Confounding and confusing events 7/25/22
I have commented several times about China buying Russian oil and gas, and now we see being reported that the Chinese are selling goods necessary for the Russian military to keep fighting in the Ukraine, including microchips and other electronic components, along with raw materials used in military applications. The Chinese have clearly picked a side, and are not, at this juncture, focused particularly on the impact it may have on them long-term, both with regard to having a potential cross border partner who was interested in reestablishing its empire, as well as what impact it may have on overall trade with the west.
Some commentators are calling for President Biden to declare victory and end the tariffs with China. We have done this before; if you are old enough you can think back to Nixon declaring victory in Vietnam and withdrawing. President Trump did that in Afghanistan as well. It is not a bad idea across the board (ending tariffs) and will help pull down inflation more than any other single act.
The Foundation for Economic Education authored a recent article headlined “Trade Wars Lead to Shooting Wars and Depressions”. This is certainly something we learned in the 1930’s with the Hoot-Smalley Tariffs, but unfortunately, our leaders today seem to lack some critical education in history.
The Atlantic recently published an article entitled “Seriously, What is Making all These Mysterious Space Signals?” The article discusses something called fast radio bursts (“FRB”), and how scientists have struggled to detect them, measure them, and attempt to determine what they mean. In other words, the who, where and how for these flashes of radio signals that reach Earth from the depths of space. Apparently, these are intense and fleeting, come from all directions in the night sky and sneak up on telescopes, as well as being primarily one-offs, never to be seen again. Only one has come from our own Milky Way, while most are from distant galaxies. A recent discovery of radio waves lasting one-thousand times longer than normal, in this case, three whole seconds, has raised significant interest and as astronomer Sarah Burke-Spolaor indicated “In FRB world, this is certainly big news”. This certainly is big news, at least to me, and should be to the rest of us as we need to keep exploring and finding out what – or who - is really out there.
I am reading John Boehner’s book “On the House” and there are any number of interesting excerpts in the book, but I found one on page 151 & 152 which I think is very compelling. He precedes it with commentary on the severity of the economic crisis of 2008, the steps being taken by President Bush, Ben Bernanke and Hank Paulson (Republican appointees) in seeking a $700 billion bail-out. He notes that Speaker Pelosi had the numbers to pass the bill, so did Harry Reed and Mitch McConnell, and indicates it was then up to him and I quote “these guys had no clue what kind of clown car I was trying to drive on the Republican side of the house”. This is a very honest statement that is accurate and continued through the rest of Mr. Boehner’s time in Congress and continues today primarily through the Freedom Caucus. Boehner notes that he was theoretically opposed to this, but in looking at two well respected government officials who were Republicans, he realized the severity of the crisis, and that failing to act could very well result in a depression, and potentially the collapse of our banking system. He worked to solve the problem.
I would also note that Mr. Boehner, and I agree with his analysis, felt that the hard-core right and left wingers are the primary problem in Congress, as no party in the near term will ever get a sufficient majority to act, if you will, unilaterally, so that means you need to get back to compromise and rational thinking.
The Secret Service deletion of transmissions are now the subject of a criminal probe, as they should be.
Canada joined the US in challenging Mexico’s energy policies. The Parties are now acting in their own best interest economically first, then politically. Not the Trump way.
Amazon announced the acquisition of a Primary Care provider, One Medical, for the hefty price of $3.9 billion. This should compliment nicely it’s prescription meds and other medical supply business. The question for the rest of us – will this transaction increase the quality of care and reduce the cost? Stay tuned.
There are many reports of the housing market chilling, as mortgage rates rise and prices go up from pressure of investors, not homeowners. It seems that a house purchased by the latter will enter the rental market. These investors can get good rental rates, use little debt, and with depreciation likely get a rate of return and cash flow that exceeds a turbulent market and savings rates.
The Ukraine and Russia reached a grain deal brokered by Turkey’s President. Then the Russians attacked the Port of Embarkation. Nice work Vlad.
Bill Owens is a former member of Congress representing the New York 21st, a partner in Stafford, Owens, Piller, Murnane, Kelleher and Trombley in Plattsburgh, NY and a Strategic Advisor at Dentons to Washington, DC.
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