This graph shows the number of workers unemployed for 27 weeks or more. According to the BLS, there are 1.203 million workers who have been unemployed for more than 26 weeks and still want a job, down from 1.277 million the previous month.
This is close to pre-pandemic levels.
Job Streak
| Headline Jobs, Top 10 Streaks | ||
|---|---|---|
| Year Ended | Streak, Months | |
| 1 | 2019 | 100 |
| 2 | 1990 | 48 |
| 3 | 2007 | 46 |
| 4 | 1979 | 45 |
| 5 | 20241 | 38 |
| 6 tie | 1943 | 33 |
| 6 tie | 1986 | 33 |
| 6 tie | 2000 | 33 |
| 9 | 1967 | 29 |
| 10 | 1995 | 25 |
| 1Currrent Streak | ||
Summary:
The headline monthly jobs number was above consensus expectations; however, December and January payrolls were revised down by 167,000 combined. The participation rate was unchanged, the employment population ratio decreased, and the unemployment rate was increased to 3.9%. Another solid report.
Uncategorized
Immune cells can adapt to invading pathogens, deciding whether to fight now or prepare for the next battle
When faced with a threat, T cells have the decision-making flexibility to both clear out the pathogen now and ready themselves for a future encounter.
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How does your immune system decide between fighting invading pathogens now or preparing to fight them in the future? Turns out, it can change its mind.
Every person has 10 million to 100 million unique T cells that have a critical job in the immune system: patrolling the body for invading pathogens or cancerous cells to eliminate. Each of these T cells has a unique receptor that allows it to recognize foreign proteins on the surface of infected or cancerous cells. When the right T cell encounters the right protein, it rapidly forms many copies of itself to destroy the offending pathogen.
Importantly, this process of proliferation gives rise to both short-lived effector T cells that shut down the immediate pathogen attack and long-lived memory T cells that provide protection against future attacks. But how do T cells decide whether to form cells that kill pathogens now or protect against future infections?
We are a team of bioengineers studying how immune cells mature. In our recently published research, we found that having multiple pathways to decide whether to kill pathogens now or prepare for future invaders boosts the immune system’s ability to effectively respond to different types of challenges.
Fight or remember?
To understand when and how T cells decide to become effector cells that kill pathogens or memory cells that prepare for future infections, we took movies of T cells dividing in response to a stimulus mimicking an encounter with a pathogen.
Specifically, we tracked the activity of a gene called T cell factor 1, or TCF1. This gene is essential for the longevity of memory cells. We found that stochastic, or probabilistic, silencing of the TCF1 gene when cells confront invading pathogens and inflammation drives an early decision between whether T cells become effector or memory cells. Exposure to higher levels of pathogens or inflammation increases the probability of forming effector cells.
Surprisingly, though, we found that some effector cells that had turned off TCF1 early on were able to turn it back on after clearing the pathogen, later becoming memory cells.
Through mathematical modeling, we determined that this flexibility in decision making among memory T cells is critical to generating the right number of cells that respond immediately and cells that prepare for the future, appropriate to the severity of the infection.
Understanding immune memory
The proper formation of persistent, long-lived T cell memory is critical to a person’s ability to fend off diseases ranging from the common cold to COVID-19 to cancer.
From a social and cognitive science perspective, flexibility allows people to adapt and respond optimally to uncertain and dynamic environments. Similarly, for immune cells responding to a pathogen, flexibility in decision making around whether to become memory cells may enable greater responsiveness to an evolving immune challenge.
Memory cells can be subclassified into different types with distinct features and roles in protective immunity. It’s possible that the pathway where memory cells diverge from effector cells early on and the pathway where memory cells form from effector cells later on give rise to particular subtypes of memory cells.
Our study focuses on T cell memory in the context of acute infections the immune system can successfully clear in days, such as cold, the flu or food poisoning. In contrast, chronic conditions such as HIV and cancer require persistent immune responses; long-lived, memory-like cells are critical for this persistence. Our team is investigating whether flexible memory decision making also applies to chronic conditions and whether we can leverage that flexibility to improve cancer immunotherapy.
Resolving uncertainty surrounding how and when memory cells form could help improve vaccine design and therapies that boost the immune system’s ability to provide long-term protection against diverse infectious diseases.
Kathleen Abadie was funded by a NSF (National Science Foundation) Graduate Research Fellowships. She performed this research in affiliation with the University of Washington Department of Bioengineering.
Elisa Clark performed her research in affiliation with the University of Washington (UW) Department of Bioengineering and was funded by a National Science Foundation Graduate Research Fellowship (NSF-GRFP) and by a predoctoral fellowship through the UW Institute for Stem Cell and Regenerative Medicine (ISCRM).
Hao Yuan Kueh receives funding from the National Institutes of Health.
stimulus covid-19 yuan vaccine stimulusInternational
President Biden Delivers The “Darkest, Most Un-American Speech Given By A President”
President Biden Delivers The "Darkest, Most Un-American Speech Given By A President"
Having successfully raged, ranted, lied, and yelled through…
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Having successfully raged, ranted, lied, and yelled through the State of The Union, President Biden can go back to his crypt now.
Whatever 'they' gave Biden, every American man, woman, and the other should be allowed to take it - though it seems the cocktail brings out 'dark Brandon'?
Tl;dw: Biden's Speech tonight ...
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Fund Ukraine.
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Trump is threat to democracy and America itself.
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Abortion is good.
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American Economy is stronger than ever.
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Inflation wasn't Biden's fault.
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Illegals are Americans too.
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Republicans are responsible for the border crisis.
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Trump is bad.
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Biden stands with trans-children.
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J6 was the worst insurrection since the Civil War.
(h/t @TCDMS99)
Tucker Carlson's response sums it all up perfectly:
"that was possibly the darkest, most un-American speech given by an American president. It wasn't a speech, it was a rant..."
Carlson continued: "The true measure of a nation's greatness lies within its capacity to control borders, yet Bid refuses to do it."
"In a fair election, Joe Biden cannot win"
And concluded:
“There was not a meaningful word for the entire duration about the things that actually matter to people who live here.”
Victor Davis Hanson added some excellent color, but this was probably the best line on Biden:
"he doesn't care... he lives in an alternative reality."
— Tucker Carlson (@TuckerCarlson) March 8, 2024
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Watch SOTU Live here...
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Mises' Connor O'Keeffe, warns: "Be on the Lookout for These Lies in Biden's State of the Union Address."
On Thursday evening, President Joe Biden is set to give his third State of the Union address. The political press has been buzzing with speculation over what the president will say. That speculation, however, is focused more on how Biden will perform, and which issues he will prioritize. Much of the speech is expected to be familiar.
The story Biden will tell about what he has done as president and where the country finds itself as a result will be the same dishonest story he's been telling since at least the summer.
He'll cite government statistics to say the economy is growing, unemployment is low, and inflation is down.
Something that has been frustrating Biden, his team, and his allies in the media is that the American people do not feel as economically well off as the official data says they are. Despite what the White House and establishment-friendly journalists say, the problem lies with the data, not the American people's ability to perceive their own well-being.
As I wrote back in January, the reason for the discrepancy is the lack of distinction made between private economic activity and government spending in the most frequently cited economic indicators. There is an important difference between the two:
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Government, unlike any other entity in the economy, can simply take money and resources from others to spend on things and hire people. Whether or not the spending brings people value is irrelevant
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It's the private sector that's responsible for producing goods and services that actually meet people's needs and wants. So, the private components of the economy have the most significant effect on people's economic well-being.
Recently, government spending and hiring has accounted for a larger than normal share of both economic activity and employment. This means the government is propping up these traditional measures, making the economy appear better than it actually is. Also, many of the jobs Biden and his allies take credit for creating will quickly go away once it becomes clear that consumers don't actually want whatever the government encouraged these companies to produce.
On top of all that, the administration is dealing with the consequences of their chosen inflation rhetoric.
Since its peak in the summer of 2022, the president's team has talked about inflation "coming back down," which can easily give the impression that it's prices that will eventually come back down.
But that's not what that phrase means. It would be more honest to say that price increases are slowing down.
Americans are finally waking up to the fact that the cost of living will not return to prepandemic levels, and they're not happy about it.
The president has made some clumsy attempts at damage control, such as a Super Bowl Sunday video attacking food companies for "shrinkflation"—selling smaller portions at the same price instead of simply raising prices.
In his speech Thursday, Biden is expected to play up his desire to crack down on the "corporate greed" he's blaming for high prices.
In the name of "bringing down costs for Americans," the administration wants to implement targeted price ceilings - something anyone who has taken even a single economics class could tell you does more harm than good. Biden would never place the blame for the dramatic price increases we've experienced during his term where it actually belongs—on all the government spending that he and President Donald Trump oversaw during the pandemic, funded by the creation of $6 trillion out of thin air - because that kind of spending is precisely what he hopes to kick back up in a second term.
If reelected, the president wants to "revive" parts of his so-called Build Back Better agenda, which he tried and failed to pass in his first year. That would bring a significant expansion of domestic spending. And Biden remains committed to the idea that Americans must be forced to continue funding the war in Ukraine. That's another topic Biden is expected to highlight in the State of the Union, likely accompanied by the lie that Ukraine spending is good for the American economy. It isn't.
It's not possible to predict all the ways President Biden will exaggerate, mislead, and outright lie in his speech on Thursday. But we can be sure of two things. The "state of the Union" is not as strong as Biden will say it is. And his policy ambitions risk making it much worse.
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The American people will be tuning in on their smartphones, laptops, and televisions on Thursday evening to see if 'sloppy joe' 81-year-old President Joe Biden can coherently put together more than two sentences (even with a teleprompter) as he gives his third State of the Union in front of a divided Congress.
President Biden will speak on various topics to convince voters why he shouldn't be sent to a retirement home.
The state of our union under President Biden: three years of decline. pic.twitter.com/Da1KOIb3eR
— Speaker Mike Johnson (@SpeakerJohnson) March 7, 2024
According to CNN sources, here are some of the topics Biden will discuss tonight:
Economic issues: Biden and his team have been drafting a speech heavy on economic populism, aides said, with calls for higher taxes on corporations and the wealthy – an attempt to draw a sharp contrast with Republicans and their likely presidential nominee, Donald Trump.
Health care expenses: Biden will also push for lowering health care costs and discuss his efforts to go after drug manufacturers to lower the cost of prescription medications — all issues his advisers believe can help buoy what have been sagging economic approval ratings.
Israel's war with Hamas: Also looming large over Biden's primetime address is the ongoing Israel-Hamas war, which has consumed much of the president's time and attention over the past few months. The president's top national security advisers have been working around the clock to try to finalize a ceasefire-hostages release deal by Ramadan, the Muslim holy month that begins next week.
An argument for reelection: Aides view Thursday's speech as a critical opportunity for the president to tout his accomplishments in office and lay out his plans for another four years in the nation's top job. Even though viewership has declined over the years, the yearly speech reliably draws tens of millions of households.
Sources provided more color on Biden's SOTU address:
The speech is expected to be heavy on economic populism. The president will talk about raising taxes on corporations and the wealthy. He'll highlight efforts to cut costs for the American people, including pushing Congress to help make prescription drugs more affordable.
Biden will talk about the need to preserve democracy and freedom, a cornerstone of his re-election bid. That includes protecting and bolstering reproductive rights, an issue Democrats believe will energize voters in November. Biden is also expected to promote his unity agenda, a key feature of each of his addresses to Congress while in office.
Biden is also expected to give remarks on border security while the invasion of illegals has become one of the most heated topics among American voters. A majority of voters are frustrated with radical progressives in the White House facilitating the illegal migrant invasion.
It is probable that the president will attribute the failure of the Senate border bill to the Republicans, a claim many voters view as unfounded. This is because the White House has the option to issue an executive order to restore border security, yet opts not to do so
Maybe this is why?
Most Americans are still unaware that the census counts ALL people, including illegal immigrants, for deciding how many House seats each state gets!
— Elon Musk (@elonmusk) March 7, 2024
This results in Dem states getting roughly 20 more House seats, which is another strong incentive for them not to deport illegals.
While Biden addresses the nation, the Biden administration will be armed with a social media team to pump propaganda to at least 100 million Americans.
"The White House hosted about 70 creators, digital publishers, and influencers across three separate events" on Wednesday and Thursday, a White House official told CNN.
Not a very capable social media team...
The State of Confusion https://t.co/C31mHc5ABJ
— zerohedge (@zerohedge) March 7, 2024
The administration's move to ramp up social media operations comes as users on X are mostly free from government censorship with Elon Musk at the helm. This infuriates Democrats, who can no longer censor their political enemies on X.
Meanwhile, Democratic lawmakers tell Axios that the president's SOTU performance will be critical as he tries to dispel voter concerns about his elderly age. The address reached as many as 27 million people in 2023.
"We are all nervous," said one House Democrat, citing concerns about the president's "ability to speak without blowing things."
The SOTU address comes as Biden's polling data is in the dumps.
BetOnline has created several money-making opportunities for gamblers tonight, such as betting on what word Biden mentions the most.
As well as...
We will update you when Tucker Carlson's live feed of SOTU is published.
Fuck it. We’ll do it live! Thursday night, March 7, our live response to Joe Biden’s State of the Union speech. pic.twitter.com/V0UwOrgKvz
— Tucker Carlson (@TuckerCarlson) March 6, 2024
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