Thursday Night Links

• If Republicans fail to close this massive generational gap, the existing large Democratic advantage among young voters will bring cataclysmic electoral destruction to the party, potentially snuffing out “paths to 270” in presidential elections. The state-level differences between young voters and voters at-large exposes the steep generational cliff the Republicans are hurtling towards as the GOP-leaning baby boomers come to age out of the electorate. Some swing states, like Arizona, Nevada, Pennsylvania, Florida, and Colorado, have a youth electorate that leans over ten points more Democratic than the state overall. This gap is especially salient in Nevada and Arizona, where young voters are over 25% more Democratic than the electorate as a whole. [link]
• The final data point in this series, April 2023, is more consistent with a cyclic system than a linear model, but by 2028 those bands will have entirely deviated one from the other, and whether the data falls in one band or the other will tell us if the world’s climate is controlled by the carbon dioxide knob, or if natural cycles dominate. I’m pretty confident that it will be the cycles. You see 1979 when the satellite records start was a pretty cold year. Here is a Science News cover from 1975 catastrophising about a coming ice age, which in truth really is something to worry about. [link]
  
• In the RCTs with the longest possible blinded follow-up, mRNA vaccines had no effect on overall mortality despite protecting against some COVID-19 deaths. On the other hand, the adenovirus-vector vaccines were associated with lower overall mortality. The adenovirus-vector vaccines were further associated with a lower risk of dying from the causes of death that would most likely represent non-specific effects of vaccines, the ‘‘non-accident, non-COVID-19’’ deaths. The pattern of effects was internally consistent within the RCTs of mRNA and adenovirus-vector vaccines. An intrinsic limitation for the estimation of overall mortality during the COVID-19 pandemic is the nature of the cohorts studied. Most of the volunteers participating in the trials were adult individuals in general good health, resulting in low COVID-19 and overall mortality. In a real-life situation in which the COVID-19 vaccines are administered to highly vulnerable populations with high COVID-19-related mortality, significant reductions in overall mortality are expected, also for mRNA vaccines. However, the intriguing differences in the effects on non-accident, non-COVID-19 mortality are likely to persist and should be investigated in future studies. [Cell]
• The Harley salesman was shocked he was real. I’m five foot seven, he said. Do you have one good for guys my size. They did, they made one just for him. He had one credit card. Some special kind you could buy a battleship with. Can you throw a couple grand cash in there for me. The bank called when the salesman rang it up. It was the first time the card had been used. [Delicious Tacos]
• Smooth and thick in texture, fritessaus is a Dutch sauce that is traditionally used as a condiment of choice with French fries. The sauce looks almost the same as mayonnaise, but is slightly sweeter, and, with a fat content of about 25%, it is much healthier. Fritessaus is made with mayonnaise, lemon juice, anchovies, and finely ground capers, which are used so that the texture of the sauce remains silky-smooth. [link]
• There are so many cheap ideas out there - it would be nice to have higher gross exposure but also be hedged against general market and recession risk. One way to do this might be to have a short book consisting of large caps that are less susceptible to being squeezed. We would want to find businesses that have low FCF/EV yields as things stand, leverage (debt) that is going to be repricing higher, oblivious retail shareholders who own for the dividend, and a dividend which might get cut because of some combination of deteriorating demand, under-investment (rising capex), or rising costs (either operational or financial, from higher rates). [CBS]
• It's nice to see the huge increase in "net income plus depreciation less capital expenditure per unit" over the four years from 2019 through 2023: from $0.28 in Q1 2019 to $0.62 in 2023. That measure should hopefully be a good proxy for the cash that the business will be able to use to distribute to unitholders and buy back units. [CBS]
• We really like royalties and we are always looking for first class assets. We generally don't favor producers as much but we are open to the idea that certain types of commodity producers are "royalty-like" if they have attributes such as: debt-free, front-loaded costs, low marginal cost. [CBS]
• Big takeaways - Exxon and Chevron are both nearly debt free, and it sounds like they are both going to make acquisitions instead of investing in increasing production. But notice the big increases in capex (+30% and +55% y/y) and low-to-no production growth (+4% and -1%) at both companies. This is why we were interested in the one type of oil producer that has both very long reserve life and front-loaded costs: the Canadian oil sands majors. (It is also why we are interested in royalties on petroleum production.) [CBS]
• Ask yourself why the macro environment is so bad for cigarette sales, yet McDonald's had a great quarter (U.S. comp sales up 13%), Chipotle had a great quarter (comp sales up 11% with margins also up), PepsiCo had a great quarter, and Valero had a great quarter (with demand for gasoline and diesel at record highs). The difference is that cigarettes have better, cheaper competition. There are the "open tank" vapes which the user refills with his own nicotine-containing liquids ("juice"), which we think appeal to the downscale ex-smokers, as well as the pothead users who have experience using them with THC liquids. [CBS]
• This is the dirty secret of our time: the device that the Woke / Progressive elite used to finally get rid of Donald Trump — Covid-19 — shoved them over a cliff Wile E. Coyote style. And now, as they freefall off that cliff, the supposed antidote to Covid-19 — getting vaccinated — is blowing up in their faces, again, Wile E. Coyote style. The elite now have to wake up every day and wonder if the vaccines they rushed to get will end up killing them prematurely. This is what has finally driven them crazy. And, of course, crazy people will do crazy things: like destroy their own country. I decided early-on to not get vaccinated for a simple reason: as the vaxx program got up to speed in the late winter and spring of 2021, reports came out that the spike protein in it attacked the endothelial lining of the blood vessels and led to unusual blood-clotting. As someone who had bypass surgery some years earlier, that was all I needed to hear. This was before any Censorship Industrial Complex formed to attack “misinformation.” The news was still getting out. By then, Mr. Trump was out, too, deposed in a janky election rigged with Covid-19 ballot “innovations” that made fraud easy. He was replaced by a fake chief executive too impotent to even campaign, but useful as a front for the gigantic “security” bureaucracy that was actually running things. This naturally raises the question: what exactly is the relationship between the political elite and this security state? [James H Kunstler]
• There are, of course, bond fortunes: Citadel started out focused on convertible bonds, Bridgewater has done very well with fixed income, and Appaloosa had many of its early wins in distressed credit. But run down the Forbes 400 list's finance section and those investors are outnumbered by the equities-focused managers. And by the private equity fund managers, whose asset allocation is technically long equities and short bonds. And many of the funds that started out bond-focused have since diversified into equities (of course, some of the equity people diversify into bonds, too). Two asset classes, similar risk-adjusted returns over multiple generations, and it's easier to get rich owning one and shorting the other than focusing entirely on the wrong asset class. It's an interesting puzzle! [The Diff]
• What qualities are possible in matter? Can we do for matter what Turing and company did for computation? Can we invent new high-level abstractions and design principles for matter, similar to what people like John McCarthy and Alan Kay did for computing? What design space is opened up when we control matter as well as we control pixels on a computer screen? What beautiful new design ideas are possible? Most of the matter in our everyday experience is constructed from just three particles: protons, electrons, and neutrons. These can be used to build an astonishing array of different things: diamonds; human beings; galaxies; black holes; iPhones. With sufficiently good tweezers and a lot of patience you could reassemble a human being into a bicycle of comparable mass; and vice versa. [Michael Nielsen]