In COVID times when the government sees a company messing up, things change quickly.

In Baltimore, there is a plant owned by Emergent BioSolutions Inc. which was making vaccine doses for two companies – Astra-Zeneca and J&J and made a large mistake. The 2 vaccines have different ingredients and they were mixed up.

In an article by Sheryl Gay Stolberg of the New York Times News Service, the Biden Administration through the Department of Health and Human Services decided to change the leadership and made the plant only making one vaccine.

The mix up is a setback and a public relations debacle for Emergent. The company based in Maryland had built up a profitable business by teaming up with the federal government – primarily by selling its anthrax vaccines to the Strategic National Stockpile.

J&J is working with Merck whose officials would help with the management of the Baltimore plant.

Emergent’s Baltimore plant was built with taxpayer support and is one of two plants are federally designated as Centers for Innovation in Advanced Development and Manufacturing. The money was part of Operation Warp Speed.

Linking to dividend paying stocks, it is very rare for any government to order changes in private sector manufacturing because the government generally does not do. It supports, regulates, protects but it does not actually do the work. In a pandemic and meeting very strict targets, different rules apply. The government did not takeover the plant, Emergent still owns it but meeting government criteria is important, when administration changes management needs to be flexible,

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

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All of us hope that as soon as many as people as possible are vaccinated, the economy improves for everyone. In the last year, those who have jobs which involves meeting groups of people – tourism, hospitality, sporting events, conventions, hotels, and the list goes on have a very slow recovery. Those who can work from home or have jobs the government calls essential had a good recovery, because there has been less ability to spend on leisure and away from home, there likely was savings.

In an article by Ben Casselman of the New York Times News Service, the US job market in March was very good. 916,000 jobs or nearly twice as many as in February and the most since August were reported by the Labour Department. The unemployment rate fell to 6%.

The good news were people were receiving their $1,400 cheques and some were saving, some were paying bills and some were paying rent and meeting payments on old bills.

Daniel Zhao, senior economist for the career site Glassdoor, said the March numbers were not the biggest but it looks like a finish line can be seen.

President Biden noted there is still a big hole, the US still has 8.4 million less jobs than in February 2020. There is a report in the Wall Street Journal saying of those who went to payday lenders or subprime auto loans over 10% are over 60 days behind. (If someone gets behind for those companies, they will lose their vehicle because it is almost impossible to get ahead given the interest rates charged).

Many economists expect this time the jobs numbers will continue to get better because the vaccines mean less opportunity for governments to shut down the economy for public health safety.

The economy is coming back but it is a K shaped, not a V shaped.

Linking to dividend paying stocks, many companies depend on a wide number of people buying their goods, so when the economy is divided sales are still made, but sometimes they are less than what they could be. When you buy your investments understand how they are diversified and sales can continue no matter how the economy is performing.

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

In the search for commodity products, the products are below the earth’s surface waiting to be discovered. If the world can use the products, companies begin to invest money and then partnerships with the government happen. The expectation is a reasonable stable working environment.

In an article by Geoffrey York of the Globe and Mail, in the country of Mozambique which is located on the eastern coast of Africa, north of South Africa and east of Zimbabwe, trillions of natural gas was found. The project to harness the natural gas was going to be Africa’s biggest foreign investment project a $60 billion offshore gas development. The LNG development is led by France’s Total SA and includes ExxonMobil, Italy’s Eni SA. The development was expected to create a city of 150,000 people and across the country could spur up to $128 billion in capital investments across the country. The LNG would turn Mozambique into the world’s 4th or 5th largest producer of liquefied natural gas and the country’s revenues would turn it into a middle income country. The financing was going to be led by South Africa’s Standard Bank.

Countries around the world have sent soldiers, Portugal, the US, South Africa private contractor, Russian military contractor. The country was going to have a reasonable stable working environment and the government would be able to help the people of the country.

The drawback is hundreds of Islamist rebels killed dozens of people and captured a town called Palma and things were put on hold. Total announced the construction which was delayed and restarted is on delay again. The President of Mozambique Filipe Nyusi and his ruling party Frelimo which is supporting the project said the project will go forth.

Linking to dividend paying stocks, to make money of a yearly basis most companies need a reasonable stable working environment and where that exists, companies can execute their strategies. All over the world, companies are looking for a stable working environment and plans will come. When the pendulum changes, investing closer to home always seems desirable, however investing in commodities means going to where the commodities are.

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

The most profitable company in the world is Saudi Aramco which is majority controlled by the Saudi Arabia and has access to the least costly oil to drill (their base price is $2.60 per barrel, which allowed it to pay $75 billion in dividends). Saudi still has billions of barrels of oil in the country and although there is a push to electrify the vehicles in the world, do not expect the end of oil usage.

In North America we are North America centric, but in the world there exists other economies do the same or similar things as in North America. In an article by Muyu Xu and Florence Tan of Reuters, Chief Executive of Saudi Aramco Amin Nasser was at the China Development Forum and told the Chinese that Saudi Aramco will supply China all the oil they need for the next 50 years and they will be top priority.

Saudi Arabia, is the world’s biggest oil exporter and supplier China with 1.86 million barrels a day up 2.1% for the month’s of January and February.

The second biggest supplier to China is Russia. Mr. Nasser noted we appreciate that sustainable energy solutions are crucial to a faster and smoother global transition but it will take time. Chinese demands was very close to prepandemic levels, while Asia and East Asia has seen a strong pickup.

Chinese President Xi Jinping announced in September that China would brings it peak carbon emissions by 2030 and reached carbon neutrality by 2060.

Mr. Nasser expects opportunities in downstream projects to help to meet China’s needs for heavy transport and chemicals, as well as lubricants and non-metallic materials.

Experts from China National Petroleum Corp’s research institute have forecasted China’s oil demand will cap at 730 million tonnes by 2025.

Linking to dividend paying stocks, we all know the world is changing, but it takes time. Time is on your side when you buy dividend paying stocks because you can enjoy the dividends and look for alternatives at a leisurely basis. If the dividends or profitability of your investments changes, you can easily make changes to the alternatives you have researched.

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

If you read about the auto companies strategies, it includes an electric fleet of vehicles by 2030, in the macro level that is a very good thing to do. The number one reason is as much as everyone enjoys their individual vehicles, the millions that are on the road contribute a great deal to climate change. If they are removed, hopefully the climate changes less.

However, from the macro level to the individual decision to buy is very different. The infrastructure to charge vehicles is coming but it is not here yet. The rules particularly in the cities where there is on street parking have to be worked out, can someone run a cord across the sidewalk to their vehicle? will homes with parking be more expensive because they have access to outlets for the vehicle? One can think of many other concerns, for the auto makers, their concern is to have the government to pay for the infrastructure in the name of the greater good theory.

In an article by David Shepardson of Reuters, the major automakers, parts companies and union (UAW) met not about contract negotiations, but to urge the government to use tax credits and other financial incentives to encourage the average person to buy electric.

The letter noted there are currently 1.5 million Electric Vehicles out of 278 million registered passenger vehicles or at the present 2% of sales are electric. At the moment there are 100,000 public charging places countrywide.

The auto industry association is asking the government to use its ability for fleet purchases to purchase electric and help pay for the infrastructure needed which will drive down costs to the average consumer.

Linking to dividend paying stocks, all large companies need the government to pay for infrastructure which helps them and the public good. The more the industry association can link their industry to the public good, the more the government will and can pay and the more profits can stay with the industry.

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

During the pandemic there has been many companies that have benefited from the government’s decision to tell people to stay at home, but one of the big winners has been Amazon. The company has a number of revenue centers but when most people think about Amazon the order and deliver service comes to the forefront. The company is involved in cloud computing with AWS; Amazon Prime, and a host of other services.

In the order and deliver service Amazon has increased the number of fulfilment centres across the world and has hired more than 500,000 people. Amazon is now the second largest private sector employer in the United States, after Walmart.

With as many people as Amazon has, some people are bound not to happy at work, at one of the retail unions has been organizing at Amazon. The RWDSU (Retail, Wholesale and Department Store Union) has a test site at Bessemer, Alabama located in central Alabama outside Birmingham. Given this is a test case, generally Amazon has not wanted a union, but is not likely as anti-union as Walmart. (Walmart shut down stores which unionized).

In an article by Mike Spector and Jeffrey Dastin of Reuters, the former head of the National Labor Relationships Board, Wilma Liebman said if the union win, this is groundbreaking because forming unions particularly in the south has been discouraged by companies and the government.

The President of RWDSU Stuart Appelbaum said the campaign has been a victory is many ways. The vote will go one way or the other, but doors have been opened to more organizing around the country.

President Biden has asked for fair elections. Senator Bernie Sanders had rallies in Alabama.

Dave Clark, chief executive of Amazon’s consumer division has encouraged people to vote against the union.

The workers voted and said no to the union.

Linking to dividend paying stocks, some companies are unionized, some are not, it is a matter of the company and its attitude toward people. Most electrical utilities are unionized, many companies in the financial sector are not unionized which means if you favor one side or the other there are choices for you. The wonderful thing in an economy the size of the US means there are many alternatives, having your values reflecting your investing is a relatively easy thing to do.

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

When companies become successful and generate tons of cash, they will try to capture more market share doing something else, but related to their business. After all if they are a success, why would would they not be in the new field because they have the ability to spend enough resources to get it done.

In an article by Daisuke Wakabayashi of the New York Times New Service, Google tried to copy Amazon to become the shopping hub of the internet, but so far they had little success.

Amazon is the elephant in the room with over $295 billion in Amazon’s third party marketplace. According to Juozas Kaziukenas, founder of Markeplace Pulse, a research company, Google’s effort is closer to $1 billion.

Amazon has been essential for marketers and its Global advertising business grew 30% to $17.6 billion, trailing only Google and Facebook.

During the pandemic every time the government closes the economy for public health, the only way for retailing to survive and prosper is to go online. The choices have been Amazon, Shopify and Google. After setting up shop online, the need to buy ads is required, and Google has algorithms to pick where the ads will go and what products to feature, depending on the budget. In the article on business placed $1,800 in ads which were viewed 3.6 million times and led to $247,000 in sales.

The retailer considered Amazon’s marketplace but Amazon fees are higher than Google’s. There is a possibility of selling more product, but at less margin. The fees can account for up to 1/4 of every sale, not including advertising. Amazon also likes to do everything in house which means it is harder to give your brand an unique identity and it limits the retailer to generate future business.

In the article, the retailer had a problem with the Google site because their algorithms noted the shipping costs on Google and the shipping costs on Shopify were different, the retailer said they were the same but it took time to sort it out.

Google is trying to break people out of their Amazon habit, but the pull of Amazon is great. Amazon has the lead on many things including same day service (it is expensive to duplicate); which means Google is trying the normal things such as lower fees, free search, and partnering with Shopify.

According to the research firm eMarketer, in October Amazon had 37% of online shopping and Shopify has 9% up from 6%.

Linking to dividend paying stocks, every industry has leaders and those in second place wanting to become leaders. There are often huge barriers to overcome and resources to be allocated if the company wants to become number one, in the meantime the number one company is continuing to push its success. Often times it is waiting game, eventually the number one company becomes complacent and then market share can shift. All industries have leaders and it is your homework to see why they are number one?

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

On Wall Street credit is the most important aspect in operations. The greater amount of credit, the greater the ability to leverage trading and the greater profits roll in. Unfortunately, every once in a while the opposite is true, if there is greater leverage and the trades go the other way, margin requirements have to be filled. The first thing to do is use cash, then stocks are sold and then higher interest rate bond financing is needed.

In the world of billionaires, if an investment manager only looks after one family money, very few regulations have to be followed because the family is expected to perform oversight of the investment managers. When investment managers have a great deal of success with a strategy, the oversight is less. When money is lost, the cry for oversight or regulations are heard.

In an article by Judy Babu of Reuters during the last days of March, a family holding company called Archegos Capital Management needed to sell large blocks of stock which had the affect of lowering the price of the shares. Companies such as ViacomCBS, Discovery Communications, Baidu, Tencent Music Entertainment were affected.

The investment banks have a division called prime brokers which deals with hedge funds and block trades. In that world, when one prime broker moves stock at a lower price to get the shares off their books or limit losses, the other prime brokers are trying to do the same thing. In the Archeogos case Goldman Sachs and Morgan Stanley were able to sell billions of dollars of stock leaving Deutsche Bank, Credit Suisse, Nourma Securities and others needing to sell more at lower prices. The root of the problem was leverage and a successful strategy by the investment manager. Bill Wang had success and his style was very active which means a generated a great deal of fees, in the world of fees he is a investment whale. Given the size of his portfolio, (Mr. Wang owned 100 million shares in ViacomCBS) investment banks were willing to sell synthetic products, however because they have a very specific purpose the products themselves are concentrated and illiquid which means when Mr. Wang is leveraged 8:1 or 20:1 there is very little room for error. The reason Mr. Wang used synthetic products or Total Return Swaps is to keep his trading less public than other investment managers. Hedge Funds need to file 13F reports to the Securities and Exchange Regulators and all over Wall Street when they are published, people review them to see what strategies successful funds are doing or what stocks they own. When the reports are published – analysts, reporters and people on You Tube will report what the top funds are doing. Then you can do something or nothing, one of the most reviewed 13F report is what is Berkshire Hathaway doing?

The issue for the Investment Banks should have been risk/reward or risk management – what is the downside and how much risk is on the books? While generating fees is wonderful, if the firm loses money was it worth it? In one report suggested the Prime Brokers had met and a strategy of an orderly exit, which meant few losses. However losses by Mr. Wang meant the strategy was null and void and the Prime Brokers were on their on. Goldman and Morgan Stanley acted first to limit losses.

Linking to dividend paying stocks, leverage is one of those double edged swords, it is possible to make more money, it is also possible to lose more money. If you buy dividend producing stocks, you are buying for the dividend and not the capital gain, although if the capital gain comes you welcome it, which tends to mean you are buying the stocks in a non leveraged position. While the price of the stock will move up and down, if you are more concerned with the ability to pay dividends, there will very few sleepless nights.

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

For generations goods have gone from Asia up the Red Sea and then transported by caravans to Cario and then to ship to Europe. For a long time the destination in Europe was Venice, but the distribution point has changed over the years. In 1869, the Suez Canal was open for boat traffic because carrying bulk goods on boat is less expensive than on land.

In the last 20 years, the ability to hold larger ships has made the world’s just in time delivery system dependent on the Suez Canal. Most of us do not pay attention, until something happens and in the last week of March, the world pay attention to a large ship blocking the canal. No one knows exactly why the ship went off course, there was a blame on winds, but 50 miles a hour winds are not uncommon.

In an article by Jon Gambrell and Samy Magdy of the Associated Press, The Japanese owner of a skyscraper sized ship carrying hundreds of containers ran aground and was stuck, The ship is so large it can only be loaded and unload at 5 ports in the world because of the need for specialized cranes. Thus the solution led by a Dutch company called Boskalis, was to dredge or dig around the ship and then have tug boats push and pull the boat to the middle of the canal.

The ship’s crew is from India, the ship is registered in Panama, the operator is from Taiwan and the owner is Japanese, welcome to the world on shipping. All ships are tracked by GPS and data firm Refinitiv shared an analysis more than 300 ships remained on the way as opposed to going around Africa to get to or come from Europe. Many of those ships are carrying oil and gas from Europe to China.

The reason why the delay is important is cargo will be delayed over the new few weeks, if you think about shopping seasons, they would be carrying the summer clothes. Stores need the supplies at the start of summer, not in the middle of the season.

The shipping journal Lloyd’s List estimates every day the Suez Canal is closed it disrupts $9 billion worth of goods that should be passing through the waterway. A quarter of the ships are container ships, the others carry bulk commodities.

Linking to dividend paying stocks, all companies embrace just in time shipping for very good reasons, keeps cost of inventory down and profits higher. The system works till it does not, but the alternative to stock greater inventory is more expensive. The blockage of the Suez Canal, puts what systems do the companies you invest in use for just in time deliveries?

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