In the early part of January, President Trump used the military forces to kidnap the President of Venezuela and put them on trial in New York. What was going to happen to the rest of the country? The President suggested the oil companies were going to add to the capital expenditure plans to overhaul the Venezuelan oil industry.

To understand if this is plausible a brief history is needed. There is a massive amount of oil in the country, it is a heavier crude and some of it is in tar sands. which needs to be extracted from the ground. The multinational oil firms have a long history in the country, but in the 1980’s the politics of the country nationalized the oil industry. Chevron remained at smaller capacity, but the majority of the country’s oil wealth is destined for the national treasury. Oil giants from Russia and China because they were from communist countries have an influence the oil industry. However, because the natural resource was nationalized (the countries sued but have never been paid for their assets), the US forced the country to sell less oil than previous and have never brought up the totals to where they were. Venezuelan oil has been sanctioned and much of the selling is on the black market.

After the President of Venezuela was removed, the President of the US said the US was going to run the Venezuela at least the oil industry. The President likes to send mixed messages, he said he was going to run it for the Venezuelan people, but in the US, he is deporting them to countries around the world. No one really knows what the President means when he says he will sell the oil and then release the funds to help the Venezuelan people.

In an article by Rebecca F Elliot of the New York Times News Service, the President invited the CEOs of 15 countries to the White House to talk about his plan to spend $100 billion in the Venezuelan oil fields. It should be noted, while the President was removed, he was replaced by the Vice President and the rest of the political process remains the same. These are the same people whom the US administration believes stole the election and represent a socialist government.

In the Houston area, because of Chevron’s continuing presence in the country, there are refineries that were built to handle the heavier crude of Venezuela.

At the table in the White House were big oil companies such as ExxonMobil, ConocoPhillips, Chevron, Continental Resources and others.

ExxonMobil’s CEO Darren Woods was particularly blunt, because before Exxon would go in there would have to the correct conditions: win-win-win. The company would win from the increase production which translates into shareholders winning; the government would win from a working relationship to the company and win for the people of the country – good neighbors. The company takes a long-term relationship meaning decades and decades.

For each country, Exxon is in, there needs to be a legal framework, durable investment protections and people working for the company in the country. At the moment, in Venezuela those conditions do no exist, but the government could change, but the process will take time.

Venezuela has great assets and finding the oil is not a problem, so ExxonMobil is willing to send in a high-level team to evaluate the situation, speak to the government and work towards working in the country. At the moment, from ExxonMobil’s perspective is the country is not investable. It is noted that ExxonMobil has made large discoveries in the offshore environment with a country beside Venezuela or Guayana.

President Trump was not happy with the answer.

Consulting energy firm Rystad Energy did projections and believed raising the production from to several hundred thousand barrels a day within the next 2 years is doable with a modest cost. But raising the output above 1.4 million barrels a day would require $140 billion between now and 2040.

Chevron expects to increase production in Venezuela by 50% over the next 2 years.

It should be noted while Venezuelan has the world’s largest oil reserves, its production is less than 5% and needs major infrastructure investments to boost output, along with no sanctions from the US.

Linking to dividend paying stocks, President Trump is acting like a stock promoter for the oil industry and while everyone sees potential there is also reality. For dividend paying companies, they need to focus on the long-term consistent profits, not the short-term gain. If you own a company which begins to sound like junior companies it is time to find other companies to invest in.

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

Last year, one of the biggest mergers announced was Netflix $82.7 billion offer to buy Warner Bros Discovery. It turned out that there were other companies interested in Warner Bros and the newest company on the block Paramount Skydance had ambitions.

In an article by Aditya Soni, Harshita Mary Varchese and Dawn Chmielewski of Reuters, the Board of Directors originally announced that the Netflix offer was superior to Paramount Skydance. The executives at Paramount Skydance went back and came up with even more money. The deal is worth $108.4 billion and includes a personal guarantee by Larry Ellison for $40 billion. Mr. Ellison made his fortune through Oracle Corp and is the father of Paramount Skydance CEO David Ellison.

Paramount is offering $30 in cash, while Netflix is offering $27.75 shares of both cash and stock. Paramount offer expires January 22, but it could be extended.

In the world of selling a house, there is comparison between houses to come up with a competitive price. In the corporate environment, sales of similar companies are used as comparison. Recently Comcast spun off divisions similar to what Warner Bros holds. The new company is called Versant Media Group and includes digital assets and TV channels such as CNBC. The stock is down since the IPO. Paramount says if Netflix spins off a division similar to Versant, the cash portion of their offer falls from $23 a share to $20 a share.

While Paramount SkyDance offer uses debt, Netflix deal requires no equity financing and is backed by $59 billion in debt from banks such as Wells Fargo, BNP Paribas and HSBC Holdings.

Media is a regulated environment and whoever wins will face some or lot of regulatory feedback. Paramount SkyDance suggests it will have fewer regulatory concerns.

Linking to dividend paying stocks, all companies have a price to be taken over and some will never be, but offering more is extraordinarily helpful. What is more and what will shareholders do with the stock. Will they take the money and leave the sector? will they switch to other companies in the sector? how attached are they to the particular company? Answering these questions gives an indication of how shareholders will vote.

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

It is always important to learn from bankruptcies because the people who made the decisions at the time often times made many rational decisions that turnout to be wrong.

In an article by Juveria Tabassum and Arriana McLymore of Reuters, it was headline news of a $2.7 billion marriage between Saks and Neiman Marcus was meant to create a powerhouse in the world of luxury department stores, helping it fight competition from online players and rivals such as Bloomingdale’s and Nordstrom.

A year has past and the results has left the enlarged company contemplating court protection under mounting debt and sluggish store traffic.

In July 2024, Saks bought Neiman Marcus along with Bergedorf Goodman, the luxury assets were spun off to create Saks Global. Saks had equity investors such as Amazon and Salesforce.

In a large merger, often debt is taken on and it this merger Saks’ took on $2 billion in debt.

The luxury brands were undergoing a slowdown which resulted in them trying new strategies such as some top brands moved from selling inside the store to directly controlled shops, giving consumers less reason to go into the department store.

Tim Hynes, global head of credit research at financial intelligence firm Debtwire, noted the deal was built on aggressive earnings and cost-cut assumptions that have never been achieved, which the added leverage has proven difficult to sustain in a structurally shrinking retail sector.

Saks was expecting to have $600 million of annual cost savings over the next 5 years, thanks to the greater scale of the company. In 2025, the luxury markets did not recover, however equity investors did add $600 million to the company, but it was not enough.

The expected $600 million became $275 million to $325,000 became $140 million to $160 million.

Similar to every company, they were trying, first looking for investors for $1 billion. Then delaying payment to creditors, reflecting receiving products nearly a month later than rivals.

This snowballed and vendors slowed orders and in many cases stopped sending orders as cash payments became fewer and fewer which makes store selection less and less.

On the bond market, Saks missed a $100 million payment in December, raising the prospect of a Chapter 11 filing.

Sak’s replaced its CEO and its prime real estate is valued at $4 billion. The iconic 5th Avenue flagship store is worth much more if the land is used for something else besides a retail store.

Linking to dividend paying stocks, the people who ran Saks had all the best intentions but could not or did not implement their plan and the classic signs were there for the world to see. Cost cutting projections were not done. Cash is king in a buyout and cash was running out. Vendor payments were delayed, stretched out and finally not paid. The company has assets, but they take time to become cash, who is most important in a bankruptcy – the bond holders. There are always signs and looking back it was hard to miss them, but people do and did.

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

If you remember back to the aftermath of great housing crisis in 2008, property values fell. For generations in many communities housing prices rose and the overall majority of mortgages were paid back. Housing prices were rising, the need for mortgages to securitize lead to a many mortgages being given out that were based on the hope that house prices were rise and the lenders would be protected from those that could not afford their mortgages. Many started with a low rate but after a year jumped to above 10%. Not surprising the number of mortgages defaulted rose which then sent the securitized bonds lower which put more houses on the market which lower prices and the cycle continued.

Time was a partial solution, with very low construction of new homes, the communities absorbed some of the houses on the markets. The other solution was for hedge funds to buy the homes and rent them out. Eventually property prices leveled off and rose which increased the value and safety to the hedge funds. The hedge funds for their rental housing could raise the rents to match and increase inflation or for early funds, they made a great deal of money.

In an article by Josh Boak of the Associated Press, President Trump has been losing popularity due to affordability and he has chosen to offer solutions. In a press release the President said he wants to block large institutional investors from buying homes. The rationale, it would make it easier for younger families to buy their first homes.

The President has floated other ideas such as increasing the 30 year mortgage to 50 years to lower monthly payments. Technically monthly payments fall, but the interest someone has to pay doubles, which puts a damper on the wealth or the home equity. (we have seen the same solution offered by car companies and loans for car loans have increased from 5 years to 8 years).

The American Enterprise Institute did an analysis of investors owning more than 100 properties. The number is 4.2% of housing stock in Atlanta; 2.6% in Dallas and 2.6% in Houston. The properties tend to concentrate in lower- and middle-income communities.

Goldman Sachs released a report that says a shortage of new construction is a problem. To relieve the problem of cost pressures 3 to 4 million homes would be needed to be built.

Linking to dividend paying stocks, in the days gone past, when there was a change in administration the Republicans tended, not always but tended to be believe in less regulation in the marketplace. Democrats tended to believe in more. Constraining ownership when the ownership does not have enough to influence prices can be good politics but lousy business. If you wish to talk about affordability, you also have to talk about incomes and expectations. Remembering prior to the 1950’s, the majority of people were renters, the government introduced the GI bill and subsidized mortgages and suburbs developed.

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

Every industry has rankings, who is at the top. The reasons they are important often times the top companies on the rankings list has the greatest margins or can make profits. If you are top of the list, every other company is the competition, but why are the companies at the top and can stay there? In the financial world, the investment banks are what every MBA graduate looks at.

In an article Dawn Kopecki and Anousha Sakoui of Reuters, Goldman Sachs Group once again dominated the league tables for global deal making in 2025, taking market share and the top spot.

The rise of the $10 billion year, there were 68 last year totaling $1.5 trillion, more than double the year prior according to LSEG data. Goldman secure its No 1 ranking advising on 38 of those deals, with at total $1.48 trillion in total volume of deals advised on.

Goldman’s Global co-head of M&A Stephan Feldgoise told clients it was an extraordinary year. Goldman ranked No 1 in 2 key areas: M&A fee revenue and overall value of the deals it worked on, gaining market share in both areas. Goldman’s fees were $4.6 billion JPMorganChase was $3.1 billion; Morgan Stanley $3 billion; Citigroup was $2 billion and Evercore was $1.7 billion.

In terms of volume of deals, Goldman, JPMorgan and Morgan Stanley held 1st, 2nd and 3rd spots. followed by Bank of America and Citibank.

For M&A with any involvement of Europe, Middle East and Africa, Goldman’s share was 44.7%.

While Goldman dominated the total M&A, it was not involved the 2 biggest deals – Union Pacific purchase of $88.2 billion purchase of Norfolk Southern and the bidding war for Warner Bros Discovery.

JPMorgan was able to Goldman as the highest-paid global investment bank after factoring in fees from equities and debt capital markets, ranking in $10.1 billion in overall banking fees compared to $8.9 billion for Goldman, according to LSEG.

Charles Ruck, the global chair of the corporate department at LSEG No. 1 ranked legal adviser Latham & Watkins attributed the rising number of large deals to size creep. And the market is even ripe for more consolidation. The pipeline is full.

Linking to dividend paying stocks, every industry has rankings and rankings gives you information. Who is the top 3 companies? who is most consistent? why are they there? what does the future look like? are the rankings similar to the year before – as a long-term investor you are invested in consistency of making profits, rankings will tell you information. Who are the rising stars?

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

In the northeast of the US, many communities benefited from auto plants nearby. Having an auto plant meant thousands of jobs and their spinoffs so economic activity in the area was good for those living in the area. Along came consolidation of brands, tougher competition and soon many of the auto plants including the spinoffs were shut down. Autos were still made they were just not made in the northeast.

One of the places where companies set up plants was Georgia and Hyundai has a large manufacturing plant in the state. A few years ago, Hyundai bought Boston Dynamics which makes robots.

At the annual Consumer Electronics Show or CES in Las Vegas, Hyundai announced that robots developed by Boston Dynamics will be in the Hyundai plant in 2028.

If you ever seen You Tube videos of robots at work in building F150 trucks or essential automated car plants in China, robots have a greater role in the manufacturing process. Similar to the last mile in delivery services, the higher-risk and repetitive manufacturing tasks have always been hard to use a robot. However. in 2028, Hyundai says it will.

Boston Dynamics expects humanoid robots to become the largest segment of the physical AI market. The robots have human-scale hands with tactile sensing and ability to lift up to 50 lbs.

Linking to dividend paying stocks, for the companies involved in the manufacturing process, they need and will use robots in repetitive tasks, because they work 24/7, 365 days a week and do not call in sick. If you ever do watch You Tube videos you see less people in the manufacturing environment, it is a good thing for the company.

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

In early January, President Trump gave the ability of the military to go into Venezuela and remove its President. Afterwards, he said he did it to control the oil reserves which Venezuela has. He has left everyone in office except the President. President Trump said the US will run the country, perhaps he has found that running one country is not the complicated except that it is.

In an article by Alexandra Stevenson of the New York Times News Service, what will the US do with existing Venezuela’s relationships. Venezuela has a great deal of proven oil, although it is the heavier type which needs more processing than oil which comes from shale oil. There are refineries in China and the US which can handle the oil and 20 years ago, most of the oil from Venezuela went to the US. Then the citizens of Venezuela voted for a socialist government, and they have been in power for the past 20 years. In the past 20 years, the economy has gone from bad to worse and millions of people left the country. Venezuela’s economy partly depends on citizens sending money back to families left in the country.

China stepped in and offered assistance for backed by shipments of oil, which is the reason they have refineries to handle the heavier oil. China has a belt and road policy and everywhere the US is not a major presence, the Chinese move in to build infrastructure and other investments in the country. Venezuela is no exception.

In the early 2000’s, the Chinese economy was booming, and they needed more energy to power its growth. The Chinese found a willing partner in Hugo Chavez who was looking to diversify its economy away from the US.

The 2 countries struck a trade partnership that would yield more than $100 billion in financing promises from China in exchange for Venezuelan oil.

The deal continues to this day and still owes China $10 billion, according to AidData, a research institute at the College of William and Mary in Williamsburg, Virginia.

The US placed sanctions on oil leaving Venezuela. Up to 2016, Beijing was the biggest buyer of Venezuelan oil. What will President Trump do?

In other articles, the oil industry in Venezuela needs capex or capital expenditures in the billions to bring it to US standards. The oil industry was nationalized, what will the Trump administration do particularly when the world supply of oil is higher than the demand, ship oil to China?

Linking to dividend paying stocks, when the President or the CEO of profit making company leaves there are people in place to continue to make profits. The CEO is thanked for his service and walks away with millions in stock appreciation, and the shareholders thanks him for his service. That process only works if the next people in line have the same values as the CEO. The President of Venezuela was removed, why does the former VP have the same values to attune the economy to the US’s market economy?

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

At one time in America, you could essentially tell much about a neighborhood by looking at the autos parked among the homes. For a number of decades, GM, Ford and Chrysler offered cars or brands at different price points. There were over 10 different categories, and it later became 5 when GM consolidated brands. Every decade since has seen further consolidation and the rise of SUVs and trucks for the urban driver. Maybe those days are coming back.

In an article by Neal E. Boudette of New York Times News Service, in 2025 car sales rose to 16.3 million, how is buying?

The auto industry has evaded a slump because affluent Americans with well-paying jobs and robust savings have continued to buy new cars at a decent clip.

Families with a household income of $150,000 a year or more now buy 43% of the new cars sold in the country. The number is up from 1/3 in 2019. Families with less than $75,000 a year are buying 25% of vehicles down from a 1/3 in 2019.

Toyota sold 2.5 million cars and light trucks. up 8% from 2024. Also at 8% were sales in the 4th quarter versus sales from 4th quarter in 2024.

GM sold 2.9 million cars which is up 6% from 2024, however sales were down 7% in the 4th quarter when compared to a year ago.

The industry considers sales of 16 million a good year, Cox Automotive, a research firm, is estimating sales will be 15.8 million.

In every industry there are headwinds, tariffs have increased prices but not as much as analysts expected. Unemployment has crept up and consumer confidence has fallen in recent months.

The average auto loan costs 9.3% up from 8.7% in 2024. Cox Automotive calculated that it takes more than 36 weeks of average income to buy a new vehicle up from 34 weeks in 2019.

The average SUV costs $77,000 and sales grew 15%. Sales of medium cars of $33,000 fell 15%.

According to S&P Global, the average age of vehicles on US roads in 12.8, a record high.

It is believed that wealthier Americans are buying new cars partly because the stock market is up or their assets have appreciated. Economists call this the wealth effect.

Linking to dividend paying stocks, in the days passed, there was a vehicle for every budget and owning a vehicle said something about your income and lifestyle. Those days are gone, but driving a new vehicle may say something about your income and lifestyle. Some of the best marketers in the world work for car companies to convince you to buy new. Depending on where you live, owning a car means going to work, which means you listen to the marketing people and buy new, there is a practical reason for having a car culture. In the vehicle world there is the high end and low income but where are the high margins and profits. Does the company capture them?

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

When you think about how oil prices are determined, the conventional wisdom is supply and demand particularly by OPEC+ producers. How well do they match the supply and demand curves. To make money you often have to think about the nonconventional ideas.

In an article by Clyde Russell of Reuters, the nonconventional idea is what is China doing? In 2025, China is the world’s largest importer of oil, effectively used to powers to provide an effective price floor and ceiling by increasing or decreasing the volume of oil it sent to storage.

China does not release public information on its strategic or commercial stockpiles, but some things are clear. In 2025, China was buying more crude than it needed for domestic consumption and exports of refined products.

In the first 11 months of 2025, the surplus crude was 980,000 barrels per day, given that imports and domestic output combined were 15.8 million b/d, while refinery processing amount to 14.82 million b/d.

There is a solid correlation between the volume of surplus crude and the price of oil, with China adding barrels when prices dip but cutting back when they rise.

This leads to a key question – for 2026, will China continue to buy excess crude when prices drop, effectively providing a floor price?

Analysts believe China ha stored between 1 billion to 1.4 billion barrels of oil, which is the equivalent to 90 days of import cover. At least 700 million barrels are likely commercial inventory, implying a strategic reserve of 500 million barrels.

Will China add another 500 million barrels? What is known is China is building more storage with state oil companies including Sinopec and CNOC adding at least 169 million barrels across 11 sites in 2025 and 2026.

Past history shows China is quite prepared to use inventory as a pricing mechanism and as a buyer of 10 million b/d or 25% of global seaborne total, China is an important factor in oil markets.

Linking to dividend paying stocks, in the developed world because of global warming, governments are trying to do less with fossil fuels, this has meant the largest oil companies have less reserves than in the past. The good news for investors is the price of oil remains higher than exploration means the companies will continue with greater dividends and stock buybacks. Given the world, invariably there will be upwards pressure on oil prices meaning the total return on your investment should mean oil companies are worth holding in your portfolio.

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