This week, the liquid energy markets exhibited some serious stress. Oil surged in both $WTIC (North America benchmark) and $BRENT, an international benchmark to levels not expected even one or two months ago. Natural Gas also soared in some regions. The..
This week, the liquid energy markets exhibited some serious stress. Oil surged in both $WTIC (North America benchmark) and $BRENT, an international benchmark to levels not expected even one or two months ago. Natural Gas also soared in some regions. The good news is that we were working down excess inventories that were built up during the pandemic.
$WTIC - USA - West Texas Benchmark
This oil price chart has quickly accelerated since November, getting another push over the last week. Having oil back to the average of 2019 is a big surprise. Everyone just assumes it will stop near there.
The International Benchmark $BRENT
The same is true for $BRENT. It is mid-range of the 2019 pricing now.
In December, everyone was hoping for a $50 average. I think OPEC+ has been successful in tightening inventories. Improving control by OPEC and a shortage of capital for liquid energy is muting the recovery of production for 2021. Oil reservoirs decline meaningfully each year and new wells have to replace old wells.
I noticed RBC bumped their estimates for crude to average over $60 this year. Notice the bump is just up to the current price.
Photo from Twitter: @Michael_Tran With RBC.
It looks like the oil rally might moderate a bit in the short term. Saudi Arabia announced they are in favour of bumping up production to control some of the price surge occurring this week. Oil is down 1% as I write this. So what should an investor do now?
Climate Change
I still believe the lack of investment in liquid energy worldwide is a problem until the electrical grid grows rapidly. We could be well above these crude price numbers by year end. As the recent price surge gives way to a pullback -nothing goes up in a straight line - I want to use the opportunity to find the investments to carry me into the fall. Normally, I would be trophy hunting for oil names around the first Friday in July, as it is the start of the Calgary Stampede and just so happens to be a time to look for a low in oil names.
Recently, the date has lost some of its bottom-picking accuracy, but, as the vaccine starts to allow economies to return to some level of normal, I expect oil demand to be one of the most obvious surges due to normalization. I think it was JP Morgan's analysis of Israel that, with 40% of the citizens vaccinated, they could drop the case count to zero by June. If, all of a sudden, this COVID-19 situation shrinks by the summertime, a lot of business plans will move forward rapidly. My July date would clearly be late.
USA oil inventories are migrating below the 5-year average suddenly, and countries like Brazil, India and China continue to use more than the prior years. We'll need significant inputs from OPEC for global balance as these developing economies increase their thirst for oil. Just because OPEC adds a little doesn't mean oil surpluses are continuing. It is widely believed OPEC has a 6-7% increase of global production volume available (6-7 Million barrels/day).
The longer-term global reduction in new oil production is probably in the range of 5% coming off the pandemic. (That is just my back-of-the-napkin guesstimate.) This is also due to the continued lack of investment in fossil fuels that the world is experiencing, not including the annual reservoir declines as we drain the oil out of existing wells. That doesn't leave a lot of spare capacity should we have more issues with weather, geopolitics, the continued lack of investment, few new mega-projects, increased carbon taxes taking R&D money away from the industry and a lack of new grads entering the industry.
People Die without Energy
As we saw in Texas, we were hours from having a huge grid implosion. An 11-year-old died of hypothermia as the home was not heated. The utility companies keep operating the grids close to maximum draws. If I am not mistaken, Washington state, Oregon, California, Texas and New York have all suffered major power outages this year. Those are some large-population states. 14 states - from Montana to Texas - suffered major power outages, wiping out the centre of the nation with one recent storm. It was a big storm, but it was still one storm. Whether it is electrical power from solar, wind, natural gas or other sources, we need energy. Do we have to wipe out the energy grid simultaneously across America to see the fragility?
A long-term major breakdown could have killed thousands quickly. From my helicopter view, as we move closer and closer to "just in time" for -capital efficiency-, we risk being closer to the nightmare scenario.
Hoarding
The US is currently controlling vaccines shipping out of the country. This is a first response by governments when faced with shortfalls. A new rumour circulates every month that China is hoarding rare-earth metals. Within America, Texas just announced no shipping of Natural Gas to neighbouring states when shortages started to show up. It's a natural reaction to keep it for your own voting residents, whatever the shortage is.
My suggestion is be very careful shorting energy at all. As the electric grid comes under increased load by moving to electric transportation without building out the grid in advance, we are looking at the setup for a perfect storm. In Texas, it was a combination of renewable but predictably inconsistent supply due to little wind and frozen windmills, as well as snow on the solar panels. We understand that about renewable energy. They may not spin or shine on any given day. Fossil fuels waxed up as the temperature dropped and small amounts of water in the grid systems froze pipeline valves, disrupting supply (not the first time weather affected output). Refinery outages (power, freezing issues, preventative shutdowns) stopped refining liquid energy like gasoline and diesel, and we have seen shutdowns in hurricanes before. Various types of supplies failed this week in Texas, but the government was quick to block sharing some of these assets. As this energy grid comes under more pressure, don't be surprised if that happens more and more.
If you google major power outages in 2021, we have already had 247 globally according to Wikipedia in 45 days.
All of this goes on behind the drive for capital efficiency, which is the opposite of reliability. It's reliable on normal days. I realize everyone wants to invest in green energy. One green power company lost $80 million in a few days in Texas as their windmills froze. Everyone tries to make energy, but these situations happen. The last time a freeze lasted this many days in Texas was 90 years ago. That was long before the discussion of climate change. We still have to plan for that strange anomaly called weather, but the current methods don't. It also suggests how quickly terrorism on a utility network can stall a country. That was a major strategy during wars. Take out infrastructure. Now it is more subtle. They use network viruses.
It's not limited to grid construction or refinery utilization. In January, the reddit traders also came close to taking down the financial markets, according to Thomas Peterffy. That was a mood swing, or crowd mania, that caused that. But the fact that Robinhood's backers had kept capital at a minimum requirement almost crushed the company. As Tenev said, they could not have come up with the $3 Billion.
I am reminded that Capital Efficiency Ratios were an issue in 2008 for the financials. At the time, US banks were pressuring US regulators. They were citing the low capital requirements for European and Asian banks. The extreme ratios the banks were using created stress when everything unwound. The systemically important banks now have this as a regular review. Somehow, grid infrastructure does not have this.
As we move to green energy, I would suggest investing in fossil fuel as a continued source of energy could be a real bridge we need. Either the power companies expand the grid rapidly and we pay huge increases in per kilowatt hour rates, or expect the grid to become a significant hurdle in business operations. An example is the semiconductor sector, which was already dealing with output shortages. They shut down chip facilities in Texas this week, due to power supplies and weather, when they already have an output shortage. The backdrop of reliable energy is fading quickly. We are getting less reliable energy.
Bill Gates' new book estimates we have to double the grid by 2050 for transportation electrification. I've bought the book this week, but have not read it yet. Elon Musk also talks about doubling the grid.
We have been expanding the global suction of electrical use (cellphones, more appliances, heating/cooling, multiple TV's, alarm systems, internet always on, ROKU, Apple, Google Chrome boxes, more decorative lighting in homes, backyard lighting, under counter, mood lighting, bitcoin farming) before cars. Now we want to charge 1000 horsepower Hummers, not 75 HP econoboxes. Just analyze the horsepower numbers these new electrical cars are coming out with. It would suggest that doubling claim is woefully inadequate. We also have the issue as developing economies need electricity. Even within the US, there are developing low-income micro-economies within the US economy. When the grid has expanded significantly, we might be able to transfer the load. Until the grid is ready, we are living with the possibility of multiple events occurring at the same time that crashes the current combination of infrastructure. A desire to create massive electricity demand before the money comes to expand the grid is a nightmare scenario.
Analysts are just starting to ramp up their oil price estimates. Some have moved 20% inside 60 days. Interestingly, they still see the 2021 average no higher than the current price. Rarely are they exaggerating coming out of the lowest level ever. Usually we see exaggeration at the top where the trend line is drawn to infinity.
Some analysts are having trouble believing 2019 prices hold and oil will fall back. An energy analyst with his own newsletter (full-time career) was expecting oil prices to plummet in December 2020/January 2021 as recently as December 2020. That is how scared analysts are for predicting higher oil prices. They have been kicked down for the last 10 years.
Some analysts are just waking up to the storm in front of us. Peter Lynch, Warren Buffett and David Tepper all like oil companies here. Jim Cramer calls it 'un-investable' now that he bought a Tesla.
My suggestion: Look for opportunities in energy. All kinds of energy.
Former Project Veritas & O’Keefe Media Group operative and Pfizer formulation analyst scientist Justin Leslie revealed previously unpublished recordings showing Pfizer’s top vaccine researchers discussing major concerns surrounding COVID-19 vaccines. Leslie delivered these recordings to Veritas in late 2021, but they were never published:
Principal scientist at Pfizer, Kanwall Gill in 2021:
“We had no idea how it’s going to look like. MRNA vaccines have been there for 50 years, but nothing went to clinical trial because MRNA have been known to have side effects.”
Featured in Leslie’s footage is Kanwal Gill, a principal scientist at Pfizer. Gill was weary of MRNA technology given its long research history yet lack of approved commercial products. She called the vaccines “sneaky,” suggesting latent side effects could emerge in time.
Gill goes on to illustrate how the vaccine formulation process was dramatically rushed under the FDA’s Emergency Use Authorization and adds that profit incentives likely played a role:
Pfizer's principal scientist in 2021:
“It takes 10 year for a vaccine to come out. It takes years of observations... we are doing everything at the same time."
"It’s going to affect my heart, and I’m going to die. And nobody’s talking about that."
Leslie recorded another colleague, Pfizer’s pharmaceutical formulation scientist Ramin Darvari, who raised the since-validated concern that repeat booster intake could damage the cardiovascular system:
Pfizer's pharmaceutical formulation scientist, Ramin Darvari, in 2021:
“They’re engineering it specifically for me to take the next one, so increasing my consumption."
“It’s going to affect my heart, and I’m going to die. And nobody’s talking about that.”
None of these claims will be shocking to hear in 2024, but it is telling that high-level Pfizer researchers were discussing these topics in private while the company assured the public of “no serious safety concerns” upon the jab’s release:
Vaccine for Children is a Different Formulation
Leslie sent me a little-known FDA-Pfizer conference — a 7-hour Zoom meeting published in tandem with the approval of the vaccine for 5 – 11 year-olds — during which Pfizer’s vice presidents of vaccine research and development, Nicholas Warne and William Gruber, discussed a last-minute change to the vaccine’s “buffer” — from “PBS” to “Tris” — to improve its shelf life. For about 30 seconds of these 7 hours, Gruber acknowledged that the new formula was NOT the one used in clinical trials (emphasis mine):
“The studies were done using the same volume… but contained the PBS buffer. We obviously had extensive consultations with the FDA and it was determined that the clinical studies were not required because, again, the LNP and the MRNA are the same and the behavior — in terms of reactogenicity and efficacy — are expected to be the same.”
According to Leslie, the tweaked “buffer” dramatically changed the temperature needed for storage: “Before they changed this last step of the formulation, the formula was to be kept at -80 degrees Celsius. After they changed the last step, we kept them at 2 to 8 degrees celsius,” Leslie told me.
The claims are backed up in the referenced video presentation:
I’m no vaccinologist but an 80-degree temperature delta — and a 5x shelf-life in a warmer climate — seems like a significant change that might warrant clinical trials before commercial release.
Despite this information technically being public, there has been virtually no media scrutiny or even coverage — and in fact, most were told the vaccine for children was the same formula but just a smaller dose — which is perhaps due to a combination of the information being buried within a 7-hour jargon-filled presentation and our media being totally dysfunctional.
Bohemian Grove?
Leslie’s 2-hour long documentary on his experience at both Pfizer and O’Keefe’s companies concludes on an interesting note: James O’Keefe attended an outing at the Bohemian Grove.
Leslie offers this photo of James’ Bohemian Grove “GATE” slip as evidence, left on his work desk atop a copy of his book, “American Muckraker”:
My thoughts on the Bohemian Grove: my good friend’s dad was its general manager for several decades. From what I have gathered through that connection, the Bohemian Grove is not some version of the Illuminati, at least not in the institutional sense.
Do powerful elites hangout there? Absolutely. Do they discuss their plans for the world while hanging out there? I’m sure it has happened. Do they have a weird ritual with a giant owl? Yep, Alex Jones showed that to the world.
My perspective is based on conversations with my friend and my belief that his father is not lying to him. I could be wrong and am open to evidence — like if boxer Ryan Garcia decides to produce evidence regarding his rape claims — and I do find it a bit strange the club would invite O’Keefe who is notorious for covertly filming, but Occam’s razor would lead me to believe the club is — as it was under my friend’s dad — run by boomer conservatives the extent of whose politics include disliking wokeness, immigration, and Biden (common subjects of O’Keefe’s work).
Therefore, I don’t find O’Keefe’s visit to the club indicative that he is some sort of Operation Mockingbird asset as Leslie tries to depict (however Mockingbird is a 100% legitimate conspiracy). I have also met James several times and even came close to joining OMG. While I disagreed with James on the significance of many of his stories — finding some to be overhyped and showy — I never doubted his conviction in them.
As for why Leslie’s story was squashed… all my sources told me it was to avoid jail time for Veritas executives.
Feel free to watch Leslie’s full documentary here and decide for yourself.
Fun fact — Justin Leslie was also the operative behind this mega-viral Project Veritas story where Pfizer’s director of R&D claimed the company was privately mutating COVID-19 behind closed doors:
BREAKING: @Pfizer Exploring "Mutating" COVID-19 Virus For New Vaccines
"Don't tell anyone this...There is a risk...have to be very controlled to make sure this virus you mutate doesn't create something...the way that the virus started in Wuhan, to be honest."#DirectedEvolutionpic.twitter.com/xaRvlD5qTo
“[…] our findings support the hypothesis that the intrauterine environment, particularly essential and non-essential metals, affect epigenetic aging biomarkers across the life course.”
Credit: 2024 Bozack et al.
“[…] our findings support the hypothesis that the intrauterine environment, particularly essential and non-essential metals, affect epigenetic aging biomarkers across the life course.”
BUFFALO, NY- March 12, 2024 – A new research paper was published inAging (listed by MEDLINE/PubMed as “Aging (Albany NY)” and “Aging-US” by Web of Science) Volume 16, Issue 4, entitled, “Associations of prenatal one-carbon metabolism nutrients and metals with epigenetic aging biomarkers at birth and in childhood in a US cohort.”
Epigenetic gestational age acceleration (EGAA) at birth and epigenetic age acceleration (EAA) in childhood may be biomarkers of the intrauterine environment. In this new study, researchers Anne K. Bozack, Sheryl L. Rifas-Shiman, Andrea A. Baccarelli, Robert O. Wright, Diane R. Gold, Emily Oken, Marie-France Hivert, and Andres Cardenas from Stanford University School of Medicine, Harvard Medical School, Harvard T.H. Chan School of Public Health, Columbia University, and Icahn School of Medicine at Mount Sinai investigated the extent to which first-trimester folate, B12, 5 essential and 7 non-essential metals in maternal circulation are associated with EGAA and EAA in early life.
“[…] we hypothesized that OCM [one-carbon metabolism] nutrients and essential metals would be positively associated with EGAA and non-essential metals would be negatively associated with EGAA. We also investigated nonlinear associations and associations with mixtures of micronutrients and metals.”
Bohlin EGAA and Horvath pan-tissue and skin and blood EAA were calculated using DNA methylation measured in cord blood (N=351) and mid-childhood blood (N=326; median age = 7.7 years) in the Project Viva pre-birth cohort. A one standard deviation increase in individual essential metals (copper, manganese, and zinc) was associated with 0.94-1.2 weeks lower Horvath EAA at birth, and patterns of exposures identified by exploratory factor analysis suggested that a common source of essential metals was associated with Horvath EAA. The researchers also observed evidence of nonlinear associations of zinc with Bohlin EGAA, magnesium and lead with Horvath EAA, and cesium with skin and blood EAA at birth. Overall, associations at birth did not persist in mid-childhood; however, arsenic was associated with greater EAA at birth and in childhood.
“Prenatal metals, including essential metals and arsenic, are associated with epigenetic aging in early life, which might be associated with future health.”
Read the full paper: DOI:https://doi.org/10.18632/aging.205602
Corresponding Author: Andres Cardenas
Corresponding Email:andres.cardenas@stanford.edu
Keywords: epigenetic age acceleration, metals, folate, B12, prenatal exposures
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About Aging:
Launched in 2009, Aging publishes papers of general interest and biological significance in all fields of aging research and age-related diseases, including cancer—and now, with a special focus on COVID-19 vulnerability as an age-dependent syndrome. Topics in Aging go beyond traditional gerontology, including, but not limited to, cellular and molecular biology, human age-related diseases, pathology in model organisms, signal transduction pathways (e.g., p53, sirtuins, and PI-3K/AKT/mTOR, among others), and approaches to modulating these signaling pathways.
Please visit our website at www.Aging-US.com and connect with us:
National insurance, income tax, VAT, capital gains tax, inheritance tax… it’s easy to get confused about the many different ways we contribute to the cost of running the country. The budget announcement is the key time each year when the government shares its financial plans with us all, and announces changes that may make a tangible difference to what you pay.
But you’ll likely be hearing a lot more about taxes in the coming months – promises to cut or raise them are an easy win (or lose) for politicians in an election year. We may even get at least one “mini-budget”.
If you’ve recently entered the workforce or the housing market, you may still be wrapping your mind around all of these terms. Here is what you need to know about the different types of taxes and how they affect you.
The UK broadly uses three ways to collect tax:
1. When you earn money
If you are an employee or own a business, taxes are deducted from your salary or profits you make. For most people, this happens in two ways: income tax, and national insurance contributions (or NICs).
If you are self-employed, you will have to pay your taxes via an annual tax return assessment. You might also have to pay taxes this way for interest you earn on savings, dividends (distribution of profits from a company or shares you own) received and most other forms of income not taxed before you get it.
VAT and excise duties are taxes on most goods and services you buy, with some exceptions like books and children’s clothing. About 20% of the total tax collected is VAT.
3. Taxes on wealth and assets
These are mainly taxes on the money you earn if you sell assets (like property or stocks) for more than you bought them for, or when you pass on assets in an inheritance. In the latter case in the UK, the recipient doesn’t pay this, it is the estate paying it out that must cover this if due. These taxes contribute only about 3% to the total tax collected.
You also likely have to pay council tax, which is set by the council you live in based on the value of your house or flat. It is paid by the user of the property, no matter if you own or rent. If you are a full-time student or on some apprenticeship schemes, you may get a deduction or not have to pay council tax at all.
This article is part of Quarter Life, a series about issues affecting those of us in our 20s and 30s. From the challenges of beginning a career and taking care of our mental health, to the excitement of starting a family, adopting a pet or just making friends as an adult. The articles in this series explore the questions and bring answers as we navigate this turbulent period of life.
Put together, these totalled almost £790 billion in 2022-23, which the government spends on public services such as the NHS, schools and social care. The government collects taxes from all sources and sets its spending plans accordingly, borrowing to make up any difference between the two.
Income tax
The amount of income tax you pay is determined by where your income sits in a series of “bands” set by the government. Almost everyone is entitled to a “personal allowance”, currently £12,570, which you can earn without needing to pay any income tax.
You then pay 20% in tax on each pound of income you earn (across all sources) from £12,570-£50,270. You pay 40% on each extra pound up to £125,140 and 45% over this. If you earn more than £100,000, the personal allowance (amount of untaxed income) starts to decrease.
If you are self-employed, the same rates apply to you. You just don’t have an employer to take this off your salary each month. Instead, you have to make sure you have enough money at the end of the year to pay this directly to the government.
The government can increase the threshold limits to adjust for inflation. This tries to ensure any wage rise you get in response to higher prices doesn’t lead to you having to pay a higher tax rate. However, the government announced in 2021 that they would freeze these thresholds until 2026 (extended now to 2028), arguing that it would help repay the costs of the pandemic.
Given wages are now rising for many to help with the cost of living crisis, this means many people will pay more income tax this coming year than they did before. This is sometimes referred to as “fiscal drag” – where lower earners are “dragged” into paying higher tax rates, or being taxed on more of their income.
National insurance
National insurance contributions (NICs) are a second “tax” you pay on your income – or to be precise, on your earned income (your salary). You don’t pay this on some forms of income, including savings or dividends, and you also don’t pay it once you reach state retirement age (currently 66).
While Jeremy Hunt, the current chancellor of the exchequer, didn’t adjust income tax meaningfully in this year’s budget, he did announce a cut to NICs. This was a surprise to many, as we had already seen rates fall from 12% to 10% on incomes higher than £242/week in January. It will now fall again to 8% from April.
While this is charged separately to income tax, in reality it all just goes into one pot with other taxes. Some, including the chancellor, say it is time to merge these two deductions and make this simpler for everyone. In his budget speech this year, Hunt said he’d like to see this tax go entirely. He thinks this isn’t fair on those who have to pay it, as it is only charged on some forms of income and on some workers.
I wouldn’t hold my breath for this to happen however, and even if it did, there are huge sums linked to NICs (nearly £180bn last year) so it would almost certainly have to be collected from elsewhere (such as via an increase in income taxes, or a lot more borrowing) to make sure the government could still balance its books.
There are likely to be further tweaks to the UK’s tax system soon, perhaps by the current government before the election – and almost certainly if there is a change of government.
Wealth taxes may be in line for a change. In the budget, the chancellor reduced capital gains taxes on sales of assets such as second properties (from 28% to 24%). These types of taxes provide only a limited amount of money to the government, as quite high thresholds apply for inheritance tax (up to £1 million if you are passing on a family home).
There are calls from many quarters though to look again at these types of taxes. Wealth inequality (the differences between total wealth held by the richest compared to the poorest) in the UK is very high (much higher than income inequality) and rising.
But how to do this effectively is a matter of much debate. A recent study suggested a one-off tax on total wealth held over a certain threshold might work. But wealth taxes are challenging to make work in practice, and both main political parties have already said this isn’t an option they are considering currently.
Andy Lymer and his colleagues at the Centre for Personal Financial Wellbeing at Aston University currently or have recently received funding for their research work from a variety of funding bodies including the UK's Money and Pension Service, the Aviva Foundation, Fair4All Finance, NEST Insight, the Gambling Commission, Vivid Housing and the ESRC, amongst others.
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