June 24
Gasoline prices: $3.22 as of yesterday. One week ago, $3.14 One month ago $3.20. Cars are expensive to purchase, to operate and to repair. See below.
Uber is also expensive. Riding a bike is inexpensive, good exercise but exhausting in the heat of a South Florida summer. It is also dangerous cycling in Naples. I cycle every day, but I still spend over $15,000 a year on Uber and Lyft. Public transportation is effectively non existent in Naples.
A bike is not an effective form of transportation for grocery shopping. But there is always Whole Foods and Walmart for online shopping. E-commerce is wonderful and under appreciated.
At the very bottom see some personal comments about my status as an ex-felon.
Iran Response
My guess is that Iran will respond with asymmetric attacks, assassinations and targeted operations against soft US interests and citizens.
I think back to my days flying back and forth to Chad in the early 1980s. During that time I was making that journey for the United States government, two commercial airliners on flights to N’Djamena, the capital, were blown out of the sky. It was unnerving to sit down in my Air Afrique seat knowing that a plane on the same route was destroyed over the Sahara just two days before I flew. But you do your job.
I doubt that Iran will try to block the Straits of Hormuz because half of Iranian government revenue is derived from oil exports through the Straits.
https://www.nytimes.com/2025/06/22/opinion/iran-israel-attack-global-struggle.html
The global economy is well supplied with oil.
And the chart only illustrates excess supply in the Middle East. Significant new oil supply is coming on line in the Americas.
Don’t chase oil. But natural gas and nuclear power are great long term investment opportunities.
Markets and Stocks
I like the market. I look for new all time highs within a few months. My year end target remains 6,300 up about 5% from current levels.
I like the big banks. Significant regulatory relief on capital requirements should come in July. Banks will be able to return more capital to shareholders.
M&A activity will help the sector. DealBook of the New York Times reports:
Bank of New York Mellon approaches Northern Trust about a merger. The lender reached out to its smaller rival about a potential deal, which would create a new giant bank, DealBook hears, confirming a report by The Wall Street Journal. There’s no guarantee a deal will be reached, though the Trump administration has shown an openness to financial services consolidation.
I like Flagstar, FLG, a lot. I think it will double in a few years.
I believe GS, JPM, BAC are great investments, as is AXP.
AI is essential for national prosperity and national security.
On the latter, see Reuters: AI firm DeepSeek is aiding China's military and intelligence operations, a senior US official told Reuters, adding that the Chinese tech startup sought to use Southeast Asian shell companies to access high-end semiconductors that cannot be shipped to China under US rules.
China will steal U.S. and European technology but diffusion of U.S. AI technology will keep the U.S. ahead of China.
I continue to be all in on the AI trade. Micron, a favorite, reports tomorrow after the close.
Gasoline prices are only up a few pennies from a month ago. I am confident consumer spending will remain positive in spite of higher gasoline prices, the weight of Trump’s tariffs and the negative employment effects of Trump’s immigration policies.
To be clear, I strongly support significantly more immigration by the best and the brightest. Moreover, over the long term, two decades, even illegal migration is positive for economic growth. But the law is the law. Every American has a duty to obey the law. Protest is great but obeying the law is a paramount duty.
Productivity
AI and automation will save the United States from economic stagnation.
Robots are being developed and deployed to automate the physically demanding task of loading and unloading trucks. Companies such as DHL, UPS, FedEx and Walmart are adopting robots to improve efficiency and cut costs in their warehouses. Advances in AI, sensors and image processing enable robots to handle heavy and oddly shaped packages, but some limitations remain. https://www.wsj.com/business/logistics/the-holy-grail-of-automation-now-a-robot-can-unload-a-truck-ad527ba8
Economics
Embrace mobile homes as a partial solution to the housing shortage.
Mobile homes can be produced in high volumes at a lower cost than traditional stick-built single-family dwellings but face regulatory, financial, and perceptual barriers to more widespread market penetration.
This research relies on data from a sample of US cities and counties to examine the influence of local land use regulations on the concentration of new mobile homes among all new homes added over two 10-year time spans.
In contrast to previous studies, this study relies on a nationwide sample of jurisdictions, employs more precise measures of mobile home placements and local land use regulations, and addresses the endogeneity of mobile home restrictions.
I find that regulatory restrictions on mobile homes and urban containment boundaries both limit the concentration of new mobile homes. Furthermore, the impact of mobile home restrictions is much larger when accounting for the endogeneity of mobile home restrictions.
These findings suggest that land use regulatory reform can play an important role in local affordable housing strategies geared towards expanding the supply of mobile homes.
https://journals.sagepub.com/doi/abs/10.1177/00420980251335564
Nuclear Power
For decades, the United States has been the world’s biggest producer of nuclear energy, accounting for 30% of global production. The country, however, currently imports 98% of the uranium feedstock it needs to power its 94 nuclear reactors. Indeed, the U.S. accounts for less than 1% of the world’s uranium output, with Kazakhstan, Canada, and Namibia accounting for nearly two-thirds of global production.
The country’s nuclear age peaked in the 1960s to the mid-1980s when it was the leader in uranium production.
The downtrend that followed can largely be chalked up to government policy, with Washington de-prioritizing away from the uranium sector, including providing less government funding and subsidies to support it over the decades.
Personal Transportation
According to U.S. Bureau of Labor Statistics, the total cost to own and operate an automobile averaged a frightening $12,296 in 2024, roughly 30% higher than a decade ago. Driving the numbers are new-vehicle prices, now averaging $48,883, according to Cox Automotive’s latest data. With middle-income buyers priced out of new cars, demand for used cars has strengthened, now averaging around $25,500.
Among the major stressors: car insurance. Lexis-Nexis Risk Solutions’ annual report found average insurance costs rose 10% in 2024, after soaring 15% in 2023. Full-coverage policies now average $2,680 annually, up 12% from June 2024, says Bankrate.
And whatever you do, don’t mention depreciation. In 2024, the AAA calculated the average new vehicle loses an eye-watering $4,680 in value every year, over the first five years. Edmunds reported that in the last quarter 2024, one in four consumers were underwater on a car loan—meaning that they owed more than the vehicle’s market value.
The spike in personal transportation is a budget buster. Many thousands of families face being forced out of their cars and into what is effectively a second-class citizenship. What are we supposed to tell a generational workforce that is going broke just getting to work? Take one of America’s fine new trains? https://www.wsj.com/lifestyle/cars/americas-love-affair-with-the-car-has-soured-over-money-4b73670f
My Status as an Ex Felon
I learned last week that I need to be interviewed at the British Embassy in Washington DC in order to obtain a visa to travel to the United Kingdom.
And I guess I will have to have an interview to travel to Europe next summer to attend a wedding ceremony for Riana and Charlie.
You do the crime, you do the time. And as Harlon Salmona always reminded me “it is all part of the sentence.”
Sunday evening returning by Uber from playing golf, as the Uber pulled into the parking lot of my residence complex, a police cruiser was pulling out of parking spaces adjacent to the apartment building where I live. I felt a surge of panic. But I thought “I walk the line.” The fear of going back never goes away and that too keeps me walking the line.
Prison is extremely unpleasant. Don’t drink and drive.