When the price of oil began to rise because of the war between the US and Iran, the European leaders and the US President said they would release some of the stockpile oil supplies they have in the country to moderate the price increases. What about the other fuels?

In an article by Keith Bradsher of The New York Times News Service, one of the other fuels affecting by closing the Strait of Hormuz was natural gas. Qatar produces 20% of the world’s supply.

In China, in Yancheng there are rows of storage tanks the size of a 20-story building filled with LNG or liquefied natural gas. The largest 6 hold enough to supply gas to 22 million people for 2 months.

The storage tanks are part of an effort by China over the past decade to accumulate stockpiles of all kinds of commodities from pork and rice to rare-earth metal and coal in case of disruptions of overseas supplies.

The natural gas supplies will help cushion the supply shocks even as its neighbors of India, Pakistan and Vietnam are running low of natural gas.

Qatar is the world’s biggest supplier of LNG and they have said it will take months to back 100% on line, as some of the drones and bombs from Iran damaged its facilities.

China is the world’s largest importer of natural gas and largest consumer of fertilizer which is made from natural gas. China does have some options, pipelines to Central Asia and Russia carry natural gas to China. It is possible to use coal rather than natural gas for some chemicals.

China does have a domestic oil and gas industry. It is the 4th largest producer of natural gas between the US, Russia and Iran. China is the 5th largest oil producer behind the US, Saudi Arabia, Russia and Canada.

Chinese government data show that natural gas imports from the Strait of Hormuz was 6.9% of the country’s overall gas consumption last year.

China is the world’s leader in alternatives of solar and wind energy to keep the lights on. The country generates only 4% of its electricity from natural gas and that could be replaced by coal or renewables.

The state-owned China Natural Offshore Oil Corporation has built 18 of its largest size storage tanks, more than twice as many as the rest of the world. South Korea is constructing 7 tanks, but they will not be ready till 2029. Japan has begun slightly smaller storage tanks.

In terms of fertilizer, China has halted overseas fertilizer sales since the war began.

Linking to dividend paying stocks, China can do many things because they have multiple state owned companies, however when a company continually makes profits, it has the ability to ensure some of the money is used to ensure no supplies will be disrupted to it. For your investments, what supplies are the companies dependent upon outside its borders?

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

If you are a regular person, you will be exposed to music and some you will like, some you love and some you will buy. As we move into the summer months, you can count on festivals to have food, drink and music as entertainment. The issue is always how does someone profit from the music?

In an article by Svea Herbst-Bayliss, Dawn Chmielewski and Mateusz Rabiega of Reuters, Pershing Square which is run by Bill Ackman has made a bid to buy Universal Music Group for $64 billion. The cash and share offer values the company at $48.95 a share which is a 78% premium to the last closing price.

Universal Music Group is the company behind superstars Taylor Swift, Billie Ellish, Bad Bunny and Kendrick Lamar. The company is on the Amsterdam Stock Exchange and the idea would be to list in on the New York Stock Exchange which would allow index funds to own the stock.

Fears of AI disrupting the music industry have played a role in UMG’s lackluster performance. Its share of the music market has been sliding and streaming grow is decelerating, Wells Fargo analyst noted.

The large shareholders of UMG are Bollore Group with 18.5%, Vivendi Group owns 13.5% and China’s Tencent and Pershing Square (4.7%) are significant shareholders. The Bollore Group controls 80% of the voting rights.

Mr. Ackman has long held an interest is owning a larger stake in the company, in 2021 proposed to take it private but US regulators said no. Until last year, Mr. Ackman was on the Board of Directors.

Mr. Ackman said the current CEO Lucian Grainge should remain as CEO, as well as a new director would be Michael Ovitz. The offering is said to be friendly.

UMG’s shares have lost 1/3 of their value since the IPO and trade at a multiple of 21.8 times earnings compared with Spotify’s 40 times earnings.

Even as global music revenues grow year after year, UMG and other labels such as Sony and Warner Music are scrambling to stay competitive as streaming services from Spotify, Amazon, Apple and Deezer take an even greater share.

On the concern about AI, one survey found that 97% of listeners cannot distinguish between AI and human generated songs.

Linking to dividend paying stocks, in this case Mr. Ackman knows who the large shareholders are and if they wish to sell, offering a large premium to the stock should make the takeover go easier. Since the Bollore Group owns the majority of voting rights, it comes to whether he wants to sell or why he cannot what Mr. Ackman proposes?

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

When you think of the industrial revolution, what industry do you think of? My answer would have been the invention of the steam engine and the railroad industry. Recently read a book which changes the viewpoint, the book is Empire of Cotton – A Global History written by Sven Beckert, published Alfred A. Knopf, NY, 2015. The book examines cotton through global transformation – the movement of capital, people, goods, and raw materials.

The crisis of cotton came from the civil war in the US. It was estimated by the time of the start in 1862, 20 million people worldwide or 1 out every 65 people, was involved in the cultivation or production of cotton cloth. In England, between 20 to 25% of the population was based on the industry; 1/10 of all British capital was invested in it and close to 1/2 of British exports was cotton yarn and cloth.

For the US, 61% of the value of its exports was cotton. In the 1850’s cotton grown in the US accounted for 77% of the 800 million pounds of cotton consumed in Britain; for France it was 92% of the 192 million pounds consumed; 92% of the cotton used in Russia.

Why so successful the US had the 3 critical ingredients that went into the production of raw cotton: labor, land and credit. Land was essentially free and soil is marvelously fertile; labor is abundant and the arrangement and mercantile organizations for cleaning and forwarding the cotton are all there. The phrase Cotton is King was true.

In an effort to force British diplomatic recognition, the Confederate government banned all cotton exports. This along with a northern blockage cotton exports fell from 3.8 million bales in 1860 to almost nil in 1862.

A mad scramble ensued because no one knew when the Civil War would end and would the south produce cotton again? The saving grace was in 1860 it was banner year and there were sufficient stocks in major ports and factories. Inventory could be used. As time went on, prices began to rise and no imports from the US led to closing for factories.

With higher prices, more supply came from India, Ottoman Empire, Egypt and Brazil.Crops increased and by 1894, the cost of cotton had fallen to 7 cents a pound from 24 cents in 1870.

Information always changes industry, for example in 1866, the first transatlantic telegraph cable was laid which accelerated the speed at which information traveled around the globe.

The emerging commodity markets were sophisticated institutions. The commodity markets helped standardize what a bale of cotton is. The standards were originally set by the Liverpool Cotton Brokers’ Association which became the Liverpool Cotton Association. This organization plus the New York Cotton Exchange helped define the standards.

In 1866, the US Department of Agriculture was formed, and it became the supplier of statistics to the public. This made their information valuable to everyone in the industry.

India has been the home to the world’s cotton industry and in 1843, it was the number one market for British manufacturers, By 1900, 78% of the British cotton industry was exported, much of it to India.

In the US, after the civil war, the US cotton empire expanded at a rapid clip and entered entirely new territories. By 1920, production had increased 2 1/2 times to 13,429,000 bales. The growth had come from 2 places: cotton in the older American cotton states of Georgia and the Carolinas increased in areas accessible by the railroad.

Cotton production increased in the Yazoo-Mississippi Delta where large numbers of African Americans grew cotton helped by new railroads, canals and levees. The most dramatic expansion occurred further west – in Arkansas, Louisiana, Oklahoma and Texas. The most important expansion was in Texas, in 1920 the growth in Texas amounted to 80% of what the south produced in 1860. The growth in Texas mirrored the expansion of infrastructure improvements including building of railroads and vast investments in irrigation infrastructure. In Dallas County, growers grew 3,834 bales in 1870 but in in 1880 21,649 bales an increase of 465% in one decade.

After the civil war, all manufacturing companies went looking for alternatives, and around the world between 1860 and 1920, 55 million acres of land in Africa, Asia and the Americas was planted for cotton. Approximately 80% of the land was situated in territories that had not grown cotton in 1860. By 1905, fully 1% of the world’s population were engaged in growing cotton.

There was another shift that was happening, the declining importance of cotton manufacturing in the United Kingdom. In 1860, 61% of the world’s mechanical spindles were located in England. By 1900 it was 43%, by 1930, 34% and it declined more during the depression and WW II, by 1963 it was 2.8%.

Where was it growing? the Asian cotton manufacturing had turned into the world’s fastest growing. Part of the reason was wages went up in England, which caused low-wage producers elsewhere to be competitive on global markets. At the same time, capitalists in the Global South supported by state policies conducive to their own project of domestic industrialization. They could draw on a pool of low-wage workers, many of whom had been displaced by the rapid transformation of the countryside.

Owners of capital in the Global South, awoke to the profit potential of industrial capitalism, and realized the opportunity in their backyards, their low-cost labor. These entrepreneurs often found themselves surrounded by workers experienced in textile production, had access to modern textile technology, and had sold imported cotton wares in their home markets. They understood to be profitable, industrial capitalism needed strong states to build infrastructures, protect markets, enforce property rights and maintain an advantageous labor market.

Today the world of cotton has changed, likely the shirt you are wearing cotton was grown in China, India, Uzbekistan or Senegal; spun and woven in China, Turkey or Pakistan, then manufactured in Bangladesh or Vietnam. In the US the top states are Arizona and Texas, but the cotton is so uncompetitive on the world market the growers receive federal subsidies to continue to farm it (about $4 billion a year). The vast complex in Lowell, Mass is a museum and closed up factories. In the US, 98% of all garments sold are made abroad. China supplies 40%, followed by Vietnam, Bangladesh, Indonesia, Honduras, Cambodia, Mexico, India, El Salvador and Pakistan. Yarn comes from China, India, Pakistan and Turkey. China contains half of the world’s spindles and looms, working with 43% of the world’s cotton.

In 1860, the US had a near monopoly on cotton growing for export, today only 14% of cotton worldwide is grown in North America. China and India lead the way with 34 million and 26 million bales respectively. Worldwide it is estimated that 3-4% of the world’s population is involved in growing, transporting, spinning and weaving machines and stitching clothing.

Linking to dividend paying stocks, every industry changes and with technology today, it will continue to change, as investors you need to understand how does your investments make a profit? In the example of cotton, it is land, labor and capital. How much does it cost for land? what is the maximum to pay for labor? what is the expected return on capital? the questions are relatively simple, but complex to answer because sometimes it depends.

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

.

When you think of the industrial revolution, what industry do you think of? My answer would have been the invention of the steam engine and the railroad industry. Recently read a book which changes the viewpoint, the book is Empire of Cotton – A Global History written by Sven Beckert, published Alfred A. Knopf, NY, 2015. The book examines cotton through global transformation – the movement of capital, people, goods, and raw materials.

In Mississippi, in 7,000 square miles, the mighty Mississippi River had unloaded its rich sediments for millennia. In 1859, as many as 60,000 slaves produced a 66 million pounds of cotton, nearly 10 times as much as exported from Haiti to France at its height in early 1790s.

As the cotton industry became larger in the US, more networks built up to increase the advantages of growing cotton in the US. For example, as transatlantic travel became more secure and more predictable, the cost of transporting goods lower.

At the core of all these networks was the flow of cotton from the US to Europe and of capital in the opposite direction. The capital was more often than not secured by mortgages on slaves, giving the owners of these mortgages the right to a particular slave should the donor default. Bonnie Martin showed that in Louisiana 88% of loans secured by mortgages used slaves as partial collateral; in South Carolina it was 82%.

Some of the money made by the planters went to research and development of better cotton. In 1806, a planter brought back seeds from a cotton plant in Mexico which had larger bolls that could be picked more easily, possessed better fiber quality, especially fiber length and was resistant to rot. This became the basic cotton plant planted in the US.

If you were new to the business, books such as De Bow’s Review and the American Cotton Planter made it easier to get into the business.

In the 1820’s the British manufacturers were wondering are they too dependent on American cotton? There were 3 reasons: would America develop its own cotton manufacturing factories? other countries had cotton manufacturing plants would they take in more American cotton? and is the system of slavery sustainable?

In 1810, Francis Cabot Lowell travelled to Manchester to acquire a blueprints for a cotton mill. It was built in Waltham and financed by a group of wealthy Boston merchants and the company was called Associates of the Boston Manufacturing Group. The plant sold inexpensive coarse cotton goods and proved highly profitable paying dividends of 10% in paid up capital. In 1823, they group expanded to Lowell. Mass where the largest integrated mills anywhere in the world was built.

Around the world, in Germany, Russia the pattern followed. Access to capital and a history of textile production were essential to embarking on the manufacturing yarn and cloth with machines. The catalyst that turned the full-fledged cotton industrialization was pressure: the competition from British imports. In addition, it was extremely helpful if the government could impose measures on the importation of cloth from Britian or tariffs. Where governments did, a domestic industry opened up.

For Britian the key in the face of protectionism was to focus on higher-quality yarn and cloth, since they lacked competition from technologically less advanced manufacturers. In addition, they depended on markets in colonial or semi-colonial areas of the world.

Where were the prices of cotton set? Liverpool’s cotton exchange. The city of Liverpool’s port was the epicenter of a globe-spanning empire. Its merchants sent ships all around the world, mostly by wind (the clipper ships) and by the 1860’s by steam. For a long time, the Liverpool price was what cotton growers looked to, now days the price is NY Cotton Exchange.

How did the system work? For a planter in Mississippi to provide cotton to a Manchester manufacturer, a local Mississippi merchant, a so-called factor, had to provide the planter with credit to acquire land, slaves and implements. The factor probably drew on London or New York for these resources. Once the cotton had ripened, the factor would offer for sale to exporting merchants in the port of New Orleans, who would sell it to importing merchants in Liverpool, who would provide insurance on the bales and organize their shipment to Europe. Once in Liverpool, the importing merchant would ask a selling broker to dispose of the cotton. As soon as a buying broker found the cotton to his liking, he would forward to a manufacturer. The manufacturer would work up the cotton and then provide it to a merchant in a distant port, for example Calcutta. Once there the yarn would be sold to Indian merchants, who would distribute it to the countryside, where it would be bought by an Indian weaver, who would sell it yet again to other traders who would deliver it to the retail merchants in towns and cities. The empire of cotton consisted of tens of thousands of such ties.

Merchants everywhere constituted these webs, built on credit, trade, information, trust, social connections, and the never-ending search for profit.

Between 1800 and 1860, cotton goods accounted for 40 to 50% of the value of total British exports. In 1820, the value of raw cotton exported from the US was $22 million; leaf tobacco was $8 million and wheat at less than $500,000. Cotton constituted 31% of US merchandise exports, by 1860, the value of tobacco had doubled, wheat increased by a factor of 8, but cotton up nearly 9 times to $192 million or 60% of all exports.

Why did the cotton trade center on Liverpool? by the late 1830’s 89% of cotton imports came through Liverpool. They merchants succeeded for several reasons: initially Liverpool’s central position in the slave trade set it up well for cotton. Cotton initially arrived along with sugar, tobacco and other goods as return freight from the West Indies. Liverpool controlled up to 85% of the slave trade, by 1807 as much as 1/4 of the shipping was in slaves. Everyone who worked in the city port was experienced in long-distance trade and with the cotton growing areas of the Americas. The city benefited from its location near the spinning districts around Manchester, a connection that rapidly improved thanks to building of canals, improvements on the Mersey River and eventually the arrival of the world’s first railroads.

The most powerful and wealthiest of Liverpool’s merchants engaged in the cotton trade. The traders started with a 607 traders trading cotton but it was dominated by the larger ones. In 1820, the leading 10 cotton merchants imported 24% of all cotton coming into Liverpool, and the top 30 controlled 37%. By 1839, the leading 10 traders brought in 36% and the leading 30 had 60% market share.

Linking to dividend paying stocks, every industry has multiple parts and when you examine it they all must work together or find a way to work together. While it is possible to be independent or semi-independent, the system is the system and you must work within the system till it changes, hopefully for the better.

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

When you think of the industrial revolution, what industry do you think of? My answer would have been the invention of the steam engine and the railroad industry. Recently read a book which changes the viewpoint, the book is Empire of Cotton – A Global History written by Sven Beckert, published Alfred A. Knopf, NY, 2015. The book examines cotton through global transformation – the movement of capital, people, goods, and raw materials.

Cotton manufacturing, even if engaged in on small scale was astonishingly profitable in the 1780s and 1790s. Firms had annual returns on their capital of 14% which allowed them to expand using retained profits.

The growth of cotton manufacturing made it the center of the British economy. In 1770 it was 2.6%, by 1801 it was 17% and 1831 it increased to 22.4%. By 1830 one in 6 workers worked in the cotton industry. Much of the cotton cloth was exported including to India whose cotton industry would go into decline.

The ability of merchants and manufacturers to access the export markets pointed to the importance of a peculiar and novel form of state, a state that would be the crucial ingredient for industrial capitalism. Cotton exports expanded on the strength of British trade networks and the institutions that were embedded – from a strong navy creating and protecting market access to bills of landing allowing for the transfer of capital over long distances.

As the British manufacturers grew more productive in producing yarn, the demand for cotton grew. With the demand increasing prices increased. Investors examined anywhere where cotton could grow and tried the countries out. It must be remember, for generations cotton was grown on small scale. The potential high profits had people looking at the West Indies. Sugar cane was the number one crop, but on islands with more uncultivated land and fewer sugar plantations, cotton production boomed.

The number one island for cotton production was Saint-Domingue (Haiti). Why the growth in the West Indies rather than elsewhere? Ottoman and Indian farmers have the same soil and climate advantages, but Caribbean planters faced few constraints on land and labor. On the capital side, the infusion of capital enabled the rapid reallocation of resources.

In 1791, there was a revolution on Saint-Domingue, the slaves beat the French and abolished slavery and changed the name to Haiti. Before the revolution it was supplying 24% of British cotton imports, afterwards it fell to 4.5%.

A new production source needed to be found and planters went to America. By 1785, the first cotton bale came into Liverpool from the US. The southern states are superbly suited for cotton production. The climate and soil of a wide swath of the American South met the conditions of rain, the right patterns of rainfall and the right number of days without frost.

Quick expansion was made easier because many had grown tobacco, there are substantial similarities between growing tobacco and cotton. Moreover, many of the planters moved from the West Indies to America and planted Sea Island cotton and it had long silky fiber which made it well suited to finer yarns and cloths much in demand by Manchester manufactures.

In 1793, Eli Whitney invented the cotton gin which was able to rapidly remove seeds from the cotton balls. This increased ginning productivity by a factor of 50. The gin was used by many planters and cotton production increased.

One of the problems with the cotton plant, is every few years it needs to be rotated, and legumes planted on it to revive the soil. The other alternative is to go west until you find better conditions. By the 1830’s the state of Mississippi produced more cotton than any other state. In 1790, the US produced 1.5 million pounds of cotton; in 1800 that grew to 36.5 and 1820 it exploded to 167.5 million pounds.

Why the US growth in cotton production? What distinguished the US was the planters’ command of nearly unlimited supplies of land, labor and capital and their unparallel political power.

America’s remarkably cheap transportation costs were not preordained, but the direct result of the expansion of its national territory. Most significant is the Mississippi River, whose surge of cotton freight turned New Orleans into a key American cotton port. The first steamboats appeared on the Mississippi in 1817, reducing costs. By the 1830s, railroads connected the new hinterland to river and seaports.

Until the advent of mechanized harvesting during the 1940’s cotton was a labor intensive crop. In the US, however, nearly any shortage can be fixed with the right amount of money.

In every society there are smaller farms, the reality is in 1860 85% of all cotton picked in the south were on farms larger than 100 acres and the planters who owned those farms owned 91.2% of all the slaves. The larger the farm, the better the planter could take advantage of the economies of scale. Larger farms could afford the gins to remove seeds, and presses to compress the loose cotton into tightly pressed bales to lower shipping costs, they could engage in agricultural experiments to wrest more nutrients from cleared soil and they could buy more slaves to avoid any labor constraints.

The large planters took political power including the 3/5’s clause which successive Presidents, Supreme Court judges, and both houses of Congress backed. At the state level, railroads were allowed to develop which decreased the costs of moving cotton bales.

Linking to dividend paying stocks, looking at the cotton industry you see a structure that has tenacles into a many different aspects of normal society. Innovation and technology play a part, demand plays a big role, political influence helps limit the negative aspects and profits continue. Ideally your investments do more good for everyone including yourself.

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

When you think of the industrial revolution, what industry do you think of? My answer would have been the invention of the steam engine and the railroad industry. Recently read a book which changes the viewpoint, the book is Empire of Cotton – A Global History written by Sven Beckert, published Alfred A. Knopf, NY, 2015. The book examines cotton through global transformation – the movement of capital, people, goods, and raw materials.

The discovery of the Americas will change cotton and enable the creation of a complex, Eurocentric maritime trade web; the forging of a military-fiscal state allowed for the protection of power into the far-flung corners of the world the invention of financial instruments – from marine insurance to bills of landing – allowed for the transfer of capital and goods of security to global investments; the construction of alliances with distant capitalists and rulers provided access to local weavers and cotton growers; the expropriation of land and the deportation of Africans created flourishing plantations.

After Columbus discovered the Americas for Europe, next came Hernan Cortes claiming the Aztec Empire for Spain and sending back gold and silver to make Spain the richest country in the world. Portugal acquired Brazil; France took parts of the Midwestern and Southern States or the states around the Mississippi River and a piece of Canada. England started a colony in Virginia and claimed most of the eastern seaboard.

For Europe the other big discovery was many people believed the earth was flat or they were Mediterranean centric. Vasco da Gama sailed around South Africa and made it to India. Before this route, all trade from India and China went through various middlemen who marked up prices. The trip around the South Africa met lower prices or higher markups or higher profits for Europeans.

India was the number one producer of cotton textiles, but European control was limited. One of the reasons why Indian textiles were so popular was their superior design and brilliant colors. The work was done in the home and had been done for centuries which allow people to have great skills.

In Americas, the Europeans started with taking gold and silver, but gradually moved to the growing of rice, tobacco and indigo. To grow these products they needed bodies or slaves. Often the currency of choice for the sellers was cotton textiles. For a time 50% of the purchase price of slaves was cotton from India, the people produced agricultural commodities for European consumers.

At first the plantations in the West Indies produced sugar cane, which requires a lot of bodies to grow and harvest. Then cotton was introduced because the manufacturers in England were dependent on India for their raw cotton and in business it is always better to have more than one source of raw material.

The revolution began in the most unlikely of places: a quiet valley in the low hills that surround Manchester, England. If you think of England, you will likely know where London is. Travel northwest 3 hours by car and you will reach the city. Not far from the airport is the Quarry Bank Mill. This was the first mill to use a new spinning machine called water frames which used falling water to mechanize the work for hundreds of years done by humans. The year was 1784.

The cotton came from Jamica and Brazil which arrived in the city of Liverpool, about a hours drive away, The spark that was ignited in Manchester changed the city into the leading manufacturer of cotton and made England the dominate country in the world.

The question of why Manchester and not somewhere else? For a long time, cotton cloth was less inexpensive in India, for example in 18th century India spinners needed 50,000 hours to spin a hundred pounds of cotton. In 1790, using a 100-spindle mule, could spin the same amount in 1,000 hours. In 1795, they needed 300 hours with the water frame. In 1825, it was 135 hours. In 3 decades, productivity had increased 370 times, which meant labor costs in England were less than India. An increase in productivity would demand more cotton inputs.

Prices for British yarn fell every year and soon were lower than yarn manufactured in India. In 1830, a British manufacturer could sell Number 40 yarn for 1 shilling, 2.5 pence, in India the price was 3 shillings, 7 pence. The output of British manufacturers grew annually at 10.8% or another way to look at it, in 1788 there were 50,000 mule spindles, by 1830, over 7 million.

Linking to dividend paying stocks, to gain entry into a market you can either do it on a value proposition or be less expensive than the other company. To be less expensive you need to use technology to increase productivity which lowers unit costs which makes it competitive and then have a competitive advantage. It seems to be a never ending loop, but there are markets that seem easier because they tend to have monopoly characteristics.

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

When you think of the industrial revolution, what industry do you think of? My answer would have been the invention of the steam engine and the railroad industry. Recently read a book called Empire of Cotton – A Global History written by Sven Beckert, published Alfred A. Knopf, NY, 2015. The book examines cotton through global transformation – the movement of capital, people, goods, and raw materials.

When you look at the cotton plant, it seems an unlikely candidate for one of the wonders of the world. Humble and unremarkable, it grows in many shapes and sizes. The dominated type of cotton is G. hirstum – also known as American upland. It rises to a height of 2 to 3 feet, and then divaricates into boughs, which bristle with hairs. The upper leaves are entire and heart-shaped; the petioles are velvety. The flowers near the extremities of the boughs are large, and somewhat dingy in color. The capsules are ovate, four-celled, nearly as large as an apple, and yield a very fine silken cotton wool, much esteemed in commerce.

The history of cotton is while it was found in various countries around the world, it was small scale and focused on households. While some sold the cotton outside the area, most used for the household or to pay taxes or tribute. There would be change in the 19th century. Cotton came to Europe via the spread of Islam. Cotton was grown in cities in Spain and exported to the rest of Europe. When Christians reconquered Spain, the expertise of the growers left and cotton was introduced to northern Italy.

Cotton manufacturing blossomed in northern Italy for 2 reasons first, these cities looked back on a long history of still vibrant wool production, which left them with skilled workers, capital-rich merchants and expertise in long-distance trade. Once entrepreneurs decided to engage in cotton manufacturing, they could draw on those resources. They advanced raw cotton to women in the area to have it spun. Then urban artisans, organized in guilds, weaved the yarn. They branded and standardized their goods and exported the goods across the Mediterranean.

Second, northern Italy had easy access to raw cotton – what is now known as Turkey and Syria at the time the Ottoman Empire. As improvements in shipping allowed for cheaper transportation of bulk commodities, Venice became Europe’s first cotton entrepot, the Liverpool of the 12th century.

To improve every industry needs new technology. For cotton, it was the introduction of the spinning wheel. Before that people used hand spindles. It was a slow process: a skilled spinner produced using the hand spindle took 11 hours to spin enough yarn for one blouse. The spinning wheel triple productivity, which is why in medieval Europe the spinning wheel was called the cotton wheel.

The downfall of the industry was the rise of a strong Ottoman Empire which controlled the raw material and did not send it to Italy and Germany. People wore linens and woolens.

For the next couple of hundred years, little changed in the world of cotton, but then Christopher Columbus discovered the Americas.

Linking to dividend paying stocks, we all think we are looking at something new and shiny but in reality, there have to be a number of elements which go together to change a industry and the profitability of it. Once that happens, more innovation and change happens and then profits can be made for a long time.

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

Tax season has come and gone and hopefully you received an income tax rebate. The important part of the tax season this year was President Trump’s One Big Beautiful Bill touted the cutting of income tax for regular people. The Democrats focus on tax cuts for billionaires. Both can be correct, but taxes and money are typically individual things that people like to keep in the family, so who was more correct?

In an article by Andrew Duehren of the New York Times News Service, the good news in the law of averages is the average tax refund is $3,521 according to the IRS which is roughly 11% higher than it was a year earlier. The bad news is the benefits are unevenly and to some tax experts, arbitrarily distributed. The reason is even if you can claim one of the new tax cuts, the savings reflect how much money they make. Someone who does not owe much in taxes gains little from a tax cut.

The New York Times spoke with 3 dozen Americans to understand how the tax cuts were reshaping their finances. In addition surveys were done by hundreds of people while others were interviewed as they waited at a tax clinic.

Many of the taxpayers said they had received their biggest refund in years, money that will go towards paying down credit card debt, catching up on bills, adding to savings accounts, covering the cost of a vacation. Among the biggest winners were high income earners and large companies, some did not gain much of anything.

According to the Tax Policy Center, roughly a third of Americans were not expecting to receive a new cut from the tax law. If you make less than $50,000, the tax refund is used to catch up on bills particularly heating and utility bills (about 30% of Americans are behind in their bills for the winter) and look to new purchases as the money will be spent.

The problem for under $50,000 is to pay for the tax cuts, the Republicans cut funding for health care, Medicaid, food stamps, and raised feeds on other government services. Is someone better off?

If you are between $50,000 and $150,000, technically you are in the middle class. Technically there is flexibility in the budget, but everything costs more and the tax cuts are similar to the amount received last year. The tax bill put a cap on overtime and tips payments, so it was not as much as expected. Bills that typically get paid from refunds include property tax, home owners insurance, and car insurance.

If you make over $500,000, then the refund is a nice surprise than can be used to buy new autos.

For corporations, many are the biggest beneficiaries and an example in the article is Amazon, it saved $8 billion in taxes last year.

Linking to dividend paying stocks, in all business, accounts receivable and write offs are important and no one likes to see them go up. In broad customer-based companies, people often get behind but something similar to a tax refund helps them give over the hurdle to pay their bills. It is something companies expect from past years of payments. For these types of companies is it important to pay to the accounts receivables.

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

In the investment world, there is are always different types of investments for different types of investors. Some people are day traders, the most important aspect is volatile prices or some sort of pop. As long as the stock is moving either upwards or downwards, it is possible to profit from it. There are other companies where the main action is the quarterly report where it says it met expectations. These companies tend to be less newsworthy carrying about their business and overtime as long as expectations are met, will increase in value. Another case is special situations which are affected by the news cycle of the day, week or month.

In an article by Purvi Agarwal, Rashika Singh, and Johann M Cherian of Reuters, when President Trump decided to start the war in Iran, that lead to increase volatility which the day traders liked. It created special circumstances because for every action, not all companies benefit.

In a war, people generally look at defense stocks because many of the products are very useful in a war and depending on how long it lasts, new orders for more product should be forthcoming.

A lot of conflict premium was in the defense stocks valuations, said David Bianco, an Americas chief investment officer at German asset manager DWS. We saw gold and oil and defense rally, part of the reason was messages from the Trump administration. When Trump sent the armada to the Middle East, nobody knew anything, but they saw chances of conflict reasonably high.

Reuters reported in the weeks leading up to the war that the US was building up forces and preparing for a weeks-long operation if diplomacy failed.

In addition, President Trump asked for more money up to $1.5 trillion for the 2027 defense budget, up from $1 trillion in 2025.

The defense index has surged more than 150% between 2020 and 2025, leaving the sector at historically elevated valuations. The S&P 500 Aerospace and Defense sub-index trades at about 32 times 12-month forward earnings, well above the broader S&P 500’s multiple of 20 times, according to LSEG data.

Sameer Samana, head of global equities at Wells Fargo Investment Institute, said the conflict would need to last longer, or expand materially for estimates to move higher.

One of the good things for existing shareholders has been share buybacks, the Trump administration is pressuring the defense firms to prioritize production rather than share buybacks, raising questions about capital returns.

The sector’s medium-term outlook depends heavily on US budget decisions with key spending details expect by April 21, Bloomberg News reported.

Linking to dividend paying stocks, with every conflict there are some companies that benefit and others that do not, but the companies that benefited before the war started, not once the war started. Once the war started other companies that have operations in the Middle East have not benefited and likely lost money. If you invest on a news cycle, it is important to do your homework before the event happens, not while it is happening.

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