Most of us do not really know much about the mechanics of shipping, expect for many goods that used to come from China are now coming from Southeast Asia including Vietnam and India. The goods which come from very large container ships are designed to have a reasonably seamless flow from the manufacturer to the shipping container to the ship to ports to rail and trucks to a distribution center to the store and eventually the consumer. There are regulations along the way and one regulation being looked at is duty-free packages.

In an article by Kevin Freking of the Associated Press, under current US law, most imports valued at less than $800 enter duty free as long as they are packaged and addressed to individual buyers. The rule has many benefits. It speeds up the pace of commerce and lowers the cost for consumers. It allows for US Customs and Border Protection to focus its resources on bigger ticket items that generate more tariff revenue for the federal government.

In 2016, the dollar requirement was changed from $200 to $800 and the volume has soared. The volume has increased from 220 million packages to 720 million in 2021 and 685 million in 2022. From a regulatory point of view, no one really knows what is in the packages. almost 2 million packages a day and 60% coming from China.

Last year, the Biden administration wanted to lower the number, but US business groups and key Republican members of Congress said no and would not support it.

If you know someone that shops with retailers Temu and Shein which ship directly to consumers, the retailers ship directly to consumers and avoid the duty free tax. Meanwhile the Gap and H&M with different business models paid $700 million and $205 million in tariffs in 2022.

The reason why business groups are against lowering the amount, is to import the goods they would have to hire a customs broker to process their shipments. Given the low amounts, lowering the amount would not collect a great deal of tax money, but cause considerable extra work.

Linking to dividend paying stocks, everyone wants a relatively smooth flow of goods which is the goal. Wat is the appropriate levels to raise revenues and allow for the flow. There is no one answer, however most investors believe the larger companies have the capability to implement whatever the government determines is the correct number for their needs. As investors in large companies we expect, they can adjust to government regulations, if you find the large companies are leading the fight against regulations it is good time to find alternatives.

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

In every layoff, everyone hopes it is the other person, because everyone was hired for a particular reason and the hiring people believed the person would make a significant contribution to the company. However, when companies announce layoffs, it is a numbers game and often times good people are let go. It is the hope of the company letting people go, that the people laid off will go to other firms and make a contribution and maybe the new firm allows the person to shine more than they were at the old company. Sometimes it actually happens.

In an article by Alexandra Olson of the Associated Press, the thousands of people who were laid off by tech companies are being courted by hotel chains, retailers, investment firms, railway companies and even the IRS. All those sectors are hiring software engineers, data scientists, and cybersecurity specialists despite the layoffs of Big Tech.

The biggest employer is the US government because they need to strengthen cybersecurity defences, and modernize the way they deliver benefits and collect taxes. The federal government is aiming to hire 22,000 workers in 2023.

According to CompTIA, a tech trade group, federal, state and local governments tech postings soared 48% in the first quarter in 2023 compared to the same period in 2022. In the tech industry postings are down 33%.

Why? according to Ray Dalio, in a talk at Goldman Sachs, if you think before the Apple iphone, nobody had a mobile selling strategy. Since the invention, if a company does not have a mobile phone strategy it is not likely in business. (Mr. Dalio’s Bridgewater Associates spends a great deal of time determining what inventions or innovations will add 3% plus market share to companies). (a number of years ago, working with institutional clients, they dealt with everyone but at the top of the list the allocation could go slightly higher, it was a fight to ensure an extra 3% market share).

The unemployment rate for tech talent remains tight, with an unemployment rate of 2%.

Abbott Labs, the Chicago based global health company is expecting to hire hundreds of software engineers, data architects and cybersecurity analysts over the next few years.

Jonathan Johnson, CEO of retailer Overstock has seen a 20% increase in applications for job openings.

The tech workers who were working in big tech are now looking at the government because although no one strikes in rich, stable jobs, a pension and the possibility of working on many different types of issues are drivers to apply.

Hilton hotels saw a 152% increase in applications to internships and full time jobs from tech majors on Handshake (a leading career site for college students and graduates) compared to last year.

Linking to dividend paying stocks, we all know in the knowledge based economy some skills are in higher demand than others, including tech workers. Determining where they are going to work can help see what companies are meeting the expectations of customers better. If expectations are met, customers tend to be repeat customers and that leads to continuing making profits to pay dividends. Those industries which are not high profile, must play catch up, but knowing the economy moves in cycles, they have an opportunity. Do the companies you have invested in, are they seen as a great place to work and good talent goes there?

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

If you know anything about Israel it is likely you are aware the landscape is primarily desert. The country has made great strides to move water from it normally flows to where the people are to allow for food and water distribution. Being a desert, it lacks the water for hydropower, the winds may blow but they do not blow enough for wind power, being a desert, it lacks vast tracks of land to build a traditional land-intensive photovoltaic power plants so what can it do? The solution is simple.

In an article by Ari Rabinovitch of Reuters, the government of Israel is passing a low to require all new non-residential buildings to have rooftop solar panels. Think about California and solar panels on new housing. Israel has a history of using sun-powered water heaters and they dominate rooftop landscape in cities, without them the country would need to produce 8% more electricity.

Ron Eifer, who heads the Energy Ministry’s sustainable energy division, says you cannot cover the entire Negev in solar panels because of electricity will be lost over long distances from generation to usage in the cities. However, a simple solution is to use rooftops and Mr. Eifer believes eventually 60% of the rooftops will be dual use – roofing and to generate power.

Israel’s government incentives includes permit exemptions, tax benefits and small producers are paid a premium for electricity.

Linking to dividend paying stocks, all governments use regulations to influence behavior and soon the behavior becomes the normal. In theory and sometimes in practice, sometimes the normal means new industries and employment opportunities open up. For example, someone has to make the solar panels or import them, someone has to put them up and someone has to connect the panels to the grid to ensure the electricity is used. All of those actions start with time delays, but as time goes on, they generate employment and opportunities to the economy and in the end it is the correct thing to do. Some of the actions will translate in larger companies generating revenue to make profits along the way and it is up to you to do your homework to see which company is best to invest in.

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

Every industry has a convention, and many have multiple conventions, but one convention tends to be more important than others. During the convention one result is multiple deals are signed or they are negotiated for months before, but they are signed at the convention. In the airline industry, the world’s largest air show is the Paris Airshow and/or Farnborough in Britain.

In an article by Tim Hepher and Joanna Plucinska of Reuters, the two biggest airlines in India – Air India and IndiGo signed multibillion dollar deals for passenger planes to be provided by Airbus and Boeing. The 2 companies dominate the marketplace or are essentially a duopoly in supplying civilian passenger planes. Air India signed a deal for 500 planes and IndiGo signed a deal for 470 planes. This should tell you something about the market in India. It is the world’s fastest growing aviation market. The list price of 500 planes is about $70 billion, but companies receive discounts for large orders.

Boeing and Airbus are similar to the automakers, they do not make all the parts but supplier companies send them the parts and the companies put together a plane. For example what kind of engine is in the plane? Signing contracts for 1,000 planes means the factories will be busy for the next few years, which means the supplier companies will be busy for the next few years.

The other aspect of the show is defense suppliers and deals were signed for example France’s Thales will supply 13 long range air surveillance radars.

Linking to dividend paying stocks, for your investments part of your homework is to determine where the most important convention is held that public companies announce deals. Then you can either attend or watch the results of the convention. If the results are optimistic for your investments, you can continue to hold and see the results translate to profits and the ability to pay dividends. If the results from the most important convention are downbeat, then you maybe to buy more shares at lower prices in the anticipation of good results in the future or find other alternatives.

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

If you have read books, you likely have read Sherlock Holmes or Dickens stories, because they are both well written and very popular. If you think about the air quality in London, England it was described as foggy, but it reality it was a mixture of coal burning ashes and fog, at the time England used coal to burn for heat. The ashes went up the chimney into the atmosphere and caused air pollution. Cities such as LA and Beijing because of their bowl structures or due to the mountains around the city also face atmosphere problems as the pollution is caught in the bowl till the wind blows the dirty air away. As a society we have been living with coal for a long time and for a long time it was less expensive to burn coal to generate electricity. Politicians may say we all should go green, but then reality has a way of reaching up its head.

In an article by Kate Abnett of Reuters, the European Union countries have the strongest desire to go green and not burn coal or fossil fuels for energy consumption. It is a noble goal and EU energy ministers meet of a regular basis in Luxembourg to reduce coal consumption.

At the meeting, the issue of Poland came forth. Poland generates 70% of its power from coal. Poland is beside Ukraine and the EU is helping Ukraine. The EU used to have 40% of its power generation from gas coming from Russia, it has been replaced with gas coming from the US and Norway. After stopping oil and gas from Russia, electric bills for individual and business users went up, since then they have dropped a bit, but as much as the energy ministers want to have no coal, there is political reality and the targets to stop using coal will be extended.

Linking to dividend paying stocks, politicians often times have aspirational goals and that is a very good thing, however to move from what exists to what could be better takes time. If you own shares in energy companies, although they are dependent on supply and demand, the reality is no government is going to stop the oil and gas industry from doing their jobs to maintain energy security. As a shareholder that is good to remember, although some of the subsidies that have grown up with the industry maybe slowed in the future, till reality says bring them back. An example is the Oakland A’s major league baseball team is moving to Las Vegas, they need to build a new stadium and government subsidies were asked for, debated and eventually agreed to.

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

Every country has a particular festival when their citizens spend money to enhance the festival. It can be related to birthday celebrations of the country or you can go to the card shop to see what future celebrations are coming up. When analysts examine the country one of the things they look for is a bump in the sales during festivals. In countries such as the US, consumer shopping accounts for 2/3s of the GDP, other countries try for a consumer society, but most are not near the US totals.

Economies evolve from agriculture based to manufacturing to services and as they evolve consumer spending becomes more important. One country where you can see the trends in the last 30 years is China. The country was agarin for centuries, then manufacturing moved into China and now as manufacturing moves to other countries, China is supporting the consumer society or how is it going?

In an article from the Associated Press, China had an online shopping festival known as 618. The festival runs from June 1 to June 18 or 618. The biggest retailers in China are JD.com and Alibaba as opposed to Amazon in the US. During the festival, Chinese e-commerce platforms offer discounts and incentives to consumers to buy stuff.

This year the festival results were weaker than pre pandemic levels. There were many reasons, but one reason is Chinese consumers have been price-conscious, looking for deals and trading down across most product categories.

Consumers bought cosmetics and luxury goods which had good sales because of the discounts.

Linking to dividend paying stocks, all industries have events or festivals where sales tend to be higher than normal. The issue for investors is to know what and where the events are held for the industry and the results. If the results are very good, it is a reason to continue to hold onto your investments, if the results are soft, perhaps it is time to look for alternatives.

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

If you have a Facebook account occasionally people post what they eat, which is a good thing, and one of the ways they were cooking it was many people bought an Instant Pot. The pot works well and the food is tasty, and people were creative in ways they were using the device as the devoted ones are called Potheads. The problem for the company called Instant Brands, during the pandemic sales jumped and Instant Pot became a best seller. After you have one, do you need anymore? If you have a kettle to borrow water, how often do you buy a new one?

In an article by Jesus Jimenez of the New York Times News Service, Instant Brands the maker of Instant Pot, Pyrex, Snapware, and CorningWare filed for Chapter 11 bankruptcy. The company went the Chapter 11 route rather than outright bankruptcy because it can access $132.5 million in funding and will restructure its business. Essentially the creditors will take less or equity in the company.

Ben Gadbois, President and CEO of Instant Brands said tightening of credit terms and higher interest rates impacted our liquidity levels and made our capital structure unsustainable.

Barbara Kahn, a marketing professor at Wharton School of Business, not the official reason for the restructuring is debt burden. It is common for companies dealing with a lull in sales to have debt burdens.

S&P Global, the credit rating and analytics corporation, downgraded Instant Brands rating because of lower consumer spending in the discretionary categories. Instant Brands sales were down 21.9% in the 1st quarter relative to the same quarter last year.

Linking to dividend paying stocks, debt can be a wonderful aspect to individual and corporate balance sheets, but if it is too much something will suffer. The issue for investors is when does debt become too much? Sometimes when sales increase dramatically, sometimes when the company buys another company at a high price and commodity prices turn downwards, there are those times as an investor you want to lighten your holdings or take profits and find alternatives as you monitor your investments.

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

If you pay attention to inside the beltway, the House Republicans have a committee on regulations, they want to take away as many as possible. The House Democrats believe regulations to stay because if you take them away, companies will and in the past move to the grey area. The grey area is where some of the processes are not quite illegal or can be charged with a violation, but pretty close. A number of years ago, people heard that baby formula from China was not healthy for babies and some of it was. Perhaps the companies that made baby formula sent out the message, we do not know, but it was not uncommon to hear regulations were stronger in the US than China. Regulations tend to go in cycles so maybe the pendulum will change.

In an article by Ana Swanson of the New York Times News Service, one of the regulations the US government is pushing is to penalize some items coming from China with heavier taxes or regulations, what is the reaction of companies in China? Some companies are moving their headquarters and some of their production facilities out of China.

In the global production of clothing, once it was in the southern US with many cities having large factories to make clothes, then it shifted to everything made in China. An example is Shein, a fast fashion app which people use to buy clothes. The company moved its headquarters from Nanjing, China to Singapore. The company has set up operations in Ireland and Indiana and lobbyists in Washington are calling in more American in nature.

TikTok is the most popular app in China and is available around the world. TikTok has set up operations in Singapore and Los Angeles.

Jinko Solar produces 1 in 10 or 10% of the solar panels installed globally. The company is headquartered in China, but it has set up a supply chain entirely outside China to serve the US market. The manufacturing facilities are in Florida, Malaysia and Vietnam.

Research by Altana, a supply chain technology company shows that since 2016, new regulations, custom enforcements action and trade policies that hurt Chinese exports to the US lead to setting up new subsidiaries outside of China, said Evan Smith the company’s CEO.

Linking to dividend paying stocks, all companies are dependent our supply chains and they evolve and have for centuries. If you think about the industrial revolution, the use of machines to drive down the costs of making fabrics and selling the fabrics to the former country which made them – India. With the advancement in robotics, perhaps fabrics can be made anywhere, we will see companies adapt. Some regulations will benefit the companies you have investments in, ensure that politicians do not throw out the baby with the bath water in a zeal to cut regulations.

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

During COVID pandemic, governments gave money to those citizens affected by the shutdowns, in general it was a good thing except for the fraud that was allowed to happen. One of the consequences was $4 trillion was put into the system, for many the money was a lifeline, for some it allowed consumer savings and spending higher. For the financial system, there is excess money in the system. What will the Federal Reserve do?

In an article written by Naomi Rovnick and Harry Robertson of Reuters, BNP Paribas estimates excess global liquidity has risen by $640 billion since the 3rd quarter of 2022 and is unsustainable by central banks as they do quantitative tightening.

BNP Paris says its base case is for global liquidity to fall 6% to 9% by end September and 7 and 11% by year-end.

The Federal Reserve in March loosened financial conditions with an emergency credit facility for cash starved banks, Japan’s central bank is buying government bonds to push money into the system, and Europe’s Central Bank is selling down the government bonds it holds at a relaxed pace.

Total global liquidity, a measure of cash and credit in the world economy has risen to almost $ 170 trillion in June, according to Crossborder Capital was $158 trillion in October.

The US Treasury is set to rebuild its general account by issuing $1 trillion or more of short-term bills, potentially at rates appealing from risker assets.

Linking to dividend paying stocks, the global money supply when there is excess capital tends to push stock markets higher because the money has to go somewhere. Eventually federal reserve banks print less money and the stock market has to move up and down based on more fundamental reasons. When the markets move on fundamental reasons, it is good to be a dividend investor because profitable companies that can pay dividends are worth more and as a long term investor you benefit.

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