Guest Post by Chris MacIntosh
According to a recent article,
A $4 billion Panasonic electric vehicle battery factory in De Soto, Kansas, will help satisfy the Biden administration’s efforts to get everyone into an EV. It also will help extend the life of a coal-fired power plant.
Funded by subsidies from the taxpayer (misallocation of capital, here we come).
Panasonic broke ground on the facility last year. The Japanese company was slated to receive $6.8 billion from the Inflation Reduction Act, which has been pouring billions into electric vehicles and battery factories as part of its effort to transition America away from fossil fuels.
Here are some realities:
A 15-pound lithium-ion battery holds about the same amount of energy as a pound of oil. To make that battery requires 7,000 pounds of rock and dirt to get the minerals that go into that battery. The average EV battery weighs around 1,000 pounds.
We truly live in a clown world. The thing with circuses is that they’re not for serious people. They’re for show. Jovial events to distract one from the mundane but real.
Unfortunately, we’re all going to walk out of the circus here and need to confront the mundane but real. And that world doesn’t care about virtue signaling, how much diversity you’ve got, whether your ESG score, or whether your car is vegan. It promises to be a harsh but lucrative (for us) awakening.
EV Economic Awakening
It would seem that economics does prevail over ideology when left up to the market to decide.
“Rental car company Hertz said it will be selling approximately 20,000 of its electric vehicles.
According to Hertz, electric vehicles depreciate more and have higher costs associated with damages.
Hertz will be dumping nearly one-third of its total E.V. fleet and will be using the money from those sales to buy more gas-powered vehicles.”
No comment here. I just can’t stop laughing.
On the dirty side, Saudi Shelves Expansion Plans
There is always something out there to keep you on your toes — a “spanner in the works” as the saying goes. According to Bloomberg:
Our view is that nothing changes our long-term thinking. Everyone (perhaps even the Saudis now) is expecting US shale production growth will continue for another 10 years at least (something like that). But we contend that US shale production is set to start posting negative surprises within the next two years as the Permian basin gets closer to the production of 50% of its proven reserves.
So we still believe that over the next six years (that takes us to 2030) the world is going to slowly wake up to a growing oil deficit and capital expenditures on exploration and development will really have to accelerate with that expenditure increasingly concentrating on offshore.
We still believe that we are a couple of years into a bull market in the oil and gas equipment and services sector. Yes, a repeat of the 2002 to 2008 bull market.
Philadelphia Oil and Gas Equipment and Services Index (the index that XES ETF tracks)
We note that the 2002 to 2008 bull market didn’t go up in a straight line. Take a closer look at the chart below. Yes, that was a bull market, but it was a horribly volatile upward “trend.”
Perhaps this Saudi announcement means we just have to be a little more patient. We have plenty of that.
URANIUM: TOO MUCH OPTIMISM?
A few subscribers have been asking us about what we should be doing with exposure to the uranium sector. I guess many clients bought into uranium stocks in 2017 to 2020 and are up about 250% (let’s leave aside those geniuses who bought in mid 2020 and are likely up 500% on average). So a 10% weighting has probably run to about 20% weighting in those portfolios (remember, the broad portfolio has also gone up during this time).
We think there is considerable more upside to come in uranium. This is largely a result of production issues at the world’s largest producer Kazatomprom. They have high-graded a significant part of their resources and now are facing the prospect of having to mine their lower grade, higher cost, ore bodies. Additional production will take a number of years to bring on line. Just look at the eventual production schedules of developers like Denison, Bannerman, Deep Yellow, etc.
Until we see FOMO (fear of missing out) behaviour in smaller cap uranium miners (using Denison as a proxy), we continue to position for further upside in uranium miners and we will “drag the chain” in getting out of the trade.
We are well aware that the longer a market has been gripped by the bears the longer the duration and magnitude of the bull market. Accordingly, the big risk still rests in the “getting out too early” camp.
However, if you find yourself with a 20% weighting in uranium stocks or even higher and you are freaking out/losing sleep because it has become such a large position in your portfolio, then sell half and invest in something else unrelated to uranium.
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Around here all I see are repo men scooping cars every night. The cars that are left are making a lot of squeaking grinding noises. Deferred maintenance I guess. At the same time the complex I live in is flooded with Indian college students. The cars are broken in to if anything if value is left in plain sight.The new owners have gotten rid of nighttime security. The parking lot is full of ever growing potholes. Evs? Give me a break people can’t pay their utility bills now . If you sit in an ev charging for hours your chance of getting carjacked or killed around Chicagoland are pretty good. The American dream.
Ahhh…..
Waiting in your car for it to charge?
Sitting duck crime victims.
Outside of the Sun Belt, you need a heated garage for charging an EV. The upscale libs are all set, but the urban renters they claim to care about would be fooked. Many have to find street parking. They can’t realistically create a charging network for street parking. The same thieves that take catalytic converters would chop off the charging cables for the copper.
Factor in the energy costs to heat all those garages that wouldn’t NEED to be heated for an IC engine. We’ve yet to fully explore the bottomless pit of stupidity this topic encompasses.
The average IQ of White people is 100. Women are slightly more than half of the White population. White women don’t think. They emote so an IQ of 500 would do them no good. Low IQ blacks are just a welfare sink.
VERY good points.
That’s a pretty vivid/stark portrayal of democrat-America. It’s sickening, and they’re hell-bent on ignoring the outcomes of their policies. This isn’t going to end well.
More fake oil scarcity? Just another aspect of climate bs. Jews are absolute liars and false scarcity is part of their economic control. They have been pushing Peak Oil since the 70s at least. The date always rolls forward as it approaches and yet more oil is refined. They use their media control to sweep up the obviously incorrect predictions. Look for the Col. Prouty vid online.
It ain’t “fake”. It’s sand nigger Muslims manipulating production.
Not to mention what $100 silver & $25 copper would mean.
Hertz may be planning on selling 20,000 EVs but are there 20,000 suckers out there with the money to buy them??
They make great incendiary devices for burning down cities.
Wait for dry windy conditions.
Cut the power.
Ignite a batch of these battery fires upwind from a community full of overgrown brush, palm trees etc.
Bake three hours.
Undeveloped land remains.
There is hundreds of years of oil under us if not more. Fuck these pricks
Long Beach Harbor has enough oil to last the country for many years. If it was developed. how about building a new refinery built somewhere in the U.S.
Freezing and starvation!