In this 07-30-21 issue of “Market Rally Continues As Earnings Beat Estimates.”
- Market Rally Continues
- The Mirage Of Strong Earnings
- GDP Eclipses Pandemic Level
- Portfolio Positioning
- Sector & Market Analysis
- 401k Plan Manager
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Market Rally Continues
Last week, we discussed that as the market hit new highs, further upside was likely limited. To wit:
“While the upside remains somewhat limited, given the already substantial advance this year, the rally will alleviate downside concerns momentarily. However, with that said, the extremely low level of volatility this year is reminiscent of 2017. The reason is that “stability” is fragile. In other words, stability ultimately leads to instability.“
For more information on the “instability of instability,” read “The Next Minsky Moment.”
Not surprisingly, the market didn’t make much headway this past week, given the current extended and overbought conditions. For now, “buy signals” remain intact, which likely limits the downside over the next week. However, a retest of the 50-dma is certainly not out of the question.
With that said, we are entering into the two weakest trading months of the year. Stocktrader’s Almanac had a good note on why the rally could experience a “pause” over the next two months.
“For the past 33 years from 1988-2020 August and September are the worst two months of the year for DJIA, S&P 500, and NASDAQ. August is the worst for DJIA and S&P 500 and September is worst for NASDAQ.
Despite the persistence and resilience of this bull rally market internals and technicals are showing some signs of fatigue.“
- Advancing issues have barely outpaced decliners in recent weeks.
- New highs have been shrinking while new lows remain high.
- Technical indicators are struggling to break through resistance.
- Relative Strength, Stochastics and MACD are breaking down again.
“The timing of a pause coincides with the weak seasonal patterns mentioned above during the worst months of the year August and September (not to mention Octoberphobia) as well as the 4-Year Presidential Election Cycle.”
6-Month Advances Are Rare
Given the bullish bias currently remains unfettered, and the Fed is still applying $120 billion a month in liquidity, there is no reason to be overly “bearish” at this juncture. Thus, while we are carrying slightly reduced exposure currently and have increased our “risk hedges” as of late, we remain nearly fully invested.
With our “money flow buy signals” triggered, such suggests there is support for stocks currently. Such means two things over the next week or so: 1) there is not a great deal of downside, and 2) there is not much upside either. Thus, a sideways consolidation and a pickup in volatility are likely. One concern is the “negative divergence” of money flows (bottom panel) against an advancing market. Such corresponds with the technical weakness we will discuss momentarily.
Therefore, given this backdrop, we increased portfolio hedges.
An additional “red flag” is the S&P 500 has had positive returns for 6-straight months. As shown in the 10-year monthly chart below, such streaks are a rarity, and when they do occur, they are usually met by a month, or more, of negative returns.
(It is also worth noting that when the 12-Month RSI is this overbought, larger corrective processes have occurred.)
While prices have advanced sharply, the bullish mantra remains that “earnings” support the increase. While that “rationalization” may seem to have merit, investors are paying more today for the same expected earnings from January of 2020.
The Mirage Of Strong Earnings
The second-quarter earnings season started with a bang, with several companies reporting earnings “knocking the cover off the ball.”
“Overall, 24% of the companies in the S&P 500 have reported earnings to date for the second quarter. Of these companies, 88% have reported actual EPS above the mean EPS estimate. Another 1% have reported actual EPS equal to the mean EPS estimate, and 11% have reported actual EPS below the mean EPS estimate. The percentage of companies reporting EPS above the mean EPS estimate is above the 1-year (83%) average and above the 5-year (75%) average.” – FactSet
It is not surprising that stocks are rallying to new highs again this week with those kinds of numbers.
However, the longer-term problem for investors is that while the earnings were strong, they are only getting back to levels where they were supposed to be at the beginning of 2020. As shown, in January of 2020, the earnings estimate for the end of 2021 was $171/share. Currently, before estimates get downwardly revised, it is presently estimated that earnings will be just $174/share at the end of 2021.
As noted, the problem for investors comes down to valuations. For example, in January of 2020, investors were paying 19x for 2-year forward earnings. Today, they are paying 25x earnings for essentially the same dollar amount of earnings.
While it gets lost in the daily media, the reality is the price of the market is outpacing actual earnings growth. More importantly, when looking back historically, we see that earnings growth isn’t as strong as headlines suggest.
We certainly understand that valuations have very little importance in the short term. For now, all that matters is price momentum. However, as investors, it is essential to remember that valuations have great importance longer-term.
Sales Are Worse
Of course, such doesn’t even come close to premiums paid for each dollar of “actual sales” generated by the underlying companies. As we noted in “Priced For Perfection,” sales will decline this quarter, driving the price-to-sales ratio to historical levels. To wit:
“Investors should not dismiss the above quickly. Revenue is what happens at the top line. Secondly, revenue CAN NOT grow faster than the economy. Such is because revenue comes from consumers, and consumption makes up 70% of the GDP calculation. Earnings, however, are what happens at the bottom line and are subject to accounting gimmicks, wage suppression, buybacks, and other manipulations.“
Currently, the price-to-sales (revenue) ratio is at the highest level ever. As shown, the historical correlation suggests outcomes for investors will not be kind.
Currently, there are more than 70 companies in the S&P 500 trading above 10x sales. That is 14% of the entire index, one of the highest levels ever on record. (How many of these companies do you own?)
A Lesson From 2000
Why is that important? For that answer, let’s revisit what Scott McNealy, then CEO of Sun Microsystems, said in 2000.
“At 10-times revenues, to give you a 10-year payback, I have to pay you 100% of revenues for 10-straight years in dividends. That assumes I can get that by my shareholders. It also assumes I have zero cost of goods sold, which is very hard for a computer company.
That assumes zero expenses, which is hard with 39,000 employees. That assumes I pay no taxes, which is very hard. And that expects you pay no taxes on your dividends, which is kind of illegal. And that assumes with zero R&D for the next 10-years, I can maintain the current revenue run rate.
Now, having done that, would any of you like to buy my stock at $64? Do you realize how ridiculous those underlying assumptions are? You don’t need any transparency. You don’t need any footnotes.
What were you thinking?”
Of course, much of this is “forgotten history,” as many investors today were either a) not alive in 1999 or b) still too young to invest. However, for the newer generation of investors, the lack of “experience” provides no basis for the importance of “valuations” to future outcomes.
That is something only learned through experience.
In Case You Missed It
GDP Eclipses Pre-Pandemic Level
On Thursday, CNBC ran the following headline:
“The U.S. economy is now larger than it was before the pandemic, but its growth rate may have peaked this year at a much slower pace than expected.” – Patti Dom, CNBC
Patti is correct; economic growth just peaked.
The problem with the 6.5% annualized rate is it was more than 50% lower than the original estimates of 13.5%. More troubling was the report was even lower than the Atlanta Fed’s much-reduced 7.6% estimate.
What was missed by the mainstream media are two very critical factors.
- The sharp decline in expected GDP growth rates suggests that “deflationary” pressures are present; and,
- Given the relationship between economic growth and earnings, current estimates will be revised lower.
Over the next two quarters and fully into 2022, economic growth rates will decline back to 2% or less.
More importantly, the weaker than expected GDP report pushed the Market Capitalization / GDP ratio (inflation-adjusted) to a record high. But, again, given that revenues are a function of consumption (70% of the GDP calculation), earnings growth will weaken by default.
Lastly, while the economy is indeed larger than pre-pandemic, such is of little consolation. When you realize it took $8 Trillion in monetary stimulus (40% of the economy) to create $406 billion in growth from Q1-2020, it is a little underwhelming.
Next year, the fiscal impulse will become a drag.
Such will make it much harder to justify current valuations in a much slower economic growth environment.
Portfolio Update (Party On Garth)
For now, as noted above, the markets remain bullishly biased, and there seems little to derail that mentality currently. The weaker than expected economic growth rate gave the markets reassurance the Fed won’t “taper” anytime soon.
In the meantime, we continue to maintain nearly full equity exposure in our portfolio models. However, the one change we have been quietly making over the last two months is increasing the duration of our bond portfolios. Such is because the recent peak in interest rates is more telling about the economy’s outlook and markets than many would like to admit. (See Why Bonds Aren’t Overvalued.)
While the markets are indeed in “Party On Garth” mode, the current extended, overbought, and bullish conditions provide the necessary backdrop for a short-term correction.
As discussed over the last couple of weeks, August and September tend to be weaker performance months. Therefore, with the bulk of earnings soon behind us, the focus will turn back to the economy and the Fed.
In the near term, the most significant risk for the market comes from the Federal Reserve at the Jackson Hole Summit this summer. If there is a change in their outlook to a more “hawkish” stance or more detailed “taper” discussions, the markets may react negatively.
Another immediate risk could be a failure to pass additional stimulus in Congress or a movement to “lockdowns” due to the virus.
In conclusion, it is simple enough to say “I have no idea” what could derail the markets. Such is why we analyze the risk each week and try to make prudent and informed decisions about portfolio exposures and risk management.
It’s the best we can do for you and our clients.
Have a great weekend.
By Lance Roberts, CIO
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Science Shaky On School Mask Mandates While Harms Ignored
Science Shaky On School Mask Mandates While Harms Ignored
Authored by Nathan Worcester via The Epoch Times,
Should children be required to wear masks at school?
A review of the costs and benefits, including some of the latest science, does.
Should children be required to wear masks at school?
A review of the costs and benefits, including some of the latest science, does not add much to the case for mandating school masks.
First, some basics... The risk of death from COVID-19 among schoolchildren is very, very low.
A Nature study estimating the COVID-19 infection fatality rate (IFR), or proportion of those infected who die, found IFRs of just 0.001 percent in children aged 5–9, and IFRs well below 0.01 percent in all those aged 19 and under.
That’s less than one in 10,000 among teenagers and less than one in 100,000 in 5- to 9-year-old children.
The American Academy of Pediatrics (AAP), which has advocated masking children aged 2 and up, found that only 460 children had died of COVID-19 between late May 2020 and Sept. 9, 2021 across 45 states, New York City, Guam, and Puerto Rico—0.08 percent of the total number of deaths they counted.
Looking again across multiple states, the AAP found that COVID-19 cases among children have surged in recent weeks, growing by 10 percent from 4,797,683 to 5,292,837 between Aug. 26 and Sept. 9—a trend that could be related to the start of in-person schooling.
Yet the AAP’s own data shows children are just 0.9 percent of COVID-19 hospitalizations, a rate on par with previous weeks, and down from reported hospitalization rates of 3.8 percent in mid-2020.
With all that in mind, what are the benefits of masking children?
According to the AAP, those benefits include the “protection of unvaccinated students from COVID-19,” as well as “reduc[ed] transmission.”
Yet as described above, COVID-19’s risks for schoolchildren have been, and remain, extremely low.
What’s more, vaccines have been made widely available or are even mandated among teachers, who belong to age groups more vulnerable to COVID-19 than children—and despite efforts to restrict access to ivermectin, individuals may still be able to obtain the drug, identified as an “essential medicine” by the World Health Organization, as well as other potential therapeutics.
Like the AAP, the Centers for Disease Control and Prevention (CDC) now recommends universal masking in schools, a change from its previous stance that vaccinated students and teachers do not have to wear masks. (Neither the AAP nor the CDC mention natural immunity in their school masking guidance).
They, too, point to transmission as a justification for universal indoor masking, citing the highly transmissible Delta variant.
Concerns about transmission come down to two questions:
First, how much is widespread COVID-19 transmission driven by children in school, and
Second, how well do masks and mask mandates limit transmission?
While some scientists have provided evidence that children might play a significant role in community spread, researchers generally agree that children, and especially young children, are not the primary drivers of it.
An observational study in the Journal of the American Medical Association suggested that children up to the age of 9 attending school were not major contributors to COVID-19 spread, though the study’s findings on teenagers were more equivocal.
A 2020 meta-analysis, or analysis of multiple studies, on COVID-19 susceptibility among young children and adolescents concluded susceptibility was lower in those groups than in adults and offered “weak evidence” that they play a lesser role in population-level transmission.
More recently, a 2021 meta-analysis on COVID-19 transmission clusters concluded that children infected in school “are unlikely to spread SARS-CoV-2 to their cohabiting family members.”
While the Delta variant appears to be more contagious, driving a rise in CCP (Chinese Communist Party) virus-related cases and deaths, many have argued that it is less deadly than the original Alpha strain.
This would be in line with the hypothesized trade-off between transmission and virulence, which suggests that pathogens evolve in the direction of spreading farther while also becoming less damaging to their hosts.
The effectiveness of masks, and mask mandates, in schools is also a matter of dispute, with mask mandates for students apparently lacking clear support.
In his July 30 executive order against mask mandates in Florida schools, Gov. Ron DeSantis argued that “forcing students to wear masks lacks a well-grounded scientific justification,” citing a 2021 preprint that found no correlation between mask mandates and COVID-19 case rates among students and faculty across schools in Florida, New York, and Massachusetts.
Yet the authors of that study stressed that their research was limited to just three states, meaning their conclusions may not apply elsewhere. They also emphasized that the masking variation they identified in Florida schools could make their findings “even less generalizable to all U.S. students.”
A 2020 report by the CDC itself on elementary schools in Georgia noted that “COVID-19 incidence was 37% lower in schools that required teachers and staff members to use masks.”
Crucially, however, the CDC found that mask mandates for students did not have a statistically significant impact on COVID-19 incidence.
Here too, the study’s authors noted some limitations to their work; notably, their findings were based on self-reporting, and investigators did not directly examine whether people were using masks.
What About Masks More Generally?
An early randomized controlled trial of 4,862 adult participants from Denmark did not find that surgical masks reduced COVID-19 infection, although the authors noted that some results were “inconclusive.”
On Sept. 1, however, researchers released a working paper detailing a cluster-randomized trial of mask promotion across communities in rural Bangladesh, which involved 600 villages and more than 300,000 individuals, that appeared to support masking.
After surveying “all reachable participants” and testing blood from symptomatic individuals, the researchers linked mask promotion to a slight reduction in symptomatic COVID-19 infections.
Yet similar to the Danish study, the Bangladesh study was explicitly intended to examine mask-wearing among those “who appear to be 18 years or older”—not the young children or adolescents to whom school mask mandates apply.
What, then, are the potential costs of requiring children to be masked at school?
An obvious one is cleanliness.
“We were almost all taught as children that disposable tissues are good because handkerchiefs are unhygienic and disgusting,” wrote Michael Brendan Dougherty in an article for National Review Online. “But for young children, toddlers in particular, the cotton-jersey masks that they most often wear in schools are just that, a handkerchief pulled over their mouth and nose constantly. They often are disgusting at the end of a day of use.”
Unsurprisingly, children’s masks may be a breeding ground for bacteria and other microorganisms, some of them potentially dangerous.
One recent analysis from the University of Florida revealed that most masks worn by children in 90-degree-Fahrenheit heat were contaminated with parasites, fungi, and bacteria, including a virus known to cause a fatal systemic disease in deer and cattle.
Masks, particularly disposable masks, are also harmful to the environment. With billions of single-use masks being thrown out every day, researchers believe that discarded masks and respirators are adding to plastic pollution—a problem to which school mask mandates can only contribute.
Masking and other interventions may also have knock-on effects related to the frequency of other respiratory diseases.
The recent, out-of-season spike in pediatric hospitalizations for respiratory syncytial virus (RSV) has been tied to the COVID-19 response, with infants and young children who would have otherwise been exposed to RSV at an earlier age now falling ill from it.
Masking may also have significant psychological and developmental effects on children.
A 2004 article on masking in a pediatric hospital, authored long before the COVID-19 pandemic shifted the scientific debate on masking, expanded on some of the psychological hazards for children.
“Imagine the impact of a hospital filled with “faceless” people on a young child. Who is smiling? Who is frowning? How do I recognize my doctor? How does my nurse recognize me? Why is everyone so scared of me and my germs?…”
“When wearing masks, goggles and/or face shields, non-verbal communication is impaired. Subtle facial cues are absent or can be misread and lip-reading is impossible.”
More recently, in a roundtable with Governor DeSantis and other scientists, Stanford professor Dr. Jay Battacharya argued that masking children is both medically unnecessary and “developmentally inappropriate.”
“I mean, how do you teach a child to read with a face mask on Zoom? I think children develop by watching other people,” Battacharya said.
The controversy over the developmental impact of masking children has even impacted the AAP.
In August, Internet users unearthed an AAP webpage emphasizing the developmental importance of face time between parents and babies that had apparently been removed from the organization’s website, along with other AAP webpages describing how babies and young children learn through looking at faces.
The AAP responded by explaining that the web pages disappeared as a result of website migration, telling Just the News that “some content areas, including Early Brain and Child Development, are still being organized before they go live on the new platform.”
Finally, the practice of mandating masks could be argued to compromise individual and parental autonomy.
Advocacy groups such as Utah Parents United have spoken out against school mask mandates, saying that they undermine parental rights and are unnecessary for such a low-risk group, particularly given the availability of vaccines to adult teachers and staff.
With all that we know so far, how can we answer these parents?
If the benefits of mask mandates do not outweigh the costs, it’s hard to find fault with opposition, or at least skepticism—especially for young schoolchildren, who are at the lowest risk of serious illness and death, and who may be most vulnerable to the uncertain and understudied costs of universal masking and other stringent measures.
Victor Davis Hanson: The Afghanistization Of America
Victor Davis Hanson: The Afghanistization Of America
Authored by Victor Davis Hanson via AmGreatness.com,
The United States should be at its pinnacle of strength. It still produces more goods and services than any other nation—China included
The United States should be at its pinnacle of strength. It still produces more goods and services than any other nation—China included, which has a population over four times as large. Its fuel and food industries are globally preeminent, as are its graduate science, computer, engineering, medical, and technology university programs. Its constitution is the oldest of current free nations. And the U.S. military is by far the best funded in the world. And yet something has gone terribly wrong within America, from the southern border to Afghanistan.
The inexplicable in Afghanistan—surrendering Bagram Air Base in the middle of the night, abandoning tens of billions of dollars of military equipment to the Taliban, and forsaking both trapped Americans and loyalist Afghans—has now become the new Biden model of inattention and incompetence.
Or to put it another way, when we seek to implant our culture abroad, do we instead come to emulate what we are trying to change?
Take COVID-19. Joe Biden in 2020 (along with Kamala Harris) trashed Trump’s impending Operation Warp Speed vaccinations. Then, after inauguration, Biden falsely claimed no one had been vaccinated until his ascension (in fact, 1million a day were being vaccinated before he assumed office). Then again, Biden claimed ad nauseam that he didn’t believe in mandates to force the new and largely experimental vaccinations on the public. Then, once more, he promised that they were so effective and so many Americans had received vaccines that by July 4 the country would return to a virtual pre-COVID normality.
Then came the delta variant and his self-created disaster in Afghanistan.
To divert his attention away from the Afghan morass, Biden weirdly focused on an equally confused new presidential COVID-19 mandate, seeking to subject federal employees, soldiers, and employees of larger firms to mandatory vaccinations—right as the contagious delta variant seemed to be slowly tapering off, given the millions who have either been vaxxed, have developed natural immunity, or both.
Consider other paradoxes. American citizens must be vaccinated, but not the forecasted 2 million noncitizens expected to cross the southern border illegally into the United States over the current fiscal year. Soldiers who bravely helped more than 100,000 Afghan refugees escape must be vaccinated, but not the unvetted foreign nationals from a premodern country?
Scientists now are convinced naturally acquired COVID-19 immunity from a previous infection likely provides longer and better protection than does any of the current vaccinations.
Yet those who suffered COVID-19, and now have antibodies and other natural defenses, must likewise be vaccinated. That anomaly raises the obvious logical absurdities: will those with vaccinations—in reciprocal fashion—be forced to be exposed to the virus to obtain additional and superior natural immunity, given the Biden logic of the need for both acquired and vaccinated immunity?
We have Afghanistanized the border as well, turning the United States into a pre-state whose badlands borders are absolutely porous and fluid. There is no audit of newcomers, no vaccinations required, no COVID-19 tests—none of the requirements that millions of citizens must meet either entering the United States or working at their jobs. Our Bagram abandonment is matched by abruptly abandoning the border wall in mid-course.
Yet where the barrier exists, there is some order; where Joe Biden abandoned the wall, there is a veritable stampede of illegal migration.
October 7, 2019. Mark Wilson/Getty Images
Coups, Juntas and Such
Third-World countries suffer military coups when unelected top brass and caudillos often insidiously take control of the country’s governance in slow-motion fashion. The latest Bob Woodward “I heard,” “they say,” and “sources reveal” mythography now claims that General Mark Milley, chairman of the Joint Chiefs, discussed separating an elected commander-in-chief from control of the military. Woodward and co-author Robert Costa also assert that Milley promised his Chinese Communist military counterpart that he would tip off the People’s Liberation Army of any planned U.S. aggressive action—an odd paranoia when Donald Trump, of the last five presidents, has proved the most reluctant to send U.S. troops into harm’s way.
If that bizarre assertion is true, Milley himself might have essentially risked starting a war by eroding U.S. deterrence in apprising an enemy of perceived internal instability inside the executive branch, and the lack of a unified command. (So, Woodward wrote: “‘General Li, I want to assure you that the American government is stable, and everything is going to be okay,’ Milley said. ‘We are not going to attack or conduct any kinetic operations against you.’ Milley then added, ‘If we’re going to attack, I’m going to call you ahead of time. It’s not going to be a surprise.’”)
More germanely, when Milley called in senior officers and laid down his own operational directives concerning nuclear weapons, he was clearly violating the law as established and strengthened in 1947, 1953, and 1986 that clearly states the Joint Chiefs are advisors to the president and are not in the chain of command and are to be bypassed, at least operationally, by the president.
The commander in chief sets policy. And if it requires the use of force, he directs the secretary of defense to relay presidential orders to the relevant theater commanders. Milley had no authority to discuss changing nuclear procedures, much less to convey a smear to an enemy that his commander in chief was non compos mentis.
Milley has been reduced to a caricature of a caricature right out of “Dr. Strangelove”—and is himself a danger to national security. After Milley’s summer 2020 virtue-signaling “apology” for alleged presidential photo-op misbehavior (found to be completely false by the interior department’s inspector general); after leaked news reports that Milley considered resignation (promises, promises) to signal his anger at Trump in summer 2020; after his dismissal of the 120 days of rioting, 28 deaths, 14,000 arrests, and $2 billion in damage as mere “penny packet protests”; after his “white rage” blathering before Congress; after the collapse of the U.S. military command in Kabul; and after his premature and hasty assessment of a U.S. drone strike that killed 10 innocent civilians as “righteous,” Woodward’s sensationalism may not sound as impossible as his usual fare.
Milley should either deny the Woodward charges and demand a real apology or resign immediately. He has violated the law governing the chain of command, misused his office of chairman of the Joint Chiefs, politicized the military, proved inept in his military judgment and advice, and may well have committed a felony in revealing to a hostile military leader that the United States was, in his opinion, in a crisis mode.
Yet, Milley did not act in isolation. Where did this low-bar Pentagon coup talk originate? And who are those responsible for creating a culture in which unelected current and retired military officers, sworn to uphold the constitutional order and the law of civilian control of the military, believe that they can arbitrarily declare an elected president either incompetent or criminal—and thus subject to their own renegade sort of freelancing justice?
As a footnote, remember that after little more than a week of the Trump presidency, Rosa Brooks, an Obama-era Pentagon appointee, published in Foreign Policy various ways to remove the newly inaugurated president. Among those mentioned was a military coup, in which top officers were to collude to obstruct a presidential order, on the basis of their own perceptions of a lack of presidential rectitude or competence.
We note additionally that over a dozen high-ranking retired generals and admirals have serially violated the uniform code of military justice in demonizing publicly their commander in chief with the worst sort of smears and slanders. And they have done so with complete exemption and in mockery of the very code they have sworn to abide.
Two retired army officers, colonels John Nagl and Paul Yingling, on the eve of the 2020 election, urged Milley to order U.S. army forces to remove Trump from office if in their opinion he obstructed the results of the election—superseding in effect a president’s elected powers as well as those constitutional checks and balances of the legislative and judicial branches upon him.
We know that these were all partisan and not principled concerns about an alleged non compos mentis president, because none of these same outspoken “Seven Days in May” generals have similarly violated the military code by negatively commenting publicly on the current dangerous cognitive decline of Joe Biden and the real national security dangers of his impairment, as evidenced by the disastrous skedaddle from Afghanistan and often inability to speak coherently or remember key names and places.
In short, is our new freelancing and partisan military also in the process of becoming Afghanized—too many of its leadership electively appealing to pseudo-higher principles to contextualize violating the Constitution of the United States and, sadly, too many trying to reflect the general woke landscape of the corporate board to which so many have retired? Like tribal warlords, our top brass simply do as they please, and then message to us “so what are you going to do about it?”
Achin, Afghanistan, 2011. John Moore/Getty Images
The Constitution as Construct
How paradoxical that the United States has sent teams of constitutional specialists to Iraq and Afghanistan to help tribal societies to draft legal, ordered, and sustainable Western consensual government charters that are not subject to the whims of particular tribes and parties. Yet America itself is descending in the exact opposite direction.
Suddenly in 2021 America, if ancient consensual rules, customs, and constitutional mandates do not facilitate and advance the progressive project, then by all means they must end—by a mere one vote in the Senate. It is as if the centuries of our history, the Constitution, and the logic of the founders were analogous to a shouting match among a squabbling Taliban tribal council of elders.
Junk the 233-year-old Electoral College and the constitutional directive to the states to assume primary responsibilities in establishing voting procedures in national elections. End the 180-year-old Senate filibuster. Do away with the now bothersome 150-year nine-justice Supreme Court. And scrap the 60-year-old tradition of a 50-state union.
Impeachment was intended by the founders as a rare reset of the executive branch in extremis. Now it is to be a pro formaattack on the president in his first term by the opposite party as soon as it gains control of the House—without a special counsel, without witnesses and cross-examinations, without any specific high crimes and misdemeanors or bribery and treason charges. And why not from now on impeach a president twice within a year—or try him in the Senate when he is out of office as a private citizen?
When private citizen Joe Biden is retired from the presidency, will his political enemies dig up his sketchy IRS records alleging that he never paid income taxes on the “big guy’s” “10 percent” of the income from the Hunter Biden money machine?
We may think virtue-signaling pride flags, gender studies, and George Floyd murals in Kabul remind the world of our postmodern sophistication. Yet, in truth, we are becoming far more like Afghanistan in the current tribalization of America—where tribal, racial, and ethnic loyalties are now essential to an American’s primary identity and loyalty—than we were ever able to make Afghanistan like us.
When we read leftist heartthrob Ibram X. Kendi’s endorsement of overt racial discrimination or academic and media obsessions with a supposed near-satanic “whiteness,” or the current fixations on skin color and first loyalties to those who share superficial racial affinities, then we are not much different from the Afghan tribalists. We in America apparently have decided the warring badlands of the Pashtuns, Tajiks, Hazaras, and Uzbeks have their advantages over a racially blind, consensual republic. They are the model to us, not us of the now-discredited melting pot to them.
How sad in our blinkered arrogance that we go across the globe to the tribal Third World to teach the impoverished a supposedly preferrable culture and politics, while at home we are doing our best to become a Third-World country of incompetency, constitutional erosion, a fractious and politicized military elite, and racially and ethnically obsessed warring tribes.
Largest Uranium-producing Countries
Which country had the highest uranium production in the world in 2020? Kazakhstan topped the list, followed by Australia and Namibia.
The post Largest Uranium-producing Countries appeared first on Investing News Network.
Output from the top uranium-producing countries rose steadily for a decade, leading to a peak of 63,207 tonnes in 2016. However, global uranium production has noticeably declined in the past five years.
The lower production numbers are related to the persistently low spot price the uranium market has experienced over the last seven years; COVID-19 has also had an impact on global uranium output. While prices have begun to rebound, there is much work to be done for the industry to reach the strength seen prior to the 2011 Fukushima disaster.
The majority of mined uranium makes its way into the nuclear energy sector. Currently, 10 percent of the world’s electricity is generated by nuclear energy, and that number is expected to grow. Another by-product of mined ore is uranium oxide, which is used in glass, ceramics and for optic applications.
10 largest uranium-producing countries
Due to its significance in energy generation, it’s important to know where uranium is mined and which nations are the largest uranium-producing countries.
Kazakhstan is the leader by a long shot, and has been since 2009. Last year, it was followed by Australia and Namibia in second and third place, respectively.
For investors interested in following the uranium space, having familiarity with these uranium production hotspots is essential. Read on to get a closer look at 2020’s largest uranium-producing countries. All statistics are from the World Nuclear Association’s most recent report on uranium mine production.
Mine production: 19,477 tonnes
As mentioned, Kazakhstan had the highest uranium production in the world in 2020. In fact, the country’s total output of 19,477 tonnes accounted for 41 percent of global uranium supply.
When last recorded in 2019, Kazakhstan had 906,800 tonnes of known recoverable uranium resources, second only to Australia. Most of the uranium in the country is mined via an in situ leaching process. Kazataprom (LSE:KAP), the country’s national uranium-mining company, is the world’s largest uranium producer with a number of projects and partnerships in various jurisdictions.
Mine production: 6,203 tonnes
Australia’s uranium production decreased slightly in 2020 to 6,203 tonnes, down from 2019’s 6,613 tonnes. The island nation holds 28 percent of the world’s known recoverable uranium resources.
Uranium mining has been a contentious and often political issue in Australia. While the sector is heavily regulated, the future of the industry is often called into question. Recently, the Western Australian government decided to allow existing projects to go ahead, but was clear that no new domestic uranium-mining projects will be approved. This decision has left a number of companies in limbo.
Australia is home to Olympic Dam, the largest-known deposit of uranium in the world. While the country permits some uranium-mining activity, it is opposed to using nuclear energy. A new partnership between Australia, the US and the UK that will allow the Oceanic country to acquire nuclear submarines has renewed debate over whether the country should develop its own nuclear energy capacity.
Mine production: 5,413 tonnes
Namibia’s uranium production has been steadily increasing after falling to a low of 2,993 tonnes in 2015. In fact, the African nation overtook longtime frontrunner Canada to become the third largest uranium-producing country in 2020, putting out 5,413 tonnes of the material.
The country is home to two uranium mines that are capable of producing 10 percent of the world’s output. Uranium miner Paladin Energy (ASX:PDN,OTCQX:PALAF) owns the Langer Heinrich mine, and mining major Rio Tinto (NYSE:RIO,ASX:RIO,LSE:RIO) controls the majority of the Rössing mine.
In 2017, Paladin took Langer Heinrich offline due to weak uranium prices. In 2020, the uranium spot price began to rise, prompting the uranium miner to ramp up restart efforts.
Mine production: 3,885 tonnes
Canada’s uranium output has fallen dramatically in recent years since hitting a peak of 14,039 tonnes in 2016. After producing 6,938 tonnes of yellowcake in 2019, Canadian uranium production sank to 3,885 tonnes in 2020 as the COVID-19 pandemic led to operational shutdowns.
Uranium exploration is also very prevalent in Canada, with the majority occurring in the uranium-dense Athabasca Basin. That particular area of Saskatchewan is world renowned for its high-quality uranium deposits and friendly mining attitude. The province’s long history with the uranium-mining industry has helped Saskatchewan assert itself as an international leader in the uranium sector.
Mine production: 3,500 tonnes
In 2020, with an estimated 3,500 tonnes of output, Uzbekistan became one of the top five uranium-producing countries. Domestic uranium production has been gradually increasing in the Central Asian nation since 2016. Previously the seventh in terms of global uranium output, it is expanding production via Japanese and Chinese joint ventures.
Navoi Mining & Metallurgy Combinat is part of state holding company Kyzylkumredmetzoloto, and handles all the mining and processing of the domestic uranium supply.
Mine production: 2,991 tonnes
Niger’s uranium production has declined year-over-year over the past decade, with output totaling 2,991 tonnes in 2020. The African nation has two uranium mines in production, SOMAIR and COMINAK, which account for 5.5 percent of the world’s uranium production.
Both projects are operated by subsidiaries of Orano, a private uranium miner with projects in top uranium-producing countries Kazakhstan and Canada.
Niger is also home to the flagship project of explorer GoviEx Uranium (TSXV:GXU,OTCQB:GVXXF). The uranium company is presently developing its Madaeouela asset, as well as projects in Zambia and Mali.
Mine production: 2,846 tonnes
Russia was in seventh place in terms of uranium production in 2020. Output has been steady in the country since 2011, usually coming in near the 3,000 tonne range.
The top uranium-producing country is expected to increase its production in the coming years to meet its energy needs and growing uranium demand around the world. However, Russian uranium has been an area of controversy in recent years, with the US conducting a Section 232 investigation around the security of uranium imports from that region.
In terms of domestic uranium production, Rosatom, a subsidiary of ARMZ Uranium Holding, owns the country’s Priargunsky underground mine and is working on developing the Vershinnoye deposit in Southern Siberia through a subsidiary.
Mine production: 1,885 tonnes
China’s uranium production rose from 885 tonnes in 2011 to 1,885 tonnes in 2018, and has been holding steady since then. China General Nuclear Power, the country’s sole domestic uranium supplier, is looking to expand nuclear fuel supply deals with Kazakhstan and additional foreign uranium companies.
China’s goal is to supply one-third of its nuclear fuel cycle with uranium from domestic producers, obtain one-third through foreign equity in mines and joint ventures overseas and purchase one-third on the open uranium market. China is also leading the way in nuclear energy generation; Mainland China has 51 nuclear reactors with an additional 18 in construction.
Mine production: 400 tonnes
After reaching a high of 1,200 tonnes in 2015, uranium production in Ukraine slid to 800 tonnes in 2016. After a few more years at around the 800 tonne level, output dropped to 400 tonnes in 2020.
Ukraine is heavily dependent on nuclear power, and has 15 reactors that meet about half of the country’s electricity requirements. Most of its uranium demand is met through Russian uranium.
Ukraine holds just 2 percent of the world’s known uranium reserves; in comparison, neighboring Russia accounts for 8 percent of the world’s uranium reserves.
Mine production: 400 tonnes
Rounding out the list is India, which produced 400 tonnes of the energy fuel in 2020. The country’s uranium output has held steady between 300 and 420 tonnes over the past decade.
As of 2018, the country had uranium stockpiles of 71,000 tonnes dedicated to its domestic nuclear energy sector. India currently has 23 operating nuclear reactors with another seven under construction. “The Indian government is committed to growing its nuclear power capacity as part of its massive infrastructure development programme,” according to the World Nuclear Association.
“The government has set ambitious targets to grow nuclear capacity.”
Don’t forget to follow us @INN_Resource for real-time news updates!
Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
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