UK windfall profits tax on energy companies. Don’t say with our crew it couldn’t happen here (and make things even worse, of course)
3 Likes
Which is to say, I’m not sure how much blame can be passed around on this one, besides the manufacturer for not maintaining safety standards in their factory in the first place.
After-the-fact, agree that there isn’t some switch that gets flipped where foreign manufacturers have excess capacity lying around to share, and local manufacturers can’t instantly fix the underlying problems to meet safety (and we certainly shouldn’t waive safety requirements).
The real blame has to trace back to how the factory situation got so bad in the first place without being noticed.
The facility doesn’t get that bad overnight – and that appears to speak to a lack of consistent and regular safety oversight that would have caught incremental deterioration of standards earlier when they could be addressed without a longer duration shutdown.
4 Likes
it’s almost like having gone for nearly 2 decades around the turn of the century and not building any new gas refineries in the US might eventually cause a problem? Nothing like an election to motivate some change in bad policy…
2 Likes
Really? Seriously? Gas prices arent high because of a shortage of gas, they’re high because of the price of oil. It doesnt matter if there are 2 refineries or 2,000 refineries, they’re all going to be refining the same high priced oil.
The only thing that will have a tangible effect on gas prices is [significantly] more oil production. Or returning Russian oil to the market.
1 Like
Considering the fact that they bungled the determination for months, no, they didn’t need to act immediately once they finally got around to it. They also didn’t need to take months to figure out how to alleviate a critical shortage the helped create that everyone else knew how to fix immediately (and we knew those people screaming from the rooftops to allow European imports were right because that exactly what they did 4 months too late).
1 Like
Did you forget my initial comment? Sure they may have bungled the whole process. But surely you cant be suggesting that after determining that the factory was selling potentially contaminated infant formula, they should’ve just quietly [and intentionally] sat on that info for weeks or months, and let millions of babies continue consuming the bad product? That’s simply not how recalls work.
And all importing European formula 4 months ago would’ve accomplished is creating an equal shortage of formula in Europe (in other words, Europe wouldn’t have facilitated it). No, I have as much faith in these dolts being proactive as you do, but it’s also not unreasonable to consider that this might’ve been the earliest they would’ve procured any imported product regardless.
2 Likes
Bull case for oil - more or less, high energy prices cause inflation but how can the Fed fight that? Higher interest rates just destroy demand, but they can’t print commodities. Probably overstating the case, but this hedge fund guy makes a reasonable point that the democracies could easily revert to “stimulus” or other subsidies to blunt the impact on voters of high gas prices, high heating costs in the winter, etc, and like anything where the government pays for something and doesn’t care about price, demand increases and prices likewise (think college aid, healthcare, etc).
1 Like
The “negative wealth effect” will soon be evident here in Silicon Valley. And that will affect the whole state of California, which is extremely dependent on income tax on large incomes. California does not have a special tax rate for capital gains but treats them as ordinary income. The state has been running a huge surplus but, of course, the Democrats in charge have not lowered tax rates.
1 Like
If we go into a recession the Fed will lower rates. If they continue to raise them, we’ll default on the debt and damage the economy. – I’m curious if you guys think the Fed will hold their ground on raising rates, or if they’ll back off in 8 or 9 months.
2 Likes
Stagflation
By Mohamed A. El-Erian
In addition to causing widespread death and destruction, and displacing millions of people, the Ukraine war continues to stoke strong stagflationary winds throughout the global economy.
Right now it is difficult to obtain a clear picture because ALL players, and that includes the Fed, are making decisions in anticipation of the fall elections. They are too close to enable us to have a clear view of the way forward.
Immediately after those elections, commencing early in November, we will enter an interval of time when the potentates will be free to show their hands . . . . at least for a short while until 2024 election considerations consume them.
1 Like
Food crises. A list of banned exports, which keeps getting longer.
Meanwhile, it looks like Pakistan is next on the list of political uncertainty and violence. The police were “heavily shelling” the protestors - sounds like Ukraine, but I guess these days “mostly peaceful” is more dangerous than it used to be.
2 Likes
This is more macro econ and stocks, but bears on inflation as well. Their prediction - volatility in the markets and stagflation.
the US economy will enter a period of stagflation something like the late 1970s. At some point, the United States Treasury will find itself unable to borrow the equivalent of 10% of GDP per year, at least not at negative real interest rates. As long as investors are willing to pay the Treasury to hold their money for them, the US government can sustain arbitrarily large deficits. That is the brunt of so-called Modern Monetary Theory. But the Herb Stein principle applies: Whatever can’t go on forever, won’t.
2 Likes
But I’m sure they’ve been taking all of these surplus tax receipts and putting them in a rainy day fund (or, for Algore fans, a L-O-C-K-B-O-X). Com’on, don’t pretend you don’t hear him dragging it out.
I know the California government is ultra-responsible (or, for Mormon Republican fans, Severely-Responsible) because they’ve been warned about the ongoing drought and they have tightly curtailed water usage for over a year, ensuring water for children, the elderly, crops, and emergencies. They certainly would not let Californians, Angelenos in particular, waste water on lawns and pools. Well, I presume they have been responsible because they are so quick to tell other people about their responsibilities.
3 Likes
Why are you saying this sarcastically?
I heard a rumor about gasoline prices dropped a few pennies. Not true!
I’m going along with idea that California gasoline prices are pretty much “out of sight”. Not comparable for comparison with any other state. Truly unbelievable, my experience today.
My car was pretty empty so I hadn’t filled it up for sometime. $6.29 such a shocker, and first time over the sky, $105.50. Don’t think it’s happened before.
Yes I do need premium gasoline, but this simply “made my day” in a bad way. 
4 Likes
I’m thinking it’ll be closer to 11 - 14 months.
2 Likes
Dude or dudette, go for something light on your first date - a movie is a semi-safe bet. 
Brent crude, on the NYMEX, has broken above $120.