Thursday, July 22, 2021

Thursday Night Links

  • BHP Group Ltd. ’s chief executive earlier this year reminded investors that mining companies that bet big on new production during a commodity-price bull run often end up regretting it. On Tuesday, the world’s biggest mining company backed up that message by forecasting a flat outlook for its output over the next 12 months. [WSJ]
  • My guess is that when CPG firms started advertising on TV in the late 1940s they were also bringing out frequently bringing out innovative new consumer packaged goods that benefited from massive television advertising explaining why this breakthrough product would make your life better (which it would — the life of the American housewife improved rapidly in the postwar era, in part due to much better products. Everybody today makes fun of old black and white TV ads in which housewives are ecstatic about their new laundry detergent or whatever, but the postwar actually was a golden age of reduction in the ancient drudgery of keeping a home). [Sailer]
  • American Tobacco’s advertisements made Bull Durham a familiar name to baseball fans around the nation. American Tobacco set up wooden bull ad signs in nearly every major league stadium during the 1912 season. American gave a $50 prize ($1,400 in 2021) to any player that hit the bull. Before Bull Durham, a huge marketing campaign was considered highly risky. However, the Blackwell Co., and later American Tobacco, showed future businesses the success that came from branding a product and keeping it before consumers. The company, and especially Julian Carr, used every conceivable advertising angle to promote Bull Durham. These techniques were unique for their time and greatly influenced modern day advertising. Bull Durham’s success did not go unnoticed by R.J. Reynolds. In 1913, he mounted his national Camel ad campaign, the first for a cigarette. [Gene Hoots]
  • In addition to heated tobacco and e-vapor, we announced in February our intention to enter the small but fast-growing nicotine pouch category this year. To complement our internal development, we have two important acquisitions to establish a base of capability in science, technology and manufacturing - and build our platform in modern oral. The first of these was AG Snus, completed during the second quarter. AG Snus has a relatively small, branded portfolio of modern oral products which provide us a foothold in the category. In addition, the proposed acquisition of Fertin Pharma will give us access to a range of promising oral delivery technologies and capabilities, some of which could be applied to the modern oral nicotine space. We will return with further news on our commercial plans in this area later this year. [PM Q2 2021]
  • However, even with the attention-grabbing developments around EV production, Jackson said the industry transition will be drawn out and both types of vehicles will coexist for decades ahead. "This is not like going from the flip phone technology to a smartphone, where they suddenly obsolete everything else," he said. [Autonation]
  • You know our first line of defense, in any events, when we look at that, we think that, this isn't a cliff, this isn't a situation where gasoline demand is going to start dropping at 10% or 20% a year going forward is nothing close to that. All of the modeling we've done and engaged consultants who do suggest that 1% to 2% decline in gasoline per year is a possible scenario, if any penetration happens at the rate that a lot of people will think it will happen in this space, diesel demand won't drop nearly as quick, if at all, it might grow. Jet fuel demand will grow. When you put all that together, we have a manageable issue to deal with. And again, if we're managing our tariffs on a cost per barrel oil, you have a 1% to 2% decline per year in volume. I'm not saying that's our projection, that's just, let's assume that that happens through the course of EV penetration. And it’s not just EV penetration, it’s fuel efficiency standards also, that that's certainly manageable within tariff increases to offset that. When we look at long-term projections, if you get at 25 years or 30 years, there's still a significant amount of refined products that are moving to the system, that are still going to require this infrastructure. I personally think it's probably never going to go to zero. You're still going to need this infrastructure long-term. It's hard for me to imagine an economy that's running 100%, electric and 0% on fossil fuels. We'll see how that plays out. [MMP]
  • The Federal Reserve continues to promote its “inflation is transitory” narrative. We’re not surprised. How many inflation-fighting options does the Fed really have that wouldn’t collapse the stock market and economy? We're not aware of any. And while we’re open to inflation eventually subsiding, as it stands now, we see few signs of it moderating. In fact, we see the opposite. [Palm Valley Capital]
  • The three biggest themes from the book were: The Great Stagnation is real, and was caused by careful strangulation of all of the potential avenues of search and advancement we have had. There is surprisingly little correlation between regulatory increase and scientific and technological progress and it can be seen over and over again in multiple sectors. There are credible paths of research as yet untapped, amongst all areas seen as science fiction - including nanotechnology, nuclear energy and yes, flying cars. [captainjcook]


Stagflationary Mark said...

And while we’re open to inflation eventually subsiding, as it stands now, we see few signs of it moderating. In fact, we see the opposite.

This was posted today by one of the board game manufacturers that I follow:

Supply Chain and Shipping Slowdown. As I noted last month, we're in a bit of a slow period at the GMT Warehouse/Office as we wait for our printers to begin shipping us some of the 21 new products that are currently being printed. The same global supply chain and shipping issues that are hampering businesses worldwide are having a negative impact on our operations, too. Both the time to get games printed (due to the issues they are having with their component supplies) and the shipping time to our warehouse (which has doubled over the past few months) are seeing big delays at the moment.

I think it is fairly safe to say that we’ve not yet reached the downhill side of transitory yet. I can’t say that I’ve been helping matters either. Our 75 pound German Shepherd requires prescription dog food. As you already know, there’s no just-in-time inventory in this household if I can help it. It goes completely counter to my lifelong saver’s mindset. She’s got 6 months worth on hand. Better safe than sorry. It’s the only food she can eat.

Allan Folz said...

German Shepherd requires prescription dog food

GTFOH. Whatever is wrong with your dog can be fixed with logs of the cheap, pink-slime ground beef ($2.99/lb) and chicken livers ($2.99/lb). Pad it with beans & rice ($0.50/lb).

Dang, I thought I knew you bro.

Stagflationary Mark said...

Just so you know, your condescending solution would kill our dog. Guaranteed. It would be a painful death and it wouldn’t take long. She has an extreme auto-immune reaction to proteins. That’s why she is on a prescription diet containing only hydrolyzed proteins.

In some dogs, this can be hard to diagnose accurately. Her specialist internal medicine vet knows exactly what is wrong though, because River’s had a biopsy. Gone are the days of vomiting, constant explosive diarrhea, and extreme lack of appetite. She’s living a very healthy life now and is expected to have a normal lifespan.

I’m probably going to regret posting this, but it won’t be the first time I’ve regretted posting here. I’ve endured ad hominem attacks telling me to grow up, being teased for being a low-agency boomer sheep, and now find myself defending the care that we’ve given our dog. At some point, I just have to take the hint and realize that there’s really no place for me here. And much to the potential delight of at least a few readers, that point is now. Constantly playing defense is not all that fun.

CP said...

Hi Mark,

You've been a valued correspondent over the years (see links below). I would encourage you to not let some flak from one person bring you down.


Allan Folz said...

Mark, I'm sorry about your dog and it's great you've been able to get a proper diagnosis. I imagine that was not at all easy to get figured out.

I completely agree protein allergies are real. The point of my joke, and it was meant as a joke, is the number of people (and pets) with a legit auto-immune disease is vastly outnumbered by the number of people (and pet owners) that think they have an auto-immune disease. It's absolutely not that they don't exist and anyone that thinks otherwise is a fool.

The jocular hard-time I've given you over the years is because you've always shown a good-natured ability to appreciate a good-natured ribbing. You seem the type of guy that's made up his mind about things and is at peace with it. Anything I say, I've always assumed is something you've already thought of yourself and is included in your decision making. I don't know that we've ever fundamentally disagreed. We are far more alike than dis-alike so when I am ribbing you, I am also ribbing myself. I hope you'll reconsider.

Stagflationary Mark said...

I am SO relieved that it was intended as a joke. “Pink-slime” really should have clued me in, but it didn’t.

As a joke, you could probably have not done a better job targeting my pet peeves (pun intended).

1. Starting with GTFOH, implying that we’re being foolish.
2. Offering advice without knowing the problem.
3. Offering advice that would kill our dog.
4. Listing off prices of the food components, as if price is that important when our dog is miserable.
5. Showing disappointment in our ridiculous decision.
6. Talking down to me, making me wonder if the previous teasing was more than just teasing.

And then there’s the timing. Nancy’s been going to the barn multiple times each day because one of her horses stepped on a rusty nail last week. He requires a lot of extra care right now. The vet’s made quite a few trips too. We’ve been very worried about him. Horses are very susceptible to tetanus.

As for River, there are way too many people in the world who treat their pets as disposable accessories. When we tell people what we are doing for River, many look at us like we’re insane. But to us, River is a member of our family. One thing we’ve done for River is splitting her food up into 4 equally spaced meals. Seems to really help. Of course, hard to get great sleep with 6 hour shifts. That’s been going on for years though, and since she is doing way better than expected (according to the vet), we’re reluctant to stop.

I will share one more reason that your joke hit close to home. We once looked after a neighbor’s pet while they were on vacation for 2 weeks. Their dog had a diseased liver. They gave us expired supplements to give her and said we could give them to her if we liked, but they didn’t bother. Of course we did! We watched their dog improve while we had her and then revert once they got home. Keep in mind that the dog was also prescribed medication to help treat it, but they never bothered with that either. It wasn’t the cost. It was just too much trouble. Good frickin’ grief. Broke our hearts.

So yeah, you could not have done a better job targeting your joke. I generally don’t mind being ribbed by people I know, but this really triggered me. Brought back a lot of bad memories.

I could also share the true story of a local barn owner who used healing crystals to determine if horses should be dewormed. The owner was a registered nurse. If you decide to reuse your joke on someone else, maybe you can work that in too. Although perhaps that’s way too much to believe.

No hard feelings! Once again, I’m just relieved, much like the aftermath of a practical joke gone horribly wrong. Seriously.

P.S. CP, you are always the gentleman. I’m picturing you as a younger Colin Firth in the Kingsman, but perhaps without the fighting skills. Perhaps. Blog manners maketh man?

Allan Folz said...

Glad no hard feelings. Glad we're still frens.

I should have known better than to razz you about animals. I remember your stories about your parrot, and I remember your partner being put in care of the horse after its owner passed. Clearly you're two people that care very much about treating animals justly.