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Tailpieces Blog Post 267
Infrastructure: Lots of Pork in the Barrel
Infrastructure: Lots of Pork in the Barrel
Most of us think that “infrastructure” means very large physical structures – bridges, tunnels, roads, railways, airports. Useful things that we’re generally in favour of, but needing large public bodies to finance and manage.
Joe Biden is using the word as a way to slip through huge amounts of spending that Democrats favour for their own political interests – ones that most of us wouldn’t normally categorize as infrastructure.
His proposed mega-package allocates only about $400 billion – less than 10 percent of the total — for projects normally classed as infrastructure. The rest is to be spent on a cornucopia of Good Ideas — windmills, solar panels, subsidies for electric vehicles, even school repairs (as a pay-off to teachers’ union, which are among the Democrats’ loyalist supporters). Even more is to be lavished on items that have nothing to do with infrastructure such as day-care tuition, unemployment benefits, community organizers and other social welfare programs.
All to be paid for by higher taxes, printing money or higher public debt. The resulting unprecedented growth in its debt-to-GDP ratio will put the US into the same super-debtor league as Lebanon, Greece and Turkey.
Update on the Pandemic
Update on the Pandemic
Some interesting items that caught my attention…
► “There is not a single documented Covid infection anywhere in the world from casual outdoor interactions such as walking past someone on a street or eating at a nearby table,” reports the New York Times.
► The risk of dying from diseases deadlier than Covid-19 such as cancer has risen significantly as medical resources are diverted to give greater priority to fighting the virus. In Britain the number of patients facing long waits – at least six weeks — for tests such as MRI scans, ultrasounds and gastroscopes has risen ten-fold in the past year from 29,832 to 327,663.
► The US Centers for Disease Control has quietly released new guidelines to laboratories recommending they lower their cycling threshold for the standard PCR test to a maximum of 28 – but only for patients who have received a Covid vaccine.
A problem with PCR is that the higher the number of cycles used in testing samples, the greater the chances of false positive readings. Worldwide it’s common to use thresholds of 35. So why aren’t lower and therefore more accurate thresholds used for everyone, including all those who haven’t yet been vaccinated?
Robots Down on the Farm
Robots Down on the Farm
American farmers, struggling to recruit seasonal labour, are starting to use machines for jobs such as weeding. That used to be considered a task too difficult to mechanize, but no longer. Seattle-based Carbon Robotics’ “autonomous weeders” are tractor-sized machines that use artificial intelligence, cameras and lasers to distinguish weeds from crops and destroy them. They can clear 15 to 21 acres of unwanted vegetation a day. Weeders will reduce farmers’ need to use toxic herbicides.
Automation has become a growing presence in fields, even orchards, as American farmers find ways to reduce their dependence on human labour because of shortages. The Western Growers Association says that over the next decade it aims to automate half of the harvesting of crops including fruits, vegetables and nuts. Robots are being developed to pick strawberries and apples.
Is an F35 Really Worth $138 Million?
Is an F35 Really Worth $138 Million?
The F35 Lightning, the most recent introduction into service of the West’s fighter fleet, is “the greatest boondoggle in American history,” claims Julian Macfarlane. Costing $138 million apiece and more than $36,000 an hour to operate, over its life-span it will cost the American taxpayer $1.7 trillion.
But it’s “slow, maneuvers sluggishly, and cannot fire its new lightweight Gatling [cannon] without destroying the housing… and the airplane. It suffers from 13 ‘class one’ defects that endanger both the aircraft and its crew.”
Last year there were reports that the Syrians downed an F35 over Syria with a Soviet-era S200 ground-to-air missile defense system. The Israelis claimed a bird did it… over Israel. The Syrians “certainly shot something down, and it wasn’t a bird.”
The Russians have yet to allow launches in Syria by their more modern and far more effective S300 and S400 systems “in a tacit agreement with the Israelis not to exacerbate regional tensions… It is not just that the very, very pragmatic Israelis don’t want to use the unreliable F35 over Syria – they don’t want to provoke the Russians.”
Electric Cars: Waiting for Top-up Takes Too Long
Electric Cars: Waiting for Top-up Takes Too Long
About 20 per cent of buyers of electric cars in California are defecting back to gasoline-powered vehicles, according to a new report by Business Insider, because charging them is such a hassle. The figure is based on people who bought electrics between 2012 and 2018.
About 70 per cent of those who switched lacked access to Level 2 charging at home. “If you don’t have a Level 2 [system] it’s almost impossible” says Bloomberg automotive analyst Kevin Tynan. But even with Level 2 access, it took him six hours to charge his Chevy Volt back to 300 miles of range. Level 1 charging from a standard home outlet puts out about 120 volts of power. Level 2 is about twice that. Tesla’s Superchargers can offer 480 volts.
Comparing Property and Equities
Comparing Property and Equities
Although the view that property is a better investment than shares has grown considerably in the UK. £100,000 invested in houses 25 years ago would be worth an average of £451,000 today, ranging from £378,000 in Scotland to around £660,000 in London. However the same amount invested in the global stock market would be worth around £727,000, according to investment managers Schroders; “10 per cent more than in even the best-performing regional property market.”
What’s more, these figures don’t take into account costs of ownership such as maintenance, repairs, insurance or taxes, which tend to be greater for property. They also ignore income and the impact of leverage/mortgage finance. The comparison “also does not take into any account the substantial tax savings which can be earned by saving into a pension [fund], nor the substantial taxes and costs associated with buying and selling property.”
Tailpieces
Tailpieces
Taiwan: Its stock market was hit hard by news of a surge in Covid infections, coming after news of a drought.
The market is dominated by semiconductor stocks. TSCM, which controls more than half the world market for made-to-order chips, has seen its shares fall by one-sixth over the past four months. However Jefferies’ Chris Wood says that with chips now going into “almost everything,” semiconductor shares should be viewed by investors, not as cyclical plays, but as structural components of portfolios.
I hold several of the island-nation’s semiconductor plays such as TSCM, Silergy, Mediatek and Novatek Microelectronics.
India: The headlines about the ravaging pandemic are dire as hospitals run out of oxygen and corpses pile up. Investors, however, aren’t particularly worried. The Nifty Index of the biggest listed companies has been holding steady, drifting sideways within a range for months. Investors are looking past the spike in infections to the surge in economic activity that they expect to follow as infections decline. Alpine Macro’s forecasting model suggests daily new cases, having peaked this month, should plunge to near zero by August.
China: It has overtaken the US as the world’s biggest destination for foreign direct investment, attracting $163 billion in 2020. Net inflows into America fell to $134 billion. China’s share of global exports rose from 13.3 per cent in 2019 to a record 15 per cent. This is remarkable given all the talk about relocation of production out of China and the Trump administration’s tariffs on Chinese goods.
Electricity: South Africa plans to ease its crippling energy supply crisis by signing a $15 billion 20-year deal with Karpowership. The Turkish company has been building a fleet of floating power stations made from old ships. Those already in operation include two based off Indonesia and Ghana, each generating 470 megawatts.
Nuclear power: Japan has decided to re-start three old nuclear reactors shut down after the 2011 Fukushima tsunami panic.
Latest woke idiocy: Oxford University’s math’s, physics and life sciences faculty has recruited students to research proposals to make its curricula less “Eurocentric” and be “decolonized” by removing from historical works of scientific progress traditional Imperial measurements such as mile, inch, yard, pound and ounce.
