CDC denies cruise sector's request to lift US sailing restrictions

[HMR74]

39 minutes ago, JABTPS said:

If i recall in an article on the Testing threshold used for Covid, the scientist/ designer of the test said that the threshold should never exceed 32 cycles.   This is another article discussing high cycle errors:  Coronavirus tests are extremely sensitive. (That could be a problem, experts say.) (advisory.com)

 

Here is some heavy reading on the testing:  COVID-19 Ct values_YNHH Aug. 2020 abbrev (yale.edu)

 

Thanks for the link.

We have friends and neighbors who were not feeling well and tested positive, all of them over 70 and they stayed at home for 2 weeks yet in about 3 days  they recovered from whatever they had without any treatment. I wonder what their scores were.  But they did not have any apparent "comorbidities". All very active and healthy. So low risk in most cases.

On the other hand,  13 months ago we had a couple we were friendly with who did pass away, but the husband had 5 or 6 co morbidities before covid, and it was a matter of time, however the wife, not in great health but workable, was tested positive, was put on ventilator, without checking with her kids (who are friends with our kids)  and in less than a day it was over.

 

I think the permutations are almost endless on this.

 

But getting back to the main issue here, regardless of any of what I just wrote, all that currently matters is the State Dept is following the CDC, and thats going to make it very difficult for the Cruise lines to find places to sail from outside the US, and also make it difficult to do much beyond cruises to nowhere.

 

2 govt agencies saying now, even if using 1 agencies position, means the cruise lines have a huge risk even if just a few cases pop up, and if a lot pop up, let's not go there.

 

I would  not want to be in management of a cruise line now- a lot of sleepless nights and massive stress from multiple directions.

[caribill]

5 hours ago, HMR74 said:

The big 3 cruise lines stocks are down almost 5% in todays trading. Still at lofty prices. So some investors are concerned about this. 

 

 

 

It is not just the cruise stocks. It is the travel industry. Airline stocks also down today.

[HMR74]

13 minutes ago, caribill said:

 

It is not just the cruise stocks. It is the travel industry. Airline stocks also down today.

Makes sense, if CDC and State say ZOOM business meetings and look at youtube for travel, then that sector declines including hotels and restaurants  and car rental and local attractions etc., and so much of this is tied to cruising.

 

Edited April 20, 2021 by HMR74

[Redwing55]

6 hours ago, caribill said:

 

It is not just the cruise stocks. It is the travel industry. Airline stocks also down today.

As is Zoom, DOCU, etc.  Maybe not as much but still down.  Market is worse than leaves blowing in the wind at times.  At least one know direction with those leaves.🤪

[HMR74]

11 minutes ago, Redwing55 said:

As is Zoom, DOCU, etc.  Maybe not as much but still down.  Market is worse than leaves blowing in the wind at times.  At least one know direction with those leaves.🤪

I think last  week the market cap of Carnival was 27 billion, RCL 20 billion and 10 billion for NCL--that's 57 billion for a business sector that's we do not know when it will start anything close to full operations. I am far from the first to mention that; plenty of blogs and analysts are astounded by this and valuations for airlines.

 

if the  average big company ship has a 3,000 occupancy, that's 150,000 passengers per year, which is about 1/2 of what RCL has carried in total in the far east the past several months-bupkis.  My point being that the 3 majors are valued assuming things get back to normal soon. but then again the S&P 500 trailing PE is 47 according to WSJ.

Nosebleed territory.

 

How is this for a scenario:

And I do not know bankruptcy law for when companies are domiciled in foreign countries, but the lenders word their contracts to be litigated according to US and perhaps NY or FL law. What if in the next couple of weeks the big 3 say the heck with all this-stop operations and enter a bankruptcy where they can continue running if creditors write off or defer debt and interest payments, except customers maintain their deposits and future cruise credits.

 

It would be nice to cruise next year on a ship where the company does  not feel it has a cash flow noose around its neck.

They might be losing most of the next several months anyway, so why not throw in the towel in this manner anyway.

 

I would think they already have this plan sitting on someones desk, with i's dotted and t's crossed, just not executed -it would be negligent if they did not have that as an option, given their cash burn and no profitable sailings. Current shareholders and bondholders would get a new class of stock, as perhaps would lenders. The problem for companies become that the big creditor end up getting  board seats and have a big say in company operations.

 

Just throwing it out there.

 

[caribill]

3 minutes ago, HMR74 said:

How is this for a scenario:

And I do not know bankruptcy law for when companies are domiciled in foreign countries, but the lenders word their contracts to be litigated according to US and perhaps NY or FL law. What if in the next couple of weeks the big 3 say the heck with all this-stop operations and enter a bankruptcy where they can continue running if creditors write off or defer debt and interest payments, except customers maintain their deposits and future cruise credits.

 

It would be nice to cruise next year on a ship where the company does  not feel it has a cash flow noose around its neck.

They might be losing most of the next several months anyway, so why not throw in the towel in this manner anyway.

 

 

 

Current stock holders would lose 100% of their investment.

 

In the case of CCL Corp, the Chairman of the Board and his family control over 121 million shares. The CEO controls over 625 thousand shares. Both are members of the Board of Directors. Another Board member owns almost 1.4 million shares.

 

Do you really think there is any way they will propose and then vote for bankruptcy?

[HMR74]

3 minutes ago, caribill said:

 

Current stock holders would lose 100% of their investment.

 

In the case of CCL Corp, the Chairman of the Board and his family control over 121 million shares. The CEO controls over 625 thousand shares. Both are members of the Board of Directors. Another Board member owns almost 1.4 million shares.

 

Do you really think there is any way they will propose and then vote for bankruptcy?

 

what's going to  be their options after several more  months of this? RCL is burning ~$275 bil a month-last year it was $250bil a month. Few really anticipated it would go this long, and the stocks are down 15-20%

 

Especially with State Dept doing its thing. Not using US ports, assuming the State Dept will not minimize that too much, as well as ports,  will add to cost and prices and diminish the best market the cruise lines have, the US. It was pretty easy to fly to SE Florida to catch a cruise, and now its more costly and complex. Somebody has to eat that cost.

 

Viking is family owned, and perhaps a better judge on this.

 

CCL has about 800 million shares outstanding-so insiders might own 15-20% of company. Its current assets approximate current liabilities, but it has cash burn too. Figure things get tight in early 2022 .

 

They will still have cash burn even if at ~80% capacity, so one way or another they have to get funding.

 

While this  is definitely back of the envelope calculations, they as I said have all done their homework to know when they have to make the critical decision.

It is not too different than the 150,000 restaurants that closed and were throwing the proverbial good cash after bad. Tough decision to make.

 

The big difference is these are publicly own companies and the stock price is very important.

 

The cash flow clocks are ticking.

This is the bigger problem. at some point they, the big 3 will be tapped out on borrowing capacity as well as selling stock.

 

Perhaps the US Govt will reverse its stance and "invest" in the cruise lines and buy them a few more months.

BTW, there is no way of knowing how many customers the cruise lines will lose, just because of many other issues.

 

and this is just a scenario that may occur (but the likelihood increases each month) and it does depend on what the cruise lines think they know, which should be a heck of a lot more than I  or anyone here knows. And I am just throwing out a possibility.

 

also what if Canada is closed this year?

 

They need to find a way to stop the bleeding.

 

 

 

 

[rabin1]

1 hour ago, caribill said:

 

Current stock holders would lose 100% of their investment.

 

In the case of CCL Corp, the Chairman of the Board and his family control over 121 million shares. The CEO controls over 625 thousand shares. Both are members of the Board of Directors. Another Board member owns almost 1.4 million shares.

 

Do you really think there is any way they will propose and then vote for bankruptcy?

Carnival owner is Micky Arinson who owns 25%. He also owns the Miami Heat. He is worth $6 billion. I think his wife Madeline owns quite a few shares as well. I agree with you can't seeing this man taking such a big hit. He is always on TV down here sitting in his box watching the Heat play. Looks a tad arrogant to me

Kathy

[caribill]

1 hour ago, HMR74 said:

 

what's going to  be their options after several more  months of this? RCL is burning ~$275 bil a month-last year it was $250bil a month. Few really anticipated it would go this long, and the stocks are down 15-20%

 

 

 

 

Same options they have been using:

Borrow money.

Sell more stock.

Renegotiate future debt payments.

 

Also, cruises that are entirely away from the USA such as the Princess "seacations" in the UK which are selling very well and RCI with Singapore sailings and elsewhere. Not the entire fleet, but producing income.

 

But  a continuing problem is having traditional ports around the globe that are willing to have cruise ships visit while a pandemic is not fully under control.

[HMR74]

Ccl is worth 27 billion now based on market cap. 25% is around 6 billion. He probably has other assets. But ccl was at 10 bil market  cap a year ago, dropping the 25% to 1.5 billion on paper.

 

 With this problem going on, and cash burn, who wants to lend any of these travel related companies money. Or buy new stock issued. 

 

Its difficult to get too far into an analysis without all the info, but this is such a multi faceted problem and the clock is ticking.

how many businesses can go 2 years without much revenues and stay solvent. Creditors are stuck. The only assets are ships which might be difficult to sell when the sector is in trouble.

 

yes, this is a different discussion than before, but if CDC does not change its position for say 6 months, and cases keep increasing and variants are real, its not just cruise lines in trouble.

 

And that scenario would support the CDC insistence on its policy.

 

Summary? Regardless of anybody’s views of any of the issues and wanting to cruise or fearful of cruising, the cash flow clock is ticking.

 

 

 

 

[HMR74]

I have to change a prior comment--Royal is not burning 275 bil cash  a month, they are projecting 275 million a month.

 

Another thing happening. Coke announced a price increase yesterday, and the cost of food is increasing. P&G is announcing price increases and labor cost has to be going up too to reflect the higher inflation the Fed is striving for. In 2019 RCL spent 600 million on food and 700 mil on fuel. On about 10 billion of revenues.

 

They also have the new costs of virus protocols in general including added medical staff and keeping some cabins open in case of a problem.

 

Its a mish mosh of problems squeezing profits-not an easy bunch of issues to deal with. However, if they can get back to some normalcy including normal occupancy, royal did earn 2 bil a year on that 10 bil in revenues.

 

 

However, my point is  that light at the end of the tunnel is, in reality,  being pushed out by CDC and State regardless of how anyone feels about it. Something has to change.

 

Cruise ship stocks up this morning. first day in a few days. Watch that for a tip something is happening one way or another that has not been disclosed. Have to wonder how much of the actions by cruise lines and Starte Dept and CDC is just posturing  and playing games with peoples lives and jobs.

 

Edited April 21, 2021 by HMR74

[voljeep]

7 minutes ago, HMR74 said:

 

However, my point is  that light at the end of the tunnel is, in reality,  being pushed out by CDC and State regardless of how anyone feels about it. Something has to change.

Really ? - I think just the opposite using 11/1 as the benchmark.

 

Dylan

 

'Cause the times, they are a-changin'

Come senators, congressmen, please heed the call
Don't stand in the doorway, don't block up the hall
For he that gets hurt will be he who has stalled
'Cause the battle outside ragin'
Will soon shake your windows and rattle your walls
For the times, they are a-changin'

[caribill]

15 hours ago, HMR74 said:

However, my point is  that light at the end of the tunnel is, in reality,  being pushed out by CDC and State regardless of how anyone feels about it. Something has to change.

 

 

 

There is more than one tunnel.

 

Worldwide, last week saw the highest number of new Covid-19 cases since the pandemic began.

 

https://www.cnn.com/2021/04/20/europe/who-global-covid-cases-rise-intl/index.html

[USCcruisecrazy]

9 hours ago, caribill said:

 

There is more than one tunnel.

 

Worldwide, last week saw the highest number of new Covid-19 cases since the pandemic began.

 

https://www.cnn.com/2021/04/20/europe/who-global-covid-cases-rise-intl/index.html

Just curious...how do those numbers of new cases compare in hospitalizations as the old numbers and hospitalizations?  I don't think the concern should be about number of cases, but the severity of the cases once someone gets the virus.  I know in our state we are down to like 450ish people hospitalized in the entire state due to COVID.  That's 450 in a population of 5,500,000.  Just curious!

[HMR74]

9 hours ago, caribill said:

 

There is more than one tunnel.

 

Worldwide, last week saw the highest number of new Covid-19 cases since the pandemic began.

 

https://www.cnn.com/2021/04/20/europe/who-global-covid-cases-rise-intl/index.html

I was referring to the green light for US cruising.

and at some point, between vaccines and those having had covid, and those with natural immunity, we have to be close to or at herd immunity.

 

the 15 days to flatten the curve was meant to keep hospitals from being overrun -they succeeded however the lockdowns continued which defers herd immunity.

 

While the CDC is watching everything  who is oversight to CDC? Is there a checks and balances, cause I see none?

 

[nocl]

34 minutes ago, HMR74 said:

I was referring to the green light for US cruising.

and at some point, between vaccines and those having had covid, and those with natural immunity, we have to be close to or at herd immunity.

 

the 15 days to flatten the curve was meant to keep hospitals from being overrun -they succeeded however the lockdowns continued which defers herd immunity.

 

While the CDC is watching everything  who is oversight to CDC? Is there a checks and balances, cause I see none?

 

Secretary HHS has over sight of CDC, as well as the President.

 

The emergency declaration was just extended for another 90 days.

 

Counts do not indicate herd immunity being close yet.

Edited April 22, 2021 by nocl

[HMR74]

1 minute ago, nocl said:

Secretary HHS has over sight of CDC, as well as the President.

 

The emergency declaration was just extended for another 90 days.

 

Counts do not indicate herd immunity being close yet.

That's what I mean, who has oversight. HHS and Presidential oversight is worthless.

Non Political independent oversight. Not the one way oversight CDC has over almost everything.

The GAO is the Government Accountability Office -that would be a decent start.

 

Define herd immunity?  It was 60-70% now its 80%. The goal posts change. Heck, let's get to 101% (the same way cruise lines show 104% occupancy)

 

Some people expect perfection--don't hold your breath waiting for that to happen.

 

we probably have 150 mil vaccinated already, and 30-40 mil have had tested positive covid even if very mild. And its likely that  millions have had it but never tested.  so call it 200 million out of 330 million--that should be good to go. That was ok under old standards  but in any event we, the US is close to a real herd immunity threshold.

 and its crazy to be worried about the next illness. If we do than we might as well close up shop. On everything. Which is probably what some people want.

 

[chengkp75]

16 minutes ago, HMR74 said:

The GAO is the Government Accountability Office -that would be a decent start.

Since the GAO undertakes studies based on requests from Congressional committees, that sort of adds a political bias to their work, even if the Comptroller is non-partisan.

[charlie murphy]

 Xavier Becerra and President joe Biden have oversight of this group, and their collective time in some type of science course work since highschool likely pushes 6 collective hours.  How's that working out for us. I thought the CDC was a reporting agency with recommendation to the HHS and the excutive office. The question remains: has the CDC over stepped it's authority in setting policy and mandates as we move throught this time of pandemic? 

[caribill]

1 hour ago, HMR74 said:

I was referring to the green light for US cruising.

 

 

 

What I was trying to point out with my post is that even after cruising is given the USA green light, where would you want to cruise to when the rest of the world is at record setting levels of new infections?

[caribill]

1 hour ago, USCcruisecrazy said:

Just curious...how do those numbers of new cases compare in hospitalizations as the old numbers and hospitalizations?  I don't think the concern should be about number of cases, but the severity of the cases once someone gets the virus. 

 

'I was posting about the record setting numbers of new infections worldwide. As to number of hospitalizations, look at this article:

https://www.reuters.com/article/us-health-coronavirus-india-hospital/two-to-a-bed-in-delhi-hospital-as-indias-covid-crisis-spirals-idINKBN2C21OT

 

Better numbers in the USA do not necessarily translate into better numbers elsewhere.

[HMR74]

14 minutes ago, chengkp75 said:

Since the GAO undertakes studies based on requests from Congressional committees, that sort of adds a political bias to their work, even if the Comptroller is non-partisan.

 

since Congress has an approval rating of less than 10%, that provides little comfort. However, GAO does pretty good work, even if it gets ignored by Congress and the President, and media .

 

Here is the summary  GAO work for the US financial statements at 9/30/20-this was the 24th straight  annual letter like this-which there or has been sent to Presidents, and Congressional leaders both parties since 1996--what it says is we have material deficiencies in US accounting and data cannot be relied upon.

 

Yet, for 24 years nothing happens as a result. So there is no real oversight. And the last 5 presidents have been negligent on a major issue, as well as Congress.

 

I have little faith

 

https://www.fiscal.treasury.gov/files/reports-statements/financial-report/2020/gao-audit-report-2020.pdf

 

 

[voljeep]

9 minutes ago, caribill said:

 

What I was trying to point out with my post is that even after cruising is given the USA green light, where would you want to cruise to when the rest of the world is at record setting levels of new infections?

Eastern Caribbean and Princess Cay for starters

[USCcruisecrazy]

29 minutes ago, caribill said:

 

'I was posting about the record setting numbers of new infections worldwide. As to number of hospitalizations, look at this article:

https://www.reuters.com/article/us-health-coronavirus-india-hospital/two-to-a-bed-in-delhi-hospital-as-indias-covid-crisis-spirals-idINKBN2C21OT

 

Better numbers in the USA do not necessarily translate into better numbers elsewhere.

Thanks.  

[HMR74]

1 hour ago, caribill said:

 

What I was trying to point out with my post is that even after cruising is given the USA green light, where would you want to cruise to when the rest of the world is at record setting levels of new infections?

its not simply where do you want to cruise. That's answered by the quote from Wayne Gretsky, the great hockey player who said he skates to where the puck is going to be. I am not worried about today numbers, as much as concerned about what the numbers are going to be in several months.

 

I believe the cruise lines can assure relatively good safety on board, esp with everybody immunized. So the question is ports. How will they be in 6 months? Will their herd immunity follow ours, and even if not, if a ship has been immunized where is the high risk, unless there is something wrong with the immunizations.

 

But if the CDC is concerned about ports, then why not let ships sail to the 2-3 ports not on the level 4 list. (if there are an left when they get done).

Which is why I suggested, knowing it will not happen, an oversight board as I still think CDC is working on a perfect situation.

And that questioning the CDC NIH and a few others makes one a candidate for road kill.

 

Once upon a time in corporate america it was a good trait to have participative management. and ask tough questions to get to a better result and better product--apparently not any more. We want teams of "yes" people.

Edited April 22, 2021 by HMR74