If you planning for retirement books, one of the phrases is having enough money to maintain the lifestyle you have been living. That phase can easily be individualized because while most people want the same things, how they go about is often very individualist. Recently read a report which suggested even though the US economy is 60% based on consumer spending, those with an income of over $250,000 per household is driving 50% of that spending. The others face all the pressures of higher prices and increased fees.

In an article by Lydia Depillis of the New York Times News Service, economists have been waiting for that multi-faceted storm system to hit the economy and the signs of the storm are everywhere, but what will be the severity of the impact?

James Egelhoh, chief economist with BNP Paribas, thinks the economy is going through a soft patch rather than entering a deep recession.

Plenty of indicators suggest that inflation and the labor market are headed in the wrong direction.

Price growth has sped up, particularly in categories of goods that are heavily imported and now steeply tariffed. One measure is the wholesale price index which is at the highest level since November 2022.

Spending has held up, particularly among higher-income consumers, according to credit card data analyzed by the Bank of America.

Economists are not surprised that tariffs are taking a while to filter into sticker prices. The President’s policies have not been consistent, some are on, some are exempted for a while, some have been threatened but not imposed. However, many countries in Southeast Asia the opportunity to bring in goods before the tariffs has gone.

In the labor market, there is a softness as the Bureau of Labor Statistics reported a large downward revisions to job creation over the past few months.

Some of it is related to AI tools being used by business and need for less people. Some of it is related fewer immigrants in the country as related to the immigration policies of the government. Losing 300,000 government workers likely did not help.

Mark Valentino, President of Citizens Bank, expect the President’s policies will have a impact on the second half of the year.

Linking to dividend paying stocks, when you are investing you are always wondering is the glass half full or half empty. There will be signs of both but it helps if your investments include companies that have near monopoly like conditions. For example, an utility has a near monopoly as long as the economy is doing okay, because people need to turn on the lights. If the economy goes down, there are longer periods when people do not pay bills on time or accounts receivable go up. However, if the number remains relatively low, then the company should be able to make a profit and pay dividend. Often the price of the stock does not double, but it does move upwards because of consistency of earnings.

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

In the last election, President Trump wanted US steelmakers to make more steel in the US, although when he built some of the buildings with his name of them, he used imported steel. However, he needed the votes and vowed to protect domestic steel making. All eyes went to Pittsburg because at the legacy of Andrew Carnegie and the US Steel as the number one steel maker in the world. Mr. Carnegie died in 1919 and much as changed, including US Steel is not the number one steelmaker in the world. Earlier this year, President Trump gave approval for Nippon Steel to buy the company for $14 billion.

In an article by Marc Levy of the Associated Press, there was an explosion at the steel making plant in Clairton, Pennsylvania which is located in the Mon Valley just outside of Pittsburg. The explosion was significant besides killing 2 workers and injury to 10 others, it took hours to find 2 missing workers beneath the charred wreckage and rubble.

It will considerable amount of money to fix the damage or the spending of more money than anticipated. The production of the facility will be down for a considerable period because the blast affected 2 of the blast furnaces and the other 4 are on reduced production because of the explosion.

Accidents are nothing new at Clariton, the coke ovens use high temperature to make coke. a key component in steelmaking and produces combustible gases and its byproducts.

In the early 1970’s US steel production led the world thanks to 62 coke plants and 141 blast furnaces. No one in the US has built a blast furnaces since. The world leader is presently China and they are heavily invested in coal-based steelmaking. New technology of electric arc furnaces which use electricity not coal. (if you ever heard of Clayton Christensen and the disruptive innovation, you should watch the YouTube video).

Linking to dividend paying stocks, when a company is a market leader the public has some attachments to it, but markets and technology change and it is hard for companies to remain a market leader for generations. It is not impossible, if you examine the Fortune 500 companies from. 1950 to 1970 to 1990 to 2000 to 2010 to 2020 there are changes. It is rare for companies to stay in the group unless they have made acquisitions or merged such as Exxon merged with Mobil to create ExxonMobil and it remains as a top tier company. It is great to own a profitable company which pays dividends but it does not mean you do not continue to evaluate it and look at alternatives.

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

In many industries companies start supplying one company and fortunately that company gains market share and becomes dominant in the industry. The rise of the company lifts all the suppliers and investors are happy. Eventually sales level out, new suppliers come in and then investors examine the suppliers and see how connected they are to the one company and stock prices go down because the dominance is beginning to fade. Often times this takes a couple of decades but it happens regularly.

In an article by Wen-Yee Lee of Reuters, Taiwan’s Foxconn became a global giant by assembling millions of iPhones for Apple. The rise of Foxconn was Apple was conceived and designed in the USA but manufactured in a Foxconn plant in Taiwan. Foxconn has announced in will be manufacturing iPhones in India so there is more diversification for them. The rise of iPhone this year is iPhone 16 has been very good for suppliers such as Foxconn.

Recently Foxconn has been diversifying into making AI servers and other cloud and networking products so these products are its main business. The AI servers are going to companies such as Nvidia which is one the cutting edge of AI silicon chips.

For Foxconn, consumer electronics accounted for 35% of total revenue in the 2nd quarter down from 54% in 2021. While cloud and networking business represented 41% of total revenue.

Foxconn has been the manufacturing choice of chips for Nvidia since 2002 starting with producing reference designs for Nvidia’s graphic cards. The AI servers and cloud service for data centers started in 2009. At the moment, Foxconn is one of the world’s largest suppliers of both general-purpose and AI servers with a market share of nearly 40% in each category.

Foxconn has announced plans to build new production facilities in Houston and in Mexico.

Foxconn is expecting its AI server revenue to grow 170% in the 3rd quarter of this year.

Linking to dividend paying stocks, when a company is the dominant market share, investors examine the suppliers because the company does not do everything. As long as the company retains it dominant share it lifts the supplier companies, but for the supplier company you need to pay attention to diversification of revenues otherwise as some point alternatives need to be found through your homework.

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

All countries around the world have government bodies that do business for the government, they are similar to private sector companies in they buy goods and services for the country, particularly agricultural products. If you want to follow how well the people are being fed, watch the agencies that buy food.

In an article by Naveen Thukral and Ella Cao of Reuters, China state-run trading firm COFCO has booked a cargo of about 50,000 tons of new-crop Australian canola.

The purchase would mark China’s first imports from Australia since 2020 when China stopped importing from Australia. Australia is the 2nd-largest canola exporter.

China needs agricultural imports and uses the purchases as a diplomatic measure, it will buy from one country then turn around and make another country the favored nation.

Also reported was China’s COFCO was increasing the size of the soybean storage facility in Santos, Brazil. In addition, COFCO has hubs in Rosario in Argentian, St. Louis in the US, Nikolaev in Ukraine and Constanta in Romania. The company deals with both the large private sector grain trading companies and states to state around the world.

Linking to dividend paying stocks, when it comes to food, in addition to the private sector companies the state run companies exist to move from the storage facilities to the warehouse to the consumer. Similar to many industries it is both simple and complex, which is the reason to buy a profit making company. There are many buyers and to consistently make profits is both simple and complex, as a shareholder you just have to see the results.

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

Since the 1980’s global supply systems have moved from relatively higher wage countries to low wage countries where there are millions of people willing to work for less money. This was the number one reason why the shift of manufacturing from the US to China. This shift took place for the goods, but what about the profits to be made? For many years countries known as tax havens have existed and will continue to exist. The corporate world uses the tax havens until the country where their headquarters is lowers their corporate taxes to manageable. In addition, other countries are not directly tax havens but corporate tax havens and Ireland is the prime example. However, with President Trump’s tariffs that might be a concern.

In an article by Rebecca Robbins of the New York Times News Service, one of the tariffs the President is imposing is 15% tariff on medicines from Europe. Ireland sends the US billions of dollars worth of cancer medications, weight loss drug ingredients and other pharmaceutical products each year, no other country is close.

For the past few decades, Ireland has been the beneficiary of American drug manufacturers shifting patents and profits to the country to avoid billions of dollars of US tax bills. The free flow of medicine has been the biggest factor towards a shift to Ireland. The problem of US drug companies is if they leave the facilities in Ireland, they face a larger tax bill; if they bring manufacturing to the US, they face increased costs.

Most executives and other employees of multinational drug companies are in the US. So are a majority of their labs, clinical trial sites and sales.

According to Martin Sullivan a tax economist who writes for Tax News, the largest drugmakers booked 91% of their profits overseas up from 76% in the mid 2010s.

Ireland is where the multinationals produce expensive brand-name medicines.

Where a company holds its intellectual property is more important for its tax bill than the locations of its manufacturing, tax experts said.

At present, a vast majority of Ireland’s corporate tax revenue comes from multinational drug companies and tech companies. In a typical arrangement, the Irish subsidiary and its parent company enters into a licensing deal: the subsidiary get to exploit a drug’s intellectual property, for example funding research. The subsidiary pays the parent company royalties but keeps most of the profits. The profits move from Ireland to tax havens such as Bermuda or Cayman Islands (if you go you will see the names of American financial firms on office buildings).

One solution is change the tax code rather than using tariffs.

Linking to dividend paying stocks, all companies pay taxes but how much is too much and what are good tax strategies that are legal to avoid paying taxes? All companies do them, there is a reason why the tax department at legal firms and accounting firms are large and expansive.

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

In the world of offshore drilling for oil and gas, if a large field is not only discovered, but is brought to production billions of dollars could flow to the country where the oil and gas is discovered. It costs billions to bring in, but the rewards can be life changing to the people of the country. The example of Ghana which through the efforts of Exxon and Hess Petroleum is transforming Ghana to an capital rich country. There are other examples such as Trinidad, where Exxon is drilling and is projected to spend north of $20 billion. If a company spends that much money, it is expected at least $100 billion in returns. But all is not equal around the world.

In an article by Geoffrey York of the Globe and Mail, French oil giant TotalEnergies and its partner Shell Oil wanted to drill offshore of South African waters for oil and gas. Discoveries have been found in the country north of South Africa – Namibia.

Group worried about the environment sued and a South African court has blocked the environmental approval to drill offshore. The reason is the brief from TotalEnergies has failed to consider the project’s full impact on climate change.

The African Energy Chamber, the oil lobby group called the decision disruptive and threatens vital projects.

Western Cape High Court Justice Nobahle Mangcu-Lockwood said the environmental assessment must consider the cumulative impact of the entire project, including its potential production of oil and gas, rather than just the exploration phase. The 2 phases are interconnected and must be examined.

The court case took 2 years from launching to a judge’s decision.

Linking to dividend paying stocks, many of the companies operate in more than one country and while everyone wants the same thing in the countries how it gets done can be different. When leaders met in world forums this is one of the topics they often discuss. Often times one expects in case similar to above, the oil companies have access to multiple consultants who can offer possible projections of the future in whatever form the government wants or can live with. Sometimes the promise that development will be good, is challenged.

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

Within every medium sized and large financial institutions is a department which tries to understand both the local and national economy. If things are expected to go well, the banks can lend more money or make credit easier, if the outlook is bad, banks will lend only to those who are guaranteed to pay it back or seemingly have a very low propensity not to pay it back. This means many will not get credit. The economists go through the government and industry data and make a report, sometimes the report is good, sometimes no so good.

In an article by Niket Nishant and Saeed Azhar of Reuters, Jan Hatzius, the Chief economist at Goldman Sachs, wrote a report about tariffs which President Trump did not like. The report said US consumers had absorbed 22% of the total costs through June and that figure could rise to 67% if tariffs continue on the same trajectory.

Consumers have likely noticed some higher prices, but as the percentage goes higher, everyone will notice higher prices because the company which imports the tariff good is not going to absorb the total costs for an extended period of time. It is why you have heard CFOs say tariffs have cost us $200 million or an extra cost that hurt margins.

President Trump jumped onto Truth Social and criticized Goldman Sachs CEO David Solomon and disagreed that tariffs have hurt the economy.

All the above shows that President Trump does not like bad news, in his mind everything is going great. The reality is some parts of the economy are doing well, some parts are not doing so well and the tariffs which are paid by the consumer take time to go through the supply system, but they will show up in higher prices.

Linking to dividend paying stocks, the best management want to hear about and the problems and how the company is solving the problems. If the person only wants to hear about success, all numbers have to be jigged to show some success, when the reality is the expectations analysts have of the company are not being met or the Aesop Fable – the Emperor has no clothes. At some point, there will be a management change because the solutions offered are terrible and anything could be better. If you invest in a company and despite all the negative aspects, the management only sees what could be, it would be good to find alternatives.

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

When someone buys a pickup truck they hopefully need it for their businesses and are willing to pay a premium price for it because all the makers of pickup trucks make a healthy profit on the vehicle. In many ways, the trucks keep the automakers in business. Technology changes and innovation still rules the production lines but other vehicles maybe in demand.

In an article by Neal E Boudette of the New York Times News Service, just 4 years ago, Ford seemed ready to give Tesla a real run on EV vehicles. Ford delivered the Mustang Mach-E, a EV truck and van. Then the growth stopped.

At the same time, higher material costs made it harder for established carmakers to make money on electric vehicles.

Ford has lost $12 billion in the last 2 1/2 years including $2.2 billion the first half of this year. Ford is still make money from the internal combustion engines, the first half of the year was $757 million versus $2.1 billion in 2024.

When a company loses money like that, a new plan is needed and was announced. Ford has developed new, lower-cost EV components that will allow it to sell more affordable cars. The new pickup truck will sell for $30,000 and be in showrooms in 2027.

CEO Jim Farley said the company has developed a brand new manufacturing process that should lower costs and improve quality. It was the most radical design since making the Model T.

Meanwhile the Chinese competition sell more EVs than Western manufacturers, often producing them at a fraction of European and American costs.

Besides the manufacturing process, Ford is counting on a new battery plant in Marshall, Detroit which uses lithium, iron and phosphate or LFP. The batteries do not use nickel and cobalt which makes less expensive.

The new production line in Ford’s Louisville factory to built an EV pickup truck has 3 assembly lines – one for front end, one for the back end and one for the battery pack and cab. The 3 branches are then joined into one where the 3 pieces are joined together. It should reduce time to assemble by 15%. Once the line is operation, the Louisville factory will no longer make the Ford Escape.

Linking to dividend paying stocks, if you own the auto companies in your portfolio, you would be receiving a dividend because the design of urban living in the US is dependent on the automobile. The world’s biggest consumer market needs vehicles to move around, and for a long time they were a license to print money. The famous saying by a GM executive – As GM goes, so does the US. Technology and innovation mean changes are on the horizon, but because the companies had a license to print money, they have the abilities to change. Will they still be a license to print money or will they make less? only time will tell and when you go to buy your next vehicle which one did you choose?

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

If you think about the revenues of an entertainment company, they will produce movies but few are going to be blockbusters, however some will make money. Then they will need subscribers and advertising and the more the better. At some level, the number of subscribers will be profitable, but to reach the level it will need to generate momentum or appeal to a specific audiences.

In an article by Wyatte Grantham-Philips and Michelle Chapman of the Associated President, recently the FTC approved the $8 billion merger between Paramount and Skydance to become the Parmount Skydance Corp. The business plan includes many ideas of using the cloud to facilitate media productions. The company also needs to attract subscribers and increase advertising rates.

Chairman and CEO David Ellison of Paramount Skydance made his first deal to buy the rights to be home to Ultimate Fighting Championships (UFC) through a 7 year agreement with TKO Group Holdings.

UFC market is under 30 men and many of them are avid followers and will pay to watch the championships. It is expected a number of them will add Parmount + to their streaming services at costs between $7.99 and $12.99 a month.

Prior to the deal, the UFC was on ESPN which had been paying $550 million a year as opposed to the $1.1 billion Paramount will pay. TKO also owns WWE or world wide wrestling, but the WWE sign a long term contract with Disney’s ESPN for a exclusive rights for 5 years. ESPN will launch a ESPN streaming service for the WWE.

Linking to dividend paying stocks, if you are going to own entertainment companies, in many respects the need commercials to pay for the operations of the company. Key metrics of how many new subscribers came in during the quarter? who is advertising on the company at what rates? then you will know if the strategy is paying off, so you can determine if the company is hold or seek alternatives.

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