Tag Archives: markets

Weakness

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Russia is continuing to withhold a free flow of natural gas to the EU, holding the flow down in order to elevate prices inflicted on the EU’s citizenry and to restrain Europe’s industrial capacity.

Gas prices have soared in Europe in recent months due to low inventories and a recovery in demand as the economy rebounds from the pandemic. The price surge has taken a toll on energy-intensive industrial activity while consumers face a steep rise in energy bills as the winter heating season begins.

Those prices are five times the level of just a year ago—before Biden surrendered to Putin on the Russia-sponsored hacker shutdown of Colonial Pipeline by unblocking the finishing of Russia’s Nordstream 2, which unblock also was in furtherance of Merkel’s demand for Russian natural gas via that cross-Baltic Sea pipeline.

Officials and analysts say that Moscow is using Europe’s energy crunch to gain geopolitical leverage.

Well, of course Putin is. He’s not an idiot.

And

In another sign that Russia isn’t about to significantly boost supplies to Europe, Ukraine’s gas transmission system said Sunday that it hasn’t received any additional requests from Gazprom and the gas transit remained below capacity.

This is the outcome of outgoing German Chancellor Angela Merkel’s and newly arrived American President Joe Biden’s (D) enthusiastically pursued energy policies coupled with Biden’s overt timidity in front of Putin. First, demonstrate Europe’s weakness. Only after that, exploit that weakness.

It stretches credulity beyond breaking to believe two such heavily intelligent people didn’t anticipate this.

Government Controls

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Here’s the latest version of the Biden-Harris administration’s attempt to expand government control over our economy, this time using Medicare drug pricing as their venue. This example also is the latest inclusion in the Progressive-Democratic Party’s reconciliation bill.

The Health and Human Services Secretary will “negotiate” 10 to 20 of the drugs that Medicare spends most on, starting in 2025. Drug makers will get socked with a 95% excise tax on gross sales if they don’t agree to the government’s price.

This is a textbook example of the fascism version of socialism. Companies are free to produce and sell whatever they want, so long as it fits within Government requirements directing what is produced, the volume of production, and the prices to be charged.

Yet, Biden can’t make the trucks run on time.

A Risk and a Solution

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Japan’s Softbank Group has reported a significant loss driven by the technology company crackdown the People’s Republic of China government has inflicted on PRC tech-oriented companies and Softbank’s heavy investments in those companies.

Masayoshi Son, Softbank’s CEO, now is saying

Our China risk is not so huge. It is within our control[.]

And

It is a time of severe trials for China’s high-tech stocks. We are right in the middle of a storm.

And, as paraphrased by The Wall Street Journal,

[T]here is only so much more damage turmoil in China can do.

Here’s a thought: Softbank could eliminate the risk altogether and prevent any further damage by divesting itself of all PRC-oriented holdings and no longer investing at all in PRC companies, whether tech or ditch digging or anything in between.

All Those Rich Fat Cats

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Easy come, easy go. Especially for those ill-sympathized-with rich fat cats. The rest of us….

All that money we saved on our Independence Day celebrations—every one of those 16 cents (and what did we get? Another day older)—is gone, and we’re deeper in debt.

We’re also going to pay a whole lot more for our Thanksgiving Day celebrations.

Nearly every component of the traditional American Thanksgiving dinner, from the disposable aluminum turkey roasting pan to the coffee and pie, will cost more this year, according to agricultural economists, farmers and grocery executives.

Meat and poultry are up over 10% since last year. Raw aluminum is up 80% over the last 16 months; guess how much that roasting pay, made of processed aluminum, is going to cost us.

It’s OK, though. ‘Least all those rich fat cats who made their 16 cents with their superiorly astute purchasing skills for their Independence Day celebrations gonna pay their fair share for the upcoming most expensive Thanksgiving Day celebration inflation can produce.

However, no worries; it’s all good. I have it on good authority that we just need to lower our expectations and quit whining.

Fantasy World

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President Joe Biden and his Progressive-Democratic Party syndicate now want to tax unrealized gains in order to raise money. WSJ‘s Editors are being generous when they call the move a mirage.

Unrealized capital gains are gains in the value of an asset that are thought to have accrued between the time of acquisition and the present time, but that haven’t been “realized,” the asset hasn’t actually been sold and a profit actually collected. That’s just one aspect of the concept of unrealized gain, though.

Another aspect is especially critical: who makes the assessment of value increase? For instance,

A tax court this year ruled that the late entertainer Michael Jackson’s “likeness and image” were worth about $157 million less than the IRS claimed.

That’s Government making the assessment of the present value of an asset before the asset has been sold and not the free market making an empirical assessment based on the actual sale price. This time, Government was caught out and reversed. But under the Progressive-Democrats’ latest tax scheme? Asset owners might not be so lucky.

Progressive-Democrats are living in fantasy land in terms of what average Americans want from our economy and for ourselves.

Now the Progressive-Democrats want the IRS to move into fantasy land with them. Unrealized gains are just that—they don’t exist, they’re purely fantasy.

Separately,

The IRS will have to hire many more auditors [to make such assessments]….

Of course it will. It’s part of the Progressive-Democrats’ Build Government Bigger plan.