Category Archives: markets

A Misnomer

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In a WSJ article centered on how to take advantage of higher bond yields, the news writer had this:

[Bond] Investors get a coupon payment that helps offset the decline in value the bond might experience if market yields rise. In other words, even if a bond’s price drops, it can still end up with a positive return.
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Currently, 2-year Treasurys are yielding over 4.9%. That isn’t much less than what the 10-year Treasury is paying at over 5.2%.

That’s the misnomer. The news writer is using yield and coupon interchangeably. They aren’t. Yield is simply the dividend payment relative to the bond’s then-current market price. Coupon is the dividend payment the bond is required to pay under the terms of its issue, and it’s fixed—independent of the bond’s market’s price. Yield will rise and fall with the movement of the market’s pricing of the bond.

Neither 2-year Treasurys nor 10-year Treasurys nor any other Federal government debt instrument (or any other bond, whether corporate or municipal or…) pays yield. The pay only the coupon’s dividend. Calling the yield what the bond is paying is badly misleading.

 

Guys like this article’s writer really ought to know better, though.

Robot as Buyers…and as Advertisement Targets?

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Meta has released its broad-spectrum AI agent Muse, which does the user’s shopping, handles his email, handles a significant measure of his financials, maintains his calendars, and on and on. Leave aside the security concerns of such a broadly capable AI agent, especially one produced by Meta.

Amazon has blocked it from shopping on Amazon‘s sites.

In addition to selling goods, Amazon‘s shopping site has a large advertising business, and it won’t want to cede any ground to Meta in that space, analysts said. If agents do more shopping for users in the future, that means fewer humans to show ads to, and a potential rethinking of Amazon‘s business model.

It seems to me, though, that most folks shopping via AI agents tell the agents to go buy this sort of thing, not buy this particular thing. Thus, one answer would be to write ads tailored for AI agents as well as human-targeted ads.

Now we’d have robots selling, and advertising, to the robots that are buying stuff. And the ripples ripple. One ripple: humans, in addition to off-loading some of our work onto robots, could now off-load some of the burden of sorting through or ignoring advertisements onto their robots. Indeed, and this is part of Amazon‘s early-stage problem, humans using AI agents already are unburdening themselves of much of the hassle of dealing with advertisements.

There’s Another Way, Also

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Environmental Protection Agency Administrator Lee Zeldin has submitted to Congress a number of California “climate” waivers for repeal under the Clean Air Act. This is a necessary step, and the Republicans in the House and Senate need to find the personal courage to take them up without delay and rescind them, an action that’s straightforwardly doable with simple majority votes in both houses and the President’s signature.

There’s another way, a parallel path, though, and it’s the responsibility of We the People and our businesses and enterprises.

One EPA waiver lets California mandate “zero emission” commercial vessels, including ferries and whale-watching boats. Another allows California to require that container ships and oil tankers docked at California ports plug into the state’s electrical grid or install technology to capture their emissions.

And

Another EPA permit lets California mandate that new lawn mowers, leaf blowers, chain saws, and other “small off-road engines” sold in the state must be electric.

And

[An EPA] waiver approved by the Obama team…allowed California to impose EV quotas through 2025.

It’s straightforward, also, for our private enterprises to adjust their supply chains and sales paradigms to avoid doing business in California altogether. These businesses need to do so promptly and broadly.

A Question

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With all the hyped up fears of a coming crash in the stock market and in the economy overall—some pundits are claiming the coming crash will make the Panic of 2008 look like a little burble (e.g., the Federal government will have to make a choice between letting banks and other financial institutions fail en masse or firing up its printing presses)—more and more folks are pushing buying gold and silver or bragging about the gold and silver they already hold.

So my question: what’s the value of all that gold and silver in such a catastrophe? Do these folks really think they’ll be able to exchange their gold or silver for their rent/mortgage payments? Their grocery and utility bills? Their gasoline down at the filling station? Or get those things with markers for their gold and silver held in brokerage accounts rather than in their closets in physical form? What if their broker is one of those financial institutions that went bust? Those holdings, if not lost forever, will be inaccessible for weeks or months while the broker’s assets wend their way through bankruptcy courts and the innumerable legal fights over distribution.

And: how will the holders sell their gold or silver, whether held in physical form or in brokerage accounts? Who will be willing to spend their cash on hand to get those metals?

Who Can Afford Obamacare?

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The lede:

Rates for many Affordable Care Act plans rose by double digits this year. Insurers want to do the same next year.

It’s especially bad in Progressive-Democrat-run States. For instance:

In Washington state, Centene is asking for a 28% hike, after boosting rates by 35% in 2026. Blue Cross & Blue Shield of Illinois wants 15%—on top of a 28% increase this year.

Who can afford Obamacare? Nobody. Not the individual, not the nation at large. That’s what those unconscionable Federal subsidies, only recently cut back, kept hidden for so long, at the Progressive-Democratic Party government dependency pushers’ behest. Dependency is votes, as they’ve long known.

It’s time the Republican Party stopped dithering and cowering. The party needs to get rid of Obamacare and replace it with an interstate commerce-centric, lightly regulated (which would entail rescinding a double potful of regulations) free market for health insurance, one in which insurers could offer plans that customers actually want, and at competition-driven prices and deductibles, and coverages. Especially that last would drive costs down. Plans that don’t try to cover everything, unless that’s what enough customers want to make a market, plans that cover only a few things, that cover only catastrophic medical events, and every coverage level in between—whatever the customers want in sufficient aggregate to make a market.