If you are interested in how the Federal Reserve is doing and because they raise and lower interest rates to the banks, most people are interested, you maybe surprised they have the same concerns as average people. The Fed has access to greater information than the average person, but the Fed has the concerns of the average person.

In an article by Jeanna Smialek of the New York Times News Service, Federal Reserve officials wanted to remain flexible about the path for interest rates as they weighed a strong labor market and high inflation against the risks of the recent bank turmoil posed to the economy, Fed Reserve minutes showed.

Before the banks of Silcon Valley Bank and Signature Bank failing, most people of the Fed were interested in fighting inflation and were considering raising rates higher. After the meeting, participants wanted to retain flexibility in the system and were suggesting raising rates was almost done. The Fed will be watching data on credit and financial institutions willingness and ability to lend money.

Linking to dividend paying stocks, the interest rate is highly linked to investing in dividend paying stocks, if you can achieve a greater yield on the dividend plus the capital gain than interest rates money flows into dividend paying stocks. If the interest rate is higher, bonds guaranteed by the government is a good thing to own, then dividend owners discuss total returns and tax advantages for dividends over interest. Paying attention to the Fed is a good thing, but do not be surprised they likely have similar views as yourself.

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

Every government leader across the world talks about having internet access across their country to allow the citizens to do more from where they live. It is a noble idea, for those of us who are from a smaller town, we like it as a policy. For generations there has been a shift from the rural or country towards cities for people to work to make more money and have greater opportunity to move up in their fields. As a society we thought this was normal, however as work for more people became in the service industries, the reality of going to the office everyday seemed it could be challenged. If you could have good internet that is secure, you could work from anywhere including not at the office. It was more of a pipe dream for millions of commuters and then COVID happened. People and companies adapted to ensure home internet was available and secure. However, most companies pay rent on office space, why would they pay rent on office space and not see someone in that office space?

In an article by Mike Schneider of the Associated Press, people working from home became younger, more diverse, better educated and more likely to move during the worst part of the COVID 19 pandemic. According to the US Census Bureau, working from home went from 5.7% in 2019 to 17.9% in 2021.

The increase in homebased workers corresponded with a decline in drivers, carpoolers, transit riders and most other types of carpoolers.

The two industry groups most affected by working from home were information from 10.4% to 42%; finance, insurance and real estate from 10.8% to 38.4%.

In the tech-heavy San Francisco more than 1/3 of their labor force worked from their home in 2021.

Linking to dividend paying stocks, if you live in an urban environment, you will see large office buildings which bring in millions of dollars in rent. If you added the vacancy rates which is generally well published, and as those rates are high do you believe they will fall? Most real estate companies buy on credit and the rents pay the loans, plus extra. If the plus extra is not included, do you still want to town the shares in the companies which open the office building? Trends happen to all industries and when you define how your investment makes money, you can take the next step of should I hold, buy more or find alternatives?

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

In every economy around the world, there are some people who by virtue of their position should have a macro level understanding that most other people do not. Very often it is not the person, it is the job that intersects with trends that the organization needs to grasp and make money from. If the person can do that successfully, they are listened to when they speak for they have lived through various cycles and still made money. One of those jobs is the head of the biggest bank in the economy, in the case of the US it is Jamie Dimon at JPMorgan Chase. Besides being the biggest bank in terms of retail, in terms of Wall Street trading which means information on both the institutional side and individual side crosses his desk. Mr. Dimon is also Chair of the Business Roundtable (many of the larger companies who are represented are clients of his bank). This means when Mr. Dimon releases his annual message, many people will read and try to understand it.

In an article by Tatiana Bautzer of Reuters, Mr. Dimon released his annual message and the report was 43 pages long if you wish to read it, the report is on the JPMorgan Chase website.

In terms of the banking crisis which happened when the SVB went bankrupt and was sold to First Citizens Bank, Mr. Dimon believes the current crisis is not yet over and there will be repercussions in the future. This will include possible increase in recession and the bank will lend less money or lending to people who are 95% plus guaranteed to repay their loans. What happens is the loan officers have their ability to lend money chopped to fewer clients and the loan officers need to make a extremely good case to lending money. Similar to most jobs, when people have to guarantee, they become less prone to take possible risks or are risk adverse.

Mr. Dimon writes the risks were hiding in plain sight in terms of the Silicon Valley Bank’s interest rate exposure and level of uninsured deposits. Mr. Dimon does not believe the crisis is similar to the global financial crisis of 2008, because most banks around the world held some form of mortgage-backed securities in their portfolios and their values all went down.

Mr. Dimon as the top banker in the US played a role in helping First Republic with 11 large lenders gave a $30 billion lifeline.

Linking to dividend paying stocks, the theory is large corporations which make profits and can pay dividends, can and do employ multiple analysts including those who worked in the government to do risk analysis for them and their competitors. When Mr. Dimon says the risk was hiding in plain site, that tends to mean those with the best analysis could see it but could do nothing about it, including what will or would be the fallout. In the SVB, the government react reasonably quickly but still there was a large cost to the banks which had to pay increased insurance premiums. If hiding in plain site on looking back is the biggest risk, even with AI and big data on your side, there will fallout of risks. How much did the stock fall and did when it bounce back to normal? are those buying opportunities if you have done your homework?

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

If you are an average citizen, you will have heard and likely debated climate change. It is coming, can we use less fossil fuels in terms of cutting costs. If you have bought a new or newer vehicle that your older one, your gasoline mileage increased for the auto makers have to have increasing fleet mileage every year. In other words, you took some steps toward saving some fuel consumption. That is a good thing for you and the planet, if you have children or grandchildren, they thanked you for your continuing efforts. In the last 15 years, one of the fossil fuel which has been under the greatest potential to change is coal. There are coal deposits and for generations the coal was used to generate electricity, The problem with coal is the byproduct of using it is the fumes go up into the atmosphere and even though the scrubbers in the smoke stack removes some particulars, the smoke is not clean. Another problem for the coal companies was the alternatives such as solar came down in price and electrical utilities switched to less expensive alternatives of natural gas and solar.

In an article by Sibi Arasu of the Associated Press, despite coal being the biggest source of planet-warming gases, the coal fleet grew by 19.5 gigawatts in 2022. New coal plants were added in 14 countries with China leading the way. The other countries were India, Indonesia, Turkey, and Zimbabwe according to the Global Energy Monitor, a organization that tracks a variety of energy projects around the globe.

There are 2,500 coal plants around the world, coal accounts for about one third of the total amount of energy installation globally.

Linking to dividend paying stocks, as an investor one of the elements you pay attention to is the infrastructure of the industry. Some industries have more flexible infrastructure and technically it can and is being done anywhere where the people are. Other industries have built out infrastructure which means that it will take longer to disrupt the industry. For example, in terms of building a ship, there are only a few shipyards which can do the job. The issue is always how good are they receiving new contracts to build more ships. When you are investing look at the infrastructure that has to be disrupted before the company does not make profits.

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

Most of us live in a bubble and that is ok, however it also means your views are shaped by the bubble and when they are shaped by a bubble they will be distorted. Some small ways to look outside the bubble is to read, to be involved with community groups which try to do good in the community. Often times the community groups can lead to connections and getting to know more people who live in bubbles of their own. An important reason is to look outside the bubble is to look at back issues of Fortune 500, which companies were on the list when you first started investing? which companies are on the list now? notice some changes, did you change your investing to match the new lists?

If you are reading, one book which was read recently was Non Obvious – Megatrends by Rohit Bhargava published by Ideal Press Publishing, 2020. There are many views of what will be the trends of next year? event next quarter? and just because you know which trend there will be, it is harder to predict what company will take advantage of the trend to make money and pay dividends. However you should try and Mr. Bhargava notes the 5 mindsets of non-obvious thinkers are Be Observant – see what others miss; Be Fickle – learn to move on; Be Elegant – craft beautiful ideas; Be Thoughtful – take time to think and Be Curious – always ask why?

When you have embrace some trends – you can Engage Your Customers – inspire more sales and greater customer loyalty; Evolve Your Strategy – embrace disruption and prepare for the future; Develop Your Career – build your personal brand and propel your reputation; Strengthen Your Culture – improve your engagement and recruiting and Share Your Story – make your marketing and sales messages more relevant.

One theme will be Big Data and how it is used. An example for the book is Chinese insurance giant Ping An. In China there are very few landline phones or the country uses cellphones. Ping An spent at least 3 years perfecting its AI based Superfast Onsite Investigation claims system. If a driver is involved in an accident, they take their app from the phone and scan the car, the app matches the damage against a database of 25 million parts used in 60,000 different makes and models of cars sold in China. The system calculates the cost of parts and labor to fix that damage in more than 140,000 garages across China. The app includes a facial recognition process that reads consumer expressions to detect possible lying and potentially fraudulent claims. In its first year of operation, the system helped settle 7 million claims and saved the company over $750 million.

For the customer the benefits include: the decision process is decreased in time; which garage the customer takes the vehicle to will be in the price range of the app; and if garages are more than the quote, the company could say we do not deal with them.

Linking to dividend paying stocks, when you own them it is entirely possible to only have to review your portfolio every month or quarter or 6 months because you want to know are the companies profitable and are they still paying a dividend and is the dividend in my account? if the answer is yes, then you do not have to do much tinkering with your portfolio. However, if you read the story about Ping An and asked does my insurance company do that? if the answer is yes, then you have a good idea you should stay with it. If no, then why not? Could the insurance company use the system of Ping An using your country’s data and gain market share? When the internet was started, Microsoft asked in commercials where do you what to go? or what are your curious about? hopefully there is always something you are curious about.

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

If you watch the Super Bowl, at the end of the game, some of the players are paid to say they are going to Disney or Walt Disney World in Florida. If you go back into history, Disneyland theme park was set in Anaheim, California but soon outgrew the space it was located in. Walt Disney looked at the hotels and other attractions that settled around the theme park, which he did not control or own and said never again. When Disney became more successful, Walt went looking for a space somewhere in the US and settled on the Orlando area. Walt Disney ensured the company bought more land that they needed, truthfully more land than they would ever need, they have 25,000 acres. The extra land, most of it swamp land was put into an entity called Reedy Creek Improvement District after the creek which went through the property. The Reedy Creek Improvement District had all the rights of a city and its bonds are backed by the full credit of the Disney Corporation.

Disney is one of those master marketing machines which is designed to cater to any group with the money to spend at Disney. It has enough attractions to cater to all faiths and ethic nationalities with very few incidents that the public knows about. There have been books and videos about the Disney customer service levels and the theme park is open every day of the year. If you have not been to Disney, it is worthwhile as a visitor or to learn about.

Disney opened the park to the LGBT groups with many having duel incomes, no kids or money to spend, the days were successful.

Florida Governor Ron DeSantis did not like Disney which is the largest employer in Florida and is the primary reason why the Orlando area and airport draw millions of tourists to Florida every year. The Governor decided to take control of the Reedy Creek Improvement Area which was set up in the 1960’s and controls the land decisions for the future operations of Walt Disney World. Similar to corporate organizations, Reedy Creek Improvement Area has a Board of Directors and according to the bylaws has an election every year. Governor DeSantis picked some people to be on the Board. Disney did not like it and at their last meeting, which was held in public, the old Board passed amendments to give control of Reedy Creek Improvement Area undeveloped lands to Disney and retain the roads, fire department and garbage department. For a long time, Disney was doing these services, but they were not what they really wanted to do – the services are public services. At the meeting, Reedy Creek gave Disney the control of the land for 30 years plus 21 years after the death of the grandson of the present King of England.

As they say in England, Governor DeSantis was not amused and sent a letter to his Inspector General to investigate the changes. Disney called the Governor acting in a manner which was not pro-business and noted at its AGM, over the next decade Disney expects to spend $17 billion in the Reedy Creek Improvement District creating 13,000 jobs.

Linking to dividend paying stocks, every large organization has to work with the government and giving the role Walt Disney World has in the economy, it is rare for the government not to cooperate. too get along and not be interested in photo ops than fighting the company. Normally an announcement by a company to create thousands of jobs would get the interest of the Governor. Profitable businesses tend to outlast politicians who tilt at windmills.

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

If you love to eat fresh bread invariably you are dependent on the grain traders and in the world of grain trading 4 firms dominate the market by controlling 70-90% of the market. The 4 companies are ADM or Archer Daniels Midland, Bunge and Cargill in the US and the Netherlands company Louis Dreyfus. In addition to the private sector companies, the countries which grow the wheat have government trading companies which do country to country trading. When one of the big 4 say they are doing something or not doing something in Russia, it is important to markets.

In an article by Olga Popova and Karl Plume, Cargill said it will take a further step back from the Russian market by stopping handling Russian grain from its export terminal in July, although its shipping unit will continue to carry grain from Russian ports.

Cargill owns a stake in the grain terminal in the Black Sea port of Novorossiysk, said as grain export related challenges continue to mount, Cargill will stop elevating (lifting of grain into export vehicles) Russian grain after the completion of the 2022-23 season.

Russian Agricultural Minister said, the cessation of its export activities on the Russian market will not affect the volume of domestic grain shipments aboard. The company’s grain export assets will continue to operate regardless of who manages them.

Linking to dividend paying stocks, even in highly monopolized markets there will be alternatives, although most will not be viable under normal circumstances. In the case of Russia, the government will subsidize the movement of grain, but generally governments will not offer subsidies to competitors. Once things return to normal, it will depend on how the company did and consumers reactions to the monopoly companies. The important aspect to remember is even though your company makes a profit and can pay a dividend there are alternatives in the marketplace, as we move to Annual Meeting time ask about the alternatives in your industry.

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

If you are an investor, you tend to believe technology and continued improvements will make the world a better place, otherwise why invest money? Sometimes governments get ahead of the technology and sometimes the technology gets ahead of government rules and regulations. In Europe, the politicians in the European Union believe climate change is the world’s most important issue and want to reduce the amount of carbon Europe releases in the atmosphere.

In an article by Kate Abnett of Reuters, transport accounts for nearly a quarter of EU emissions and the EU gave final approval to end sales of new CO2 emitting cars in 2035.

This means cars sold in Europe can either be electric or run on e-fuels. This type of fuel is considered carbon neutral because they are made using captured CO2 emissions. Although at the moment, e-fuels are not produced at scale.

Porsche and Ferrari are among the supporters of e-fuels, while VW, Mercedes-Benz and Ford favor battery electric vehicles.

Linking to dividend paying stocks, most of these companies are similar to ocean liners in the sense they need a large space to make turns. There will be divisions which are very nimble and quick to decision making, but due to the infrastructure the company has built up, it is very hard to turn on a dime. The companies can believe in the intent of the government legislation, the company can want to follow the legislation but often times it has millions of dollars in sunk costs dealing with the present system. It takes time and government subsidies to change. If the government wants change and provides the correct incentives, the company can more easily embrace the changes.

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

After WW II was over and peace was in the land, there were many countries around the world that needed to be rebuilt. In Europe the rebuilding was called the Marshall Plan, but as the country with a large economy and not needing basic infrastructure to be built, the US and International Monetary Fund (IMF) and later the World Bank came together to lend money to countries. Ideally the premise was to stay within the free market economy. Eventually the USSR had a fund for those countries that were communist. For generations, the US and USSR were the bankers for the world, when the USSR broke up and China began to government surpluses, it rose to be the banker to other countries. In China, the plan is called the Silk Road or the Belt and Road Initiative.

In an article by Keith Bradsher of the New York Times News Service, China has emerged to provide emergency loans to debt ridden countries. New data show that China is providing ever more emergency loans to countries including Turkey, Argentina and Sir Lanka. The countries are either geopolitical significance, or have lots of natural resources.

While China is not equal to the IMF, in recent years, China has provided $240 billion in financing. In 2021, China gave $40.5 billion. The data is provided by AidData, a research institute at William and Mary University in Willamsburg, Virgina.

The IMF lent $68.6 billion in 2021.

China’s money has paid for construction of highways, bridges, hydroelectric dams and other infrastructure. US officials have accused China of engaging in debt trap diplomacy. The country is saddled with debt, but the work is carried out by Chinese companies often using Chinese engineers, Chinese workers and Chinese equipment.

China typically charges higher rates than the IMF at 4% versus 1 to 2% for financially distress countries, but both charge about the same for middle income countries at 4.8%.

Linking to dividend paying stocks, similar to businesses, when there is a gap in the market someone will cover it for both political and economic gains. Sometimes the larger profitable companies do not want the business because of economic risk factors or in the private sector companies can determine who they want as customers or do not want. When there is a gap, a company will emerge to close the gap. When there is a concern is does the second-tier company begin to take business from the top tier company. In the world of digital finance, the distinction maybe less than previous years. For your companies that you invest in, who and who is not the target market?

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