Time to Slop the Corporatist Hogs

[] [View in browser]( [View in browser]( [] MAR 1 2023 [] [] DON YOCHAM Knowing is not the Point It seems everywhere you look, industrial policy is creeping back into America. Just yesterday, the “Bread and Circus Brigade” opened the gates to a $53 billion trough. That’s the amount of subsidies the U.S. government is willing to feed corporate semiconductor giants to entice them to build chip fabrication plants here in the U.S. – i.e. the CHIPS Act. Now, thankfully, companies have a few hurdles to clear first. I mean, after all, the commies in Biden’s administration have their priorities too. In order to get the Commerce Department to strike a check, the government will “be implementing a number of safeguards to ensure companies that receive funding are holding up their end of the bargain.” And that bargain includes: • Diversity and inclusion will be a staffing priority (gotta make sure propagandists have a place to sit during the day). • They must hire union button pushers (presuming robots don’t do everything). • All iron and steel will be Made in the U.S.A. (I guess that rules out repurposing or recycling existing facilities). • The companies have to provide affordable child care (think about the children). • They can’t just use the money to pay dividends or buy-back stock (which assumes the government should be handing out checks in the first place). • They gotta share their profits with the government (wink, wink, nudge, nudge). • No business expansion in China for 10 years (our commies don’t like their commies) “We are not writing blank checks,” assured Gina Raimondo, the head comrade overseeing this particular feeding frenzy. That’s a relief… Now, all this Nouveau Industrialism is giving “journalists” plenty to write about. And those that pretend at “free markets” tend to say something like, “[Governments seldom know better than markets which technologies will succeed, and often burden the effort with objectives having nothing to do with helping the targeted industry thrive]( This rather high-handed justification is technically true. The individuals making decisions for companies tend to have a lot of experience risking money and making profits. You would expect them to be much better at allocating capital than government lackeys. But the truth is, no one is that great at making these decisions. In the book “Why Things Fail,” Paul Ormerod notes that the success rate for new businesses is generally low, with some studies suggesting that as many as 80% of new businesses fail within the first five years. Even when you look past those first five years, 50% of businesses still ultimately fail. And this jives with what I know of company profitability. The average [economic profit]( across all publicly traded U.S. companies is basically zero. Meaning that half of all companies don’t create shareholder value. So, why not let the lackeys have at it? Well, it’s not about good decisions. It’s about bearing the risk of failure. When private interests fail, the Board, CEO, and shareholders feel the pain. But when public interests fail, no one takes the blame. In 2011, Solyndra filed for bankruptcy after receiving a $535 million loan guarantee from the US Department of Energy (DOE) in 2009. But Obama didn’t suffer. He didn’t hold an urgent press briefing acknowledging that donor considerations clouded his judgment. Only taxpayers suffered. With the CHIPS act, we can expect to suffer more. Think Free. Be Free. [] Don Yocham, CFA [] [] JEFF ZANANIRI THE TIME IS NOW! [Get in on The Biggest Trade of Q1 2023]( Before it’s too late… [] [] JEFFRY TURNMIRE’S CHART OF THE WEEK Turning Point for Gold For 3 months, from early November through February 1st, gold moved relentlessly higher… [] A move that U.S. Dollar Index ([DXY]( mirrored in nearly lock step. This is a classic correlation that makes sense. Dollar weakness makes gold cheaper in dollar terms, putting a bid on gold. But the thing about correlations is that they work when they work – and then they don’t. The lesson here being not to get hung up on what’s supposed to work. When tried and true relationships break down – when things don’t work like they should – I always fall back on my Market Roadmap pattern. See that yellow line circled in blue in this week’s chart? That’s my Market Roadmap. It’s now signaling a potential move to new highs for SPDR Gold Shares ([GLD]( – an ETF linked to the price of gold. As I’ve pointed out in “The Chart of the Week,” I’m watching for a potential move to new highs for 2023. GLD is also on my Market Roadmap Watchlist, which you can access for 12 weeks [right here](. It’s only $5. So [click on this link]( for a Roadmap that I believe works when everything else fails [] [] [] MAR 1 2023 [] [] DON YOCHAM Knowing is not the Point It seems everywhere you look, industrial policy is creeping back into America. Just yesterday, the “Bread and Circus Brigade” opened the gates to a $53 billion trough. That’s the amount of subsidies the U.S. government is willing to feed corporate semiconductor giants to entice them to build chip fabrication plants here in the U.S. – i.e. the CHIPS Act. Now, thankfully, companies have a few hurdles to clear first. I mean, after all, the commies in Biden’s administration have their priorities too. In order to get the Commerce Department to strike a check, the government will “be implementing a number of safeguards to ensure companies that receive funding are holding up their end of the bargain.” And that bargain includes: - Diversity and inclusion will be a staffing priority (gotta make sure propagandists have a place to sit during the day). - They must hire union button pushers (presuming robots don’t do everything). - All iron and steel will be Made in the U.S.A. (I guess that rules out repurposing or recycling existing facilities). - The companies have to provide affordable child care (think about the children). - They can’t just use the money to pay dividends or buy-back stock (which assumes the government should be handing out checks in the first place). - They gotta share their profits with the government (wink, wink, nudge, nudge). - No business expansion in China for 10 years (our commies don’t like their commies) “We are not writing blank checks,” assured Gina Raimondo, the head comrade overseeing this particular feeding frenzy. That’s a relief… Now, all this Nouveau Industrialism is giving “journalists” plenty to write about. And those that pretend at “free markets” tend to say something like, “[Governments seldom know better than markets which technologies will succeed, and often burden the effort with objectives having nothing to do with helping the targeted industry thrive]( This rather high-handed justification is technically true. The individuals making decisions for companies tend to have a lot of experience risking money and making profits. You would expect them to be much better at allocating capital than government lackeys. But the truth is, no one is that great at making these decisions. In the book “Why Things Fail,” Paul Ormerod notes that the success rate for new businesses is generally low, with some studies suggesting that as many as 80% of new businesses fail within the first five years. Even when you look past those first five years, 50% of businesses still ultimately fail. And this jives with what I know of company profitability. The average [economic profit]( across all publicly traded U.S. companies is basically zero. Meaning that half of all companies don’t create shareholder value. So, why not let the lackeys have at it? Well, it’s not about good decisions. It’s about bearing the risk of failure. When private interests fail, the Board, CEO, and shareholders feel the pain. But when public interests fail, no one takes the blame. In 2011, Solyndra filed for bankruptcy after receiving a $535 million loan guarantee from the US Department of Energy (DOE) in 2009. But Obama didn’t suffer. He didn’t hold an urgent press briefing acknowledging that donor considerations clouded his judgment. Only taxpayers suffered. With the CHIPS act, we can expect to suffer more. Think Free. Be Free. [] Don Yocham, CFA [] [] JEFF ZANANIRI THE TIME IS NOW! [Get in on The Biggest Trade of Q1 2023]( Before it’s too late… [] [] JEFFRY TURNMIRE’S CHART OF THE WEEK Turning Point for Gold For 3 months, from early November through February 1st, gold moved relentlessly higher… [] A move that U.S. Dollar Index ([DXY]( mirrored in nearly lock step. This is a classic correlation that makes sense. Dollar weakness makes gold cheaper in dollar terms, putting a bid on gold. But the thing about correlations is that they work when they work – and then they don’t. The lesson here being not to get hung up on what’s supposed to work. When tried and true relationships break down – when things don’t work like they should – I always fall back on my Market Roadmap pattern. See that yellow line circled in blue in this week’s chart? That’s my Market Roadmap. It’s now signaling a potential move to new highs for SPDR Gold Shares ([GLD]( – an ETF linked to the price of gold. As I’ve pointed out in “The Chart of the Week,” I’m watching for a potential move to new highs for 2023. GLD is also on my Market Roadmap Watchlist, which you can access for 12 weeks [right here](. It’s only $5. So [click on this link]( for a Roadmap that I believe works when everything else fails [] [] [] Disclaimer & Disclosures ABOUT US: We believe that the opportunity for financial literacy and freedom belongs to all people, not just those who already have years of investing experience. Prosperity Pub provides an array of educational services and products that will help you navigate the markets and become a better investor. Trading is made simple through our online forum full of trading techniques to give you the best tools to kick-start your investing journey. We offer collaborative webinars and training; we love to teach. No matter the opportunity, we bring together a strong community of like-minded traders to focus on analyzing market news as it’s presented each day. DISCLAIMER: FOR INFORMATION PURPOSES ONLY. The materials presented from Prosperity Pub are for your informational purposes only. Neither Prosperity Pub nor its employees offer investment, legal or tax advice of any kind, and the analysis displayed with various tools does not constitute investment, legal or tax advice and should not be interpreted as such. Using the data and analysis contained in the materials for reasons other than the informational purposes intended is at the user’s own risk. 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[Unsubscribe]( This email was sent to {EMAIL} by Prosperity Pub 495 Town Plaza | Ponte Vedra | FL | 32081 [Prosperity Pub]( [] Disclaimer & Disclosures ABOUT US: We believe that the opportunity for financial literacy and freedom belongs to all people, not just those who already have years of investing experience. Prosperity Pub provides an array of educational services and products that will help you navigate the markets and become a better investor. Trading is made simple through our online forum full of trading techniques to give you the best tools to kick-start your investing journey. We offer collaborative webinars and training; we love to teach. No matter the opportunity, we bring together a strong community of like-minded traders to focus on analyzing market news as it’s presented each day. DISCLAIMER: FOR INFORMATION PURPOSES ONLY. The materials presented from Prosperity Pub are for your informational purposes only. Neither Prosperity Pub nor its employees offer investment, legal or tax advice of any kind, and the analysis displayed with various tools does not constitute investment, legal or tax advice and should not be interpreted as such. Using the data and analysis contained in the materials for reasons other than the informational purposes intended is at the user’s own risk. DISCLAIMER: TRADE AT YOUR OWN RISK; TRADING INVOLVES RISK OF LOSS; SEEK PROFESSIONAL ADVICE. Prosperity Pub is not responsible for any losses that may occur from transactions effected based upon information or analysis contained in the presented. To the extent that you make use of the concepts with the presentation material, you are solely responsible for the applicable trading or investment decision. Trading activity, including options transactions, can involve the risk of loss, so use caution when entering any option transaction. You trade at your own risk, and it is recommended you consult with a financial advisor for investment, legal or tax advice relating to options transactions. Please visit [( for our full Terms and Conditions. [Unsubscribe]( This email was sent to {EMAIL} by Prosperity Pub 495 Town Plaza | Ponte Vedra | FL | 32081 [Prosperity Pub](