Farmer Diaries

 For the better part of the past decade, the State of Nuevo Leon has been plagued by the same water problems that Arizona and New Mexico have faced -- there is a massive drought in the US Midwest, and it's been a big problem for at least a decade. On Friday AMLO signed a new law that makes drinking water in NL a national emergency -- that one unlike the building of the Maya Train actually is an emergency. Granted there is not much that can be done in the short term, cistern trucks will have to be used to ship water to the most affected areas, but there is virtually no short-term solution.  Now before you think that NL is some small forgotten state (there are 35 in Mexico) the capital of NL is called Monterrey.  Yes that town, is basically one of the most important manufacturing center in Mexico and a very important part of the North American manufacturing hub.   How things got so bad is an exercise in laissez-faire by the governments over the past few years....

 Over the past decade, I have written more than 1,000 blog posts (actually as of today it's 1,035) on average 300 people read my blog per month, so it sounds like people want to listen to me (no not really).  My most popular post was on PISA, a ranking of teenager school performance across the globe.   Overall I am a drop in the ocean, I have an acquaintance who writes a daily financial blog, and he has for years, it's rather technical on interest rates, he averages 10,000 readers a day!  What he gets in 10 days (including weekends and holidays) I got in 10 years. Anyway, I write this for myself, like my books!  I like to believe that...

 On Tuesday, at his daily two-hour press conference where AMLO takes no questions from any real journalists, but rather is fed questions from his own team, he revealed the projected costs for two of three iconic mega projects: (1) Maya Train:   Until about a month ago the cost of the Maya train was estimated at US$ 8 billion.  It started at less than four and had slowly, and unofficially, risen to eight billion a few weeks ago, then FONATUR revealed that the now planned cost had risen to 200 billion Mexican Peso or about ten billion dollars.  Ok, a 20% increase considering inflation, it's expensive.  Already at eight billion, it was the equivalent of $5.3 million dollars per kilometer, about 40% higher than the highest estimate, but ok, its a government project, and its Mexico, then about two weeks ago FONATURE announced that the Maya Train would now cost US$ 11.3 billion or about seven and a half per kilometer.  On Monday the Presidential bombshell, the to...

A few weeks ago, I wrote about guns and mass shootings in America, and I wrote that really mass shooting was the outcome many Americans wanted.  Not really wanted, but at least didn't care about in terms of national policy.  I remain of the opinion, that for many Americans the fear they hold of the Federal Government makes them want to be heavily armed in case, the Federal Government comes for their guns (I know, I understand how it sounds). So last week I was speaking to an ex-colleague who apparently reads my blog (He was born in Russia, but has lived nearly his entire life in America -- I think he told me that he arrived in America in 1981, he was 11 years old).  He is a proud American, a heavily armed one at that.  Ridiculously smart, and for an American really well read, despite everything (Ha Ha Yuri...) but he took umbrage to my commentary.  I told him that like him, for mass shootings, I don't care about his opinion but really we had an ho...

 About two years ago, the new government of Sri Lanka decided that it would lead the green revolution and forbid the use, across the country of all pesticides in agriculture. Farmers protested, demonstrated but the government held firm, and since 2020 no pesticides have been imported into Sri Lanka. Until 2021 farmers used what pesticides they had left, but in 2022 the vast majority of Sri Lanka's farmers failed to produce food in the quantities they had in the past because their harvest was destroyed by pests.  Sri Lanka began importing food.  In addition, nearly 80% of all farmers are now mired in poverty because they borrowed to buy seeds and now that the harvest has failed they cannot repay their loans.  In addition, food price inflation has been near 50% over the past year, the result of high global prices but also a weaker domestic currency. A few weeks ago the government fell, due to massive popular protests.  Now a new government is trying to form a coal...

 It has been more than six months since Evergrand defaulted on $300 billion in bonds.  Since then things in China have not improved.  The pandemic brought a massive slowdown to the construction sector and for the past year those who bought "planned" real estate projects have largely stopped paying their advance payments (these are often termed mortgage payments in China, but it's really a secured loan on a construction project).   Over the past 10 years, Beijing has been aggressively supporting the construction sector with cheap loans and debt forgiveness.  It has been widely reported that the margin return on capital has been below 1 for at least a decade -- every $100 dollar invested only generates $70 of economic growth, and the rest is wasted, compared to 30 years ago when every $100 dollar invested generated nearly $300 in economic growth. Over the past 40 years, local governments have relied on real estate taxes to grow their operations.  These a...

 Obviously, this is an impossible question to answer.  Some would say that the January 6, attack on the Capitol was the first nail in the coffin of democracy.  Recently, several studies have shown that nearly 40% of Americans believe that a strong president is more important than democracy.  The same percentage that believes that "White America is under threat".  There is a smaller percentage of the population 30% who believe that violence is acceptable.  Many Americans perceive democracy as a non-event as politics is a non-event.  They have seen the US government attempt to set up democracies in the Middle East (no not really but still) and they "see" the economy of Russia and China thriving -- again not really but with low information, voters will believe almost anything, that fits their social anxieties, and what the talking heads tell them So it could happen, but:  Civil wars don't start by chance, they are engineered and it's hard to see what...

So when the sale of cannabis was made legal in Quebec, the government decided that all cannabis products would be sold via government-owned stores -- why they could not have a small space in 1,000 liquor stores is beyond me...still. So the government of Quebec created a new store infrastructure that includes 27 stores.  In early May 2022, the workers of 22 of these stores went on strike for higher pay, equal to what other government workers were getting when working in the Quebec Government-owned liquor stores. They've been on strike for two months, no negotiations are taking place, and more Quebecers didn't notice because most cannabis buyers continue to use their old "illegal" network. Funny!

 He's not the first, but AMLO's blatant lies about the impact of USMCA on his energy objective of making PEMEX and CFE the only energy players in the country.   He's a moron not because he is certain to lose, he's a moron because it's ENTIRELY AMLO's fault that the energy sector was included in the USMCA. Canada and the US energy sectors have been fully integrated for decades.  The USMCA adds nothing to the Canada/USA ties in the sector.   No, this is a self-inflicted wound.   His latest is the most brazen way to increase corruption; there will be new "secret rules" for private enterprises to participate in his new green energy initiative, and these secret rules will be determined by government officials.  I cannot think of a more perfect way to ensure that foreign participants bribe officials. It doesn't matter anyway, there is such a shortage of solar panels, batteries and other systems that companies will focus on other more promising mark...

 When AMLO took power in December 2018 he announced three projects and the cancellation of a fourth;   1) Build a new refinery in Dos Bocas to process oil into gasoline (cost US$ 2 6 8   18 billion) 2) Build a new airport in Mexico City that would cost US$ 5 billion 3) Build a tourist train in the Yucatan that would cost US$ 3 8 11.3 20 billion and 4) Cancel the building of the "private" Texcoco Mexico City airport (it would cost nothing to cancel since it's private), which was built during the term of the previous administration Well, almost 4 years on and the results have been less than what was advertised! 1) Dos Bocas total cost so far is near US$ 8   18 billion and although inaugurated by the President a few weeks ago (July 2022) the plant will not be able to process any oil for at least 18 months.  In addition, no pipeline has been planned (or built) to link the new refinery to the country's oil network (at least another billion in cost)....

 Many moons ago, with colleagues, we were sitting in the office of the president of CFE to discuss the new energy market.  These guys were all engineers, bright as hell but knew next to nothing about finance, markets and how they operate.  The then government of Pena Nieto had given CFE the mandate to create the electricity market. The presentation started with the usual introduction, and we quickly move to some important but obvious topics; the market size and what it could do for CFE and its planning.  The first thing we told CFE is that the market's price discovery would give deep insight into local, regional and national power demand trends that are almost better than anything else available.  This was true in Spain and in the US, the second thing we mentioned is that this was a relatively small pricing market with 240,000 daily markets.  The third thing we mentioned is that a large part of the domestic (Mexican) oil and gas market could eventually be r...

 Headline:   "British Columbia Man blames Air Canada for luggage delay!" What's wrong with this headline -- its easy, Air Canada aside from taking your luggage when you check in has zero input on how the luggage is processed.  In fact, airlines pay a per passenger fee for use of terminal, baggage handling and other important service to CATSA which manages virtually all Canadian airports. When the pandemic hit in 2020 the airlines cut employment but in early 2021 airlines such as Air Canada started hiring back laid-off workers.  I don't have the most recent figures but Air Canada in particular grew its payroll by nearly 80% from 16,000 in January 2021 to nearly 27,000 in January 2022.  Lets leave WestJet aside for a minute but I understand that they did the same thing, with number of employees. What did the airport do during that time?  Very little, they saw that AC and WJ were bringing workers back, they saw that both airlines were adding back aircraft that...

 Last Friday, the President of Mexico inaugurated the  Dos Bocas, a refinery that is being built in his home state.  This is a gasoline-only refinery, the rest of the petrol will be distilled elsewhere.  In fact, for the foreseeable future oil, will be distilled elsewhere because the main contractor to the project, FONATUR, the government's own department has recognized that the facilities will not be able to process any oil for at least 18 months.  In "Mexican" that means within the next five years! It gets worse because there is no pipeline that goes to that refinery. None have been built and none are planned, I guess everything will be delivered by trucks! I am reasonably certain that by the middle of 2023, AMLO, the president of Mexico will inaugurate the Maya train, which will not be completed for several years.  Both projects, two of the three that the President announced at the beginning of his term are severely over budget.  The Maya train's bu...

 It may sound bizarre, even weird still one has to wonder if this current situation is not exactly what Americans want...mass shootings every day, sometimes twice a day is maybe the outcome that most Americans seem to want. It's not like the rest of the world cannot show them how to avoid them! I am now convinced that this is what Americans want, it's part of their freedom (except in the bedroom, but that's another topic).  Sur most Americans are against guns, but not ready to actively do something about it, rather it's something to say to a pollster:  "I am against gun violence"  Sounds good and costs nothing, after all, I'm against puppy mills but I am not ready to do anything about it!  Maybe not exactly the same but close to. Those many who are pro-guns will find any reason, independently how far-fetched to show that all the mass shootings are faked (false flag) and are there to remove their guns (all evidence to the contrary).  The press is now lookin...

 On Monday, July 4th America saw its 309th mass shooting of 2022.  Yes in the first 180 days of 2022 America saw a total of 309 mass shootings.  How terrible? inevitable yes that too.  There is a cost to America's unfettered love for guns, there has to be a cost to the "harshness" of the country.  No, it's a sure thing that America is on the road to implosion.  How many Americans must die for a false interpretation of the second amendment, which talks about a "well-organized militia" and not "Davie wants to shoot pew pews all day long" after some unknown and unresolved grievance? In a sense, we watch in awe how America can be amazing and at the same time are appalled by its wantonness.  that is the reality of America we love it, we fear it, and we hate it all at once.