Looking Backwards …
LB #1
Competition is a good thing, it brings out the best in us, but what happens if the best isn’t in us anymore. What if others are simply much much better. That is the predicament American businesses are finding themselves in as we are trying to onshore manufacturing led by Joe Biden and Don Trump. Herein lies the problem. We can’t compete. Liz Essley White writes for the Wall Street Journal, “The generic drug business has become a hostile environment for American companies. Prices for the often critical medicines have dropped so low that it has become difficult for U.S. manufacturers to compete with companies overseas. One after another, generic-drug makers have gone bankrupt or moved their operations overseas or cut the number of products they offer. The number of facilities making generic drugs in their final form in the U.S. has dropped by roughly 20% since 2018, to 243, according to federal data…Today some crucial generic drugs now sell for $2 or less a pill or injection. India is now the No. 1 supplier of solid-form generic drugs to U.S. patients, according to the nonprofit U.S. Pharmacopeia. When it comes to making drugs, Asian countries usually have a 40% to 60% lower cost structure than Western nations, University of Minnesota economist Stephen Schondelmeyer told Congress earlier this year. Drug shortages have become common. Today, 300 medicines are in short supply, according to the American Society of Health-System Pharmacists.”
She was writing about amoxicillin and how after the patent on the drug ran out in 2002 the generic manufacturers simply moved their production facilities overseas and voila. American businesses couldn’t compete on what became a commodity. We wrote about this in March regarding China controlling 2/3 of prescription medicine input materials, but now we are also seeing that other countries control production. This rapidly aging and overprescribed country is dependent on other countries for its health care now. That is a very large problem.
LB#2
As America is promised that AI and robots will takeover the country the question often turns to how will people survive without a job. One idea that has been floated around is universal basic income or as I like to call it a check for doing nothing. There is one problem. That dog don’t hunt. ZeroHedge writes about a new study in which they prove what everyone already knows. “According to the 3,000-participant, three-year study from the National Bureau of Economic Research, giving people $1,000 per month increased leisure time, as recipients spent less time on sleeping, child care, community engagement, caring for others, and self-improvement.
The study also found that recipients’ income, not including the free money, reduced their incomes significantly, as “for every one dollar received, total household income excluding the transfers fell by at least 21 cents, and total individual income fell by at least 12 cents.”
“The takeaway from the best study done so far about UBI in the United States is that handing out money isn’t the solution to all our problems,” Daniel Di Martino, a economics researcher and graduate fellow at the Manhattan Institute, told The Center Square. “In fact, sometimes it makes things worse.”
This should be obvious, but in a world of buying votes through handouts which we term democracy it can’t be anything but self-evident. We have become a society that is so allergic to hard work it is embarrassing. We don’t want to shop, we have people do it for us, they even come into your house and put the groceries in your refrigerator for you. The average American can’t be bothered to ease themselves on their davenports and pry themselves away from the NCIS Davenport to see if they have a new bag of cheese puffs. Americans want to have self-driving because the thought of actually having to pay attention to the road and not your dopamine injecting phone for a commute actually gives them headaches and is so unfair. Why can’t we just teleport, why do I have to actually drive? Life isn’t fair, you little oompah loompahs. Deal with it. Get out of the basement and go get some sun, you can use a freckle or two.
LB #3
We have watched some pretty dramatic uprisings around the world as there was the storming of the presidential palace in Sri Lanka and the European farmer protests were a crap shoot, literally. However I haven’t seen what is happening yet in Bangladesh. This from ZeroHedge, “Weeks-long protests in Bangladesh led by students have descended into increasing violence amid severe economic woes and a new controversial law widely seen as unfairly rewarding supporters of Prime Minister Sheikh Hasina’s Awami League party with lucrative government jobs.
Since early June, campus-based protests have called for a complete shutdown of the country until the new policy is repealed. A High Court ruling at the start of the summer came down in favor of a quota system which secures 30% of government jobs for family members of veterans who fought in Bangladesh’s 1971 war of independence from Pakistan. Authorities have also escalated, as of Saturday allowing security forces to use live-fire to put down protests:
Police imposed a strict curfew with a “shoot-on-sight” order across Bangladesh as military forces patrolled parts of the capital Saturday after scores were killed and hundreds injured in clashes over the allocation of civil service jobs.
The curfew began at midnight and was relaxed from noon to 2 p.m. for people to run essential errands, and is expected to last until 10 a.m. Sunday, allowing officers to fire on mobs in extreme cases, said lawmaker Obaidul Quader, the general secretary of the ruling Awami League party.”
Shoot on sight authority is a last resort and it seems that this is what is happening here. The next step is civil war as people decide to shoot back against the authorities. Protesting and violent protesting are two different things.
Looking Forwards…
LF#1
We have see Robby Starbuck take a flamethrower to Tractor Supply and John Deere regarding their woke policies including DEI and even Microsoft fired its DEI staff as the moral outrage from the George Floyd affair has subsided. I guess having massive amounts of fentanyl in his system has caused people to rethink exactly what happened. In the aftermath of that companies scrambled to become more diverse and universities were on the cutting edge to be more representative of the population breakdowns in our society. Unfortunately this has not been true. Emily Fowler writes for The College Fix, “Chief diversity officer positions at major universities primarily go to black males and females, according to a College Fix analysis.
Though black females are only six percent of the population, they obtained about 55 percent of top diversity officer roles among the country’s top 50 colleges and universities. The Fix compiled its list using the U.S. News and World Report rankings of national universities. While black Americans are only 13 percent of the population, they were 80 percent of the highest-ranking diversity officials. Meanwhile, Latinos were only six percent, despite being 19 percent of the population. Asians were only two percent, despite being seven percent of the U.S. White people did not fare well, also only getting about two percent of the top roles. Males were also underrepresented – despite being roughly 50 percent of the population, they were only 34 percent of the top diversity roles.”
Well blow me over with a feather. It seems like racism is alive and well and sexism too. It turns out all you have to do to find it is go to a university.
LF#2
I am very curious to see what happens with Harley Davidson because Robby Starbuck is at it again. The man who forced quick u-turns from Tractor Supply and John Deere regarding their woke corporate policies has focused his expose of woke policies on the motorcycle company. This from ZeroHedge, “ Starbuck’s anti-woke crusade drives a wedge between the corporation and the customer base, forcing high-level executives to immediately respond, as seen by Tractory Supply and John Deere, or risk ‘Bud Lighting’ itself (i.e., boycotts). It’s a genius move by Starbuck and his team as the anti-woke crusade against companies infected with the woke mind virus gains momentum.
Starbuck claims that under Harley Davidson CEO Jochen Zeitz, the iconic motorcycle brand has been infected with woke activism, supports the Equality Act (which would allow men into girl’s bathrooms, sports, and locker rooms), funded all-ages pride events, and required 1,800 employees to undergo virtual LGBTQ+ ally training.
Starbuck notes that Harley Davidson is a founding member of Wisconsin’s LGBTQ+ Chamber of Commerce, sponsored an LGBTQ+ Entrepreneur Bootcamp, and made February and March “Months of Inclusion.”
Robby, keep up the good work as the disconnect between the haves at corporate and the have nots continues to widen. The haves need to be reminded of who is the customer and what the customer believes in.
LF#3
Hunting season is approaching, and you might be interested to know that I am a hunter. I hunt black swan, and no that isn’t a racist reference towards swans with regards to our previous topic nor is it a search from Mila Kunis or Natalie Portman although I might have to rethink my position on this. No, I am looking for the event that might tip our economy over into recession. This could be the commercial real estate debacle that is hiding in plain sight. They are the big overpriced buildings in a city near you with no people in them. Yep those black swans. This from ZeroHedge, “Blackstone Mortgage Trust, a real estate finance company that originates senior loans collateralized by commercial real estate across North America, Europe, and Australia, reported its second-quarter earnings on Tuesday. The report revealed a near-quarter reduction in its dividend due to rising defaults and increasing challenges with borrowers in making payments or refinancing office tower loans amid a worsening CRE downturn.
Bloomberg was the first to report that the $3.4 billion real estate investment trust BXMT slashed its dividend to 47 cents from 62 cents. BXMT has been distributing the 62-cent dividend to shareholders since late 2015. Most of the distress comes from BXMT’s office portfolio, which makes up about 25% of its outstanding loans. Recent data from the Green Street Commercial Property Price Index shows US office tower values have plunged 37% from early 2022 peaks. Towers have been the worst hit in the CRE downturn. The rest of the commercial sector has slumped only 20%. In recent quarters, short seller Carson Block has been vocal about his bearish BXMT bet.
“This kind of reminds me of 2007,” the Muddy Waters founder told Bloomberg TV in mid-March, adding there was a period after the failure of Bear Stearns that the general market sentiment was that “‘there’s been deleveraging, everything’s OK.’ And it turned out not to be.”
If you are a loyal listener then you know I don’t know a lot, but I do know when you cut your dividend, that’s bad. When the values of an underlying loan drop by 37% that’s bad. When people compare your situation to the great financial crisis, that’s bad. If the big game hunter known as C Thomas Printer has found a black swan, that’s bad. Let’s hope it is not.
Sincerely Yours,
C Thomas Printer
The Dow Jones finished trading …at 40,589.
The 10-year Treasury bond is at …at 4.193%
The price of Brent Crude is … at $81.13 per barrel.
The price of gold is … at $2,385/oz.
The price of silver is … at a $28.07/oz.
Thank you for listening today and you can find all of our articles and more on our website cthomasprinter.com.