For every investor, the cost of money or interest rates pays an important factor in the investment decision. If you could receive 15% return for buying bonds, would you buy stocks? conversely if returns for buying bonds are 1% why would you not buy stocks? We all know what we would do if interest rates are very high or very low, what about the middle? One of the people who influence the interest rate is the Chair of the Federal Reserve.

In an article by Jeff Mason, Howard Schneider and Katharine Jackson of Reuters, President Trump says we already knows how he will pick to lead the Federal Reserve as Chair. Next May, the present Chair Jerome Powell mandated 10 years is up and he will not be reappointed.

Treasury Secretary Scott Bessent along with President Trump has led the search process. Mr. Bessent does not want the job. The leading contenders are Kevin Hassett, Michelle Bowman, Christopher Waller, Kevin Warsh and Rick Rieder.

Secretary Bessent says he has completed 2 rounds of interviews with each of them and plans a narrowing of the list to President Trump later in December.

President Trump favors someone who will lower interest rates.

Regardless of who leads the Fed, the first order of monetary policy is determined by economic conditions, James Egelhof, Chief Economist for BNP Paribas said.

Linking to dividend paying stocks, when buying dividend stocks the total return of dividends plus capital gains are the reward for the investor. In down markets, dividend stocks go down the least, why in up markets they trade at higher multiples because they are profitable. What is not to like?

There are more questions than answers, till the next time – to raising questions.

If you are an investor, ideally you like to own shares in companies that have monopolies or near monopolies, to ensure there is a floor for the commodity prices. The floor means prices of the commodity should not go lower than that, if they go higher so much the better. Sometimes the ideals of the investor and the ideals of the consumer are opposite.

In an article by Ahmad Ghaddar, Alex Lawler and Oleysa Astakhow of Reuters, the OPEC companies offer a monopoly. Ever since 1973, OPEC has influence prices, before that it was the 7 largest oil companies at that time.

OPEC or the Organization of the Petroleum Exporting Companies is combined with the + which is allies led by Russia. (Russia’s number one export is oil and gas).

Having oil in the ground and not being in the G7 countries, is the entrance way into OPEC.

Since April of 2025, OPEC+ members have released 2.9 million barrels a day into the market.

OPEC+ has about 3.24 million b/d of output cuts in place, representing about 3% of global demand. The cuts are in place until the end of 2026.

The process for 2027, is an outside company will assess capacity at 19 of the 22 OPEC+ members. Capacity in the countries under sanction such as Russia, Iran and Venezuela will be assessed by a different company or by using an average of their oil output for August through October 2026.

With quotas, there are always some companies that either want to produce more or want higher quotas such as the UAE and others that resisting quota cuts because their production capacity as fallen such as Angola.

Linking to dividend paying stocks, many industries are complicated because the players have different influence over the industry. In the oil industry, the OPEC countries produce more than they consume, so they need to sell to other companies. The companies have consumers and consumers wish to pay as low as possible. On top of that the major oil companies produce oil domestically and offshore in non OPEC countries but all are influenced by the OPEC desirability for a range of prices. As an investor in the oil business this ensures oil companies make money, the issue is how much?

There are more questions than answers, till the next time – to raising questions.

Every industry has trend lines, and one of the lines in the world of trading is the trend is your friend until it is not.

In an article by Mike Dolan of Reuters, trillions of dollars of AI investment spending earmarked over the next 5 years hinge on a belief that a grand technological transformation of the entire US – and likely global – economy is under way.

Strategists at the world’s biggest asset manager BlackRock unveiled their annual outlook, which showed just how difficult it would be for even this sort of tech metamorphosis to knock off the US off the steady course it has mapped over a century and a half.

The report from BlackRock Investment Institute noted the US sits at the global economic frontier. All major innovations of the last 150 years – including steam, electricity and the digital revolution – were not enough for it to break out of its 2% growth trend. Doing so is a tall order.

By that they mean AI could begin to generate, test and improve new concepts of its own- accelerating and driving scientific breakthrough in materials, medicines and tech.

Blackrock’s charts maps US GDP per capita growth stretching back to 1870. Aside from the big swings around the Second WW II, the two notable periods of above-trend were in the late 19th century and the 1990s. But it never strays far from the 2% line.

Maybe this time it’s different.

While we wait for AI’s long promise to unfold, the immediate economic horizon is likely still constrained by that 2% trend line – to the extent that bottlenecks in the labor market or existing supply chains or construction capacity still exist.

Linking to dividend paying stocks, if you are a trade then the trend is your friend until it is not. If you are long term holder, it is important to know what the trends are and have been to decide whether to reinvest or ensure your portfolio is well diversified.

There are more questions than answers, till the next time – to raising questions.

While the President and some members of his Cabinet may not think there is climate change going on, insurance companies do. The insurance companies determine the premiums to insure they make money on both ensuring the premiums and investing the surpluses. If a natural disaster happens more than the once in a 100-year scenario, the AI data means the price of home insurance premiums increase unless the amount the person has to pay first increases. The insurance company are in the risk allocation business, and they like less risk to themselves.

In an artice by Claire Brown and Mira Rojanasakul of the New York Times News Service, a homeowner in Lafitte, Louisiana which has been in the family for 5 generations, has seen the premium increase to $8,312 more than doubling in the past 4 years. The house is on a small coastal community and has been raised with stilts.

The homeowner is considering selling, but the home values have fallen 38% since 2020 as people cannot afford the higher insurance premiums, the area is dotted with for-sale signs.

New research shared with the New York Times on where insurance costs have risen the most and how they are affecting home values. Since 2018, a shock in the home insurance market has meant that homes in the ZIP codes most exposed to hurricanes and wildfires, would sell for an average of $43, 900 less than they would otherwise found. The research analyzed tens of millions of housing payments through 2024.

Changes in the reinsurance market is a helping drive the trend. Insurance companies purchase reinsurance to help limit their exposure when a catastrophe hits. Global reinsurance companies have been raising the rates.

Benjamin Keys at the Wharton School of the University of Pennsylvania and Philip Mulder of the University of Wisconsin-Madison analyzed 74 million home payments between 2014 and 2024. The researchers found a rapid repricing of disaster risk had been responsible for about 1/5 of overall home insurance increases since 2017. Another 1/3 could be explained by construction costs.

The researchers found that in ZIP codes most vulnerable to catastrophes rising insurance premiums weigh down home values by about $20,500 in the top 25% of the most exposed ZIP codes, if you go to the top 10 ZIP codes the number is closer to $43,900.

In the parts of hail-prone Mid-western states, insurance now eats up more than 1/5 of the average homeowner’s total housing payments which include mortgage costs and property taxes. Remember without insurance no mortgage. In Orleans Parish, La the number is closer to 30%.

Higher insurance premiums and higher interest rates are making it harder for first-time buyers to afford to buy new homes.

According to Census Bureau data some 13% of US homeowners are uninsured, that is expected to increase and higher payments out of pocket if and when a disaster happens.

Linking to dividend paying stocks, similar to most things in life there are multiple parts that need to exist in the market is in order. While you may or may not like climate change, insurance companies are putting increasingly putting the risk on homeowners. As investors you need to look to the companies that adapt changing circumstances to continually make profits.

There are more questions than answers, till the next time – to raising questions.

Politicians love slogans such as President Trump’s drill baby drill. While just about every voter has a good idea what that means, the question is are the companies doing more drilling?

In an article by Lisa Friedman of the New York Times News Service, according to Kenneth B Medlock, an energy economist at Rice University’s Baker Institute for Public Policy in Houston, the answer is no,

There are reasons, oil is a commodity business, and the price has fallen from $75 to in the $60’s. That direction means the oil companies needed to find more efficiencies rather than drilling more. When President Trump imposed tariffs on steel and other commodities, oil companies need for wells and other equipment, costs went up.

President Trump has repealed dozens of environmental regulations that added costs to oil companies. He has also opened up millions of ecological sensitive lands in Alaska to drilling and is poised to deliver millions of acres of offshore ocean waters.

One area where the President has delivered is President Trump’s tax and policy law is projected to deliver at least $18 billion in government subsidies and tax breaks for oil, gas and coal over the next decade.

Bob Ryan, who runs the Ryan Commodity Insights consulting firm said the first year has been too confusing to be positive for most companies.

Taylor Rogers, a White House spokesperson, credited President Trump’s agenda with lowering gasoline prices and improving energy security. According to AAA the average gasoline price was $3.069 a gallon versus $3.056 a gallon a year ago. (no one is positive where President Trump fills his tank for $2.00 a gallon).

There are reports that the peak of the shale oil productivity expansion will be 2026 and after that prices will tend to go as the US needs more imported oil.

In terms of electricity prices that everyone pays, they have gone up 11%, partly due to the demand for AI data centers.

Linking to dividend paying stocks, the oil companies have been and continue to be some of the best dividend paying companies in the US. For investors, it is good that oil companies can drill for oil, but oil is a commodity and when you are investing in the company, you need to know whether the company can make money at $60 a barrel? if yes and the price increases then your total return will be enhanced no matter what the politics are.

There are more questions than answers, till the next time – to raising questions.

For many decades, it has been reasonably easy to determine why the price of gold has increased. Everyone knows gold has been an inflation source and if someone lives in an economy which collapses, having physical assets such as gold is very helpful in getting out of the country and starting in a new one. Gold is seen in jewelry, coins and central banks own it, but there is a new player.

In an article by Mike Dolan of Reuters, there are many analysts who search the world to determine who is buying the gold? Until recently the focus was on central bank managers in China and the developing world. Add to that sizable private buying and strong inflows into exchanged-traded gold funds, and there’s the familiar flight to safety narrative.

Another buyer is Tether, the issuer of the US dollar-pegged crypto token or stablecoin USDT and smaller gold-backed token Tether Gold XAUt.

Investment bank Jefferies calculates gold buying from what’s now the world’s largest digital assets company exceeded official central bank purchases over 2 quarters through September 30.

Tether owns 116 tons of gold for its customers – about $14 billion. That made it the largest single holder of bullion outside the big central banks.

Gold’s price rose in 2 waves this year: the first was a $1,000 per ounce jump in 4 months tied to the tariff shock and a 10% drop in the US dollar. The second was a $1,000 per ounce jump without the normal rational reasons as well as the dollar did not decline.

Central banks bought 220 tons in both the 2nd and 3rd quarters.

Jefferies notes Tether bought 26 tons in the 3rd quarter or 2% of the gold demand. In the 2nd quarter Tether accounted for 14% of central-bank buying.

At last count, Tether reported holding 104 tons of gold as part of USDT’s reserves and another 12 tons backing XAUt.

Linking to dividend paying stocks, in every industry as an investor you make some basic assumptions on the reasons why the stock goes up and down. If you own investments in resources, if a new discovery is made, if it can be taken out of the ground and refined and sold at current prices, then can expect a good return. But what is driving the price of the resource? We make assumptions because they have worked in the past, then something new happens and you need to examine the assumptions. For your investments, what assumptions are you making?

There are more questions than answers, till the next time – to raising questions.

In April, President Trump announced to the world Liberation Day in connection to the trade and how goods move around the world. While the manner in which he did them is in the courts and the Supreme Court will decide whether the President can both enact and change tariffs by himself or does the Congress have to vote for it first. The tariffs are having an effect on the economy.

The idea behind President Trump is if tariffs are imposed on goods made outside the US, goods made inside the US will be more competitive and maybe companies will decide to make more goods in the US. It is a good idea, tariffs have been used for generations but similar to anything involving a good being made there are timelines that come into place. No company can start making everything in the US, so goods still have to be imported.

In an article by Ana Swanson of the New York Times News Service, in August imports dropped 5.1% tp $340.4 billion according to data from the Commerce Department.

Prior to the tariffs, companies stockpiled goods at non tariffs prices and it was expected the first few months after implementation importation of goods would fall.

US goods exports also fell shrinking $500 million to $179 billion as the rest of the world bought fewer American consumer goods, cars and car parts.

The trade deficit fell 24% to $59.6 billion compared with July.

According to the Yale Budget Lab, the US effective tariff rate is more than 18%, the highest level since 1934.

Tariffs are likely to continue to weigh on imports in the coming months. Because of the rush by businesses to stock up before the tariffs, US companies held off on increasing their prices as they worked through the old inventory. Eventually the inventory will need to be replaced, and companies will pass onto the consumer higher prices.

Linking to dividend paying stocks, if you own profit making companies, these are the companies that will need to pass on higher prices assuming they cannot replace the goods to American made. Chances are high they will not replace everything because it does not exist and offshore makes it cheaper and equal quality. Some higher value manufacturing can be done in the US, but CEOs will explain it at Investor Days and quarterly meetings. The issue for the investor is done the company have the ability to pass on higher costs in the form of higher prices. If it does, it can be a good company to own.

There are more questions than answers, till the next time – to raising questions.

Hopefully, you know that the AI is coming and will be in very wide use soon, but what does it mean for the labor market and long-term growth? For those of in the baby boom generation, having money for retirement will soften what the labor market is doing or not doing. For others, it is a very important question.

In an article by Chris Wilson-Smith of Reuters, there are competing views turn on whether the latest wave of AI behaves like earlier technological breakthroughs, with productivity gains arriving only after costly reorganization or whether its acceleration marks a shift in which automation outpaces the creation of a new economic activity.

AI-related capital spending (capex) contributed to 1.1% to US economic growth in the first half of 2025, outpacing household consumption in an economy typically driven by consumer spending, a recent report from JPMorgan Chase shows. The report’s author noted that data centers once built employ few workers compared to a factory or office campus. This limits the job creation and local spending that usually follow large investments, a dynamic economists refer to as the multiplier effect.

Serdar Ozkan, a senior policy advisor for the Federal Reserve Bank of St. Louis, says AI investment follows a much longer pattern of general-purpose technologies the reshaped economies, only after years of adaption. From electrification to the rise of computers to the early internet. The visible promise of each wave arrived well before the productivity data showed measurable effect, largely because firms needed time to redesign workflows and workers had to build complementary skills.

David Rosenberg, founder of the economic consulting firm Rosenberg Research & Associates said there is a key distinction between technologies that expand an economy’s productive capacity and those that speed up tasks the companies already confirm.

AI is in latter category. This will tend to compress labor demand rather than create new forms of economic activity. This is pure job replacement with very little offsetting multiplier effect.

Earlier technological cycles eventually increased output as firms reorganized and new industries formed. But AI is narrowing the process by directly competing white-collar tasks, rather than enabling workers to do more.

Linking to dividend paying stocks, if the head count or labor employed by a profit-making company goes down, it means a cost has gone down and the company can make greater profits with less people. What is good for the company, may not be good for the individual which means your investments will tend to go up in value.

There are more questions than answers, till the next time – to raising questions.