Your Survival Guy feels like Jason Bourne writing to you about a secret, underground black-ops finance story—like I’m uncovering some hidden truth. A secret. But in reality, the truth isn’t hidden at all—it’s right in front of our eyes. More like in front of our “I.” That’s the beauty with stories full of EGO and hubris—they just can’t keep their success to themselves. So here we go. You know about my concerns with “You Invest, They Win” and how EGO plays an unfortunate role in “high” finance. We get a front-row seat to all of this in Blackstone founder Stephen A Schwarzman’s book, What It … [Read more...]
Archives for July 2021
Delta Variant News Spooks Commodities Market
The media uproar over the Delta Variant, a version of COVID-19 that is thought to spread more quickly than other variants, is having an effect on commodities prices, reports the FT, writing: From crude to copper and corn, commodity prices slipped on Monday, knocked by the spread of highly infectious coronavirus variants and concerns about slowing growth in China, the world’s biggest consumer of raw materials. Brent, the international oil marker, fell as much as 1.7 per cent to $74.27 a barrel, while copper dropped 1.1 per cent to $9,390 a tonne — leaving it more than $1,000 below the … [Read more...]
SURPRISE: The World Doesn’t Have Enough Natural Gas
A surprising surge in demand thanks to hotter than expected temperatures, droughts, and economic growth has created a shortage in natural gas. Joe Wallace reports for The Wall Street Journal: A scramble for natural gas is creating pockets of scarcity in the global market, boosting prices for the fuel and for the electricity generated by burning it. Rampant demand in China is sucking in chilled cargoes of gas from the U.S., after a year in which American energy companies throttled back production. A drought in Brazil has added to the competition by curtailing power output from hydroelectric … [Read more...]
FUNDS: These Models Are the Ugly Kind
You have here yet another reason why certain exchange-traded funds and mutual funds are dangerous because MODELS break. That's when things get ugly. Dawn Lim reports in The Wall Street Journal what happened when some BlackRock models were altered. She writes: When BlackRock told brokerages that it had tweaked rules around its flagship model portfolios in late May, that set in motion synchronized buying and selling across its own funds. A BlackRock fund that tracks financial stocks took in a record influx of money for a day too. As part of changes on the week of May 26, BlackRock also cut the … [Read more...]
Inflation Tailwinds Could Soon Rise to Dangerous Levels
In a long piece in The Wall Street Journal, Gwynn Guilford explains some of the major trends that could foster rising inflation in the United States. She writes (abridged): For the past few decades, the Federal Reserve has succeeded in keeping inflation low—perhaps too low. It had an assist: Shifts in the global economy, including globalization, demographics and the rise of e-commerce, helped keep prices in check. Some economists say these so-called secular forces have begun to reverse in ways that the pandemic has intensified. “The factors that were…playing a significant role in that … [Read more...]
As Oil Prices Rise, Where Are Shale Drillers?
In the recent past, shale oil drillers have acted to create a cap on oil prices by drilling heavily any time the price of crude seemed to get too high. Despite climbing oil prices, shale drillers seem to be absent. Collin Eaton and Christopher Matthews explain why at The Wall Street Journal, writing: Shale companies pumped with abandon anytime oil prices rose sharply last decade. But as crude tops $70 a barrel, they are barely doing enough to sustain U.S. production. Frackers have been forced to rein in spending and live within their means after many investors lost faith in the companies … [Read more...]
Your Retirement Life: To Where Will You Flee?
Your retirement life is sacred ground. You know my favorite advice, to your dismay, is to work as long as you can and put off retirement. That doesn’t mean you need to give up your dreams. You just need to be creative. Can you do remote work? Wherever you choose to go, familiarize yourself with my Super States, rent for a year to make sure it’s a good fit, and downsize. Don’t worry the kids will visit. Bankrate.com just came out with its annual ranking of the best places to retire, and you won't be surprised by the top three. According to Bankrate.com, the best three states for retirement … [Read more...]
SCARE: Morgan Stanley Warns on Dot-Com Like Fragility
At MarketWatch, Christine Idzelis reports that Morgan Stanley analysts are raising the alarm over increased market fragility. She writes: The relationship between high-flying technology stocks and U.S. Treasury yields has broken down, echoing ‘the extreme anomalies of the dot-com boom when tech valuations became unmoored,” according to Morgan Stanley. “For most of the last 20 years, tech stocks have traded directionally with economic growth—carrying a positive correlation with long-duration Treasury yields—as investors viewed them as tied to positive economic growth,” Lisa Shalett, chief … [Read more...]
Electric Vehicles? American Gasoline Demand Hits Record High
Despite all the attention being given to electric vehicles, American gasoline demand has just hit an all-time high. Bloomberg's Mike Jeffers reports: Gasoline supplied in the U.S. hit a record high going back to 1990 during the week leading to the July 4th holiday weekend. A proxy for demand, gasoline supplied rose to 10 million barrels a day the week ended July 2, according to the Energy Information Administration. Market watchers were eagerly awaiting this week’s figures to see whether demand for the fuel has fully recovered from the pandemic. The inflection point underscores how … [Read more...]
COAL COMEBACK: What Happens When the Sun Doesn’t Shine?
Despite major investments in renewable energy around the world, coal is making a comeback. Coal is best suited to the energy challenges of today's post-COVID-19 economic rebound. Coal energy can come online quickly, and doesn't need the sun to shine, or the wind to blow, in order to produce. The resurgence of coal use may not last long, but its occurrence shows the inflexibility of renewable power sources. Sarah McFarlane and Katherine Blunt write for the WSJ: Coal use is surging in some of the world’s largest economies as electricity demand rebounds from the pandemic, illustrating the … [Read more...]