Happy Friday!

Grab that cup of java and have a seat.

I got a few fun messages in the mailbag to share with everyone. (I only tweak them grammatically and hide any oversharing.)

Then, I hope you’ll have a lovely glass of something bubbly this evening.

Let’s get straight into it:

East Palestine Versus Ukraine

East Palestine and/vs Ukraine: I found this article interesting but somewhat confusing. The disaster was caused by a private co. Shouldn't they be the ones to show up and fix the problems? Why should that be gov - Biden - Buttigieg’s- problem since you already think big government is too big. I hope you aren’t suggesting tax money bailout the railroad.

Regarding Ukraine: most of the aid is military supplies. The big defense contractors and their shareholders will be getting rich for years to come as they rebuild stockpiles. This is where taxpayer money is going. Buy defense stocks!! What am I missing?

PL F.

Thanks, PL F., for the great questions and comments.

Let me parse this out.

Yes, a private company, Norfolk Southern, caused the disaster. Yes, it should be held accountable and financially liable.

Yes, the government is far too big. I'd be thrilled if we got rid of the Department of Transportation. But we haven’t. What’s the point of its existence if not for these types of accidents? What more significant problems does Mayor Pete have on his plate?

As for Biden, my argument is one of optics. It would take nothing to have Air Force One land nearby and to visit those affected for moral support. That he didn’t tells me Ukraine matters more to him than Ohio and Pennsylvania. Personally, I prefer an America First president, but most Americans didn’t feel that way in 2020.

I am not suggesting a dime of taxpayer money go to Norfolk Southern.

Regarding Ukraine, you have a point. Defense contractors may be an excellent call.

Since September 10, 2001, here’s how that sector has performed:

Lockheed Martin leads the way with a staggering 2,023.24% return. Over the same period, the SPX managed “only” 264.11%. Northrop Gruman earned a 1,812.67% return, General Dynamics earned 821.67%, Raytheon earned 683.20%, and Boeing earned 633.39%.

Yes, war is a racket.

What’s the National Interest?

Just wanted to thank you for the excellent Rude column “China Takes the Gloves Off.” Clearly, there is something going on in DC that doesn’t have the best interests of the nation in mind. Eventually, the truth will emerge. In the meantime, thanks to people like you, at least some of us have an inkling of what’s up. Hope you are enjoying a peaceful weekend.

Best wishes, Margaret B.

Thank you, Margaret, for the kind words.

Your comments reminded me of one of my favorite economists, Thomas Sowell.

There are a few quotes of his I’ll pass on to you, as they describe perfectly what you intuitively understand:

“There are no solutions. There are only trade-offs.”

“It is hard to imagine a more stupid or more dangerous way of making decisions than by putting those decisions in the hands of people who pay no price for being wrong.”

“Politics is the art of making your selfish desires seem like the national interest.”

Is ESG Here to Stay?

Sean, What I learned about money from my father and mother is what they knew: if you need more money, get another job; work longer hours. After 25 years of 80-hour weeks and at least 2 and sometimes 3 jobs, I was able to retire from my day job. I began learning other ways of financial success with investing about 2009. Didn't lose a penny in 2008! 😎 I have learned much regarding financial topics from Agora and related publications. When I retired in 2018, having learned about paying attention to such things, I tried to learn where my TSP money was invested. I was informed that that information was proprietary information. That prompted me to remove all of my money out of the TSP into a self-directed IRA and invest using the info gleaned from Agora sources. 

Although I don't care to spend every waking hour worrying about my investments like some of your colleagues seem to, I have used what I have learned from y'all to do quite well so far. I am grateful for that. I think China is also watching Russia's relative weakness with an eye to taking advantage of it at some point in the future. Trump might get another shot at a Nobel peace prize. I would like to know if any reliable brokerage firm has the balls to not drink the ESG Kool-Aid. Or at least leave their clients alone if they want to ignore the stupidity? Thanks and carry on Agora!

Tom B.

Tom, I must congratulate you. You have figured out the game of life and are enjoying it. Well done!

As for Russia and China, one day, they may duke it out. But we’re a long way from that. They’ve got bigger fish to fry right now and will be friendly for the foreseeable future.

But ESG? Now, that’s starting to get interesting.

I’ll give you a few examples as to why the ESG game may be fizzling out.

A few weeks ago, I wrote about how good fund managers like the UK’s Terry Smith ignored ESG missives.

Then, Governor DeSantis of Florida, along with fellow Trustees of the State Board of Administration (SBA), passed a resolution directing the state of Florida’s fund managers to invest state funds in a manner that prioritizes the highest return on investment for Florida’s taxpayers and retirees without considering the ideological agenda of the environmental, social, and corporate governance (ESG) movement.

Finally, Vanguard's CEO, Tim Buckley, withdrew his firm from the $59 trillion Net Zero Asset Managers initiative, part of the $150 trillion United Nations-affiliated Glasgow Financial Alliance for Net Zero. “Our research indicates that ESG investing does not have any advantage over broad-based investing,” Mr. Buckley said in a recent interview with the Financial Times.

ESG may have seen its peak already, and thank heavens for that!

One Bitcoin to Rule Them All?

Hi Sean,

Ever since subscribing to Paradigm, I have read (and enjoyed) your missives. Every day they are posted. I have not missed any.

Question: You always talk about and analyze the USD and other currencies. Do you think any of the cryptos could one day be used routinely for selling and buying the same way the USD (and other currencies) are used to do this?

Joe B.

Thanks, Joe! I really appreciate it.

The short answer to your question is “yes.” I think cryptocurrencies (Bitcoin) will be used for ordinary transactions. It is already used in crypto hubs like San Francisco and Zug, Switzerland.

But I find crypto hard to use. And I’m technically inclined. I use a computer every day. I use my smartphone every day. But just getting USD into BTC and back is painful.

Until they make that process easier, people won’t use it.

Then, we’ll need to get to a point where people are pricing goods in BTC and not constantly converting goods prices into USD from BTC.

Then and only then will mass adoption take place.

We may be a generation or two away from that.

And governments will do everything they can to prevent the switch.

Wrap Up

Thank you so much for writing in.

It’s always great to hear from you.

Have a wonderful, restful weekend.