You can read here about the negative impacts of a Biden administration tax increase on dividends. In summary, a higher tax on dividends motivates companies not to pay them. My take? Stock-rich executives and the largest shareholders don’t want to fork over half the payout in taxes. Pinar Cebi Wilber writes in The Wall Street Journal: The Biden administration has released a flurry of tax proposals, including a headline-grabbing tax hike on capital gains that would apply retroactively from April. Dividends would be subject to the same treatment, according to a recently released Treasury … [Read more...]
Archives for June 2021
Can You Trust Amazon Ratings?
Amazon may have a ratings problem. Sellers of some items are breaking the rules on paying customers for ratings, and some ratings may not be real at all. Nicole Nguyen reports in the WSJ: A charging brick recently caught my eye on Amazon. AMZN +0.13% It was a RAVPower-branded two-port fast charger, and it had five stars with over 9,800 ratings. The score seemed suspect but Amazon itself was the seller, so I added it to my cart anyway. The device arrived a day later, along with a clue to all that customer satisfaction. A small orange insert offered a $35 gift card—roughly half of the … [Read more...]
Battery Battle: Detroit is Coming for Tesla
Big automakers have watched for a long time as Tesla has continuously proven that they can surprise the market with progress on electric vehicles. Now, Detroit wants to get in on the action. Mike Colias reports: General Motors Co. GM -1.42% is raising its investment in electric vehicles—the second boost in recent months—and pushing deeper into battery production, making it the latest global auto maker to accelerate its transition to plug-in cars. The company also raised its guidance for pretax profit excluding one-time items for the first half of this year, to between $8.5 billion and $9.5 … [Read more...]
Inside Real Estate Market: This Bubble’s Popped Baby
Your Survival Guy’s been watching lumber prices. I reported here and here that much of the increase was due to a bottleneck at sawmills. (There’s plenty of trees, just no excess capacity at the mills creating finished lumber.) Lumber futures reached a high of $1,711.20 per thousand board feet in May. On Tuesday, July futures were down to $1,009.90, off 41% from the record high. Ryan Dezember reports in the WSJ: The rapid decline suggests a bubble that has burst and the question is how low lumber prices will fall. Even after tumbling, lumber futures remain nearly three times what is typical … [Read more...]
Can China Curb Commodity Costs?
China is planning to sell stockpiled metals to fight inflation in their prices. Will it be enough? Chuin-Wei Yap reports for The Wall Street Journal: China said it would begin to sell major industrial metals from state stockpiles, an effort to squelch factory-gate price increases that have hit a 13-year high and are stoking fears of global inflation. As the world’s biggest buyer of a range of industrial commodities, China is using its market heft to try to quell the sharp rise in global metal prices over the past 12 months, including a 67% surge in copper, a bellwether for macroeconomic … [Read more...]
COVID Was a Retirement Stress Test: Did You Pass?
You're probably feeling pretty good about your retirement after getting tested by COVID-19. You've been saving until it hurts your whole life. That's why my favorite investment is Y-O-U. Relying on yourself to work to make money, and then investing to save it, is the best way to ensure that an inflated stock market, or a pandemic crash, don't determine your destiny. You have read my warnings about the number of people who are confident in their retirement plan. At near record highs, the numbers beg some skepticism. New data have come out from CNBC that suggest at least some retirees are … [Read more...]
Capital-Heavy Companies For the Future?
In the Financial Times, Ian Harnett of Absolute Strategy Research makes the case for capital heavy businesses. He writes: The trend towards more capital-heavy companies is driven by four structural themes: investment in “reshoring”; a shift from investment in information to infrastructure; the need to develop climate-transition technologies and, finally, investment in technologies needed to secure geopolitical leadership. These all require shifts from investing in ideas and information to investing in stuff. Reshoring is an investment in independence and resilience. The fragility of long, … [Read more...]
Americans Fleeing High Tax States for Growth Corridors
You already know that America's growth corridors are where the action is for businesses who want to keep their own money and thrive. The Census has confirmed as much, and the economic numbers do too. Now the IRS is coming in with another analysis to put the final nail in the coffin for high tax states. The Wall Street Journal explains that new IRS data show vast income losses for high tax states, with low tax, growth corridor states the winners in the migration trend. Allysia Finley and Kate LaVoie report: New IRS data compiled by research outfit Wirepoints illustrate the flight from high- … [Read more...]
SPAC Model for EV Startups Takes Hit as Lordstown Motors’ CEO, CFO Leave After “Inaccuracies”
Bloomberg reports on the fiasco at Lordstown Motors, where "inaccuracies," in reporting have seen the CEO and CFO leave the company. Christine Watkins writes: Lordstown Motors Corp. announced the abrupt departure of its two top executives and said its board found evidence of inaccurate statements, intensifying the turmoil for the electric-vehicle maker and onetime SPAC star. The company said in a statement Monday that Chief Executive Officer Steve Burns and Chief Financial Officer Julio Rodriguez have resigned from the company, effective immediately. It is the latest setback for the … [Read more...]
Profit and Power Drive Environmentalism on Wall St. and in Washington
It used to be rare that regulators in Washington D.C., and money men on Wall St. would find common cause, but that has changed in an era when the government is so big, its subsidies alone drive the profits of many businesses. Big Wall St. firms like BlackRock have found a way to turn Washington into a profit machine. The Biden administration is loaded with former BlackRock employees. Do you think they left their high-paying jobs on Wall St. to do what's best for the farmers of Iowa or the fishermen of Maine? No, they came to Washington to grease the skids for policies that will make … [Read more...]