Engaging Articles of the Week
Thank heavens for the oddballs that make their way in the world by interpreting the tea leaves correctly, by spending the time to notice and flag important things that fly under the radar. Take this example with respect to a recent White House publication, the “America First Investment Policy”. It is a pretty dense document that lays out the ways in which the US administration will try to reshape capital flows. Buried in the document, or hardly noticed (certainly not by me), down in Sec. 2 (k), is this nugget: “we will review whether to suspend or terminate the 1984 United States-The People’s Republic of China Income Tax Convention.” I’m betting that document never showed up on any bestseller lists, so truly, hats off to those who spotted the significance. This convention allowed Chinese government entities to pay zero tax on portfolio income from US investments, and bond holdings are exempt from withholding tax for all Chinese investors. This treaty was put in place no doubt to facilitate Chinese absorption of US currency as China built up a huge trade surplus with the US. Chinese government entities hold almost US$2 trillion in US assets. Ripping up this treaty would mean a 30 percent withholding tax on China’s investments, and would make the US far less attractive for Chinese investment. The results of such a rip-up would be wild; a potential windfall for the US government but also a potential dumping of US assets, and the disappearance of a significant market for US-denominated anything. Crazy, hey, how such a potentially big item gets lost in the tidal wave of policy documents. Credit to Michael McNair, US fund manager, for flagging this and posting online about it, here.
Say hello to the return of a brand new 7 MPG thunder-truck. A few years back, Dodge announced plans to abandon forever their iconic Hemi V-8 engine, which last showed up as a supercharged 6-litre beast developing more than 700 useless-but-oh-so-fun horsepower. Dismay blanketed the heartland, tens of thousands of dusty peaked baseball caps pointed forlornly at the ground. The engine was disappearing because we are all supposed to be driving EVs within a few years, never mind rumble-rumble V8s. Turns out that shift isn’t going according to plan, and not only are such beasts as the Ram TRX truck (717 hp, and often shown airborne in reviews, because give a grown up a truck that powerful and the first thing they do is build a ramp and act like a 10-year old) returning, but they will include “even more power than before.” Story here.
You can’t make this stuff up, Chapter 438: An 8 mile/13 kilometer stretch of the Amazon rainforest just outside the Brazilian city of Belem was clear cut for a 4 lane highway to provide access to the COP30 climate summit. There are no words. The story was reported by the BBC, and because it was the BBC, the article goes to considerable lengths to point out that it is a “sustainable highway” with bike lanes and solar lighting and animal crossings. Despite that woeful rah-rah, they couldn’t help but note that the local state government has repeatedly shelved the highway because of environmental concerns. Apparently it took the power of a global climate conference to finally snuff out those pesky local environmental voices (international ENGO environmental voices are NEVER drowned out), leading even a green cheerleading powerhouse like the Beeb to acknowledge the elephant in the room: “Scrutiny is growing over whether flying thousands of them [conference attendees] across the world, and the infrastructure required to host them, is undermining the cause.” Go figure, you tweedy idiots. Actually, many have been outraged for quite some time, and the ‘growing scrutiny’ of which you speak is BBC-speak for the excruciating and inescapable embarrassment of the attending jet-set. May you all be greeted by a thousand pumas. Article here.
On March 6, Midland news station NewsWest9 reported a pipeline explosion and tank battery fire in Reeves County (here), in the Permian basin. The site manager for the midstream company reported that crude oil was burning, there were two tanker trucks on site, and that the pipeline had been shut off but there was 2.5 miles of pipeline to burn off. The company, and any service companies, were asked by the local sheriff to inventory trucks and account for all employees. Four days later, right out of an episode of Landman, the same news station gave us an update: two thieves with vacuum trucks “appeared to be attempting to steal petroleum product.” Unsurprisingly, the thieves “violated safety protocols” and the buildup of static electricity caused fire and detonation. No arrests have been made yet, but anyone in the Permian – be on the lookout for two blackened desperadoes running across the plains with no eyebrows and tattered clothes. They may be a little hard of hearing. More here.
Well, it was a good try, now back to reality. The energy transition is far more challenging than most realized, as outlined in The End of Fossil Fuel Insanity – the energy story for those that don’t live it, and want to find out. And laugh. Available at Amazon.ca, Indigo.ca, or Amazon.com.
Read more insightful analysis from Terry Etam here, or email Terry here.