October 18
George Will is right, “World War III is underway.”
https://www.washingtonpost.com/opinions/2024/10/16/world-war-presidential-election-harris-trump/
China is actively engaged in overt espionage against the United States. Chinese agents use drones to spy on sensitive military installations located in the domestic United States. Who is in charge in the White House? A massive espionage campaign by China is underway and the Administration is doing nothing.
@TomRtweets Much of this multiyear effort has focused on Chinese intelligence operatives working without diplomatic cover who have been flying drones and sometimes aircraft into protected airspace to monitor U.S. military training operations.
See also the Wall Street Journal.
Over a year ago, I wrote that nuclear power would be the way forward on green energy.
https://www.washingtonexaminer.com/opinion/beltway-confidential/2738448/is-uranium-the-new-gold/
Does passive smoking, second hand smoke, cause cancer? See below under Politics.
Markets and Stocks
The market is in good shape. Momentum is positive. 6,000 on the S&P is in sight. But stocks are not cheap so invest don’t trade.
The weekly jobless claims report signals a resilient labor market.
September retail sales were stronger than expected. Q3 GDP probably exceeded 3%.
TSMC reports a great quarter and guides higher. TSMC says demand for Nvidia’s chips is extraordinary.
I like Nvidia, TSMC and the entire AI complex.
And I continue to assert that ASML is a must own stock because ASML’s $350 million lithography machines MUST be used to fabricate the most powerful advanced chips.
Barron’s says “investors should carefully dissect ASML’s management comments for the factors underlying the lowered guidance. The company called out weakness in the smartphone and PC markets while emphasizing anything related to AI was “very, very strong.”
ASML’s explanation puts a focus on Intel which makes central processing units, or CPUs, for traditional PCs and servers, and Samsung which is a large memory chip maker and has fallen behind its rivals, such as Micron, in its ability to manufacture the latest high-bandwidth memory for artificial intelligence servers.
https://www.barrons.com/articles/nvidia-stock-asml-chips-2395e721
After Boeing raises equity capital, the stock will be attractive for investors. The Administration and senior Washington state politicians are pressuring Boeing and the union to reach a deal.
Deere announced another small headcount reduction. Deere guided lower a few months ago. Deere is a great investment.
The nuclear power renaissance has arrived.
Nuclear stocks have been huge winners in recent days and weeks.
AWS announced it has signed an agreement with Dominion Energy, Virginia’s utility company, to explore the development of a small modular nuclear reactor, near Dominion’s existing North Anna nuclear power. See CNBC.
Alphabet Inc.’s Google sees nuclear power as a key part of its strategy to get around-the-clock clean energy to operate artificial intelligence facilities, Michael Terrell, senior director of energy and climate, said on Bloomberg Television. See Bloomberg.
Rolls Royce is a major player in the Small modular reactor industry. I think RR will double in the next 2-3 years.
On the uranium sector, Barron’s says:
Important uranium miners include North American leader Cameco and smaller players NexGen Energy andUranium Energy. Investors can also buy uranium enrichment company Centrus Energy. Uranium has to be enriched to be useful in reactors. Having domestic uranium enrichment capabilities is particularly important, because Russia dominates the market and Congress passed a law this year to stop buying Russian uranium. Centrus is already selling a particular kind of uranium, known as High-assay low-enriched uranium, or HALEU, that many of the SMR developers use.
https://www.barrons.com/articles/google-nuclear-energy-deal-nuscale-oklo-bwx-centrus-stocks-43745e97
Uranium stocks are surging. They won’t stop going higher anytime soon. We are in the first inning of the nuclear power renaissance.
The semiconductor capital equipment stocks: KLAC, AMAT and LRCX sold off with ASML. All remain great investments.
I continue to recommend buying Eli Lilly. The Financial Times says LLY’s obesity drugs effectively treat opioid and alcohol addiction.
Economics
Researchers at the University of Chicago explore the concept of the “American Dream,” strong economic and social upward mobility.
Parents who believe in the American Dream invest more in their children. Vivienne and I believed and believe in the Dream of upward mobility. We invested heavily in the boys. That investment is paying strong dividends today.
We believe in education, and all three boys do as well. Human capital is essential for a prosperous nation. And human capital flourishes with strong families and communities.
The American Dream is more than an abstract idea for parents, and this work provides some of the first causal evidence for the influence of such beliefs on parental decision-making.
In doing so, this research contributes to current discussions about the relevance of the American Dream, especially regarding widespread perceptions of increasingly lower returns to college education.
This pessimism about higher education is countered by an otherwise growing economy with a consistently low unemployment rate, which suggests a mismatch between parents’ economic perceptions and the stakes of their children’s educational attainment.
Given the link between beliefs about children’s economic mobility prospects and parents’ investment in children as revealed in this work, current parental attitudes about the economy could jeopardize children’s educational futures.
Politics
Is passive smoking bad for health? The truth matters.
In 2003, UCLA epidemiologist James Enstrom and I published a study of environmental tobacco smoke (ETS)—also called "secondhand smoke" or "passive smoking"—in the British Medical Journal (BMJ). Using data from the American Cancer Society's prospective study of 1 million adults, we concluded that ETS exposure was not associated with increased mortality.
Since that conclusion flew in the face of the conventional wisdom that had long driven state and local bans on smoking in public places, our study understandably sparked a controversy in the public health community. But the intensity of the attack on us in the pages of a medical journal—by critics who were certain that our study had to be wrong but typically failed to provide specific evidence of fatal errors—vividly illustrates what can happen when policy preferences that have taken on the status of doctrine override rational scientific debate.
A recent study by American Cancer Society (ACS) researchers underscores that point by showing that, contrary to what our critics asserted, the cancer risk posed by ETS is likely negligible. The authors present that striking result without remarking on it, which may reflect their reluctance to revisit a debate that anti-smoking activists and public health officials wrongly view as long settled.
Exposure to ETS is known to cause eye and throat irritation and to exacerbate preexisting respiratory conditions. In addition, it is simply disagreeable to many people (including me). But assessing the claim that ETS is potentially deadly requires dispassionate examination of the available scientific evidence.
That is not what Enstrom and I encountered when we published our BMJpaper. Critics were outraged by the article and demanded its retraction. But they were never able to satisfactorily explain why such an extreme step was justified.
https://reason.com/2024/10/16/we-were-wrong-to-panic-about-secondhand-smoke/
The truth matters.
Sociology
A new book The Invention of Good and Evil By Hanno Sauer, explains why human beings will cooperate within their self identified group. Humans especially cooperate within the traditional family unit, parents and children and maybe grandparents.
Much of his argument hinges on a trait that sets humans apart from other animals: the extraordinary complexity of their social relations. People’s early ancestors lived in an unstable environment, the African savannah, and developed “an unusually spontaneous and surprisingly flexible capacity for co-operation”.
Since a hunting party might be successful one week but return empty-handed the next, rules emerged about sharing meat with the wider group, to maximise every member’s chance of survival. Competition with other bands of hunter-gatherers over territory swiftly turned violent, however. “Inwardly, our ancestors were family-centric pacifists, but outwardly, they were gangs of murderers and plunderers,” the author writes.
Wars ravaged hunter-gatherer societies yet involved great individual altruism. When each person’s survival depends to a large degree on the clan’s, people have an incentive to co-operate selflessly to defend it. From an evolutionary perspective, such self-sacrifice made sense only if the beneficiaries were closely related. See also The Economist.
Even men in prison will generally cooperate in order to minimize the upheavals of dorm shakedowns or dorm confinement, no recreation or canteen. Cooperation minimizes friction.