Congress's youngest and possibly most famous new member, Alexandria Ocasio-Cortez has made many lofty proclamations during her time in the lime light, but perhaps the one getting the most attention is her call to raise tax rates to 70% to pay for her agenda. Rational thinkers can see the issue in taking 70% of another person's dollar for no other reason than wanting to use it for something else. For the benefit of Congresswoman Cortez and those who believe like she does, the Tax Foundation has done the math to show that even if you confiscate 70% of the income of the wealthiest Americans, … [Read more...]
Archives for January 2019
Is Indexing Hurting Competition?
Researchers working for the NBER have made an interesting case that high levels of common ownership in companies could be anti-competitive. This trend is exacerbated by high levels of indexing, as a greater percentage of publicly traded shares are owned by the same index funds. Bloomberg reports: The rise of indexing mutual funds and other diversified investors is increasing the temptation for public companies to act in the interests of their rivals, a trio of professors say. Their study, “Common Ownership in America: 1980-2017,” is the latest entry in a growing body of research looking … [Read more...]
Sears Saved by Lampert Once Again
Eddie Lampert, Sears' largest creditor and shareholder, won a last minute bid to buy the company out of bankruptcy for $5.3 billion. This prevented the complete liquidation of the stores, and will keep about 400 Sears open. The Wall Street Journal reports: With more than $7 billion in assets when it filed for chapter 11, Sears is one of the biggest in a string of recent U.S. retail bankruptcies. The company, which also runs the Kmart chain, has already closed about 200 of the roughly 700 stores it had when it filed for protection. The agreement, reached in early-morning hours Wednesday, … [Read more...]
No Stock is Worth 100% of Your Time or Money
There is simply no company out there that has a stock safe enough for you to invest in just that one and nothing else. Even tried and true utility stocks demand diversification in your portfolio. There is no better example than what is happening to PG&E right now. PG&E is the California utility being alleged to have caused some of the wildfires there. Despite being a "widows and orphans" staple, the stock has plunged and the company has announced it will file for bankruptcy. Juliet Chung and Nicole Friedman report in the Wall Street Journal: Utilities have long been considered … [Read more...]
Electric Volvos about to Go Wireless?
Volvo has purchased a portion of Momentum Dynamics, a company building wireless charging stations for battery powered vehicles. Volvo is trying to gain an edge in what has become a worldwide race among the largest car companies to gain an advantage in the electric powered vehicle market. Kate Beioley reports for the FT that Volvo isn't alone in exploring wireless charging technology. She writes: The Volvo Group Venture Capital AB, a subsidiary of the Volvo Group, said it was investing in the Philadelphia-based company which develops high-power wireless charging systems for trucks, buses and … [Read more...]
New Deal Creates World’s Largest Gold Miner
Newmont Mining Corp. is buying Goldcorp Inc. to form the world's largest gold miner, report Bloomberg's Thomas Biesheuvel and Elena Mazneva. This deal and the recent acquisition of Randgold by Barrick will be followed by numerous smaller deals in response as both giants sell certain assets. Bloomberg reports: The deal will create a company that runs mines in the Americas, Australia and Ghana and exceeds Barrick-Randgold in scale, producing about 7.9 million ounces of gold a year. It also rivals Barrick’s purchase of Placer Dome Inc. as the gold-industry’s biggest takeover. That deal had a … [Read more...]
Democrats’ Opening Bid? 70% Tax Rates
Speaker of the House Nancy Pelosi hasn't even warmed up her gavel, but already the newest, and youngest member of her party's Congressional caucus, Alexandria Ocasio-Cortez, has suggested a 70% tax rate on earnings over $10 million. That's probably not the issue Pelosi thought she would have to explain right away to voters. John Harwood reports in CNBC: The top tax rate stood above 90 percent throughout the 1950s. But through deductions and tax avoidance, “taxes on the rich were not that much higher” then, the conservative Tax Foundation noted in a 2017 article. The top rate remained 70 … [Read more...]
Can Copper Recover without China?
Copper prices have been sliding as the Chinese economy has weakened. The question is, can copper recover even if the Chinese economy has not? Christopher Alessi and Amrith Ramkumar examine at the copper industry for The Wall Street Journal: Growth worries have recently focused on China, which is the world’s largest consumer of copper, accounting for about half of global demand, and is in engulfed in a tariff fight with the U.S. Apple cited weak Chinese demand in cutting its revenue target, a move that came following tepid Chinese manufacturing figures that showed a commonly-referenced … [Read more...]
Be the Master Chef of Your Own Unique Investment Recipe
Back in June of 1992 and today, I stress to my readers the importance of balance and diversity in their portfolios. Back then I wrote: Fine Balance From a Master Chef Did you happen to see the McIlhenny & Co. recent advertisement for the company’s Tabasco brand pepper sauce? The ad caught my eye because it ran a photo and culinary commentary from Susan Spicer, chef/owner of Bayona, a New Orleans restaurant most deserving of the recognition it is receiving. In the ad, Susan tells readers, “In my approach to creating dishes, balance is a primary concern. I love playing with the palette … [Read more...]
The Shutdown’s Real Lesson: Too much of Economy Hostage to Government
“The problem with the shutdown is not that President Trump is holding the government ‘hostage,’ as House Majority Leader Steny Hoyer said, but that the government has taken hostage of too much of the U.S. economy,” writes Chris Edwards editor of www.DownsizingGovernment.org at the Cato Institute, a Washington, DC.,-based think tank focused on limited government. When security at the nation’s 450 commercial airports depends on the government—a shutdown matters explains Edwards pointing out that a spokesman for the TSA screener’s union said this Tuesday: “Some of [my members] have already quit … [Read more...]