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Bigworld, It looks like Jamie Dimon may be right about the return of 1970s type stagflation. Rickards has also been predicting a recession later this year, combined with stubborn inflation.
Fwiw, I dropped the stock allocation down to 18% (from 28%), so will try to go with that. On the geopolitical front, while we managed to avoid the 'US bombs Iran' scenario (for now), the Ukraine situation appears even more dangerous than ever. Add in the upcoming election angst and uncertainty, and I figure it makes sense to limit the stock exposure.
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QIPT --> key support broken over past several weeks, and is now bouncing to re-test that level (now resistance)
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LWLG breaks key support
Had formed descending triangle over past year.
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LWLG breaks key support
Had formed descending triangle over past year.
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Ombow, Looks like LWLG may have broken key support over the last two days. The short position was already over 16%, per Yahoo Finance.
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Bar, Those allegations against Globe Life do sound serious. The stock is staging a nice recovery, but still down by 1/3 or so. I guess the moral of the story is that when Buffett exits a stock completely, it's probably best to follow his lead. But there are a bunch of stocks that Buffett sold out of last year that I decided to keep for the longer term --> DHI, GL, MKL, MMC, JNJ, MDLZ, PG. So far only GL has blown up, but luckily only a small position. Still unnerving to watch though.
>>> Globe Life profit surges on strong underwriting, investment returns
Reuters
Apr 22, 2024
https://finance.yahoo.com/news/globe-life-profit-surges-strong-210636532.html
April 22 (Reuters) - Globe Life posted a rise in first-quarter profit on Monday as the insurer benefited from strong investment returns and underwriting activities.
The insurance industry, known for its resilience to economic downturns, sustains a stable demand for policies, with both corporate and government spending on insurance remaining steady.
Total premiums at Globe Life rose to $1.15 billion in the first quarter from $1.10 billion a year ago.
The surge in the broader equity capital markets on the other hand has enhanced investment income for insurers, who diversify a portion of their cash across various asset classes.
Globe Life's net investment income for the quarter increased about 10% to $282.6 million.
The company's net operating income for the three months ended March 31 came in at $2.78 per share, compared with $2.53 per share in the prior-year quarter.
Globe Life expects its operating income for the year to be between $11.50 to $12.00 per share. The insurer further expects to resume share buybacks once the blackout period related to a potential acquisition ends for the first quarter.
Earlier this month, Fuzzy Panda Research disclosed a short position in the company, citing numerous cases of insurance fraud, leading Globe Life's shares to drop to their lowest in over a decade.
Globe Life denied the allegations, saying "the short seller analysis by Fuzzy Panda Research mischaracterizes facts and uses unsubstantiated claims and conjecture to present an overall picture of Globe Life that is deliberately false."
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>>> Globe Life profit surges on strong underwriting, investment returns
Reuters
Apr 22, 2024
https://finance.yahoo.com/news/globe-life-profit-surges-strong-210636532.html
April 22 (Reuters) - Globe Life posted a rise in first-quarter profit on Monday as the insurer benefited from strong investment returns and underwriting activities.
The insurance industry, known for its resilience to economic downturns, sustains a stable demand for policies, with both corporate and government spending on insurance remaining steady.
Total premiums at Globe Life rose to $1.15 billion in the first quarter from $1.10 billion a year ago.
The surge in the broader equity capital markets on the other hand has enhanced investment income for insurers, who diversify a portion of their cash across various asset classes.
Globe Life's net investment income for the quarter increased about 10% to $282.6 million.
The company's net operating income for the three months ended March 31 came in at $2.78 per share, compared with $2.53 per share in the prior-year quarter.
Globe Life expects its operating income for the year to be between $11.50 to $12.00 per share. The insurer further expects to resume share buybacks once the blackout period related to a potential acquisition ends for the first quarter.
Earlier this month, Fuzzy Panda Research disclosed a short position in the company, citing numerous cases of insurance fraud, leading Globe Life's shares to drop to their lowest in over a decade.
Globe Life denied the allegations, saying "the short seller analysis by Fuzzy Panda Research mischaracterizes facts and uses unsubstantiated claims and conjecture to present an overall picture of Globe Life that is deliberately false."
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>>> Jay Powell just made 2024 more of a puzzle for regional banks
Yahoo Finance
by David Hollerith
Apr 21, 2024
https://finance.yahoo.com/news/jay-powell-just-made-2024-more-of-a-puzzle-for-regional-banks-130039910.html
Federal Reserve Chair Jay Powell is making the rest of 2024 more complicated for regional banks.
This past week 12 of the nation's best-known midsize lenders reported sizable drops in first quarter profits thanks largely to the effect elevated interest rates are having on their operations.
Many of these banks are paying higher costs for deposits as customers continue to seek out higher yields, and those costs are eating into a key revenue source known as net interest income.
That pressure is not likely to abate anytime soon as the Fed dials back its expectations for rate cuts in 2024, a move that was cemented by Powell this past Tuesday just as many regional banks prepared to release their first quarter results.
The Fed was a popular topic for regional bank executives as they explained their results to Wall Street and described their outlook for the rest of the year.
Most reaffirmed that they expect the money they make from lending to drop as rates remain elevated.
Some, however, predicted that if rates stay high, their banks will eventually be able to make more from lending or the repricing of their securities, perhaps during the second half of this year.
Take US Bancorp (USB) and PNC Financial Services Group (PNC), the two biggest regional lenders in the US.
Minneapolis-based US Bancorp now expects to make between $200 million and $500 million less in net interest income than it forecast in January, driven by lower loan growth and more expense pressure from deposit costs.
"The outlook for potential rate cuts in 2024 has meaningfully changed," Andy Cecere, US Bancorp CEO, told analysts Wednesday. "We now expect our net interest income for the full year to be lower than anticipated."
As for next year, "we're not going to give a 2025 guide right now because it's so volatile in terms of what rates could be."
Pittsburgh-based PNC, however, said it expects improvement in the last two quarters of the year thanks to the repricing of its under-earning securities portfolio. That will help even out any rise in deposit costs, the bank’s CEO said.
"It would be a bit of a heroic assumption for anybody to say that deposit costs won't continue to creep up in the face of a steady Fed," PNC CEO Bill Demchak told analysts Tuesday.
First Horizon (FHN) CFO Hope Dmuchowski told analysts Wednesday that forecasting how much the bank can make from its net interest income “in this environment is very, very hard, even within a 3% range, with as many moving parts as we have.”
The Memphis-based lender kept its previous guidance for net interest income to grow between 1% and 4%, assuming three rate cuts. It also bucked an industry-wide trend in the quarter, with costs for interest-bearing deposits declining from the previous quarter while overall levels were stable.
At Buffalo, N.Y.-based M&T Bank (MTB), executives bumped the bank's net interest income guidance up to $6.8 billion, the top of its previous range. But that is an estimate based on two rate cuts.
Part of that estimate also leans on the repricing of M&T's securities portfolio as a margin boost.
“Obviously, we could outperform, but I'd much rather under promise and over deliver right now,” M&T CFO Daryl Bible told analysts Monday.
These regional banks could surely use more loan growth, but that may have to wait until the Fed lowers rates. And that largely depends on the path of inflation.
So far this year, readings from the Consumer Price Index (CPI) have been hotter than expected. Fed officials have cited those readings as a reason why rates will likely remain elevated for longer than expected.
"When you read those [CPI] reports, it's a little bit like you’re looking into Snow White’s magic mirror; you kind of see what you want to see," Fifth Third Bancorp (FITB) CEO Timothy Spence said in an interview Friday.
CPI rose 3.5% over the prior year in March, an acceleration from February's 3.2% annual gain in prices and more than economists expected.
"You can conclude by looking at it that inflation is stuck at 3%, that it’s grinding down slowly to 2%, you could conclude that it’s reigniting towards 4%," Spence added.
As long as rates remain where they are, Spence said, the key for banks is "the race between your ability to reprice fixed-rate assets and your ability to manage deposit costs."
Fifth Third's interest-bearing deposit costs rose by 0.01% in the first quarter compared with the previous quarter, a much lower rise than some rivals.
"For all banks in an environment like this one, your ability to continue to control interest expense is going to be a big driver of your ability to hit your outlook," Spence said.
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>>> Move Aside, Big Banks: Giant Funds Now Rule Wall Street
The Wall Street Journal
by Matt Wirz
4-22-24
https://www.msn.com/en-us/money/news/move-aside-big-banks-giant-funds-now-rule-wall-street/ar-AA1npR11?cvid=9604790d90024acef4ec5a709c7bd156&ei=35
Giant investment companies are taking over the financial system.
Top firms now control sums rivaling the economies of many large countries. They are pushing into new business areas, blurring the lines that define who does what on Wall Street and nudging once-dominant banks toward the sidelines.
Today, traditional and alternative asset managers control twice as many assets as U.S. banks, giving them increasing control over the purse strings of the U.S. economy.
The firms—such as Blackstone, Franklin Templeton, BlackRock and KKR—are becoming more complex and more similar to one another all at once. Investors say this creates risks that markets have never encountered before.
Fund-manager executives insist the expansion, as striking as it is, remains in its early innings. Good news for them because fast growth is bringing them vast wealth, especially in private, or “alternative,” investing. Private equity has minted more billionaires than any other industry in recent years, according to data from Forbes.
Here’s a look at how the field is shifting:
Trillion-dollar titans
Huge fund-management companies are bulking up by offering new types of products to capture market share. The biggest are evolving into financial supermarkets, mostly for institutions and the wealthy, but increasingly for middle-class investors as well. Banks consolidated similarly in the decade leading up to the financial crisis.
Private-equity and private-debt funds, such as Apollo Global Management and Blackstone, mostly manage money for institutions, but are increasingly selling products to individual investors. Mutual-fund behemoths, including BlackRock, are growing bigger still by building or buying private-fund operations.
Asset managers are also supplanting banks as lenders to U.S. companies and consumers and intertwining with the insurance industry.
Top private-fund executives say they require long-term client commitments, making them more stable than deposit-dependent banks such as Silicon Valley Bank.
“We’re moving into a gray area as asset-management businesses move into different silos of financial services,” said Tyler Cloherty, a managing director at consulting firm Deloitte who advises fund managers. “The big question I’m getting is ‘What do we do around getting alternatives to retail clients?’ There’s a lot of complexity there.”
The growth spurt came out of the 2008 financial crisis, when new regulation curtailed investing and lending by banks, making room for fund managers to expand. Central banks kept interest rates low for most of the following decade, driving investors out of savings accounts and Treasury bonds and into managed funds.
Blurring the lines
In 2008, U.S. banks and fund managers were roughly neck and neck at about $12 billion of assets. Today, traditional asset managers, private-fund managers and hedge funds control about $43.5 trillion, nearly twice the banks’ $23 trillion, according to a Wall Street Journal analysis of data from the Federal Reserve, HFR, ICI and Preqin.
Large banks have responded by becoming more like fund managers, beefing up investment teams. Goldman Sachs reported this month revenue of about $4 billion from asset and wealth management in the first quarter, twice the earnings from its storied investment-banking division.
Public-fund managers, meanwhile, became huge, mostly by offering low-fee mutual and exchange-traded funds that track indexes. Four of the biggest—BlackRock, Fidelity, State Street and Vanguard—control about $26 trillion, equivalent to the entire annual U.S. economic output.
But over the past four years, private equity and debt fund assets doubled to almost $6 trillion, far outpacing the 31% growth rate for public funds. The firms began selling private-credit funds to their core clients—pension funds and endowments that had maxed out on private equity. The fund managers also made inroads with new investors, such as insurance companies and individuals.
As the funds grow bigger, their founders make more money. Private-equity fund managers took 41 spots on Forbes magazine’s list of U.S. billionaires published this month, more than any other profession. The investors make up 5.5% of all the country’s billionaires, almost twice the 3% they comprised just 10 years ago.
The surge could continue. KKR Co-CEO Scott Nuttall—a 2022 addition to the Forbes billionaires list—told shareholders at a meeting this month that KKR will double the money it controls to $1 trillion by 2029. Only 2% of wealthy individuals currently invest in alternative funds and that will jump to 6% by 2027, he said.
Rival Marc Rowan, CEO of Apollo Global Management, says his firm will increase its roughly $650 billion under management to $1 trillion by 2026. Blackstone, which crossed the $1 trillion threshold in July, launched this year its first private-equity fund targeted at individual investors. The fund has raised about $3 billion so far, the fastest start ever for a retail fund by the firm, a person familiar with the matter said. Blackstone has raised more than $100 billion through private debt and real-estate funds aimed at individuals.
Public-fund managers are much bigger than their private counterparts, but also less profitable after years of lowering fees to gain market share. A growing number, including Franklin Templeton and T. Rowe Price, are buying alternative managers to boost profits.
The trend hit a fever pitch in January, when BlackRock struck a deal to buy Global Infrastructure Partners for $12.5 billion, the highest price ever for an alternative-asset manager, according to Dealogic. If the acquisition goes through as expected, it will mint another six billionaires for the Forbes list from among Global Infrastructure’s founding partners.
Other traditional fund managers have taken a slower—and less expensive—approach, building their own private-fund businesses.
Regulating private equity for the masses
Neuberger Berman, a traditional fund manager born out of Lehman Brothers’ collapse, has about one-third of its $463 billion in investments in alternatives, up from about 10% a decade ago. The employee-owned firm raised the bulk of the assets from institutional investors.
“Much of the future growth will be driven by individuals who don’t have either the experience or professional staff to help them,” said Neuberger Chief Executive George Walker. The onus is on fund managers to educate the new buyers and provide them with well-diversified products to reduce risk, he said.
Neuberger launched in 2021 a product it calls Access that pools dozens of private funds and their investments to give clients with low buy-ins a diversified portfolio. The fund doubled in size over the past year to about $1 billion.
Bond-fund powerhouse Pacific Investment Management Co., which manages about $2 trillion, has increased alternative investments to $165 billion from $10.7 billion in 2010, a company spokeswoman said. TCW, another bond-fund manager, doubled alternative investments over the past four years to $20 billion, about 10% of total assets, a person familiar with the matter said. Both firms hired portfolio managers away from private-equity and hedge-fund firms to help staff the efforts.
Regulators are tackling titanic fund managers from several angles. The Securities and Exchange Commission approved in August new rules for private funds requiring more investor disclosures and proscribing side deals with institutional clients.
Rising sales of private funds to individuals come as leveraged buyouts by private equity returned 8% last year, the lowest level since 2011, according to Preqin. Higher interest rates have made it harder for the funds to sell companies they own and more expensive to buy new ones.
Traditional fund managers are being scrutinized over their outsize influence in shareholder votes. In November, an interagency regulator passed a rule allowing large fund managers to potentially be regulated as systemically important institutions, as large banks are. Still, the decision only reinstates an Obama-era measure overturned by the Trump administration.
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Bigworld, Calif still has the best year-round weather in the country, which is a big plus as you enter the retirement years. Imagine a place where almost every day has perfect weather. Not having the cold winters and summer humidity would be enough for me. It might get boring, but I'll take it :o)
San Luis Obispo looks especially nice, and has been called 'the happiest place in America'. My dad went out there frequently (Vandenberg AFB), and loved the area. The politics, who cares really, although it has meant higher taxes, and real estate out there is expensive. But ---> no cold / snow and no sweltering summer humidity, and lots of tan beach babes :o)
Bigworld, With the stock market, it's hard to argue with its resilience over very long periods. But while it's rare for a really long drought, it does happen. One of the longest 'nowhere' periods for stocks was from 2000 --> 2013, where it took 13 years for the S+P 500 to finally get above its 2000 peak. During the period from 1966 - 1982 it took even longer --> 16 years for the DJIA to get back to its peak from 1966.
The approaching debt bomb crisis represents something that hasn't happened before --> the US dollar losing its status as the world's main reserve currency. When the British pound lost its world's reserve status between WW1 and WW2, the US dollar was there to gradually take over that role. As the US dollar system begins teetering in earnest, some possible scenarios could include the new BRICS currency stepping in, and / or the SDR - Special Drawing Rights of the IMF taking a key role as the world's reserve currency.
The timeline is the big unknown, but I'm figuring things start to hit the fan as the US debt enters the $40-50 trillion range. Just a guess, but if so then investors would want to start reducing their bond allocations in a few years from now (2026-27), and move away from financial assets toward more hard assets. Fwiw, I figure we still have a couple years, but the debt reaching $40 tril will be the signal that the debt bomb is approaching the global 'confidence is lost' level for the US dollar.
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Bigworld, Your new place seems like a great choice, and the 3 acres allow for plenty of 'elbow room' :o) And being fairly rural will spare you the many urban problems, traffic, etc. Plus your real estate taxes are ultra low. N. Carolina does have a 4.75% income tax rate, but they don't tax Social Security benefits. Here in PA the income tax rate is a little less (3.07%), but we are one of only six states with an inheritance tax, so that's a bummer.
Real estate seems like the best way to keep up with inflation. There are expenses and maintenance hassles, but you have to live somewhere. Fwiw, I skipped the 'big house' stage and went right to a condo (for 32 years), but a house would have been a better investment. But the condo is still up 4-5 fold since 1992, so can't complain too much.
Check out the view from this place in San Luis Obispo Calif. Kind of pricey out there, but those warm sunny winters would be great for the retirement years -
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Texas Pacific Land (TPL) - >>> A passive company packed with passive income potential
https://finance.yahoo.com/news/think-crude-oil-going-100-094500311.html
Daniel Foelber (Texas Pacific Land): Formed out of the bankruptcy of Pacific Railroad in the 19th century, Texas Pacific Land owns around 880,000 acres of land in West Texas. If you've ever been to West Texas, you know the terrain can be inhospitable to human settlement. But it is gushing with oil reserves.
Texas Pacific makes money from its land through royalties, water sales, and other factors. It typically makes more money when oil and gas prices are higher, but it isn't as correlated to the price of fossil fuels as an exploration and production company.
For example, it reported significantly lower realized oil, natural gas, and natural gas liquids (NGLs) prices in 2023 compared to 2022. The price per barrel of oil equivalent, which is basically a weighted average for oil, natural gas, and NGLs, was 30% lower in 2023 than in 2022. Yet overall revenue was down less than 6%, and net income was down a little over 9% thanks to higher water royalties.
Category
2022
2023
Oil and gas royalties
$452.43 million
$357.39 million
Water sales
$84.73 million
$112.20 million
Produced water royalties
$72.23 million
$84.26 million
Easements and other surface-related income
$48.06 million
$70.93 million
Land sales and other operating revenue
$9.97 million
$6.81 million
Total Revenue
$667.42 million
$631.6 million
In the following chart, you can see that Texas Pacific Land consistently makes a profit no matter the cycle due to its low cost and passive business model. It also converts a majority of revenue to net income.
Texas Pacific rewards its shareholders with quarterly dividends, which vary in size based on its earnings. For example, the company paid $32 per share in 2022 dividends but just $13 per share in 2023.
Texas Pacific isn't the ideal company if you're looking for predictable passive income or to supplement income in retirement. Still, it is a good choice if you want to invest in oil and gas but avoid the volatility that comes with severe downturns.
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Texas Pacific Land (TPL) - >>> A passive company packed with passive income potential
https://finance.yahoo.com/news/think-crude-oil-going-100-094500311.html
Daniel Foelber (Texas Pacific Land): Formed out of the bankruptcy of Pacific Railroad in the 19th century, Texas Pacific Land owns around 880,000 acres of land in West Texas. If you've ever been to West Texas, you know the terrain can be inhospitable to human settlement. But it is gushing with oil reserves.
Texas Pacific makes money from its land through royalties, water sales, and other factors. It typically makes more money when oil and gas prices are higher, but it isn't as correlated to the price of fossil fuels as an exploration and production company.
For example, it reported significantly lower realized oil, natural gas, and natural gas liquids (NGLs) prices in 2023 compared to 2022. The price per barrel of oil equivalent, which is basically a weighted average for oil, natural gas, and NGLs, was 30% lower in 2023 than in 2022. Yet overall revenue was down less than 6%, and net income was down a little over 9% thanks to higher water royalties.
Category
2022
2023
Oil and gas royalties
$452.43 million
$357.39 million
Water sales
$84.73 million
$112.20 million
Produced water royalties
$72.23 million
$84.26 million
Easements and other surface-related income
$48.06 million
$70.93 million
Land sales and other operating revenue
$9.97 million
$6.81 million
Total Revenue
$667.42 million
$631.6 million
In the following chart, you can see that Texas Pacific Land consistently makes a profit no matter the cycle due to its low cost and passive business model. It also converts a majority of revenue to net income.
Texas Pacific rewards its shareholders with quarterly dividends, which vary in size based on its earnings. For example, the company paid $32 per share in 2022 dividends but just $13 per share in 2023.
Texas Pacific isn't the ideal company if you're looking for predictable passive income or to supplement income in retirement. Still, it is a good choice if you want to invest in oil and gas but avoid the volatility that comes with severe downturns.
<<<
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Texas Pacific Land (TPL) - >>> A passive company packed with passive income potential
https://finance.yahoo.com/news/think-crude-oil-going-100-094500311.html
Daniel Foelber (Texas Pacific Land): Formed out of the bankruptcy of Pacific Railroad in the 19th century, Texas Pacific Land owns around 880,000 acres of land in West Texas. If you've ever been to West Texas, you know the terrain can be inhospitable to human settlement. But it is gushing with oil reserves.
Texas Pacific makes money from its land through royalties, water sales, and other factors. It typically makes more money when oil and gas prices are higher, but it isn't as correlated to the price of fossil fuels as an exploration and production company.
For example, it reported significantly lower realized oil, natural gas, and natural gas liquids (NGLs) prices in 2023 compared to 2022. The price per barrel of oil equivalent, which is basically a weighted average for oil, natural gas, and NGLs, was 30% lower in 2023 than in 2022. Yet overall revenue was down less than 6%, and net income was down a little over 9% thanks to higher water royalties.
Category
2022
2023
Oil and gas royalties
$452.43 million
$357.39 million
Water sales
$84.73 million
$112.20 million
Produced water royalties
$72.23 million
$84.26 million
Easements and other surface-related income
$48.06 million
$70.93 million
Land sales and other operating revenue
$9.97 million
$6.81 million
Total Revenue
$667.42 million
$631.6 million
In the following chart, you can see that Texas Pacific Land consistently makes a profit no matter the cycle due to its low cost and passive business model. It also converts a majority of revenue to net income.
Texas Pacific rewards its shareholders with quarterly dividends, which vary in size based on its earnings. For example, the company paid $32 per share in 2022 dividends but just $13 per share in 2023.
Texas Pacific isn't the ideal company if you're looking for predictable passive income or to supplement income in retirement. Still, it is a good choice if you want to invest in oil and gas but avoid the volatility that comes with severe downturns.
<<<
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>>> 'Unhealthy dose' of pesticides found in popular produce, new report reveals
Fox Business
by Daniella Genovese
4-18-24
https://www.msn.com/en-us/health/nutrition/unhealthy-dose-of-pesticides-found-in-popular-produce-new-report-reveals/ar-AA1ng5bH?cvid=be3ca3c907324f41e3c5957f5501587a&ei=46
About 20% of all fruits and vegetables examined by Consumer Reports in a new report revealed an "unhealthy dose of dangerous pesticides."
Consumer Reports published the report — its "most comprehensive review" of pesticides in food to date — after analyzing 59 common fruits and vegetables, which included fresh, canned, dried and frozen products.
"Our new results continue to raise red flags. Pesticides posed significant risks in 20 percent of the foods we examined," Consumer Reports said.
CHEMICAL FOUND IN CHEERIOS, QUAKER OATS, OTHER OAT-BASED FOODS LINKED TO POTENTIAL HEALTH ISSUES: STUDY
Bell peppers, blueberries, potatoes and strawberries were included in the report, as well as green beans, which "had residues of a pesticide that hasn’t been allowed to be used on the vegetable in the U.S. for over a decade," according to the report.
"Imported produce, especially some from Mexico, was particularly likely to carry risky levels of pesticide residues," the organization said.
CHLORMEQUAT: WHAT IS THE CHEMICAL FOUND IN CHEERIOS, QUAKER OATS?
Consumer Reports analyzed seven years of data from the Department of Agriculture, which every year tests a selection of conventional and organic produce grown in or imported to the U.S. for pesticide residues.
Certain chemicals are used by farmers to control bugs, fungi and weeds. However, some of these chemicals carry "unacceptable health risks."
Consumer Reports said that certain "notorious pesticides, such as DDT, have been banned in the U.S." but claimed that government regulators have been slow to ban others. Additionally, the outlet argued that when a dangerous chemical is removed from the market, chemical companies and growers, in some cases, start relying on "other options that may be as dangerous."
Consumer Reports said that it has been tracking the use of pesticides on produce for decades and has "seen this pattern repeat itself over and over."
On the other hand, it said pesticides "presented little to worry about in nearly two-thirds of the foods," which included nearly everything that was organic.
According to Consumer Reports' analysis, "the largest risks are caused by just a few pesticides, concentrated in a handful of foods, grown on a small fraction of U.S. farmland."
According to its analysis, about 16 of the 25 fruits and about 21 of the 34 vegetables tested showed low levels of pesticide risk. This means that kids and those who are pregnant can safely consume more than three servings a day of those foods, Consumer Reports food safety experts said.
Ten foods were of moderate risk. This means up to three servings a day were safe to consume.
A dozen foods "presented bigger concerns." This means kids and pregnant women should consume less than a serving a day of high-risk fruits and vegetables. They should also consume less than half a serving per day of very high-risk ones, Consumer Reports said.
"Everyone else should limit consumption of those foods, too," it said.
Consumer Reports created a list of six conventionally grown fruits and vegetables where pesticides pose a serious problem and possible substitutions for them.
Substitutions: organic blueberries did well and fresh domestic strawberries fared okay.
Substitutions: organic bell peppers are the best choice or to consume this food "sparingly."
Hot peppers also posed a "high risk," Consumer Reports said.
Substitutions: sweet potatoes pose a low risk.
Substitutions: snap peas pose a low risk. Organic green beans grown domestically are also a good substitute.
Substitutions: organic kale and mustard greens as well as broccoli all pose a very low risk.
Fresh spinach, which is also a better choice, poses a moderate risk.
Substitutions: organic watermelon. Cantaloupe also poses a very low risk.
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>>> 'Unhealthy dose' of pesticides found in popular produce, new report reveals
Fox Business
by Daniella Genovese
4-18-24
https://www.msn.com/en-us/health/nutrition/unhealthy-dose-of-pesticides-found-in-popular-produce-new-report-reveals/ar-AA1ng5bH?cvid=be3ca3c907324f41e3c5957f5501587a&ei=46
About 20% of all fruits and vegetables examined by Consumer Reports in a new report revealed an "unhealthy dose of dangerous pesticides."
Consumer Reports published the report — its "most comprehensive review" of pesticides in food to date — after analyzing 59 common fruits and vegetables, which included fresh, canned, dried and frozen products.
"Our new results continue to raise red flags. Pesticides posed significant risks in 20 percent of the foods we examined," Consumer Reports said.
CHEMICAL FOUND IN CHEERIOS, QUAKER OATS, OTHER OAT-BASED FOODS LINKED TO POTENTIAL HEALTH ISSUES: STUDY
Bell peppers, blueberries, potatoes and strawberries were included in the report, as well as green beans, which "had residues of a pesticide that hasn’t been allowed to be used on the vegetable in the U.S. for over a decade," according to the report.
"Imported produce, especially some from Mexico, was particularly likely to carry risky levels of pesticide residues," the organization said.
CHLORMEQUAT: WHAT IS THE CHEMICAL FOUND IN CHEERIOS, QUAKER OATS?
Consumer Reports analyzed seven years of data from the Department of Agriculture, which every year tests a selection of conventional and organic produce grown in or imported to the U.S. for pesticide residues.
Certain chemicals are used by farmers to control bugs, fungi and weeds. However, some of these chemicals carry "unacceptable health risks."
Consumer Reports said that certain "notorious pesticides, such as DDT, have been banned in the U.S." but claimed that government regulators have been slow to ban others. Additionally, the outlet argued that when a dangerous chemical is removed from the market, chemical companies and growers, in some cases, start relying on "other options that may be as dangerous."
Consumer Reports said that it has been tracking the use of pesticides on produce for decades and has "seen this pattern repeat itself over and over."
On the other hand, it said pesticides "presented little to worry about in nearly two-thirds of the foods," which included nearly everything that was organic.
According to Consumer Reports' analysis, "the largest risks are caused by just a few pesticides, concentrated in a handful of foods, grown on a small fraction of U.S. farmland."
According to its analysis, about 16 of the 25 fruits and about 21 of the 34 vegetables tested showed low levels of pesticide risk. This means that kids and those who are pregnant can safely consume more than three servings a day of those foods, Consumer Reports food safety experts said.
Ten foods were of moderate risk. This means up to three servings a day were safe to consume.
A dozen foods "presented bigger concerns." This means kids and pregnant women should consume less than a serving a day of high-risk fruits and vegetables. They should also consume less than half a serving per day of very high-risk ones, Consumer Reports said.
"Everyone else should limit consumption of those foods, too," it said.
Consumer Reports created a list of six conventionally grown fruits and vegetables where pesticides pose a serious problem and possible substitutions for them.
Substitutions: organic blueberries did well and fresh domestic strawberries fared okay.
Substitutions: organic bell peppers are the best choice or to consume this food "sparingly."
Hot peppers also posed a "high risk," Consumer Reports said.
Substitutions: sweet potatoes pose a low risk.
Substitutions: snap peas pose a low risk. Organic green beans grown domestically are also a good substitute.
Substitutions: organic kale and mustard greens as well as broccoli all pose a very low risk.
Fresh spinach, which is also a better choice, poses a moderate risk.
Substitutions: organic watermelon. Cantaloupe also poses a very low risk.
<<<
---
>>> 'Unhealthy dose' of pesticides found in popular produce, new report reveals
Fox Business
by Daniella Genovese
4-18-24
https://www.msn.com/en-us/health/nutrition/unhealthy-dose-of-pesticides-found-in-popular-produce-new-report-reveals/ar-AA1ng5bH?cvid=be3ca3c907324f41e3c5957f5501587a&ei=46
About 20% of all fruits and vegetables examined by Consumer Reports in a new report revealed an "unhealthy dose of dangerous pesticides."
Consumer Reports published the report — its "most comprehensive review" of pesticides in food to date — after analyzing 59 common fruits and vegetables, which included fresh, canned, dried and frozen products.
"Our new results continue to raise red flags. Pesticides posed significant risks in 20 percent of the foods we examined," Consumer Reports said.
CHEMICAL FOUND IN CHEERIOS, QUAKER OATS, OTHER OAT-BASED FOODS LINKED TO POTENTIAL HEALTH ISSUES: STUDY
Bell peppers, blueberries, potatoes and strawberries were included in the report, as well as green beans, which "had residues of a pesticide that hasn’t been allowed to be used on the vegetable in the U.S. for over a decade," according to the report.
"Imported produce, especially some from Mexico, was particularly likely to carry risky levels of pesticide residues," the organization said.
CHLORMEQUAT: WHAT IS THE CHEMICAL FOUND IN CHEERIOS, QUAKER OATS?
Consumer Reports analyzed seven years of data from the Department of Agriculture, which every year tests a selection of conventional and organic produce grown in or imported to the U.S. for pesticide residues.
Certain chemicals are used by farmers to control bugs, fungi and weeds. However, some of these chemicals carry "unacceptable health risks."
Consumer Reports said that certain "notorious pesticides, such as DDT, have been banned in the U.S." but claimed that government regulators have been slow to ban others. Additionally, the outlet argued that when a dangerous chemical is removed from the market, chemical companies and growers, in some cases, start relying on "other options that may be as dangerous."
Consumer Reports said that it has been tracking the use of pesticides on produce for decades and has "seen this pattern repeat itself over and over."
On the other hand, it said pesticides "presented little to worry about in nearly two-thirds of the foods," which included nearly everything that was organic.
According to Consumer Reports' analysis, "the largest risks are caused by just a few pesticides, concentrated in a handful of foods, grown on a small fraction of U.S. farmland."
According to its analysis, about 16 of the 25 fruits and about 21 of the 34 vegetables tested showed low levels of pesticide risk. This means that kids and those who are pregnant can safely consume more than three servings a day of those foods, Consumer Reports food safety experts said.
Ten foods were of moderate risk. This means up to three servings a day were safe to consume.
A dozen foods "presented bigger concerns." This means kids and pregnant women should consume less than a serving a day of high-risk fruits and vegetables. They should also consume less than half a serving per day of very high-risk ones, Consumer Reports said.
"Everyone else should limit consumption of those foods, too," it said.
Consumer Reports created a list of six conventionally grown fruits and vegetables where pesticides pose a serious problem and possible substitutions for them.
Substitutions: organic blueberries did well and fresh domestic strawberries fared okay.
Substitutions: organic bell peppers are the best choice or to consume this food "sparingly."
Hot peppers also posed a "high risk," Consumer Reports said.
Substitutions: sweet potatoes pose a low risk.
Substitutions: snap peas pose a low risk. Organic green beans grown domestically are also a good substitute.
Substitutions: organic kale and mustard greens as well as broccoli all pose a very low risk.
Fresh spinach, which is also a better choice, poses a moderate risk.
Substitutions: organic watermelon. Cantaloupe also poses a very low risk.
<<<
---
>>> Why Badger Meter Stock Is Off the Charts Today
by Rich Smith
Motley Fool
Apr 18, 2024
https://finance.yahoo.com/news/why-badger-meter-stock-off-154259846.html
Shares of water measurer Badger Meter (NYSE: BMI) jumped 12% through 11:15 a.m. ET Thursday after exceeding expectations with its Q1 2024 earnings report this morning.
Analysts had forecast Badger Meter would earn $0.82 per share on sales of $182.3 million -- but Badger beat those numbers with a stick. Badger's earnings for the quarter came within a whisker of $1 a share -- $0.99 -- and sales were $196.3 million.
Badger Meter Q1 sales and earnings
Badger Meter scored wins across the board this morning, growing sales 23% year over year, expanding its operating profit margin by 290 basis points to 18.6%, and growing its net income a whopping 50%. CEO Kenneth Bockhorst credited both "robust customer demand" and "operating execution" for the "exceptional" results.
Sales growth among water utility customers was particularly strong, up 29% -- continuing a yearlong trend of 30%-ish sales growth in this sector. This suggests that America's long-delayed project to improve water infrastructure is now well underway.
Is Badger Meter stock a buy in 2024?
There are pluses and minuses in this for Badger Meter investors. On the one hand, Bockhorst notes that Badger Meter will face "more difficult prior-year comparisons as the year progresses" in 2024. On the other hand, though, he agrees that the water industry is currently enjoying a "resilient macro trend" that should "drive sales and earnings growth."
My big worry as an investor: Continuation of this trend could already be baked into the stock's price. While 50% Q1 earnings growth was certainly impressive, Badger stock also trades at a very impressive price-to-earnings ratio of 48. That's a fair price to pay if growth keeps going at its present pace, and Badger's share price surge today is certainly justified by the news.
But if growth slows at all, Badger investors could find themselves caught in a trap. Caveat investor.
<<<
---
>>> Why Badger Meter Stock Is Off the Charts Today
by Rich Smith
Motley Fool
Apr 18, 2024
https://finance.yahoo.com/news/why-badger-meter-stock-off-154259846.html
Shares of water measurer Badger Meter (NYSE: BMI) jumped 12% through 11:15 a.m. ET Thursday after exceeding expectations with its Q1 2024 earnings report this morning.
Analysts had forecast Badger Meter would earn $0.82 per share on sales of $182.3 million -- but Badger beat those numbers with a stick. Badger's earnings for the quarter came within a whisker of $1 a share -- $0.99 -- and sales were $196.3 million.
Badger Meter Q1 sales and earnings
Badger Meter scored wins across the board this morning, growing sales 23% year over year, expanding its operating profit margin by 290 basis points to 18.6%, and growing its net income a whopping 50%. CEO Kenneth Bockhorst credited both "robust customer demand" and "operating execution" for the "exceptional" results.
Sales growth among water utility customers was particularly strong, up 29% -- continuing a yearlong trend of 30%-ish sales growth in this sector. This suggests that America's long-delayed project to improve water infrastructure is now well underway.
Is Badger Meter stock a buy in 2024?
There are pluses and minuses in this for Badger Meter investors. On the one hand, Bockhorst notes that Badger Meter will face "more difficult prior-year comparisons as the year progresses" in 2024. On the other hand, though, he agrees that the water industry is currently enjoying a "resilient macro trend" that should "drive sales and earnings growth."
My big worry as an investor: Continuation of this trend could already be baked into the stock's price. While 50% Q1 earnings growth was certainly impressive, Badger stock also trades at a very impressive price-to-earnings ratio of 48. That's a fair price to pay if growth keeps going at its present pace, and Badger's share price surge today is certainly justified by the news.
But if growth slows at all, Badger investors could find themselves caught in a trap. Caveat investor.
<<<
---
>>> Analyst reviews Palantir stock price target ahead of earnings
The Street
by Rob Lenihan
Apr 18, 2024
https://finance.yahoo.com/news/analyst-reviews-palantir-stock-price-231500926.html
In J.R.R. Tolkien's fantasy epic "The Lord of the Rings," a palantir was an indestructible crystal ball used for communication and seeing events in other parts of the world and in the past.
In 2003, Peter Thiel, co-founder and chairman of Palantir Technologies (PLTR) , thought that would be the perfect name for the software platform company.
You won't have to look into any crystal ball to find Palantir, as the company has been creating some serious magic of its own.
While Palantir's sales are largely driven by helping the U.S. government with its counterterrorism efforts, it's also pushed more deeply into managing, interpreting and reporting data for large companies.
The company's revenue has been boosted by surging AI activity after the successful December 2022 launch of OpenAI's ChatGPT, the first large language model AI app to become widely available.
In February, Palantir posted fourth-quarter earnings of 8 cents per share on $608.4 million in sales, beating analysts' call for $602.9 million.
Palantir is scheduled to report earnings next month
Palantir CEO: U.S. commercial performance 'bombastic'
"Obviously, our performance in U.S. commercial is extraordinary; some would say bombastic," Chief Executive Alex Karp told analysts during the company's earnings call. "The numbers that just fly off the screen are the 70% year-on-year growth in Q4."
Citing the company's more than 100 contracts, Karp said "it's almost inconceivable to do that many contracts given the way our product used to be."
"And so, what you see is a convergence of our product being easier to use, an augmentation of its charisma, both driven by developments in AI, large language models, which make the product approachable foundry to the broader market," he said.
Karp said that Palantir was proud to support the U.S. and the U.S. military.
"We are proud to have an operational crucial role in Ukraine," he said. "And I am exceedingly proud that after October 7, within weeks, we are on the ground, and we are involved in operationally crucial, operations in Israel." Oct. 7, 2023, was the day that Hamas invaded Israel, killed 1,200 people and kidnaped more than 200.
Earlier this month, Palantir and Oracle (ORCL) announced a partnership where they would jointly sell cloud and AI services.
As part of the agreement, Palantir said it would move its Foundry workloads to Oracle Cloud Infrastructure and make its Gotham and AI Platforms deployable across Oracle's distributed cloud.
Gotham is an intelligence and defense tool used by militaries and counter-terrorism analysts, while Foundry is used for data integration and analysis by corporate clients.
Oracle is one of the top 10 largest cloud providers, and its position as a multidecade leader in data management has given it global reach.
Analyst is investing in Palantir for the future
On April 17, Palantir said that it had been designated as an Awardable vendor for the Chief Digital and Artificial Intelligence Office’s Tradewinds Solutions Marketplace.
The Tradewinds Solutions Marketplace is a digital repository of awardable capabilities that can address challenges the Department of Defense faces in the arena of artificial intelligence, machine learning and data analytics.
Palantir’s AI Mission Command Capability and its Predictive Maintenance & Precision Sustainment Suite have been added to the Marketplace and are available to support critical missions across the Defense Department.
Palantir is scheduled to report first-quarter earnings on May 6.
Analysts surveyed by FactSet are expecting the company to post profit of 8 cents a share on $615.3 million in revenue. A year earlier Palantir earned 5 cents a share on $525 million of revenue.
TheStreet Pro's Stephen Guilfoyle has a good feeling about Palantir. He has said more than a few times that "this is one name I am investing in for the future generations of my bloodline."
Guilfoyle noted in his April 16 column that for the 12 months ended in late December, operating cash flow printed at $712 million, more than triple the $224 million of 2022, as free cash flow printed at $697 million, up from $184 million in 2022.
"Palantir is quickly becoming a cash-flow beast," he wrote.
The stock has already given up its 21-day exponential moving average and 50-day simple moving average, he said.
“Should the stock lose contact with that pivot, there is a very good chance that it moves to fill the gap created in early February,” he said.
“That would take the shares down to about $18 and test support at the 200-day [simple moving average] as it does. This is where I suspect the real support may lie.”
<<<
---
>>> Analyst reviews Palantir stock price target ahead of earnings
The Street
by Rob Lenihan
Apr 18, 2024
https://finance.yahoo.com/news/analyst-reviews-palantir-stock-price-231500926.html
In J.R.R. Tolkien's fantasy epic "The Lord of the Rings," a palantir was an indestructible crystal ball used for communication and seeing events in other parts of the world and in the past.
In 2003, Peter Thiel, co-founder and chairman of Palantir Technologies (PLTR) , thought that would be the perfect name for the software platform company.
You won't have to look into any crystal ball to find Palantir, as the company has been creating some serious magic of its own.
While Palantir's sales are largely driven by helping the U.S. government with its counterterrorism efforts, it's also pushed more deeply into managing, interpreting and reporting data for large companies.
The company's revenue has been boosted by surging AI activity after the successful December 2022 launch of OpenAI's ChatGPT, the first large language model AI app to become widely available.
In February, Palantir posted fourth-quarter earnings of 8 cents per share on $608.4 million in sales, beating analysts' call for $602.9 million.
Palantir is scheduled to report earnings next month
Palantir CEO: U.S. commercial performance 'bombastic'
"Obviously, our performance in U.S. commercial is extraordinary; some would say bombastic," Chief Executive Alex Karp told analysts during the company's earnings call. "The numbers that just fly off the screen are the 70% year-on-year growth in Q4."
Citing the company's more than 100 contracts, Karp said "it's almost inconceivable to do that many contracts given the way our product used to be."
"And so, what you see is a convergence of our product being easier to use, an augmentation of its charisma, both driven by developments in AI, large language models, which make the product approachable foundry to the broader market," he said.
Karp said that Palantir was proud to support the U.S. and the U.S. military.
"We are proud to have an operational crucial role in Ukraine," he said. "And I am exceedingly proud that after October 7, within weeks, we are on the ground, and we are involved in operationally crucial, operations in Israel." Oct. 7, 2023, was the day that Hamas invaded Israel, killed 1,200 people and kidnaped more than 200.
Earlier this month, Palantir and Oracle (ORCL) announced a partnership where they would jointly sell cloud and AI services.
As part of the agreement, Palantir said it would move its Foundry workloads to Oracle Cloud Infrastructure and make its Gotham and AI Platforms deployable across Oracle's distributed cloud.
Gotham is an intelligence and defense tool used by militaries and counter-terrorism analysts, while Foundry is used for data integration and analysis by corporate clients.
Oracle is one of the top 10 largest cloud providers, and its position as a multidecade leader in data management has given it global reach.
Analyst is investing in Palantir for the future
On April 17, Palantir said that it had been designated as an Awardable vendor for the Chief Digital and Artificial Intelligence Office’s Tradewinds Solutions Marketplace.
The Tradewinds Solutions Marketplace is a digital repository of awardable capabilities that can address challenges the Department of Defense faces in the arena of artificial intelligence, machine learning and data analytics.
Palantir’s AI Mission Command Capability and its Predictive Maintenance & Precision Sustainment Suite have been added to the Marketplace and are available to support critical missions across the Defense Department.
Palantir is scheduled to report first-quarter earnings on May 6.
Analysts surveyed by FactSet are expecting the company to post profit of 8 cents a share on $615.3 million in revenue. A year earlier Palantir earned 5 cents a share on $525 million of revenue.
TheStreet Pro's Stephen Guilfoyle has a good feeling about Palantir. He has said more than a few times that "this is one name I am investing in for the future generations of my bloodline."
Guilfoyle noted in his April 16 column that for the 12 months ended in late December, operating cash flow printed at $712 million, more than triple the $224 million of 2022, as free cash flow printed at $697 million, up from $184 million in 2022.
"Palantir is quickly becoming a cash-flow beast," he wrote.
The stock has already given up its 21-day exponential moving average and 50-day simple moving average, he said.
“Should the stock lose contact with that pivot, there is a very good chance that it moves to fill the gap created in early February,” he said.
“That would take the shares down to about $18 and test support at the 200-day [simple moving average] as it does. This is where I suspect the real support may lie.”
<<<
---
Derf hasn't posted in a while, any news you are aware of?
Thanks for any updates. Hope he is OK.
---
Bigworld, It looks like the Middle East tensions could start subsiding, with both sides looking to back away from the precipice. Last night the S+P 500 futures tanked to near 4950, then recovered by morning, so I'm thinking that was most likely the near term bottom for the stock market. Time will tell, but I decided to move back up to 28% with the stock allocation, so will try to hold on to that for the recovery.
Fwiw, my strategy for this year is evolving into a Core / Flex approach, with 12% as the Core LT buy / hold, and the rest (~16%) as 'Flex', which can be traded depending upon market conditions. I'm hoping to not have to trade very much, but will take profits as they build up if it's clear the market will be tanking, as happened recently. This drop was pretty easy to see coming, and looks like the rest of the year could be choppy.
I figure there will be 5 main factors (below), with the geopolitical side hopefully fading in relative importance. It looks like Fed policy may no longer be a big plus for a while since they are moving away from their dovish narrative. So the economic / inflation numbers and corporate earnings will need to be decent. Meanwhile the election uncertainty will provide a queasy background vibe. Anyway, I'm hoping for an oversold bounce in the weeks ahead, and then probably a choppy market for the remaining year. Just a guess though..
- Fed Policy
- Corporate Earnings
- Economic / Inflation
- Geopolitical
- Election
---
Bigworld, Another aspect to this Middle East situation is that it can potentially affect the upcoming election dynamics in a big way. If the 'US bombs Iran' scenario is in fact an absolute necessity for halting Iran's nuclear weapons program, and that program is now very close to its goal, then there could be a strong existential incentive within Netanyahu's extreme coalition to see the Rep Party return to power in the US. But since the main globalist factions want nothing to do with Trump again, this potentially sets up some hair raising internecine scenarios right out of 'The Day of the Jackal'. Let's hope not, but logic says there could be even more election related intrigue than usual.
Btw, speaking of that 'Day of the Jackal' novel / movie --> back in college (1973-75) in the dorm I met a student from France whose father was in a French prison for his supposed role in that military plot against de Gaulle. His dad was a French military officer (major or colonel I think), and ended up in the slammer. Anyway, people in the US tend to dismiss 'conspiracies', but in Europe they have been part of the fabric for centuries.
---
Bigworld, Thanks. The McAlvany commentary makes a good case for not having too much in financial assets (stocks, bonds, cash), and for increasing the hard asset side (real estate, land, gold, silver, commodities, etc).
Upping the hard assets definitely seems like a good idea. Along those lines, it could make sense to start counting one's home / real estate as an 'investment class', and include it in the allocation mix. So maybe a 50-50% mix between financial and hard assets, and then as the debt bomb approaches, the hard asset side can be increased. Bonds seem like the most vulnerable class over the long haul. Since the debt bomb timeline may be longer than we think, I figure it makes sense to have all bases covered, but the hard asset side will become more important for long term wealth preservation.
In addition to the rapidly growing debt bomb (34 tril and rising fast), another factor in the demise of the dollar reserve system is BRICS expansion and their planned gold-linked BRICS currency. However it appears the timelines have been slipping, since Saudi Arabia and Argentina have backed out of joining BRICS (for now). It also appears the gold-linked BRICS currency has encountered headwinds from India, since they see it as favoring China too much.
Anyway, I figure we have a period of years before things unravel in earnest, but shifting more into hard assets seems like the logical path.
---
>>> Why big Medicare Advantage insurers may root for Biden to lose in 2024
The Biden administration has delivered consecutive blows to the industry that offers private-sector Medicare alternatives
Yahoo Finance
by Janna Herron
Apr 11, 2024
https://finance.yahoo.com/news/why-big-medicare-advantage-insurers-may-root-for-biden-to-lose-in-2024-080028510.html
Insurance giants have a bigger stake in this year’s presidential election after recent moves by the Biden administration cut into the profitability of Medicare Advantage plans.
In the last week, the Centers for Medicare and Medicaid Services (CMS) delivered consecutive blows to the industry that offers these private-sector Medicare alternatives, denting insurance stocks and pulling down estimates of future earnings.
Insurers will get paid less than expected next year for providing these plans, while, at the same time, they must abide by new, and probably costlier, regulations. Other key changes rolling out over the next three years could also nick their bottom lines.
The industry expects a second term for President Joe Biden would bring more of the same at a time when the youngest baby boomers become Medicare-eligible and more of the older ones seek healthcare services.
"Do I want to say it's a historic level of regulations? If it's not, it's got to be close to it," Whit Mayo, an analyst with Leerink Partners, told Yahoo Finance. "Biden is no friend to the industry right now."
'A major change'
The new regulations have come hard and fast recently.
Last week, the government said it would increase its payments to Medicare Advantage (MA) insurers by 3.7% in 2025. That’s "marginally worse" than the earlier proposed rate, Mayo said, and “inconsistent with almost any historic precedent.”
It also caught the industry by surprise because many expected CMS to incorporate the uptick in healthcare service volumes in the fourth quarter.
A few days later, CMS finalized other rules around health equity, behavioral healthcare services, and supplemental benefits that would require more action from insurers.
The agency also established new rules on how much insurers can compensate a broker selling Medicare Advantage plans to ensure seniors are steered into plans that best meet their needs — not into ones that are most profitable.
“CMS does not want an agent to have preference over any plan based on commissions…so this is a major change,” Mayo said.
These efforts are weighing down insurer stocks.
Year to date, shares of Humana (HUM) — which has the largest exposure with MA accounts making up 77% of its total revenue — are down 30%.
The stock of UnitedHealthcare (UNH) has declined nearly 13% since the beginning of the year. MA accounts make up 31% of UnitedHealthcare's total revenue, according to Ann Hynes, managing director at Mizuho Americas.
In a note last week to investors, Hynes estimated the 3.7% increase in the MA payment rate could be a 2% and 4% "headwind" for UnitedHealthcare’s 2025 earnings, a 2% to 6% drag on both CVS Healthcare Corp.’s (CVS) and Centene Corp.’s (CNC) profits, and an 8% anchor on Humana’s bottom line.
One of the three "key upcoming catalysts" for Humana’s stock, Hynes wrote, is “the 2024 Presidential election.”
On the horizon
More change is on its way under the Biden administration’s CMS that could also upend insurance profits.
The agency recently put out a new patient risk coding model. Each patient receives a risk score based on the number and severity of their health conditions. The unhealthier the patient, the higher the risk score and the more money CMS pays to insurers.
Under the new model, risk scores will overall likely decline, meaning fewer dollars will flow to insurers. How much exactly? The model, which will be fully phased in 2025, is expected to save Medicare $11 billion this year, per CMS estimates. Next year, it will likely be more.
How Medicare Advantage plans are rated by CMS is also changing.
CMS ranks each plan annually using a one-to-five-star scale, with five being the best, based on a variety of metrics. The idea is to reward plans that provide quality care with reimbursement and bonuses while cracking down on mediocre plans by reducing CMS payments and restricting their marketing.
Over the next three years, CMS plans to increase or decrease the weighting of some measures, eliminate others, and add a health equity index to the ranking. Insurers work hard to maintain at least a four-star rating on their plans to get a 5% quality bonus, which, by law, must be invested into plan benefits.
"That's what gives you a competitive advantage in the market," Mayo said.
Insurers also remain under pressure from increasingly vocal healthcare providers, which are dropping some Medicare Advantage plans due to too many denials, delays, and refusals to pay for care that Original Medicare would usually cover.
October surprise, anyone?
Under Donald Trump, those changes may not be carried out.
"I think the perception among the investment community is that, under a Trump administration, the environment would be more favorable,” Mayo said. “Just not as much regulation, maybe even roll back."
It may be seniors — historically one of the most reliable voting blocs — who may get the last word.
Mayo expects insurers will readjust some of the MA benefits so they can grow — or at least hold — their margins in light of the recent changes, a reversal of the years-long cycle of "massive" investment in these perks.
Extras like a supplemental grocery benefit could be eliminated for next year, while the share that patients pay out of pocket for services such as dental or vision care could increase.
Seniors will see those reductions in benefits or increases in co-insurance during Medicare’s annual open enrollment period, when they choose their health insurance for next year. Open enrollment kicks off Oct. 15, less than a month before the presidential election on Nov. 5.
That means the 33 million Americans now enrolled in Medicare Advantage plans, making up over half of Medicare-eligible adults, may get mad after their plan drops benefits that enticed them to sign up in the first place.
They may carry that anger into the voting booth. That may be what insurers are hoping for.
<<<
---
>>> Why big Medicare Advantage insurers may root for Biden to lose in 2024
The Biden administration has delivered consecutive blows to the industry that offers private-sector Medicare alternatives
Yahoo Finance
by Janna Herron
Apr 11, 2024
https://finance.yahoo.com/news/why-big-medicare-advantage-insurers-may-root-for-biden-to-lose-in-2024-080028510.html
Insurance giants have a bigger stake in this year’s presidential election after recent moves by the Biden administration cut into the profitability of Medicare Advantage plans.
In the last week, the Centers for Medicare and Medicaid Services (CMS) delivered consecutive blows to the industry that offers these private-sector Medicare alternatives, denting insurance stocks and pulling down estimates of future earnings.
Insurers will get paid less than expected next year for providing these plans, while, at the same time, they must abide by new, and probably costlier, regulations. Other key changes rolling out over the next three years could also nick their bottom lines.
The industry expects a second term for President Joe Biden would bring more of the same at a time when the youngest baby boomers become Medicare-eligible and more of the older ones seek healthcare services.
"Do I want to say it's a historic level of regulations? If it's not, it's got to be close to it," Whit Mayo, an analyst with Leerink Partners, told Yahoo Finance. "Biden is no friend to the industry right now."
'A major change'
The new regulations have come hard and fast recently.
Last week, the government said it would increase its payments to Medicare Advantage (MA) insurers by 3.7% in 2025. That’s "marginally worse" than the earlier proposed rate, Mayo said, and “inconsistent with almost any historic precedent.”
It also caught the industry by surprise because many expected CMS to incorporate the uptick in healthcare service volumes in the fourth quarter.
A few days later, CMS finalized other rules around health equity, behavioral healthcare services, and supplemental benefits that would require more action from insurers.
The agency also established new rules on how much insurers can compensate a broker selling Medicare Advantage plans to ensure seniors are steered into plans that best meet their needs — not into ones that are most profitable.
“CMS does not want an agent to have preference over any plan based on commissions…so this is a major change,” Mayo said.
These efforts are weighing down insurer stocks.
Year to date, shares of Humana (HUM) — which has the largest exposure with MA accounts making up 77% of its total revenue — are down 30%.
The stock of UnitedHealthcare (UNH) has declined nearly 13% since the beginning of the year. MA accounts make up 31% of UnitedHealthcare's total revenue, according to Ann Hynes, managing director at Mizuho Americas.
In a note last week to investors, Hynes estimated the 3.7% increase in the MA payment rate could be a 2% and 4% "headwind" for UnitedHealthcare’s 2025 earnings, a 2% to 6% drag on both CVS Healthcare Corp.’s (CVS) and Centene Corp.’s (CNC) profits, and an 8% anchor on Humana’s bottom line.
One of the three "key upcoming catalysts" for Humana’s stock, Hynes wrote, is “the 2024 Presidential election.”
On the horizon
More change is on its way under the Biden administration’s CMS that could also upend insurance profits.
The agency recently put out a new patient risk coding model. Each patient receives a risk score based on the number and severity of their health conditions. The unhealthier the patient, the higher the risk score and the more money CMS pays to insurers.
Under the new model, risk scores will overall likely decline, meaning fewer dollars will flow to insurers. How much exactly? The model, which will be fully phased in 2025, is expected to save Medicare $11 billion this year, per CMS estimates. Next year, it will likely be more.
How Medicare Advantage plans are rated by CMS is also changing.
CMS ranks each plan annually using a one-to-five-star scale, with five being the best, based on a variety of metrics. The idea is to reward plans that provide quality care with reimbursement and bonuses while cracking down on mediocre plans by reducing CMS payments and restricting their marketing.
Over the next three years, CMS plans to increase or decrease the weighting of some measures, eliminate others, and add a health equity index to the ranking. Insurers work hard to maintain at least a four-star rating on their plans to get a 5% quality bonus, which, by law, must be invested into plan benefits.
"That's what gives you a competitive advantage in the market," Mayo said.
Insurers also remain under pressure from increasingly vocal healthcare providers, which are dropping some Medicare Advantage plans due to too many denials, delays, and refusals to pay for care that Original Medicare would usually cover.
October surprise, anyone?
Under Donald Trump, those changes may not be carried out.
"I think the perception among the investment community is that, under a Trump administration, the environment would be more favorable,” Mayo said. “Just not as much regulation, maybe even roll back."
It may be seniors — historically one of the most reliable voting blocs — who may get the last word.
Mayo expects insurers will readjust some of the MA benefits so they can grow — or at least hold — their margins in light of the recent changes, a reversal of the years-long cycle of "massive" investment in these perks.
Extras like a supplemental grocery benefit could be eliminated for next year, while the share that patients pay out of pocket for services such as dental or vision care could increase.
Seniors will see those reductions in benefits or increases in co-insurance during Medicare’s annual open enrollment period, when they choose their health insurance for next year. Open enrollment kicks off Oct. 15, less than a month before the presidential election on Nov. 5.
That means the 33 million Americans now enrolled in Medicare Advantage plans, making up over half of Medicare-eligible adults, may get mad after their plan drops benefits that enticed them to sign up in the first place.
They may carry that anger into the voting booth. That may be what insurers are hoping for.
<<<
---
>>> Billionaire Warren Buffett Recently Cut This Stock From Berkshire Hathaway's Portfolio. It Just Dropped 53% In 1 Day. Here's What Investors Need to Know.
by Courtney Carlsen
Motley Fool
Apr 17, 2024
https://finance.yahoo.com/news/billionaire-warren-buffett-recently-cut-101500983.html
Globe Life (NYSE: GL) stock plummeted by more than 53% in a single day last week after short-seller Fuzzy Panda Research accused the life insurance company of fraud. The claims piled onto the already struggling stock, which had previously been a longtime holding of Warren Buffett's conglomerate, Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B).
If you're thinking about buying the dip in the stock, there are some things you'll want to know.
Globe Life's troubles began last year
Globe Life was one of Berkshire Hathaway's longest-held investments, having been part of the conglomerate's portfolio for more than two decades. Berkshire held Globe Life through several difficult economic periods, including the COVID-19 pandemic, which put tremendous pressure on life insurers by elevating claims costs.
Buffett examines a management team's character and trustworthiness when investing. Buffett and his team have an excellent track record of evaluating management, which is a big reason for the conglomerate's long-term success. When Globe Life became the subject of several lawsuits accusing it of misconduct, Berkshire pulled the plug on its investment.
Last year, two Globe Life subsidiaries, American Income Life Insurance Co. and Arias Agencies, faced a lawsuit accusing them of inappropriate workplace conduct; this included rampant drug use, sexual abuse, and degradation of agents who didn't hit sales targets.
Globe Life's struggles continued when a former executive claimed he was fired for blowing the whistle on "potentially illegal" sales practices at the subsidiary. It appears that the accusations were why Berkshire sold its stake in the insurer last year.
Here's what short seller Fuzzy Panda had to say about the insurer
Fast-forward to this year, and Globe Life's troubles have gone from bad to worse. On March 6, the U.S. Department of Justice issued subpoenas to Globe Life and American Income Life. The subpoena is part of an investigation into allegations of fraud and misconduct at the (renamed) Arias Organization, now one of American Income Life's agencies.
Last week, the dam broke after short-seller Fuzzy Panda Research accused Globe Life of "extensive" insurance fraud that was ignored by management. According to Breakout Point and reported by Bloomberg, Fuzzy Panda Research was the best-performing active short-seller in 2023. Although short-sellers -- investors who try to profit from falling share prices -- suffered deep losses during the long bull market of the 2010s, they can help expose harmful or downright fraudulent business practices.
Fuzzy Panda reviewed hundreds of court documents and interviewed former executives and agents "who showed us where the fraud was hidden." According to the short-seller, the fraud was ignored by management despite being "obvious and reported hundreds of times." After the short report was released, Globe Life's stock plummeted 53% in a single day.
Following the serious accusations from Fuzzy Panda, Globe Life responded by saying:
We reviewed the report and found it to be wildly misleading, mixing anonymous allegations with recycled points pushed by plaintiff law firms to coerce Globe Life into settlements ... The short seller analysis by Fuzzy Panda Research mischaracterizes facts and uses unsubstantiated claims and conjecture to present an overall picture of Globe Life that is deliberately false, misleading and defamatory.
Buy the dip?
According to The Fly, analysts believe the stock sell-off is overdone, but big question marks remain. Investment bank and investment firm Piper Sandler said that Globe Life's response "serves to assuage concerns but does not completely remove the vacuum that remains absent a broader communication about this matter with the investment community."
Another investment firm, Evercore, meanwhile, sees limited downside from here but says there is still "significant uncertainty for the shares."
Globe Life faces serious allegations, and the stock price reflects this. After its significant sell-off, aggressive investors may find the stock ripe for the picking. If you're willing to tolerate this risk, though, don't bet more than you're willing to lose.
However, given the uncertainty around the situation and the Department of Justice's investigation, most investors are better off waiting to see how things shake out; they should avoid the stock for now.
<<<
---
Global Life - >>> Billionaire Warren Buffett Recently Cut This Stock From Berkshire Hathaway's Portfolio. It Just Dropped 53% In 1 Day. Here's What Investors Need to Know.
by Courtney Carlsen
Motley Fool
Apr 17, 2024
https://finance.yahoo.com/news/billionaire-warren-buffett-recently-cut-101500983.html
Globe Life (NYSE: GL) stock plummeted by more than 53% in a single day last week after short-seller Fuzzy Panda Research accused the life insurance company of fraud. The claims piled onto the already struggling stock, which had previously been a longtime holding of Warren Buffett's conglomerate, Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B).
If you're thinking about buying the dip in the stock, there are some things you'll want to know.
Globe Life's troubles began last year
Globe Life was one of Berkshire Hathaway's longest-held investments, having been part of the conglomerate's portfolio for more than two decades. Berkshire held Globe Life through several difficult economic periods, including the COVID-19 pandemic, which put tremendous pressure on life insurers by elevating claims costs.
Buffett examines a management team's character and trustworthiness when investing. Buffett and his team have an excellent track record of evaluating management, which is a big reason for the conglomerate's long-term success. When Globe Life became the subject of several lawsuits accusing it of misconduct, Berkshire pulled the plug on its investment.
Last year, two Globe Life subsidiaries, American Income Life Insurance Co. and Arias Agencies, faced a lawsuit accusing them of inappropriate workplace conduct; this included rampant drug use, sexual abuse, and degradation of agents who didn't hit sales targets.
Globe Life's struggles continued when a former executive claimed he was fired for blowing the whistle on "potentially illegal" sales practices at the subsidiary. It appears that the accusations were why Berkshire sold its stake in the insurer last year.
Here's what short seller Fuzzy Panda had to say about the insurer
Fast-forward to this year, and Globe Life's troubles have gone from bad to worse. On March 6, the U.S. Department of Justice issued subpoenas to Globe Life and American Income Life. The subpoena is part of an investigation into allegations of fraud and misconduct at the (renamed) Arias Organization, now one of American Income Life's agencies.
Last week, the dam broke after short-seller Fuzzy Panda Research accused Globe Life of "extensive" insurance fraud that was ignored by management. According to Breakout Point and reported by Bloomberg, Fuzzy Panda Research was the best-performing active short-seller in 2023. Although short-sellers -- investors who try to profit from falling share prices -- suffered deep losses during the long bull market of the 2010s, they can help expose harmful or downright fraudulent business practices.
Fuzzy Panda reviewed hundreds of court documents and interviewed former executives and agents "who showed us where the fraud was hidden." According to the short-seller, the fraud was ignored by management despite being "obvious and reported hundreds of times." After the short report was released, Globe Life's stock plummeted 53% in a single day.
Following the serious accusations from Fuzzy Panda, Globe Life responded by saying:
We reviewed the report and found it to be wildly misleading, mixing anonymous allegations with recycled points pushed by plaintiff law firms to coerce Globe Life into settlements ... The short seller analysis by Fuzzy Panda Research mischaracterizes facts and uses unsubstantiated claims and conjecture to present an overall picture of Globe Life that is deliberately false, misleading and defamatory.
Buy the dip?
According to The Fly, analysts believe the stock sell-off is overdone, but big question marks remain. Investment bank and investment firm Piper Sandler said that Globe Life's response "serves to assuage concerns but does not completely remove the vacuum that remains absent a broader communication about this matter with the investment community."
Another investment firm, Evercore, meanwhile, sees limited downside from here but says there is still "significant uncertainty for the shares."
Globe Life faces serious allegations, and the stock price reflects this. After its significant sell-off, aggressive investors may find the stock ripe for the picking. If you're willing to tolerate this risk, though, don't bet more than you're willing to lose.
However, given the uncertainty around the situation and the Department of Justice's investigation, most investors are better off waiting to see how things shake out; they should avoid the stock for now.
<<<
---
Global Life - >>> Billionaire Warren Buffett Recently Cut This Stock From Berkshire Hathaway's Portfolio. It Just Dropped 53% In 1 Day. Here's What Investors Need to Know.
by Courtney Carlsen
Motley Fool
Apr 17, 2024
https://finance.yahoo.com/news/billionaire-warren-buffett-recently-cut-101500983.html
Globe Life (NYSE: GL) stock plummeted by more than 53% in a single day last week after short-seller Fuzzy Panda Research accused the life insurance company of fraud. The claims piled onto the already struggling stock, which had previously been a longtime holding of Warren Buffett's conglomerate, Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B).
If you're thinking about buying the dip in the stock, there are some things you'll want to know.
Globe Life's troubles began last year
Globe Life was one of Berkshire Hathaway's longest-held investments, having been part of the conglomerate's portfolio for more than two decades. Berkshire held Globe Life through several difficult economic periods, including the COVID-19 pandemic, which put tremendous pressure on life insurers by elevating claims costs.
Buffett examines a management team's character and trustworthiness when investing. Buffett and his team have an excellent track record of evaluating management, which is a big reason for the conglomerate's long-term success. When Globe Life became the subject of several lawsuits accusing it of misconduct, Berkshire pulled the plug on its investment.
Last year, two Globe Life subsidiaries, American Income Life Insurance Co. and Arias Agencies, faced a lawsuit accusing them of inappropriate workplace conduct; this included rampant drug use, sexual abuse, and degradation of agents who didn't hit sales targets.
Globe Life's struggles continued when a former executive claimed he was fired for blowing the whistle on "potentially illegal" sales practices at the subsidiary. It appears that the accusations were why Berkshire sold its stake in the insurer last year.
Here's what short seller Fuzzy Panda had to say about the insurer
Fast-forward to this year, and Globe Life's troubles have gone from bad to worse. On March 6, the U.S. Department of Justice issued subpoenas to Globe Life and American Income Life. The subpoena is part of an investigation into allegations of fraud and misconduct at the (renamed) Arias Organization, now one of American Income Life's agencies.
Last week, the dam broke after short-seller Fuzzy Panda Research accused Globe Life of "extensive" insurance fraud that was ignored by management. According to Breakout Point and reported by Bloomberg, Fuzzy Panda Research was the best-performing active short-seller in 2023. Although short-sellers -- investors who try to profit from falling share prices -- suffered deep losses during the long bull market of the 2010s, they can help expose harmful or downright fraudulent business practices.
Fuzzy Panda reviewed hundreds of court documents and interviewed former executives and agents "who showed us where the fraud was hidden." According to the short-seller, the fraud was ignored by management despite being "obvious and reported hundreds of times." After the short report was released, Globe Life's stock plummeted 53% in a single day.
Following the serious accusations from Fuzzy Panda, Globe Life responded by saying:
We reviewed the report and found it to be wildly misleading, mixing anonymous allegations with recycled points pushed by plaintiff law firms to coerce Globe Life into settlements ... The short seller analysis by Fuzzy Panda Research mischaracterizes facts and uses unsubstantiated claims and conjecture to present an overall picture of Globe Life that is deliberately false, misleading and defamatory.
Buy the dip?
According to The Fly, analysts believe the stock sell-off is overdone, but big question marks remain. Investment bank and investment firm Piper Sandler said that Globe Life's response "serves to assuage concerns but does not completely remove the vacuum that remains absent a broader communication about this matter with the investment community."
Another investment firm, Evercore, meanwhile, sees limited downside from here but says there is still "significant uncertainty for the shares."
Globe Life faces serious allegations, and the stock price reflects this. After its significant sell-off, aggressive investors may find the stock ripe for the picking. If you're willing to tolerate this risk, though, don't bet more than you're willing to lose.
However, given the uncertainty around the situation and the Department of Justice's investigation, most investors are better off waiting to see how things shake out; they should avoid the stock for now.
<<<
---
Rickards - >>> AI, Gold and Nuclear War
BY JAMES RICKARDS
APRIL 16, 2024
https://dailyreckoning.com/ai-gold-and-nuclear-war/
AI, Gold and Nuclear War
So-called artificial intelligence (AI) is taking the world by storm. Meanwhile, gold has shot up like a rocket over the past couple of months.
In mid-February, gold was trading at $1,990. Two months later, gold is trading above $2,400 — a $410 gain in just two months.
So here’s a question:
Is there a connection between AI and gold? It seems like an odd question. But as it turns out, the answer is yes. And surprisingly, there has been for decades. It involves the Cold War between the U.S. and the Soviet Union.
In the early 1980s, the KGB was deeply concerned about the possibility of a nuclear first strike by the United States. At the time, Yuri Andropov was head of the KGB.
Andropov’s fear of a nuclear first strike by the U.S. was based in part on the 1980 election of Ronald Reagan and Reagan’s plan to install Pershing II intermediate-range missiles in Europe.
Those missiles could be armed with nuclear warheads and could strike the Soviet Union within minutes of being launched. This put Soviet nuclear forces on a hair-trigger alert. They adopted a “launch on warning” posture.
This means that as soon as credible evidence of a planned first strike was discovered, the Soviet Union would launch its own first strike to avoid destruction of its forces.
The irony was that the U.S. had no actual plans to launch a first strike, but the Soviet Union didn’t know that. Reagan’s speeches about the “evil empire” did nothing to calm Soviet concerns.
AI and Nuclear Readiness
In response, the Soviets developed a primitive (by today’s standards) AI system called VRYAN. That’s a Russian acronym for: sudden nuclear missile attack.
VRYAN took about 40,000 military, economic and political inputs and computed the relative strength of the Soviet Union compared with the United States expressed as a percentage output. The model used a value of 100% for equivalence of the USSR to the U.S.
The Soviet leadership was comfortable that the U.S. would not launch a nuclear first strike if the USSR could maintain a value of 60%, although they viewed 70% as providing a more comfortable margin.
A VRYAN output of 40% was considered the critical threshold at which the U.S. might feel it could launch a first strike with acceptable risk that the Soviets would not be able to mount a successful second strike.
VRYAN output values were in steady decline in the dangerous period from 1981–1984 (in 1984, the VRYAN output had declined to 45%).
The VRYAN AI system relied on by the KGB and the Soviet Politburo was an important factor in the Soviet decision in 1981 to vastly increase intelligence collections aimed at detecting U.S. preparations for a first strike.
Close Call
This intelligence collection effort was complicated to the point of extreme danger by the fact that the U.S. and NATO were conducting a war game in late 1983, code-named Able Archer 83. This war game was to practice a nuclear strike on the Soviet Union.
It turned out that the U.S. was rehearsing a nuclear first strike at the same exact time that the KGB was looking for evidence of a nuclear first strike. Able Archer 83 provided the KGB with more than enough reason to suspect the U.S. was indeed preparing for a first strike under cover of a war game.
VRYAN’s AI output on relative U.S. strength was compounded by massive U.S. intelligence failures regarding Soviet intentions. U.S. intelligence analysts assumed that the future would resemble the past, and that Soviet alerts were really propaganda designed to halt the U.S. deployment of Pershing II intermediate-range nuclear missiles in Europe.
U.S. intelligence analysts were also guilty of what’s called mirror imaging: the belief that because you know your own intentions, your opponents must share your view. In this case, the U.S. assumed that because they had no intention to launch a first strike, the Soviets must have understood that intention and would therefore have no cause for concern.
In fact, the Soviets had the opposite view based in part on VRYAN AI output.
The world came extremely close to World War III and a nuclear holocaust as a result of this sequence of events and misperception of intentions. It was only when one U.S. general decided not to escalate in the face of Soviet first strike preparations that both sides deescalated, and the crisis eventually receded.
The information above wasn’t fully understood by either side at the time of the escalation. On the U.S. side, it wasn’t until the 1990 publication of a study entitled The Soviet War Scare by the President’s Foreign Intelligence Advisory Board (PFIAB) that something like the full story was revealed.
Nuclear War Threats: Good For Gold
This study was originally classified above TOP SECRET. (Most citizens assume that TOP SECRET is the highest level of classification. But there are secret access codes that limit circulation of certain documents even among those cleared with TOP SECRET access.
In the case of The Soviet War Scare, those restrictions had the code names UMBRA, GAMMA, ININTEL, NOFORN, NOCONTRACT, ORCON. I can’t discuss my own TOP SECRET clearances, but I can inform you that very few intelligence operatives would have been able to view the PFIAB report based on those restrictions.
So what does all this have to do with gold?
Buried inside The Soviet War Scare was this passage about the U.S. assessment of KGB collection requirements related to a potential nuclear war:
VRYAN Collection Requirements – Throughout the early 1980s, VRYAN requirements were the No. 1 (and urgent) collection priority for Soviet intelligence… They were tasked to collect:… monitoring of the flow of money and gold on Wall Street as well as the movement of high-grade jewelry, collections of rare paintings and similar items. (This was regarded as useful geostrategic information.) (Emphasis added)
And there it is! The U.S. assessed that the KGB tracked the movement of gold as a leading indicator of nuclear attack.
I didn’t find this completely surprising. From 2004–2010, I was co-director of a CIA effort called Project Prophesy that looked at capital markets activity as an early warning of an enemy attack.
Gold was one of the valuable assets that was on our list of items to track. The idea was that if a general or political leader had advance information about an attack, they’d convert their wealth to gold in safekeeping in order to financially survive the fallout.
The bottom line is that this intelligence reporting and AI system are not ancient history. Today, the world is closer to nuclear war than at any time since the Able Archer scare in 1983. Gold is once again on the move, having risen from $1,830 per ounce on Oct. 5, 2023, to over $2,400 today. That’s a 31% gain in six months.
Is this a coincidence? Hardly. A close correlation of huge gains in gold with serious threats of nuclear war is exactly what one should expect.
Unfortunately, those threats of nuclear war are not going away soon. One need only look at the Iranian attack on Israel this past weekend and the possibilities of further escalation.
There are also situations in Ukraine, Russia, NATO, Gaza, the Red Sea and the Suez Canal revealing that the world is a more dangerous place than it has been for decades.
That’s bad news for the world but good news for gold investors. The rally we’ve seen in the past six months is just getting started.
<<<
---
Rickards - >>> AI, Gold and Nuclear War
BY JAMES RICKARDS
APRIL 16, 2024
https://dailyreckoning.com/ai-gold-and-nuclear-war/
AI, Gold and Nuclear War
So-called artificial intelligence (AI) is taking the world by storm. Meanwhile, gold has shot up like a rocket over the past couple of months.
In mid-February, gold was trading at $1,990. Two months later, gold is trading above $2,400 — a $410 gain in just two months.
So here’s a question:
Is there a connection between AI and gold? It seems like an odd question. But as it turns out, the answer is yes. And surprisingly, there has been for decades. It involves the Cold War between the U.S. and the Soviet Union.
In the early 1980s, the KGB was deeply concerned about the possibility of a nuclear first strike by the United States. At the time, Yuri Andropov was head of the KGB.
Andropov’s fear of a nuclear first strike by the U.S. was based in part on the 1980 election of Ronald Reagan and Reagan’s plan to install Pershing II intermediate-range missiles in Europe.
Those missiles could be armed with nuclear warheads and could strike the Soviet Union within minutes of being launched. This put Soviet nuclear forces on a hair-trigger alert. They adopted a “launch on warning” posture.
This means that as soon as credible evidence of a planned first strike was discovered, the Soviet Union would launch its own first strike to avoid destruction of its forces.
The irony was that the U.S. had no actual plans to launch a first strike, but the Soviet Union didn’t know that. Reagan’s speeches about the “evil empire” did nothing to calm Soviet concerns.
AI and Nuclear Readiness
In response, the Soviets developed a primitive (by today’s standards) AI system called VRYAN. That’s a Russian acronym for: sudden nuclear missile attack.
VRYAN took about 40,000 military, economic and political inputs and computed the relative strength of the Soviet Union compared with the United States expressed as a percentage output. The model used a value of 100% for equivalence of the USSR to the U.S.
The Soviet leadership was comfortable that the U.S. would not launch a nuclear first strike if the USSR could maintain a value of 60%, although they viewed 70% as providing a more comfortable margin.
A VRYAN output of 40% was considered the critical threshold at which the U.S. might feel it could launch a first strike with acceptable risk that the Soviets would not be able to mount a successful second strike.
VRYAN output values were in steady decline in the dangerous period from 1981–1984 (in 1984, the VRYAN output had declined to 45%).
The VRYAN AI system relied on by the KGB and the Soviet Politburo was an important factor in the Soviet decision in 1981 to vastly increase intelligence collections aimed at detecting U.S. preparations for a first strike.
Close Call
This intelligence collection effort was complicated to the point of extreme danger by the fact that the U.S. and NATO were conducting a war game in late 1983, code-named Able Archer 83. This war game was to practice a nuclear strike on the Soviet Union.
It turned out that the U.S. was rehearsing a nuclear first strike at the same exact time that the KGB was looking for evidence of a nuclear first strike. Able Archer 83 provided the KGB with more than enough reason to suspect the U.S. was indeed preparing for a first strike under cover of a war game.
VRYAN’s AI output on relative U.S. strength was compounded by massive U.S. intelligence failures regarding Soviet intentions. U.S. intelligence analysts assumed that the future would resemble the past, and that Soviet alerts were really propaganda designed to halt the U.S. deployment of Pershing II intermediate-range nuclear missiles in Europe.
U.S. intelligence analysts were also guilty of what’s called mirror imaging: the belief that because you know your own intentions, your opponents must share your view. In this case, the U.S. assumed that because they had no intention to launch a first strike, the Soviets must have understood that intention and would therefore have no cause for concern.
In fact, the Soviets had the opposite view based in part on VRYAN AI output.
The world came extremely close to World War III and a nuclear holocaust as a result of this sequence of events and misperception of intentions. It was only when one U.S. general decided not to escalate in the face of Soviet first strike preparations that both sides deescalated, and the crisis eventually receded.
The information above wasn’t fully understood by either side at the time of the escalation. On the U.S. side, it wasn’t until the 1990 publication of a study entitled The Soviet War Scare by the President’s Foreign Intelligence Advisory Board (PFIAB) that something like the full story was revealed.
Nuclear War Threats: Good For Gold
This study was originally classified above TOP SECRET. (Most citizens assume that TOP SECRET is the highest level of classification. But there are secret access codes that limit circulation of certain documents even among those cleared with TOP SECRET access.
In the case of The Soviet War Scare, those restrictions had the code names UMBRA, GAMMA, ININTEL, NOFORN, NOCONTRACT, ORCON. I can’t discuss my own TOP SECRET clearances, but I can inform you that very few intelligence operatives would have been able to view the PFIAB report based on those restrictions.
So what does all this have to do with gold?
Buried inside The Soviet War Scare was this passage about the U.S. assessment of KGB collection requirements related to a potential nuclear war:
VRYAN Collection Requirements – Throughout the early 1980s, VRYAN requirements were the No. 1 (and urgent) collection priority for Soviet intelligence… They were tasked to collect:… monitoring of the flow of money and gold on Wall Street as well as the movement of high-grade jewelry, collections of rare paintings and similar items. (This was regarded as useful geostrategic information.) (Emphasis added)
And there it is! The U.S. assessed that the KGB tracked the movement of gold as a leading indicator of nuclear attack.
I didn’t find this completely surprising. From 2004–2010, I was co-director of a CIA effort called Project Prophesy that looked at capital markets activity as an early warning of an enemy attack.
Gold was one of the valuable assets that was on our list of items to track. The idea was that if a general or political leader had advance information about an attack, they’d convert their wealth to gold in safekeeping in order to financially survive the fallout.
The bottom line is that this intelligence reporting and AI system are not ancient history. Today, the world is closer to nuclear war than at any time since the Able Archer scare in 1983. Gold is once again on the move, having risen from $1,830 per ounce on Oct. 5, 2023, to over $2,400 today. That’s a 31% gain in six months.
Is this a coincidence? Hardly. A close correlation of huge gains in gold with serious threats of nuclear war is exactly what one should expect.
Unfortunately, those threats of nuclear war are not going away soon. One need only look at the Iranian attack on Israel this past weekend and the possibilities of further escalation.
There are also situations in Ukraine, Russia, NATO, Gaza, the Red Sea and the Suez Canal revealing that the world is a more dangerous place than it has been for decades.
That’s bad news for the world but good news for gold investors. The rally we’ve seen in the past six months is just getting started.
<<<
---
In addition to RSI for the main stock indices, another indicator I'm using is the $VIX, since when its RSI approaches or reaches overbought (RSI of 70), this has consistently identified stock market bottoms (see below). The $VIX had an RSI reading over 70 yesterday, and is currently ~ 68, so this suggests that a near term bottom could be near.
I figure a lot will depend upon Israel's response to the Iranian bombing. Since the US has told Netanyahu pretty bluntly that the US will not support his retaliatory efforts, it seems doubtful that he'll do anything really big. Who knows, but I figure that after a few more days the financial markets will go back to concentrating more on corporate earnings. Anyway, I re-upped my stock allocation to 20%, so will go with that for now. I figure a conservative approach might be 12.5% as Core (LT buy/hold), and 7.5% as Flex, but still a 'work in progress'.
2022 - late Sept / early Oct
2023 - March
2023 - August
2023 - late Sept thru Oct
2024 - mid Feb
2024 - April
---
In addition to RSI for the main stock indices, another indicator I'm using is the $VIX, since when its RSI approaches or reaches overbought (RSI of 70), this has consistently identified stock market bottoms (see below). The $VIX had an RSI reading over 70 yesterday, and is currently ~ 68, so this suggests that a near term bottom could be near.
I figure a lot will depend upon Israel's response to the Iranian bombing. Since the US has told Netanyahu pretty bluntly that the US will not support his retaliatory efforts, it seems doubtful that he'll do anything really big. Who knows, but I figure that after a few more days the financial markets will go back to concentrating more on corporate earnings. Anyway, I re-upped my stock allocation to 20%, so will go with that for now. I figure a conservative approach might be 12.5% as Core (LT buy/hold), and 7.5% as Flex, but still a 'work in progress'.
2022 - late Sept / early Oct
2023 - March
2023 - August
2023 - late Sept thru Oct
2024 - mid Feb
2024 - April
---
Bigworld, In addition to RSI for the main stock indices, another indicator I'm using is the $VIX, since when its RSI approaches or reaches overbought (RSI of 70), this has consistently identified stock market bottoms (see below). The $VIX had an RSI reading over 70 yesterday, and is currently ~ 68, so this suggests that a near term bottom could be near.
I figure a lot will depend upon Israel's response to the Iranian bombing. Since the US has told Netanyahu pretty bluntly that the US will not support his retaliatory efforts, it seems doubtful that he'll do anything really big. Who knows, but I figure that after a few more days the financial markets will go back to concentrating more on corporate earnings. Anyway, I re-upped my stock allocation to 20%, so will go with that for now. I figure a conservative approach might be 12.5% as Core (LT buy/hold), and 7.5% as Flex, but still a 'work in progress'.
2022 - late Sept / early Oct
2023 - March
2023 - August
2023 - late Sept thru Oct
2024 - mid Feb
2024 - April
---
Chart-wise, the main stock indices are nearing oversold, based on the RSI (under 30 is oversold) -
DJIA ------ 31
S+P 500 - 39
Nasdaq -- 42
Russell --- 37
Wall Street is waiting to see Israel's response to the Iranian bombing, but if nothing happens soon then the near term bottom in stocks might be in (?)
---
Chart-wise, the main stock indices are nearing oversold, based on the RSI (under 30 is oversold) -
DJIA ------ 31
S+P 500 - 39
Nasdaq -- 42
Russell --- 37
Wall Street is waiting to see Israel's response to the Iranian bombing, but if nothing happens soon then the near term bottom in stocks might be in (?)
---
Chart-wise, the main stock indices are nearing oversold, based on the RSI (under 30 is oversold) -
DJIA ------ 31
S+P 500 - 39
Nasdaq -- 42
Russell --- 37
Wall Street is waiting to see Israel's response to the Iranian bombing, but if nothing happens soon then the near term bottom in stocks might be in (?)
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European solar - >>> Losing hope of rescue, some European solar firms head to US
Reuters
by Sarah McFarlane and Riham Alkousaa
4-15-24
https://www.yahoo.com/news/losing-hope-rescue-european-solar-060514885.html
FRIEBERG, Germany (Reuters) - European governments due to move to support their solar power manufacturers this week will be too late to stop solar panel maker Meyer Burger packing up a German factory to send production to the United States.
The plant in Freiberg in eastern Germany closed in mid-March with the loss of 500 jobs, as the Swiss-listed firm joined a growing list of European renewable energy manufacturing factories shutting down or moving. In the past year, at least 10 have said they are in financial difficulties.
On a recent visit to the site, giant white robotic arms hung dormant over empty wooden pallets as workers prepared the last production line for shutdown. Talks with the German federal government to try to secure a future for the factory ended without success in late March, a company spokesperson told Reuters.
Germany's economy ministry said it was aware of the "very serious situation" of German companies and has been examining funding options with the industry for over a year. It agreed to give Meyer Burger an export credit guarantee for equipment produced in Germany to be used at the U.S. factories, which will help a site nearby but won't save the Freiberg one.
The closure, which in one sweep reduced European solar panel production by 10%, comes despite a boom in wind and solar energy in Europe. Additions to renewable energy capacity, including solar panels, are running at record pace, according to data from the International Energy Agency.
But Europe-based manufacturers that supply those panels are being crushed by competition from China and the U.S., whose governments give more support to their producers.
The situation poses a dilemma for European governments keen to fight climate change: Either offer more support to ensure local production can stay competitive, or allow the unfettered flow of imports to keep up the pace of installations. A meeting in Brussels between European energy ministers on Monday will make a gesture of support for the struggling industry.
China is expanding solar output and now accounts for 80% of the world's solar manufacturing capacity. The cost of producing panels there is around 12 cents per watt of energy generated, compared with 22 cents in Europe, according to research firm Wood Mackenzie.
U.S. subsidies announced as part of the 2022 Inflation Reduction Act allow some renewable energy manufacturers and project developers to claim tax credits, which are attracting businesses from within the European Union and beyond.
Meyer Burger says its plans include a solar panel factory in Arizona and a solar cell factory in Colorado.
"We made a bold move in the absence of any industry policy support in Europe and shifted a solar cell expansion project from Germany to the U.S.," its chief executive Gunter Erfurt told Reuters in an interview.
Similarly, battery company Freyr which operates mostly in Norway, has stopped work at a half-finished plant near the Arctic Circle and is focusing on plans for a plant in the U.S. state of Georgia after Washington announced the policy.
Freyr said in February it had changed its registration to the U.S. from Luxembourg.
"We did spend quite a bit of time trying to really make sure that we weren't committing a mistake," said Birger Steen, chief executive of Freyr: The company first hunted for support from Norwegian or European governments.
"We got to the point where we concluded that that form of policy level response was not forthcoming."
Asked to comment, Norway's ministry of trade and industry said that it had launched an industrial policy framework targeting energy transition technologies including solar and batteries, but did not directly address questions about additional funding for the companies in this story.
CHARTER
At Monday's meeting, the European Commission will launch a voluntary charter for governments and companies to sign in support of solar manufacturing plants. Industry association Solar Power Europe will coordinate company signatories. But the charter, which says that buyers of solar panels should include some domestic production in what they buy, is not enforceable, Solar Power Europe said.
Michael Bloss, EU parliament member for Greens, launched a petition earlier this month calling for action at a European level to rescue panel manufacturers.
Bloss says he is pushing for the European Commission to set up a 200 million euro ($213 million) fund to buy up unused European-made solar panels, but Europe has been unwilling to pursue that. The European Commission declined to comment.
"We are -- in headlines and Sunday speeches -- very much in favour of creating our own solar industry, but then in action, nothing happens," Bloss told Reuters.
"The charter will be more like a political declaration signed by member states, solar companies and the Commission, it's more long term, it has no immediate effect."
In February, European policymakers adopted the Net-Zero Industry Act, a set of measures including a target to produce 40% of the region's clean tech needs by 2030.
The previous month, the EU also approved almost $1 billion of German state aid for a Swedish battery producer, Northvolt, to help it set up a production plant in Germany after Northvolt threatened to take its business to the United States. It was the first time the bloc made use of an exceptional measure allowing member countries to step in with aid when there's a risk of investment leaving Europe.
But aid for ongoing operations has not been forthcoming, amid political disagreement over how much public funds should go to struggling businesses.
Decisions about supporting industries or firms like Meyer Burger are down to member states, a spokesperson for the European Commission told Reuters. Germany's economy and climate ministry believes aid to maintain an existing company like Meyer Burger would not be legal "if there is a lack of market prospects from the company's perspective," a spokesperson told Reuters.
Potential customers -- renewable energy installers that depend heavily on cheap Chinese imports -- have also pushed back against any new subsidies for local panels, arguing such moves could hurt them by causing consumers to postpone orders as they wait for the subsidies to kick in.
INTERTWINED
More than a year's worth of low-price imported panels sit in European warehouses awaiting installation, according to consultancy Rystad Energy and solar panel makers. Reuters could not independently verify that estimate.
That backlog could grow as Chinese capacity continues to expand, Rystad says: If all the plans Chinese firms have announced go ahead, China's industry will be able to make twice as many panels as are expected to be installed worldwide in 2024, said Marius Mordal Bakke, senior analyst at Rystad.
Dresden-based Solarwatt is carrying six to nine months of stocks, up from around six weeks, its chief executive Detlef Neuhaus told Reuters in March.
The company laid off around 10% of its employees last year and says its local panel production is running at roughly one-third of capacity.
"This industry is so important for the future, we cannot allow that we are losing all our competence," said Neuhaus.
Analysts say it's not clear what support could actually help, because firms like Meyer Burger produce a fraction of the volumes made by those in China, or planned in the U.S.
"They are tiny, so they will always struggle with volume, not just to compete with Chinese producers but also with U.S. producers," said Eugen Perger, senior analyst at Research Partners AG.
And local clean technology industries are so globally intertwined it's hard for European manufacturers to imagine a fully independent supply chain.
Norway-based NorSun, which produces solar wafers – thin silicon film used in panels – said Chinese equipment is crucial to both its plant in Norway and a proposed facility in the U.S. The company has halted production at the Norway plant while it decides whether to upgrade it.
Most of the equipment for either project would have to come from China. "There's essentially no other option," said Carsten Rohr, chief commercial officer at NorSun.
DEJA VU
Freiberg has been here before. Since the 1990s, companies setting up operations in the region have benefited from federal funding programmes to rebuild east Germany and help it close the gap with western Germany's prosperity.
New industries sprang up, including in solar and semiconductors. But Freiberg took a big hit in the 2010s after China's solar industry boosted production and undercut competitors.
In 2020, the German government removed a cap on subsidies for solar power installations which helped lift demand. In 2021, the EU's Green Deal signalled political support for future demand, and Russia's full invasion of Ukraine also helped solar deployment.
Meyer Burger, which is headquartered in Gwatt, Switzerland, only set up production in Freiberg in 2021 as the industry started coming back to life. It refurbished a bankrupt solar company's plant that had stood unused for almost three years.
For a while it became one of the town's largest employers, mayor Sven Krueger confirmed.
"This is the second time the German solar industry is at risk. They failed once already," said apprentice Max Lange, 19, greeting colleagues with a silent nod as they cleaned idled machinery on the factory floor.
"If it fails again, I doubt that I will be able to pursue a career in the European solar industry, because I don't think it will come back," he said, wondering aloud if he might instead find work in the U.S. solar industry.
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