In the world of shipping there are pinch points or the straits of water are relatively narrow and the world of shipping has operated that the water in the middle is international waters. The waters benefit everyone and is owned by no one, although if a country wishes to have services along the coast that is up to them. If you look to naval battles in the past, some of them result in who controls the straits? When the world is relatively peaceful, the shipping industry says no one.

In an article by Ephrat Livni of the New York Times News Service, Iran is trying to take over the control of the Strait of Hormuz and potentially generate new revenues.

The head of Iran’s primary insurance regulator, Mousa Rezaei said a new insurance company has been established that was dedicated solely to the Strait of Hormuz. The Persian Gulf Strait Authority was created by Iran and demanded that vessels register and sign up for a new mandatory Iranian insurance policy – free for the next 60 days.

Richard Meade, editor-in-chief of Lloyd’s List, a shipping news service said we are in unchartered territory.

The International Maritime Organization – has told the New York Times the insurance requirement has not been officially submitted to IMO is not part of any official record or process.

It was added the right of ships to transit through the passage cannot be suspended or hampered by coastal states and there was no established basis in international law.

Linking to dividend paying stocks, all profitable companies depend on the law to operate and continue. Ideally for multiple generations, and although the law can and does change a bit, the consistency for the long term is the rule of law. You will often see companies that have takeover offers cite the process and the law when the bid is lower than the Board expects.

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

Somewhere around the world there is a crisis for some companies and for the most part they have to learn to adapt to the crisis and live with it. When there is man made crisis such as war, while the world hopes it will be short, the reality is there are many critical issues which pop up at once. If in ideal world, the war is short, it is reasonably easy to adapt to what was before, if the war goes on, then rising prices is a partial answer for companies.

Prior to the US-Iran war, one of the busiest airports in the world was in Dubai which mean many planes flew in Iranian airspace. For the past 50 years, many Gulf States have been trying to diversify their economies and for the Dubai area it meant tourist related facilities. In the US, many Americans think of Orlando on the east coast or Las Vegas on the west coast as tourist dominated cities. The airports were expanded; there are multiple entertainment facilities and lots of hotels and hospitality infrastructure. For Dubai, it has many hotels, entertainment facilities, expanded airport and people from across Europe and Asia coming to visit.

In an article by Rajesh Kumar Singh, Alessandro Parodi and Joannna Plucinska of Reuters, airlines which increased their prices due to the US-Iran war are expected to slowly lower them now there is a signed MOU to stop the war. This slow expectation has the result of airlines saving billions of dollars on jet fuel and keeps prices for an airline seat above prewar levels.

There is a slow process for the processing system to lower prices as the infrastructure is rebuilt in Iran and other states on the Persian Gulf.

Jet fuel spot prices on June 17 were $2.85 a gallon, in early April it was $4.88. A decline of that size would cut the US airline industry’s annual fuel bill by more than $40 billion, if sustained, according to a Reuters calculation based on industry fuel consumption.

Industry data show jet fuel prices more than 3 times as fast as airfares from January to May. Deutsche Bank estimated US carriers would recover only 60 cents of every additional dollar spent on fuel. Alaska Air said it was recovering 1/3 of the increase. Delta, United and American Airlines were all in the 40-50% range and discount airlines JetBlue and Frontier was less than 50%.

United CEO Scott Kirby told Reuters his airline was getting closer to recoupling the fuel-cost spike through pricing – we are on a path to recover 100% by the end of the year.

Raymond James showed fares increased 34.1% from a year earlier.

Dudley Shanley, head of aviation and travel research at Dublin based Goodbody, noted lower prices will take time to feed through to jet fuel, and unless jet fuel falls back toward start-of-year prices, airlines are likely to keep fares firm or push them higher.

Europe may see a split, long-haul fares are more likely to ease because airlines passed on higher fuel costs

In Asia, HSBC analysts said China’s Big 3 airlines face weak pricing power and falling aircraft utilization, while Hong Kong’s Cathay Pacific is better placed as higher fares, cargo revenue and premium demand could offset fuel costs.

In the Middle East, one can expect promotions to win back traffic.

According to the IATA or International Air Transport Association jet fuel costs are 54% higher than a year ago.

Jefferies estimates each 5% drop in its roughly $3 a gallon 2027 fuel cost forecast would lift projected earnings per share by 10 to 15% for Delta, Southwest and United and as much as 50% for American Airlines.

In the past US fuel cycles, falling oil prices often triggered a capacity race than push fares lower. Those conditions are not broadly in place right now. Aircraft deliver delays (by Boeing), tight airport capacity (fewer open gates at airports) and weaker low-cost carriers are limiting a price war. US domestic airline seats are looking at a 0.4% growth rate down from 4.6% before the war.

Linking to dividend paying stocks, we are all have various hats – our consumer hat, investor hat and the list goes on. Sometimes what we want as a consumer and what we want as an investor are a little different. As a consumer besides great service and comfort we like lower prices as an investor you want the company to give great service and comfort but at higher prices to ensure profitability to pay dividends. When you examine the companies as an investor, you expect to pay a higher fee, but you get some back in a dividend or higher stock prices.

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

You may read the story that because the Baby Boom generation as a whole is richer than other generations, the next generation will likely inherit billions of dollars. How that is divided among individuals is a different issue, but people will inherit something. If the town or city you were born in the property prices have gone up, likely your parents or grandparents were able to buy a house for less than $10,000 and can no sell it for something in the 100,000’s plus, that is one small example of an inheritance which is coming.

In a different look at inheritances is the book The Inheritance by Joanna Goodman published by HarperCollins, NY, 2024.The story is a lady goes to work in the secretarial pool of a large company, catches the eye of the CEO who enjoys her sexual company. The result is a child; the man dies unexpectedly in a plane crash and the woman decides to have the baby because she truly believed the man loved her. He kept her in the shadows of his life, wrote her notes and said enough nice things for her to believe. The man’s estate comes up, she petitions for a slice, but the courts rule no. The primary reason is for generations, “bastard child or children born out of wedlock” had very few legal rights. And many people who have money are not interested in good will to look after possible children. They will raise money for charities that look after people, but not directly. The law spoke of direct relations or from marriages.

The world moves on and you might remember the CSI TV series, the use of DNA for testing comes forth. It takes a few years but courts and most people believe if there is a DNA match, there is proof.the lady is now in her 40’s she tries again to get a piece of the fortune, partly because she needs it, partly because scientific progress changes things, although it takes the court system time to catch up. The book is about one of the first cases, the defense lawyer likes the old rules, the court finds one of the brothers died and left his brain for research. There was no reason to dig up the grave, the DNA was tested and came back and 98.4% agreement they are a match. The lady has genes of the late brother.

In the book, there was another case, another delay, but likely she would win something. In the past with inheritance cases, if the banks believe there will be a settlement soon, the banks can give partial payment of the funds expected as a loan.

Linking to dividend paying stocks, science has the ability to change how we see things and when it does, it will move into the court system as evidence. Of course, ever since science has been use, both sides will present evidence from people of science background to determine if the proper handling of evidence was done and so forth. One side will say yes the science helps them, the other side says the science does not, which is the reason we have courts.

In the book, the young lady led her life from early age to expect the inheritance. It took a long time because it this case, no one wants to give up money, whether they can afford it or not. If you are expecting an inheritance, hopefully you will see it as a lottery win and not live your life as the inheritance is coming tomorrow.

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

Depends on where in the economy you are, you may love Federal Reserve Chair Kevin Warsh or wish he had a replacement. The reason is Chair Warsh’s focus will be on fighting inflation. The last time Mr. Warsh was on the Federal Reserve, there was a housing crisis, the Federal Reserve Chair Hank Paulson used as many tools as he could to stabilize the banks and try to ensure the banks did not cut off credit. Mr. Warsh believed the Chair should have fought inflation.

In an article by Howard Schneideider of Reuters, every year we all believe the world has been become more complex and interrelated, and hopefully with the use of AI, the modeling should be better. However, there are now a more intense and polarized information environment, and markets accustomed to a steady diet of top policy-maker commentary.

The Fed held the rate steady in the range between 3.5% and 3.75%, where they have been operating since December.

Former Fed Chair Jerome Powell used simple factual statements such as inflation is elevated. Chair Warsh said inflation was elevated relative to the Committee’s 2% target.

The committee will deliver price stability.

Linking to dividend paying stocks, Chair Warsh should be good for investors on Wall Street because the Chair is an inflation hawk. If you expect the Fed to ease into the economy to help everyday people, the answer will be likely not. In the 1930’s inflation was low, but unemployment was high. Ideally that is not a good outcome.

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

One of the major divisions of every company is security including cybersecurity. The growth of cybersecurity continues and every year it will get bigger and more important.

In an article by Reuters, a cyber extortion group claimed to have stolen more than a terabyte of data from pharmaceutical giant Novo Nordisk and said it is going to sell parts of the data after unsuccessfully demanding $25 million from the company.

FulcrumSec, a cyber extortion group said it spent more than 2 months in Novo Nordisk’s networks stealing data. It said that data included company source code, proprietary information on released and unreleased drugs, trial data, and unreleased drugs, trial data, and unreleased drugs, trial data, employee and doctor and patient data, information related to company processing facilities and internal AI model information.

Thomas Willkan head of research at cybersecurity firm Lab-1 has closely tracked Fulcrum Sec and the hacking group is usually quite legit in terms of both their capabilities and also their claims.

Linking to dividend paying stocks, there is a quote by John Dillinger, why rob the banks, that is where the money is. The world has changed and the money is still at the banks but it is also on the internet. Cyber security is important and most of the time when cyber criminals get into companies, the news does not get into the press.

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

In many companies one of the most important methods to decide how it is doing is to examine the logistics or operations. On You Tube, watched a documentary about Jerome, Arizona. The town is beside a mountain called Cleopatra Hill which contain billions of copper for the United Verde Mine and paid over $200 million in dividends to its owner William Clark who was one of the richest men in America from 1888-1925. After Mr. Clark died, the mine was bought by Phelps Dodge Corporation. Before Mr. Clark, people knew about the copper, but it was located 26 mines from the nearest railroad and none of the land was flat. It cost Mr. Clark $100 million to build a railroad for those 26 mines and then the mine was profitable.

In an article by Jenny Gross and Peter Eavis of the New York Times News Service, President Trump announced the Strait of Hormuz will be open for regular shipping. That is good news, because it is one of the chokepoints around the world that needs to be open for shippers to move goods around the world.

Just do not expect a steady stream of traffic to start the following week. It will take longer.

S.V. Anchan, Chair of Safesea Goup believes there are lot of questions that need to be clarified. He needs a clear commitment from Iran they will not attack his ships.

Harry Vafias, CEO of StealthGas said Let’s hope this time it is for real.

Kpler, a ship tracking firm said 500 large commercial vessels remain in the gulf.

Andreas Enger, CEO of the Norwegian shipping company Hoegh Autoliners, said news of the agreement alone was not enough to allow for the immediate resumption of ships through the straight.

Let’s us hope it is the start. The process could take weeks or even months for him to feel comfortable sending ships into the Persian Gulf.

Jakob P Larsen, chief security officer at Bimco, the world’s largest shipping association, wants a neutral body such as the International Maritime Organization to identify safe routes and a sequence for ships to exit.

Do ships hug the Iranian coast or the Omani coastline? who will sweep the Strait for mines? Safety is the big concern.

Linking to dividend paying stocks, for the investments you make, pay attention to the logistics, does the company get its products and services to customers when they want it and will use it? Many years ago, read an article about someone who was shopping at a store and saw a run in a ladies stocking on the mannequins. It was a symptom or sign the company was in trouble because the standards were slipping. As an investor you need to keep your eyes open.

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

As an investor you tend to have a mind sight that business do the right thing, sometimes they do, sometimes they do not but business seeks opportunity. One of the great drivers of the US economy is data centers, and it is attracting billions of dollars in investment. Are all data centers equal, no but there seems to be a great demand for them.

In an article by Jack Healy of the New York Times News Service, Kevin O’Leary who many readers have seen on Shark Tank invested in a company that wants to build the largest data center in the world outside of Salt Lake City, Utah.

Data centers are wonderful to run large model AI, but they also need water, natural gas and relatively inexpensive land.

Mr. O’Leary’s Stratos Project did the correct political thing, he called upon Governor Spencer Cox to start the hype and gain approval from the regulations the state would require for the project.

Then people have a say. It is important to note in Utah, generally the Republic Party candidates win the elections. However with data centers everyone has an opinion and given Great Salt Lake is drying up, would the data center have claims for the water or would individuals? Two town halls were packed with people and public comments have reached into the thousands against.

Two commissioners who voted yes are facing Republican primary challengers who would say no. The Utah State Senate President who championed the deal, has called for cuts to its size.

Mr. O’Leary had cut back the project in half to cover 20,000 acres.

One long time resident of Utah noted there is a lot of top-down follow the leader culture. But something has changed, it is torches and pitchforks out there.

Linking to dividend paying stocks, as someone who benefits from companies making profits, you like the idea the company continually proposes new projects to ensure it makes profits. Not every project is great, some of them should not have been done in the first place. Ideally in the company there is some sort of balance which allows for the company and the community it settles it to benefit.

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

When you are investing you are projecting what will happen in the future and often it is based on what has happened in the past. If a company is well run in the past, there are few reasons not to expect the companies to be run in the future, thus it should have similar results. The issue is what changes the projections?

If you think about China, it is the world’s second largest economy and the center of global manufacturing. That means it will consume a great deal of energy. If you add that China is the leading customer of Russia and Iran, that adds perspective into what is happening in the Middle East.

In an article by Chen Aizhu, Sam Li, and Lewis Jackson of Reuters, China the world’s largest importer of oil needs less oil than previously thought.

Gasoline sales at Sinopec, which runs China’s biggest network of petrol stations and is the world’s largest refiner, dropped 8% on a yearly basis in April, diesel fell 6%.

Fuel use in China had been dropping in recent years owning to slowing economic growth and the rise of electric cars and trucks, but the recent declines has caught industry players by surprise.

Goldman Sachs estimates the drop in gasoline and related products by 20% in April.

Alternatives such as rail travel grew by 10% according to the Ministry of Transport data.

The China Charging Alliance grew 69% from a year earlier as the Chinese EV fleet became larger.

About half of China’s crude oil consumption is refined into gasoline or diesel.

May imports slumped 29% to their lowest level in 8 years to 7.8 million barrels a day, after a 20% fall in April. The last time China had a dropped in fuel was during the pandemic, but that was an imposed shutdown by the government or lack of mobility for the population.

Sinopec expects national demand for gasoline, diesel and jet fuel to fall 10% in the 2nd and 3rd quarter.

The Chinese transport ministry said 1/4 of all vehicles on the highways over the May Day holiday were electrics or hybrids, 1/3 more than the previous year.

Linking to dividend paying stocks, we all make expectations about the future and most of them rely on some assumptions from the past. In the US, the Trump administration encourages gasoline powdered vehicles, in China the government encourages EV. Both populations are mobile, but one is more connected to the world price of oil. Is that good? will something change in the future? If it was to change, which companies would have the advantage?

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

If you think about the Trump administration the second term, one of the many topics that would come up is the number of lawsuits or the use of the legal system has dramatically increased. Generally, with government, there is a process and although it sometimes seems lengthy, in the end, people abide with the decision making. President Trump’s administration wanted to speed things up and uses executive decisions. This leads to anyone in opposition to using the courts to slow things down or turn back the clock.

In an article from Reuters, a federal judge stuck down a $100,000 fee President Trump imposed on new H-1B visas for highly skilled workers, concluding that it constituted an unlawful tax Congress never authorized.

The lawsuit was launched by 20 Democratic state attorneys general (if the President was Democratic, you could change it to Republican state attorneys general).

The administration argued that the fee constituted a lawful monetary policy penalty that the President was authorized to impose under federal immigration law, which gave him the power to restrict the entry of certain foreign nationals when he deems it “detrimental to the interests of the US”.

The Judge said, the fee was not a penalty but a tax and the President lacked any authorization from Congress to issue. You can called the fee anything you wish, but it is a tax. Taxes need Congress’ approval.

The administration will appeal the decision.

The H1-B offers 65,000 visas annually, with another 20,000 visas for workers with advanced degrees, approved for 3-6 years. Technology companies are very dependent on the visas.

Prior to President Trump raising the fee to $100,000 the fee was between $2,000 and $5,000. It should be noted if a person was hired on a student visa, there was no fee and the bulk of H1-B visa are in this category.

Linking to dividend paying stocks, every company has a legal department and often in the past it was important to have because companies get sued. For lawyers, process and policies are the important road to follow – what process or policies does the company have in place to ensure whatever happened was an exception not the rule. Then the lawyers follow the process or policies – did the person do what was expected? In recent years, as more people use the court system to settle disputes, the role of the lawyer has changed and become more integrated with the senior management. It is rare for a company not to be have been sued, although the best outcome is the person was doing something that followed the process and policies.

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