In every community there is a large employer some of them are large relative to the other employers. However in every community, the large employer tends to make life for politicians see grey rather than black and white. On the plus side is people have jobs, the company pays taxes and on the negative side is the employer and the community’s interests are not always aligned, sometimes they are not aligned.

In an article by Melissa Eddy of the New York Times News Service, an example of the above is seen. In Schwedt, Germany a large oil refinery has been operating for decades (think of the refineries in the Baytown area around Houston). The refinery has been and is providing jobs for thousands of people and Berlin has a reliable source of gasoline, jet fuel and heating oil. The issue is the oil comes from Russia.

Ever since Russia invaded the Ukraine, the European Union and countries around the world have been backing the Ukraine and by not buying Russian oil and gas, the revenues of Russia should fall and maybe put pressure on withdrawing their troops from the Ukraine.

The refinery in Schwedt is called the PCK refinery which is linked back to when Germany was East and West Germany with the Eastern side connected to the Soviet Union. The refinery is owned by Soviet oil giant – Rosneft and the oil comes from the longest pipeline in the world bringing oil from Siberia.

The officials who run the refinery have no interest in using oil that is not from Russia. If the Russian tap is turned off, Rosneft shares would have to be sold. Shell, Europe’s largest energy company owns 37.5% of the shares but last year, Shell has trying to sell its stake. Things are different with the invasion.

Alcmene, part of the privately owned Liwathon Group in the UK is willing to examine share ownership.

25 years ago, unemployment in the Schwedt was 25%. The refinery has over 10% of the jobs in the area tied to the refinery output, workers are reluctant to stop Russian oil.

Linking to dividend paying stocks, often companies making a profit have capital investments and given the size of the company tends to have a say in local government. One hopes the capital investment in communities is beneficial to employees and the local government but sometimes things out of the control of the local government happens. Who should benefit and what can the profitable company do?

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

If you think about places in the world to gamble, Las Vegas comes up because it is in the US but so does Macau. All the big names you see in Las Vegas are in Macau which caters to the Chinese gambling market. It is not surprising to see gaming stocks as some of the most active on the Chinese and Hong Kong Stock Markets.

In an article by Jose Ye of Reuters, the biggest gaming company in China – Tencent reported a quarterly profit halved from a year ago and revenues stagnating. The company blamed a variety of events including cuts in advertising spending by consumers, e-commerce and travel business. The other factor was the Chinese government regulatory crackdown to lower the influence of large internet companies.

Even though the stock is down by over 50%, Tencent remains China’s most valuable company.

In recent months, China shut down many of its cities for health reasons dealing with COVID, however Tencent President Martin Lau believes the government is now encouraging the tech companies as China’s growth rate has been the lowest rate in years.

In the gaming side of business, Tencent big names are Honor of Kings and Call of Duty Mobile. New games are the lifeblood of a company and for 6 months China has not issued game licenses, however Mr. Lau expects that to change soon and has new games under development.

The regulatory concerns were the Chinese government believed too many people under the age of 20 were gambling through games and impose a strict program to ensure young people did not game. Tencent has turned to the overseas market to make up for lost revenue.

Linking to dividend paying stocks, in many countries some companies tend to be favored by the government through regulatory and administrative abilities. In many cases, profitable companies fall into the category, as an investor you need to see that companies can navigate through both sides of the aisle governments. As an individual you can pick sides, as an investor you want the company to be neutral in the government but willing to accept handouts.

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

As an investor, when you invest your money you want more – more than you have at the moment, more than competing investments, more in the future, but generally more is good. When the sentiment is translated to many people, more often flows in inequality because some make more than others. Most of believe somehow overtime there is a net benefit – some will lose money, some will make money and some with stay about even.

In an article by Marc Jones of Reuters, the central bank to the world’s central banks is called the Bank of International Settlements (BIS) and it recently released a study about wealth inequality.

The BIS examined 182 recessions over 70 countries and came to the conclusion after a downturn in the economy the income share of the bottom 50% remained at 0.3% below the prerecession level on average, for those in the top10% it was 0.7% higher.

Economies that are more unequal go through deeper recessions which it turns further increases inequality.

The solution for the BIS is for central banks to try to keep inflation in check and that governments use stabilization policies such as subsidies or support payments that help poorer people.

Linking to dividend paying stocks, when you buy a stock you are expecting the company to stay profitable and pay dividends over a long period of time. That is a good thing and then you have choices what to do with the increases in wealth. For most of us, one of the choices is not to give more to the government, but we can choice to give to our particular choices.

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

When the stock price is rising and investors are making money, it seems companies can do little wrong, but when stock prices fall, everyone questions the strategic planning of the company.

In an article by Ross Kerber and Simon Jessop of Reuters, last year climate concerns were the number one issue for institutional shareholders and Big Oil was being challenged at the AGMs. The most telling example was at the AGM of ExxonMobil 3 directors who had a focus on climate change were elected to the Board. This year the world has changed, oil prices are up, oil company shares are up and investors are backing management.

Votes that were receiving greater than 50% of the vote regarding climate change are now receiving less than 50%.

Linking to dividend paying stocks, issues always come up and there will be some validity about them, however if the company can make a profit and pay dividends the majority of shareholders will tend to vote for management. If the stock price declines expect greater dissatisfaction with management.

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

Similar to most things in life, actions have consequences. Often it is not just the action but how long it has or does go on, for example the world outside Russia for lots of different reasons did not like Russian invading Ukraine. For countries closer to Russia, they were worried if Ukraine fell, what country is next? For western powers or G7 type countries they were worried about balance of power shifting. For businesses, they relied on their home government for guidance. If a corporation had business with Russia, there was a benefits to Russia and benefits to the corporation. If you think about Europe, in order to diversify themselves from OPEC countries they used Russian oil and gas. It was a good strategy till it does not work.

In an article by David Koeing of the Associated Press, McDonald’s after 30 years of serving Big Macs in Russia has decided to sell its business. McDonald’s has 850 restaurants and through the supply chain connections employees 62,000 people. When McDonald’s opened it had to not only worry about building and operating the restaurants, they had to open factories to supply the restaurants. Those 850 restaurants are about 9% of McDonald’s revenue and 3% of the operating revenue before the war.

When McDonald’s opened its restaurants it was the time of the fall of the Berlin Wall and easing of cold war tensions. Neil Saunders, managing director of GlobalData PLC did not believe the sale price will be close to the value of the business before the invasion.

Linking to dividend paying stocks, some of the dividend paying stocks are global brands and even though they are US based, their revenue and profits come from around the world. For all companies with operations outside the US, they must continually determine if it is worth operating in the country, if and when governments change their policies or regimes. For McDonald’s losing about 10% of its business is a big decision for them, but they have to worry about the other 90%. If they had stayed would people still be loyal? The invasion does not seem to have an end point, although most people would like it to be over a month ago. Diversification just to be diversified is often not worth it.

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

With the calendar changes to June, people are thinking about summer and one aspect of summer is warmer temperatures. Most of like them, but in the world some countries are beginning to experience higher than normal or extreme temperatures. In depends how long it lasts because if it is too long the crops which are expected to grow in more tempered temperatures will and do wilt and die. If that happens crops will and do fail or the yields will be very low even if the rains come. If the rains do come, because the crops have failed, soil erosion will be a cause of concern.

In an article by Rajendra Jadhav, Mayank Bhardwaj, and Nigam Prusty of the Associated Press, due to the long period of extreme heat in India, the government has stopped exports of wheat. The reason why it is important is after the Ukraine (think war with Russia – no planting) India was the second largest exporter of wheat. India was expecting to export 10 million tonnes this year. Due to the long heatwave, prices of bread and prices counting to inflation has increased.

If you consider not exporting means a loss to the Treasury of India and for many growers their business plan is to export wheat, it is a big loss. It does not happen very often sometimes not at all if you consider the potatoe famine in Ireland, wheat and other crops were being exported at the same time. It is normal to maintain exports.

Wheat prices in India have soared due to the long heatwave from what the government of India supports the farmers 20,150 rupees to over 25,000 rupees ($320) a tonne. The government of India similar to other governments around the world ensure supports for both the farmers to make enough to plant again the next year and the consumers who need bread to survive. The government of India made a political decision to ban exports.

Linking to dividend paying stocks, with climate change or extreme weather, governments will make political decisions to stay in power. There will always be a side which says they could do both – cap prices and export, but governments make decisions in their best interests. For the company, they have to have the ability to adjust and this is why how the company deals with crisis is a very good thing to know.

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

Commodity prices tend to go up and down, when they go up the profits flow to the companies. If the company is a low cost producer of the commodity, then the bank till is ringing or from the comic books Scrooge McDuck is swimming in money. The trick is knowing which producers are the low cost ones and riding the wave.

In an article by Isabel Debre of the Associated Press, oil giant Saudi Aramco said profit soared 0ver 80% in the first 3 months as oil prices went up. The effect was to push up net income to $39.5 billion versus $21.7 billion a year ago. With the rise in oil prices comes a rise in stock prices and Saudi Aramco overtook Apple as the world’s most valuable company with a market cap of $2.43 trillion.

The oil group kept its dividend payout of $18.8 billion and because the government of Saudi Arabia owns 98% of the company, its revenues received a good boost in income.

The cost of oil is still less than $5, however the issue is some of the easiest to drill petroleum is quickly being uses, however Saudi Arabia still has over a 100 year supply to the world, some of the oil will be a little more expensive, but much less than shale oil.

Linking to dividend paying stocks, if you wish to own any commodity stock, you will need to know 2 pieces of information – cost to produce and price to sell. Public companies will tell analysts how much it costs to produce and there is always an exchange where futures sell and many financial press report it. For oil prices, the Wall Street Journal shows the price everyday. After you are aware of the 2 prices, you can then pick the best companies to invest in, whether it is to catch a wave or to hold long term.

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

As an investor you have many decisions to make on the risk reward spectrum and one of the points of the interest is what will the policy of the Federal Reserve be? Similar to many organizations who leads the organization plays a role, otherwise why would shareholders give large payments to senior management? The Federal Reserve among other duties sets the interest rates. If you are a borrower you like them low, if you are an investor you what a balance to fight inflation, which means if anyone uses credit, they have an opinion about the federal reserve.

In an article by Christopher Rugaber of the Associated Press, the US Senate in a vote 80 -19 to confirm Mr. Powell for another 4 years. The vote was similar when former President Trump nominated Mr. Powell with a 84 – 13 vote.

Linking to dividend paying stocks, when you are an investor, one of the expectations is the government does little or no harm to the stocks you invest in. If you are very successful, the government may want some of the spoils, but only if you are very successful. The confirmation of the Federal Reserve Chair means similar policies will be followed and they seem to work last time, which is a good indication for the future.

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

Every government has the right and responsibility to determine the immigration levels for the country. Over the past number of years, some countries have closed their borders while others have open borders, ideally it is somewhere between.

In an article by Nicolas Riccardi of the Associated Press, economists believe because former President Trump tried his best to lower immigration, the country is waking up to a labor storage partly fueled by the shutdown during COVID. Another factor is the Baby Boom (those born between 1950 and 1965) generation is retiring and there are millions of them. The Baby Boom generation was the last generation where the average household had greater than 7 people. Now days the average is 4 or 3.

Giovanni Peri, an economist at University of California at Davis said the 2 million missing people then it would normally have and they are missing are helping to cause prices and wages to increase.

Steve Camarota, a researcher at The Center for Immigration Studies believes wages going up is good for the poor, and I think mathematically it is not possible to drive down inflation by limiting wages at the bottom.

The areas most affected are home building, hospitality and agriculture. In agriculture, many farmers believe those born in the US will not work in the fields at any wage.

Linking to dividend paying stocks, government policies have an affect on many business and whether you and others like them or not, they do have an affect on some aspect of the business. When demand is high and profits can be made with people, owners tend to look at mechanization of any and all rolls. For your investments what type of policies do you need to allow the long term value to go up? is either party helping you?

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