Monday Night Links

• Amongst the vast flock of contested facts that wheel around this virus like a murmuration of starlings, darkening the skies and addling the mind, one stands out. It is the single fact that blows a cathedral-shaped hole in the strategy being pursued by governments at present, and which offers a glimpse into the crypt. It is the fact that these vaccines, whatever their efficacy in other areas, do not prevent transmission of the virus. This single fact - which has long been known but is barely ever mentioned - blows apart the case for vaccine passports, segregation, lockdowns of the 'unvaxxed' and all such similar measures. Even if you believe (or pretend to) that this virus is dangerous enough to justify the radical new forms of authoritarianism which have emerged around it - and I certainly don’t - those forms will fail anyway if both vaccinated and unvaccinated people can spread it; which we know they can. [paulkingsnorth]
• Last year I shared with readers some of the Christmas albums that were a large part of our family's holiday tradition. Mostly they were CD's I bought in the mid and late 90's, which we listened to every year from Thanksgiving to Christmas. They were an eclectic mix of standards with the one thing in common that they all sounded great. Years later I learned about the importance of dynamic range and realized there was a objective reason I never tired of listening to these every Christmas, year after year. They sounded great because they had excellent dynamic range. While those albums will always have a special place in our Christmas tradition, with streaming services now broadly available, over the last few years I have added some new favorites to our listening rotation. Last year's guest post was so well received I took it as an invitation to write another post sharing some of our newer favorites. (Ed: Absolutely, Allan!) Many of these albums I listen to via streaming service so I don't always have dynamic range measurements from the CD's to compare. Rest assured they all sound great. [Allan Folz] 
• An exercise in simple arithmetic may be sobering to those counting on EV growth to dampen oil demand. The number of vehicles on the road powered by internal combustion engines (ICE) will continue to grow until EVs achieve a near-total share of new vehicles sold. This is because the size of the total ICE passenger vehicle fleet is dictated by flows in and out (i.e., the removal of ICE vehicles from the road). In the first half of 2021, the EVs represented just 2.4% of all new passenger vehicles sold in the US. Modern vehicles have incredible reliability and longevity. New vehicles sold today tend to remain on the road for decades. [Doomberg]
• That leaves the S&P 600 price-to-earnings ratio at about 68 per cent of the S&P 500, among the lowest levels since the dotcom bubble at the turn of the millennium. Small-capitalisation value stocks, companies that are considered to be priced inexpensively when compared with corporate fundamentals like book value, are trading at an even steeper discount as investors have piled in to quickly-growing companies instead, according to William Heaphy, head of William Blair’s value equity team. The valuation gap has grown even as the S&P 500 and 600 have both more than doubled from their coronavirus-induced lows last March, showing how investors need to pay richly to scoop up shares in the biggest US groups. [FT]
  
• Two former Democratic senators from rural states, Max Baucus of Montana and Heidi Heitkamp of North Dakota, lobbied against the Biden proposal and quickly won over Senator Jon Tester, the current Democrat from Montana, who killed it in October in the name of “our family farms, ranches and small businesses.” [NY Times]
• Initially, the tannins leached into a wine are smaller molecules. With time, these tannins start to combine and form larger chains—a process called polymerization. One theory is that this aging process reduces the tannins’ reactive surface, which produces a softer mouthfeel. These tannin chains become so long that they fall out of suspension, which creates a deposit and leads to sediment in some bottles. [link]
• As you may know, soybean oil is very popular among professional pizza operators, and that is certainly true of the large pizza chains, and especially those that specialize in the American style of pizza that call for large amounts of soybean oil in the doughs. Examples include Papa John's, Pizza Hut and Domino's. I believe that the main reason for their using soybean oil in their doughs is because it is perhaps the cheapest, if not the cheapest, edible food oil available for commercial use. [link]
• It is a recurring theme with Oddballs and value investing: if there isn't something a prospective investor could complain about, it isn't going to be cheap. The question is pricing the flaws. The K-Banks we have mentioned (FIEB, OPBK, UNIF) are all pretty similar but OPBK is NASDAQ listed and better about returning capital to shareholders. It is also much more expensive. [Oddball Stocks]
• What ends up happening with mutual companies is that the people managing them eventually realize that they can help themselves to a lot of the retained earnings by demutualizing. What would be most intuitive would be for a mutual to simply distribute shares to its customers or members, perhaps per capita or else pro rata if it were possible to measure the amount that each customer had contributed to building up the surplus. But this is NOT how demutualizations work. Instead, the a demutualizing company will do an IPO and sell stock, raising capital that it typically does not actually need. The real purpose of this is to make sure that the successor company will be owned by the management (which probably were not customers) and whatever customers were sophisticated enough to understand the con, and liquid and rich enough to participate meaningfully. The other key ingredient in looting the customers' surplus is to underprice the IPO. This is all disguised from the small mom and pop customers' noticing thanks to an intimidating and discouraging sounding prospectus, as well as accounting treatment of unsold mutual shares that disguises their value. [CBS]