Comment of the Day
Big Picture Long-Term video June 17th 2022
A link to this week's Big Picture Long-Term video is posted in the Subscriber's Area.
Biden Takes Swing at Inflation, Signs Law to Cut Shipping Rates
This article for Bloomberg may be of interest to subscribers. Here is a section:
“One of the factors affecting prices is this: nine major shipping companies consolidated into three alliances controlling the vast majority, mostly shipping in the world,” Biden said.
“And each of these nine is foreign-owned. During the pandemic, these carriers increased their prices by as much as 1,000%.”
Attempts to “demonize ocean carriers” are not only inaccurate but dangerous because they undermine the ability to understand the root of US supply-chain problems, the World Shipping Council said in a statement.
“As long as America’s ports, rail yards and warehouses remain overloaded and unable to cope with the increased trade levels, vessels will remain stuck outside ports to the detriment of importers as well as exporters,” the WSC said. “Ocean carriers continue to move record volumes of cargo for our country and have invested heavily in new capacity – America needs to make the same commitment and invest in its land-side logistics infrastructure.”
My view - Price controls are a lot easier to impose when the targets are overseas companies. The challenge is that insisting ships need to leave with full cargoes ignores the reality of a trade imbalance. China does not import the same quantity of goods from the USA that it exports. It’s impossible to send every ship back full, at a minimum loading empty containers is time consuming and additional layers of compliance raise costs and slow down turn around. Of course, there is also the possibility these measures could shift supply of ships away from the USA if the burden of regulation becomes too onerous.
Crypto Lender Babel Freezes Withdrawals as Industry Pain Spreads
This article for Bloomberg may be of interest to subscribers. Here is a section:
In a sign of deepening turmoil in the crypto community, Babel Finance became the second major digital-asset lender this week to freeze withdrawals, telling clients it is facing “unusual liquidity pressures” as it contends with recent market declines.
“The crypto market has seen major fluctuations, and some institutions in the industry have experienced conductive risk events,” the Asia-based lender and asset manager said in a notice on its website to explain the temporary measure.
My view - Another day, another crypto exchange declines to allow withdrawals. Cryptocurrencies are pure liquidity plays so they are unlikely to recover until there is clear visibility on where the next outsized round of new money is going to come from.
Seagen Surges on Report Merck Eyeing Purchase of Company
This article by Caitlin Fichtel for Bloomberg may be of interest to subscribers.
Seagen jumps as much as 20% Friday, the most since February 2021, after Dow Jones reported that Merck is eyeing a purchase of the biotech firm, citing people familiar with the matter.
Merck gains as much as 1% Friday
Report adds that talks have been in progress for a while, although a deal is not imminent
Marketing agreement could be struck instead of full purchase
Other unnamed companies are also interested in Seagen
My view - The biotechnology sector was overtaken by vaccine mania during the pandemic. A small number of companies led by Moderna quickly grew to dominate the weighting of the sector. For 18 months the biotech index behaved more like a small number of vaccine providers, than the wide array of solutions to intransigent problems the companies it is comprised by represent. The collapse of vaccine providers, as the immediate risk from this pandemic recedes, means the biotech sector is back trading on the individual merits of its companies.
Eoin's personal portfolio Stock market short increased June 13th 2022
One of the questions subscribers as most often is how to find details of my open trades. To make it easier I will simply repost the latest summary daily until there is a change.