Numlock News: October 1, 2020 • T. Rex, Bread Fight, Whistle-blowers

By Walt Hickey

Tyrannosaurus Rex

I’ll level with you, over the past several months I’ve made a number of objectively poor decisions while online shopping, projects that will never see completion, impulse purchases I’ve come to regret or apparel choices that will stylistically age like a mayfly in milk. Anyway, I’m declaring all of this now because I think we’ve all made some mistakes in the past couple months, and it’s good to be open about them, but the good news is that Christie’s is going to livestream an auction of a full Tyrannosaurus rex skeleton next week, and after that happens the rest of us don’t have to feel guilty about our stupid pandemic financial decisions anymore because someone else will have made a much more impulsive one. The skeleton — 67 million years old, named Stan, consigned by the Black Hills Institute of Geological Research, 188 bones, found in ‘87 — has an asking price of $6 million to $8 million. In 1997, Sotheby’s sold a T. rex named Sue for $8.4 million that ended up in the Field Museum in Chicago. Stan found his way from the cretaceous to Christie’s because one of the two paleontologist brothers who own the Institute wanted out of the bones game, and to afford the buy out Stan’s got to go.

Kelly Crow, The Wall Street Journal

Whistle

The Securities and Exchange Commission announced six whistle-blower awards on Wednesday, granting millions of dollars to individuals who sounded the alarm on corporate wrongdoing and fraud. That brings the total number of whistle-blowers rewarded in the fiscal year of 2020 to 39, who between them reaped a total of $175 million as part of the deal where whistle-blowers get 10 to 30 percent of the money collected in enforcement cases where the penalty is over $1 million. Those funds are paid out of the penalties, not the money due to harmed investors, so it’s basically a finder’s fee for fraud. Since instituting the program in 2012, the SEC has paid $562 million to 106 people, and given 2020’s share of that, it’s been a particularly bad year for book cookers.

Matt Robinson, Bloomberg

Emergency

On Monday, the emergency 911 phone systems in 14 states were down for over an hour, a dangerous situation that some at first speculated to be the result of a Microsoft Azure outage, but has since been traced to a technical issue that involves Intrado and Lumen, two of those companies that neatly fall into the category of “0 percent chance you’ve heard of them, but many people would be dead if they did not function” of infrastructure. Those companies — Intrado was known as West Safety Communications and Lumen as CenturyLink — are pointing fingers, but it wouldn’t be the first time that a goof up on their part has led to chunks of the 911 system failing. In 2019, they agreed to pay $575,000 to settle an FCC investigation about an August 2018 outage, and in 2014 for eight hours, 11 million people were disconnected from now-Intrado’s systems leading to a $17.4 million fine. The FCC is investigating.

Brian Krebs, Krebs On Security

Curtains

The movie theater business is girding for a disastrous end of year, with studios pulling their October and November slate and punting much of it back to the end of the year, if not next. The lack of demand and the subsequent lack of top-tier supply has led cinemas to scale back their hours, their film slates, and in many cases just shut back down. Per Comscore, there were 3,453 North American theaters in operation the weekend of September 18 to 20, a number that as of now is down to 3,350 open theaters. The fate of the theaters may be decided by New York and L.A., the largest markets for movies in America that have kept their cinemas shut down amid the ongoing pandemic.

Pamela McClintock, The Hollywood Reporter

Audits

Americans with incomes under $25,000 have their taxes audited by the Internal Revenue Service at a rate of 0.69 percent annually, which is significantly higher than the rate for filers with incomes over $500,000, which is 0.53 percent. This means that the poorest people — those with the fewest resources to bring to contend with an audit — tend to be disproportionately targeted by the IRS, compared to those who are most likely to have the financial resources to fight the IRS tooth and nail. It hasn’t always been this way — when rich tax cheats are busted the government recovers far more than when poor tax cheats are — but was the direct result of funding for the IRS enforcement division being routinely slashed by interests who prefer the agency toothless. The IRS is projected to fail to collect $7.5 trillion in taxes it is owed between 2020 and 2029, and were the agency able to conduct more audits of high earners that could be cut by $1 trillion.

Marcy Gordon and Paul Wiseman, The Associated Press

Italian Herb and Cheese (Not Legally) Bread

A five-judge decision from the Supreme Court of Ireland found that the bread in Subway’s heated sandwiches is, legally speaking, not bread. The determination came from the sugar content in the bread — which is not allowed to exceed 2 percent of the weight of the flour in the dough — that was far too high, at 10 percent of the weight of the flour in the dough. When a food is considered a staple food, it’s not taxed under the value-added tax system, and a Subway franchisee argued that it wasn’t liable for VAT on teas, coffees and heated filled sandwiches. The definition of “bread” as having less than 2 percent of sugar and fat is designed to delineate it from other dough-based foods.

Tim Healy, Irish Independent

Online

The rush to online delivery has meant this is a banner year for the warehousing and logistics companies that make the ecosystem function, with American logistics providers projected to hit $53.3 billion this year, up 29 percent year-over-year. In the second quarter of 2019, e-commerce sales were 10.8 percent of all retail sales. In the second quarter of 2020, digital’s share of all retail rose to 16.1 percent, rising to $200.7 billion and up 44.4 percent year-over-year.

Jennifer Smith, The Wall Street Journal

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