16 March 2021

1) The technology known as carbon capture and storage, a concept that has been around for at least a quarter century to reduce the climate damaging emissions from factories, is being pursued by major international oil companies. The idea sounds deceptively simple, just divert pollutants before they can escape into the air, and bury them deep in the ground where they are harmless. But the technology has proved to be hugely expensive, and so has not caught on as quickly as advocates hoped. Exxon Mobil, BP and Royal Dutch Shell plus lesser known Norway’s Equinor, France’s Total, and Italy’s Eni are investors in capture and storage projects.

2) Reports are, that amid all the trillion dollar spending, the White House is now starting to consider how to pay for the programs meant to bolster long term economic growth with investments in infrastructure, clean energy and education. The challenges are twofold: 1) how much of the bill is paid for with tax increases and 2) which policies to finance with more borrowing. The administration hasn’t decided whether to pursue a wealth tax. With interest rates so low, U.S. borrowing costs are manageable right now. The federal government currently collects the biggest chunk of its revenue, about half in 2019, from individual income taxes, which now tops out at 37% of income above $518,000 per year. For now, there are few signs of inflationary spiral or fiscal crisis that policy makers thought would accompany debt levels like today’s. The Congressional Budget Office this month projected that the national debt would double as a proportion of gross domestic product over the next 30 years. But the cost of borrowing is rising for the government and across the economy so the large debt could mean trouble in the future.

3) India’s foreign-exchange reserves has surpassed Russia’s to become the world’s fourth largest, as India central bank continues to hoard dollars to cushion the economy against any sudden outflows. Reserves for both countries have mostly flattened this year after months of rapid increase. India’s reserves, enough to cover roughly 18 months of imports, have been bolstered by a rare current-account surplus, raising inflows into the local stock market and foreign direct investment. India’s foreign currency holdings fell by $4.3 billion to $580.3 billion as of March 5, edging out Russia’s $580.1 billion pile. China has the largest reserves, followed by Japan and Switzerland on the International Monetary Fund table.

4) Stock market closings for – 15 MAR 21:

Dow 32,953.46 up by 174.82
Nasdaq 3,459.71 up by 139.84
S&P 500 3,968.94 up by 25.60

10 Year Yield: down at 1.61%

Oil: down at $65.29

4 March 2021

1) Kelley Aerospace has officially launched the world’s first supersonic unmanned combat aerial vehicle (UCAV), called the ‘Arrow’. The drone is designed with a single shell of lightweight carbon fiber that allows it to reach speeds up to Mach 2.1. The UCAV has reduced radar cross-section and infra-red signatures, and is designed for multiple combat or reconnaissance roles. Kelley has 100 pre-orders for the war machine, which costs between $9 to $16 million dollars each. It’s designed to complement manned aircraft making it a force multiplier in the aerial battlefield. A manned combat aircraft would control multiple Arrow UAVs, tasking each with a different missions.

2) There are about a thousand restaurant closures a month in Texas, a result of the coronavirus pandemic. About 11,000 restaurants have closed in Texas since the start of the pandemic. This is about a fifth of all Texas restaurants with about 150,000 Texans who have lost their jobs. Nine out of 10 of these restaurants are small businesses employing less than 50 people. Restaurants in downtown city centers have been hit particularly hard because business lunches and conventions were suspended almost immediately. Surprisingly, the more expensive restaurants have not fared as well as family dining locations.

3) The American Petroleum Institute is considering throwing its weight behind a government imposed price on carbon dioxide emissions as a way to slow global warming, making for a major policy shift by the oil industry’s top trade group. Supporters of a tax argue that a carbon tax increases the cost of energy derived from oil, natural gas and coal so it would be more effective than regulations at paring U.S. greenhouse gas emissions. Exxon Mobil Corp., ConocoPhillips, BP and Royal Dutch Shell already support a carbon tax-and-rebate plan. The tax has gained momentum as international energy companies make investment decisions based on the assumption that emission limits will be imposed by regulation, tax or other mechanisms. The companies are seeking regulatory certainty on the issue, instead of environmental policies that whipsaw with every presidential election. A carbon tax could benefit producers of natural gas over coal and spur investment in renewables and nuclear power. Some environmentalists who oppose fossil-fuel development criticized the possible move, calling it little more than a public relations ploy by letting producers buy their way out of climate accountability. Several utilities have lobbied Biden administration officials to support a nationwide carbon price.

4) Stock market closings for – 3 MAR 21:

Dow 31,270.09 down by 121.43
Nasdaq 12,997.75 down by 361.03
S&P 500 3,819.72 down by 50.57

10 Year Yield: up at 1.47%

Oil: up at $61.06

9 February 2021

1) The 141 year old Chevron Corp. has built a $170 billion dollar fossil fuels empire that has made it synonymous with the oil and gas industry. Chevron, and many other petrochemical companies, may not be ‘oil-first’ companies in 2040. The climate crisis is forcing oil companies, large and small, to rethink their once reliable business models. Facing political and shareholder pressure, BP (British Petroleum), Shell and other European oil majors see the writing on the wall, announcing plans to gradually retreat from fossil fuels. Recently BP released a report forecasting that recoverable oil reserves will be as little as one fifth of today’s levels by 2050. Oil companies are embracing clean energy including electric vehicle charging and renewable energy. But Chevron is not banking on solar and wind energy.

2) The era of gasoline powered automobiles is coming to an end faster than anyone expected. One of the questions that has long plagued automobile executives was whether motorists would be willing to switch to electric vehicles that typically require hours to charge. Automakers are forging ahead with plans to convert the majority of new car and light truck sales to electric by the 2030s. Batteries for power are so much more efficient, and there’s so many less moving parts, that there is less maintenance and repairs of cars. The only thing that holds it back is people are afraid they can’t take long road trips. But once they’ve shorten the charge to minutes and not hours, that’s a game changer. The production costs of electric vehicles are close to those of gasoline powered vehicles, and could go even lower. However, the fast chargers can cost $100,000 each. In addition, upgrading the power grid to handle the increased demand from electric vehicles is likely to be costly.

3) Technological investments has propelled Mexico in another direction giving the country a boost to being a most promising tech scene in Latin America. In turn, the US technology industry is taking advantage of this landscape to solve its shortage of qualified technological labor. Mexico has built a ‘tech hub’ of three cities- Guadalajara, Monterrey, and Mexico City, each having its own specialties and advantages that makes them unique. Mexico has several top tech universities, which is the keystone to being a tech hub. There are a lot of advantages to hiring remote workers in Mexico in addition to the savings U.S. companies will see.

4) Stock market closings for – 8 FEB 21:

Dow 31,385.76 up by 237.52
Nasdaq 13,987.64 up by 131.35
S&P 500 3,915.59 up by 28.76

10 Year Yield: down at 1.16% up by

Oil: up at $58.05