Comment of the Day
17th February 2023
Eoin Treacy
Feb 18
Big Picture Long-Term video February 17th 2023
A link to this week's big Picture Long-Term video commentary is posted in the Subscriber's Area
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Mercedes Cars Become More Elusive After 43% Jump in Prices
This article from Bloomberg may be of interest to subscribers. Here is a section:
Mercedes is hiking the prices even of entry-level models like the A-Class hatchback. Drivers are increasingly only be able to buy versions of the car with bells-and-whistle options as standard.
Mercedes isn’t alone. Around the world, manufacturers are reaping the benefits of selling fewer but more expensive cars. In the US, average monthly payments for a new car nearly doubled from late 2019. And as battery-powered vehicles tend to cost more than the average combustion-engine car, the shift to EVs may make the affordability crisis even worse.
Eoin Treacy's view
Companies have clearly made the decision to push the cost of migrating from internal combustion engines to batteries onto consumers and governments. The increasing range of subsidies to support EV rollout and the increasing burden of carbon credit expense ensure companies can produce fewer vehicles and charge more for them.
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Star Banker's Disappearance Unnerves China's Business Elite
This article from Bloomberg may be of interest. Here is a section:
Increasingly in China, a suddenly absent boss has come to signal a crackdown or investigation by authorities. In many cases, the person is said to be “assisting” graft probes.
Publicly listed companies typically report they have lost contact with the executive and need to make their own inquiries into what happened within the country’s opaque legal system.
A suave and outspoken dealmaker, Bao built China’s pre- eminent tech-focused investment bank. He convinced a Jack Ma-backed company to become a cornerstone investor when his firm went public in 2018 and has been the go-to banker for the biggest tech stars.
Bao is among China’s “western-educated individuals with lots of connections with the global financial elite,” said Victor Shih, an associate professor at University of California San Diego who specializes in China’s banking policies. “We don’t see those types suddenly running into such serious trouble that often.”
Bao studied English literature at China’s prestigious Fudan University and received a master’s degree in business and economics from the BI Norwegian School of Management in 1995. He once said it was his mission to “participate in the value creation of the greatest entrepreneurs” in China.
A former banker at Morgan Stanley (NYSE:MS) and Credit Suisse Group AG (NYSE:CS), Bao founded China Renaissance in 2005, making a name for the firm by brokering tough mergers that led to the formation of ride-hailing service Didi Global Inc. and food-delivery giant Meituan.
Eoin Treacy's view
When China accompanied the abandonment of Covid-zero with dovish rhetoric towards the markets, the USA, and signaled additional assistance to the domestic economy, investors breathed a sigh of relief.
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Ukraine is burning through ammunition faster than the US and NATO can produce it. Inside the Pentagon's plan to close the gap
This news item from CNN may be of interest to subscribers. Here is a section:
Running full-tilt, as it was on a recent January morning, the Scranton Army Ammunition Plant churns out roughly 11,000 artillery shells a month. That may seem like a lot, but the Ukrainian military often fires that many shells over just a few days.
To meet that demand, the Scranton plant is undergoing a massive expansion, fueled by millions of dollars in new defense spending from the Pentagon. It’s investing in new high-tech machinery, hiring a few dozen additional workers and will eventually shift to a 24/7 schedule of constant production.
“It’s certainly ramped up over the last year. As we bring in more modern equipment, it’ll be able to ramp up even further,” said Todd Smith, senior director of General Dynamics (NYSE:GD) Ordnance and Tactical Systems, which operates the plant for the Army.
Eoin Treacy's view
Russia is taking a calculated bet that NATO will run out of munitions before it runs out of material and men to throw into the offensive. The cost in lives to Russia is grizzly to comprehend but there are several examples of how human waves can blunt the appetite of opposition to continue fighting. The Russian route to victory lies in grinding the Ukrainian armed forces down and weakening NATO’s ability to fight conventional wars by expending their arsenals. Avoiding that outcome means NATO countries will need to spend significantly more on defense.
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Eoin's personal portfolio: commodity long initiated and stock option long initiated February 14th 2023
One of the questions subscribers ask most often is how to find details of my open trades. To make it easier I will simply repost the latest summary on a daily basis until there is a change.
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