Tuesday Night Links

• At today's WTI futures curve, CVE will generate close to C$9 billion in free cash flow in 2022. On a market cap of C$31 billion, that's a free cash flow yield of ~29%. [Cenovus]
  
• Given that the COVID-19 vaccines do not appear to stop the spread of the virus, there is simply no medical or moral justification for vaccine mandates and passports. Those comfortable with these policies should ask themselves how they would feel if a fourth jab is soon required to buy groceries, take a domestic flight, rent an apartment, access a bank account, be admitted to an ER, or receive unemployment benefits after being fired for noncompliance. The emerging bio-authoritarianism that began as “two weeks to flatten the curve” will metastasize into something even more repellent and dangerous unless it is forthrightly opposed now, through boycotts, protests, lawsuits, labor action, and civil disobedience. [Tablet]
• Several times since August 30, 2021, Southwest Airlines has taken new unilateral actions which violate the status quo between the parties in further violation of the Railway Labor Act. Most recently, on October 4, 2021, Southwest Airlines unilaterally rolled out a new and non- negotiated COVID vaccine mandate for all employees, including SWAPA pilots. The new vaccine mandate unlawfully imposes new conditions of employment and the new policy threatens termination of any pilot not fully vaccinated by December 8, 2021. Southwest Airlines’ additional new and unilateral modification of the parties’ collective bargaining agreement is in clear violation of the RLA. Because of Southwest Airlines’ continued unilateral actions, and its continued violations of the RLA which harm SWAPA and its members, this motion is necessary and SWAPA respectfully seeks an immediate hearing. Counsel for SWAPA has conferred with counsel for Southwest Airlines in a good-faith attempt to resolve this dispute by agreement. [pdf]
• Governor Lucius Hubbard of Minnesota lamented that “the ingenuity of depraved human genius has culminated in the production of oleomargarine and its kindred abominations.” [link]
  
• I completed my tobacco book research in mid-2017, as British American Tobacco was buying Reynolds American.  This was a high-water mark for tobacco stocks.  They have since suffered a steep decline. This chart shows financials for the five largest cigarette companies. Four years ago, these companies had a combined market value of $664 billion with a dividend yield of 3.3% and a Price/Earnings ratio of 21. Today, those numbers are $393 billion market value, yield 6.9%, and a P/E of 15.5. At the same time, dividend dollars paid rose 25%. [Gene Hoots]
  
• Readers may think that Juul was killing kids after lung illnesses emerged in 2019. Credit to Ms. Ducharme for reporting that the Centers for Disease Control and Prevention had “fairly clear-cut data” that bootleg cannabis products, not Juul, were making kids ill. But the CDC for many weeks “refused to draw firm conclusions,” content to let the public stay confused. (Sound familiar?) Savor the irony that marijuana attracts none of the scrutiny into long-term harm and teen addiction that has doomed vaping. Juul is waiting for the FDA to decide whether it can stay on the market. Ms. Etter faults Juul for seeking “monster growth” rather than a “diligent, plodding path that might have earned” the company “buy-in from regulators and permission from society.” That’s a conveniently unfalsifiable thesis that is contradicted by the evidence in her book: Removing its popular flavored products and killing its social-media accounts are odd things to do for a company that wants “monster growth.” Marlboros are still on the shelves, and many Americans now think vaping is more dangerous than lighting up a cigarette. Investors won’t be eager to make another big bet on trying to save the lives of smokers. No one should call this sad state of affairs a victory for public health. [WSJ]
  
• The Ziegler family owns Swisher International, an $800 million (estimated sales) manufacturer of cigars based in Darien, Conn. It's best known for the brand bearing its name: Swisher Sweets, a line of cigarillos, a cross between a cigar and a cigarette. The history of Swisher is a fractious one. In the 1990s, William Ziegler and his sister, Helen Steinkraus, were the controlling shareholders of American Maize-Products, which made corn syrup and cornstarch; it also contained a small tobacco business. The siblings' grandfather had gotten a hold of the company in 1907, and it had passed down to Ziegler and Steinkraus. Harvard-educated Ziegler was running the business--not well enough for Steinkraus' liking. She and her children tried to force out Ziegler through a number of lawsuits. No luck there. Ziegler won in the courtroom--and outside of it, arranging for a French agrifood company, Eridania Beghin-Say, to buy American Maize in 1995. After the acquisition, Eridania sold the tobacco business to Ziegler, who then quickly took the company public. He privatized it in 1999 amid a tough time for tobacco companies and ran it until his death in 2008, four years before his sister's. While Ziegler's heirs still own Swisher, it's unclear whether any of them are actively running the business. [Forbes]
• The U.S. Food and Drug Administration announced today that, for the first time, it has authorized the marketing of products through the modified risk tobacco product (MRTP) pathway. The authorizations are for eight Swedish Match USA, Inc. snus smokeless tobacco products sold under the “General” brand name. These products had previously been authorized for U.S. sale without modified risk claims by the FDA in 2015 in response to filings of premarket tobacco applications (PMTAs). Today’s action further authorizes the manufacturer to market these specific products with the claim “Using General Snus instead of cigarettes puts you at a lower risk of mouth cancer, heart disease, lung cancer, stroke, emphysema, and chronic bronchitis.” The FDA made this authorization after reviewing scientific evidence submitted by the company that supports this claim. [FDA]
• In 1996, the Food and Drug Administration (FDA), after having expressly disavowed any such authority since its inception, asserted jurisdiction to regulate tobacco products. See 61 Fed. Reg. 44619—45318. The FDA concluded that nicotine is a “drug” within the meaning of the Food, Drug, and Cosmetic Act (FDCA or Act), 52 Stat. 1040, as amended, 21 U.S.C. § 301 et seq., and that cigarettes and smokeless tobacco are “combination products” that deliver nicotine to the body. 61 Fed. Reg. 44397 (1996). Pursuant to this authority, it promulgated regulations intended to reduce tobacco consumption among children and adolescents. Id., at 44615—44618. The agency believed that, because most tobacco consumers begin their use before reaching the age of 18, curbing tobacco use by minors could substantially reduce the prevalence of addiction in future generations and thus the incidence of tobacco-related death and disease. Id., at 44398—44399. Regardless of how serious the problem an administrative agency seeks to address, however, it may not exercise its authority “in a manner that is inconsistent with the administrative structure that Congress enacted into law.” ETSI Pipeline Project v. Missouri, 484 U.S. 495, 517 (1988). And although agencies are generally entitled to deference in the interpretation of statutes that they administer, a reviewing “court, as well as the agency, must give effect to the unambiguously expressed intent of Congress.” Chevron U.S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842—843 (1984). In this case, we believe that Congress has clearly precluded the FDA from asserting jurisdiction to regulate tobacco products. Such authority is inconsistent with the intent that Congress has expressed in the FDCA’s overall regulatory scheme and in the tobacco-specific legislation that it has enacted subsequent to the FDCA. In light of this clear intent, the FDA’s assertion of jurisdiction is impermissible. [FDA v. Brown & Williamson Tobacco Corp.]
• As can be seen in NASA’s photos, the egress side of the lunar modules (the side with the ladder and hatch) was usually in the shade (though almost always well lit). What that means is that, after traipsing around in the sun for a spell, the astronauts would have had to step into the shadows to reenter the spacecraft. And when they did so, those spacesuits were apparently smart enough to react instantly and switch over from turbo-charged air conditioning to blast-furnace heating in the blink of an eye. Awesome! [link]
• The recent Tesla court case established that the latest going rate for paying off a black plaintiff for having to endure the agony of living in a multicultural society in which Hispanic, black, and perhaps white co-workers like hip-hop and thus use its vocabulary in your presence is $137 million. But is the dingy-looking Duluth charter school district as deep-pocketed as Elon Musk? [Sailer]