Hey Influence Traders,
Andrew Giovinazzi and I went deep on DC and world events this past week.
We explained why forces in play have caused a seismic shift in the energy sector and how you can benefit from it.
Lo and behold, a slew of headlines later in the week echoed our thoughts.
As you know, we like to keep you ahead of the curve.
But you need to be part of the Capitol Gains experience, which you can do by clicking here.
And there’s more news …
We’re going live this Tuesday!
Virginia is up for grabs, Brazil is in an uproar and Russia and OPEC continue to cozy up.
And we’ll show you how to trade it all when you register here.
Now for my weekend ruminations …
Snitches Get … PAID!
In New Jersey, snitches get stitches.
In finance, they get paid!
An insider blew the whistle on Deutsche Bank AG’s manipulation of global interest rate benchmarks.
That information helped U.S. and U.K. regulators investigate Deutsche and led to $2.5 billion in fines against the bank.
It also led to a nearly $200 million whistleblower award for assisting the probe.
The payout is the largest ever by the Commodity Futures Trading Commission.
Supply Chain Updates
Clogged ports continue to contribute to global supply chain shortages.
Policymakers continue to struggle with the supply chain concerns.
It is sparking issues with everything from consumer goods to semiconductors.
This has caused domestic factors to slow down or close and is hurting economic growth.
Treasury Secretary Janet Yellen described the phenomenon as a “very, very unusual shock.”
But the administration can’t decide what to do about it … or even the cause.
Depending on which talking head is on the TV, it is either a buying spree issue, a container ship issue, a port issue, or a truck issue.
Perhaps it’s a combination of all.
Clearly there is a mismatch of strong pent-up demand for goods fueled by coronavirus aid checks and higher savings rates pitted against supplies constrained by production shutdowns, dwindling inventories and worker shortages.
One headline item is clear – we have a record number of container ships parked off the California coast.
The director of the Long Beach port said the backlogs will likely last until next summer as container ships continue to arrive, despite moving to 24/7 operations.
Enter Florida Gov. Ron DeSantis
He believes that Florida “can be part of the solution.”
He announced this week that:
- “We’ve got capacity, and all of our ports can offer these businesses good incentives if they reroute their ships.”
- “We’ve already had some ships rerouted. We expect to have more, but if you’re going to sit off the coast for days on end, you might as well just bring it to Florida. We’ve got great logistics on the ground that can get it to market.”
And, of course, the Republican governor couldn’t help but take a shot at his left wing cousins on the left coast by emphasizing that “unlike California, ports in Florida are always operated with 24/7 service.”
Gotta love Politics!
Spending Bill Watch
We are on watch for the final version of the spending bill.
Speaker Pelosi stated this week that an agreement is imminent.
But a lot of cutting still needs to occur.
That’s why Sen. Joe Manchin was not so optimistic.
What we know for sure is that the progressives are not happy.
Their optimism for seismic social change has dwindled.
What is on the rise is inter-party finger-pointing.
It’s going to make for another interesting week on the Hill.
And we will continue to monitor and analyze the situation in Capitol Gains.
One thing we do know is that green energy pushes need to be reevaluated (more on that below).
My wife often asks me, what exactly do you do?
I explain to her that I analyze how the actions of DC and Wall Street intersect, including the revolving door of players that move between the two.
She said – “Example?”
I said – “Vaccines!”
Many have wondered how vaccines and boosters with limited testing data have been so easily fast tracked, approved and heavily pushed by the administration.
Here’s three reasons that highlight the revolving public-sector, private-sector revolving door that is a pillar of my system.
- Pfizer (Ticker: PFE): Former FDA Commissioner Scott Gottlieb sits on the board of Pfizer.
He also sits on the boards of Illumina (Ticker: ILMN) and Tempus Labs, which sell FDA-authorized COVID-19 test kits.
Finally, he sits on the board of Aetion, which partners with the FDA to research COVID-19 policy.
- Moderna (Ticker: MRNA): Stephen Hahn, who led the FDA when it authorized MRNA’s COVID shots, now is an executive with Flagship Pioneering, the VC firm that helped launch MRNA, and which holds 20 million shares valued at $6.5 billion.
- Johnson & Johnson (Ticker: JNJ): JNJ board member Mark McClellan has served in a number of government positions and was the FDA commissioner from 2002-2004.
Follow the money and the revolving doors!
After our Wednesday event I got a number of questions about uranium.
I hinted that a big squeeze may be coming, and folks asked me to elaborate, so here goes:
Many pushing for a green energy future have not been fans of nuclear energy.
But the reality is slowly setting in that we can’t go green without it … and it may be a bigger part of the equation than ever.
The core of nuclear power (no pun intended) is uranium.
And after many years of lackluster performance, the commodity is running hot and about to get hotter.
The Sprott Physical Uranium Trust holds 1/3 of the market, continues to buy, and since August has been taking uranium out of market circulation.
SPUT has removed over 15.3 million pounds of uranium, all told. For perspective, a gigawatt-class reactor uses around 450,000 pounds per year.
On top of that, a contact at the SEC let me know this past week that another fund backed by the world’s largest uranium producer, Kazatomprom, is raising up to $500 million to also buy uranium.
If ANU Energy OEIC, in which Kazatomprom is participating, also removes (i.e., stacks and stores) uranium, a price squeeze could be a go.
And that is why Andrew and I will continue to make #PowerMoves for you in the Capitol Gains portfolio.
Be sure to join us LIVE on Tuesday.
Cutting Through the Noise for You.