Here we analyze a selection of third-party news articles—both those we agree and disagree with.
Please note: Though we make every effort to source articles from freely available sites, we will also regularly include articles on sites that have limited content for non-subscribers. Doing so is increasingly unavoidable, as more and more financial media is published behind paywalls.
MarketMinder’s View: This piece offers some basic financial counsel for Canadians getting a tax refund, but the wisdom applies on both sides of the border. Especially wise, in our view, is this tidbit: “Many people’s goal is to ensure they get money back on their taxes. They are, in essence, using it like forced savings and it’s a great way to keep that money safe from yourself. However, Canada Revenue Agency (CRA) does not pay you any interest on the money they hold for you. If you find you consistently get large tax refunds and your budget runs short each month, one of the ways to increase your income is to reduce the amount of tax withheld throughout the year.” Giving the US or Canadian government a tax-free loan for a calendar year is a terrible idea, especially when so many folks are feeling the pinch of elevated inflation. If you got a tax refund, instead of celebrating, change your withholding. That money could and should be doing more for you than sitting fallow until you file.
MarketMinder’s View: If this isn’t the perfect example of people extrapolating recent past performance forward, then we don’t know what is. “A whopping 74% of MLIV readers say stocks that look cheap relative to valuation fundamentals are set to outperform their growth counterparts for the rest of 2022. … A majority are backing the investing style in this wild stretch in global markets that’s seen cyclical sectors including energy and banks revive amid the great bond selloff and the commodity supercycle.” They are also quite down on Emerging Markets, whose decline since early 2021 has breached -20%, the typical bear market threshold—but they are bullish on Emerging Market Brazil, which happens to be up big year to date thanks to rising commodity prices. Equally unsurprising, those calling for value to beat growth cite the same things headlines have blared for months, including rising interest rates. The likelihood markets haven’t already priced that thesis and moved on is pretty much zero, presuming they are efficient at all. Friendly reminder: Stocks don’t move on what just happened, and past performance isn’t predictive. They also tend to pre-price widespread expectations, then do something different.
MarketMinder’s View: Remember those Trump administration China tariffs that supposedly threatened to upend trade and make made-in-China goods way more expensive here, presuming US companies even continued sourcing from Chinese suppliers? At the time, we argued that threat was overstated, in part because clever businesses are good at finding workarounds. The obvious tricks then included trans-shipping through Vietnam or other regional stopovers, and trade data suggested that indeed happened. Now, this piece brings another trick to light: the rules on de minimis imports, which were designed to enable Americans to bring home souvenirs duty-free when traveling abroad. You see, e-commerce orders of $800 or less that are sent directly to the individual customer fall under de minimis exemptions, and companies have used this as a workaround. Some retailers have the goods sent directly from China to their customers. Others use this rather novel approach: a fulfillment company collects shipments at West Coast ports, loads them on a sealed truck before they leave the premises, drives them across the border, stores them in a bonded warehouse, then packs and ships items directly to the customer when they place an online order. “The Mexican detour can yield big savings. A $75,000 shipment of women’s tops would normally be charged just over $29,000 in tariffs, as well as additional harbor maintenance fees and merchandise-processing fees.” Whether you think this is genius or appalling, it does help businesses keep costs down, limiting tariffs’ impact on consumers and the broader economy. In our view, stocks fathomed this long ago, even if many people have been late to see it.
MarketMinder’s View: While this piece leans on anecdotal evidence writ large in places, it does provide plenty of harder evidence suggesting the UK’s rising living costs aren’t yet cratering consumer demand. While March retail sales fell, that was tied partly to people shifting spending from goods to services as Britain ended Omicron restrictions—the latter is broadly outside the retail sales dataset. Meanwhile, demand for travel and leisure appears resilient: “Retail sales account for about a third of overall consumer spending. Credit and debit card figures from Barclaycard showed other forms of spending booming over the Easter weekend as Britons enjoyed days out in the sun. Restaurant sales rose by 116% compared with Easter 2021, and by more than a third on 2019. Pubs, bars and nightclubs saw a 74% jump on pre-Covid levels.” We may yet see more belt tightening, but for now, the big tailwinds from reopening appear to be counterbalancing higher prices. Even if that stops, though, a UK recession isn’t automatic. The article implies that while the US could avoid a recession if consumers falter because business investment would likely be a strong offset, the UK would be more vulnerable because “consumers account for two-thirds of the UK economy.” Buuuuuuuut that is about the same percentage of activity generated by US consumers, so if businesses are the swing factor in America, it stands to reason they would have the same role in Britain.
MarketMinder’s View: This piece is a pretty good snapshot of how China’s continued zero-COVID strategy is affecting businesses and the economy in general, which we think makes it a good summation of what stocks have likely priced in. Some companies are burning through cash, roadblocks prevent deliveries, local governments are controlling food distribution and black markets are springing up. What we find particularly interesting, though, is how sentiment is shifting. People don’t just fear the near-term economic damage—they are starting to speculate about long-term consequences. As one economist put it: “‘This is not only making it impossible for many private businesses to survive, but also accelerating outbound immigration and quickly dampening willingness to invest. … Once people lose confidence in the country’s future, it will be extremely difficult for the economy to recover from the zero Covid policy’s impact.’” Some of the subjects interviewed for the article expressed concerns about returning to the age of central planning and its associated poverty. People parse government statements for clues about the long-term policy direction and wonder whether President Xi Jinping securing a third term at this autumn’s National Party Congress will be enough to foment a policy change. We won’t speculate at how this plays out, but the general air of capitulation is noteworthy. This is how sentiment often evolves during market downturns, helping stocks price in potential worst-case scenarios. That sets a low bar for reality to clear. Seems to us it probably won’t take much for reality in China to exceed expectations.
MarketMinder’s View: This piece makes a couple of observations we find overall useful, even if it uses the dodgy price-weighted Dow Jones Industrial Average and bizarrely adjusts it for inflation to get there. Yes, year two of a president’s term is historically the weakest of the four-year cycle, year three is historically the strongest, and those strong returns often start late in the midterm year. We also think this year’s early grind and volatility are consistent with typical midterm years’ first halves (or so), even though the accompanying stories (war, inflation) are new. But we quibble with the discussion of causality. It presumes presidents load stimulus in the back half of their first term in order to boost their re-election chances, which follows deficit cutting in the first two years. Problem is, that ascribes far too much stimulatory power to the president, who can’t control fiscal or monetary policy by fiat. It also overlooks the fact most major legislation—which would often include stimulus—tends to come earlier in a president’s term (first or early second year). In doing so, it ignores gridlock entirely, which we think is crucial since midterms tend to increase it. We think that is why presidents’ third and fourth years are stronger than years one and two, which tend to be more variable due to their higher legislative risk. When gridlock arrives, it drops legislative uncertainty—markets don’t have to spend time thinking through new laws’ potential winners and losers. That encourages risk taking and boosts stocks, in our view. Lastly, this article repeats the oft-cited fallacy that markets prefer Democrats because historical average returns are higher under them than Republicans. The problem? Markets—like us—favor neither party nor any president. But they are forward-looking and tend to pre-price expectations for the new administration before it gets down to brass tacks. In our experience, investors tend to lean more Republican and view Democrats’ campaign pledges as anti-business, which weighs on election-year returns when Democrats win and boosts them when Republicans win. But things shift once the president takes office and doesn’t stick to said campaign proposals. Often, markets rally on relief when Democrats don’t do as much as feared and sag in disappointment when Republicans don’t do as much as hoped. But that effect usually fades after the first two years, with gridlock setting in to lift years three and four no matter which party holds the White House. Lesson: Painting with broad brush strokes won’t get you far.
MarketMinder’s View: According to the German Bundesbank, a full ban of Russian oil and gas would knock €180 billion—or 5% of GDP—off German output. This forecast comes on the heels of the IMF’s warning that Germany is already in recession, using the popular two straight quarterly contractions definition, based on its assessment of recent monthly indicators. German GDP hits the wires next week, so soon we will know if that forecast is correct, but either way, we think some context is key. For one, stocks are forward-looking. Germany’s benchmark DAX index, in euros, breached -20% during this year’s global correction. Now, whether you want to call that a bear market is a matter of semantics, given it is normal for some countries to breach a bear market’s -20% threshold during a global correction. But the fact remains the country trailed the world on the way down and since the most recent low, which could be stocks’ way of pricing in the economic weakness everyone expects. So, we hesitate to see even confirmation of a recession as a reason to ditch German or European stocks. Two, we already have evidence, courtesy of the eurozone recession that accompanied the regional debt crisis in 2011 – 2013, that a weak Europe doesn’t take down the world. And lastly, the Bundesbank’s exercise seems mostly academic considering Germany has repeatedly shot down a full ban of Russian fossil fuels. Indeed, this forecast could very well make that ban even less likely, giving policymakers another reason to kick the can. Setting aside the sociological implications, which markets are cold to, that would spare the country from the projected economic damage. Presuming those projections are even right, given the model’s inputs and assumptions are questionable at best, in our view.
MarketMinder’s View: The UK is one of the few nations to provide inflation-adjusted retail sales data, so we have eagerly awaited this release. How did shoppers respond to higher prices? As one might expect, they adjusted. Total retail sales volumes fell -1.4% m/m, which is pretty big. But under the hood, the winners and losers from high gas and food prices are interesting. Conventional wisdom suggests higher prices in these essential categories would dent demand elsewhere. Yet gasoline sales volumes fell -3.8% m/m as high prices incentivized people to drive less. Food store volumes fell -1.1% m/m, which the Office for National Statistics pinned on higher prices as well as the end of COVID restrictions, which shifted spending back to restaurants, cafes and pubs. Non-store sales (e.g., catalogue and Internet) fell a whopping -7.9%, but considering non-food physical stores’ sales rose 1.3% m/m, it is difficult to parse how much of the fall in online sales stemmed from people cutting back as prices rose versus reverting to pre-pandemic shopping norms. The UK, like the US, is in the process of wringing out COVID distortions in both life and economic data. So while it does seem fair to pin some of the decline on high prices, that seemingly doesn’t tell the full story. As for warnings that this report could signal a contraction in broader consumer spending, that is possible, but most consumer spending is on services, not physical goods. Demand for services tends to be less economically sensitive and might hold up far better than many suggest.
MarketMinder’s View: Welp, Fed head Jerome Powell told an IMF conference that he could see a 50 basis point (or half a percentage point) rate hike being on the table in May and maybe even June because “demand for workers is ‘too hot – you know, it is unsustainably hot,’” creating the need to “front-load” rate hikes. This is sparking fears that the Fed sees increased unemployment as necessary to cool rising prices, which may inspire them to instigate a recession either accidentally or on purpose, a la former Fed Chair Paul Volcker in the early 1980s. Given the yield curve spread is currently over two percentage points wide per FactSet, using the 10-year minus 3-month measure (which best approximates banks’ business models and, by extension, future lending conditions), we doubt the Fed will induce a recession with one or two half-point hikes. That points to slower lending, not a credit freeze and contraction. But also, the reasoning here is all a bit weird to us. Inflation stems from supply-side factors, not monetary, so trying to fix it with monetary policy seems quite wide of the mark. Similarly, presuming that curbing demand for workers will slow the economy presumes job growth drives economic growth—it is actually the other way around. So, overall, we think this is quite misguided. For now the associated market and economic risks are low, thanks to the aforementioned wide yield curve spread, but if the Fed keeps this up too long and inverts the yield curve, then the economy could be in for tough sledding.
MarketMinder’s View: Please note, this article delves into a potentially emotional topic—i.e., economic sanctions and their effectiveness (and lack thereof)—so whatever your personal feelings may be, we suggest putting them aside. Whether you agree with the West’s decision to impose numerous sanctions on Russia or not, their economic impact tends to be limited as countries and businesses find ways around them—a cold, stark reality stocks recognize. As noted here, “Oil from Russian ports is increasingly being shipped with its destination unknown. In April so far, over 11.1 million barrels were loaded into tankers without a planned route, more than to any country, according to TankerTrackers.com. That is up from almost none before the invasion. … The use of the destination unknown label is a sign that the oil is being taken to larger ships at sea and unloaded, analysts and traders said. Russian crude is then mixed with the ship’s cargo, blurring where it came from. This is an old practice that has enabled exports from sanctioned countries such as Iran and Venezuela.” Yes, sanctions cause economic dislocations, but they don’t necessarily crimp production or activity—buyers are still finding ways to get Russian oil, whether by buying directly, on the black market or through alternative methods. Note, too, companies’ legal obligations: “Shell said on April 7 that it would stop buying Russian oil in the spot market but that it is legally obliged to take delivery of crude due to contracts signed before the invasion. The company defines refined products to be of Russian origin if blends contain 50% or more, leaving the door open to trading products such as diesel if it contains 49.9% Russian oil or less.” Sanctions are a blunt tool, and they can inflict some pain on economies—and a country’s citizens. But one shouldn’t overstate their impact. For more, see our 4/6/2022 commentary, “A Broad Update on Energy Markets.”
MarketMinder’s View: Ever since the US and other Western powers restricted Russia from accessing most of its foreign exchange reserves, many have argued the US dollar may lose its spot as the world’s preeminent reserve currency—perhaps to other options, including China’s yuan—as countries question the greenback’s dominance in the global financial system. But even though China has been expanding the yuan’s international use, big structural and political considerations remain, which this piece nicely highlights. To have a major global currency, a country must allow free capital flows—not the case in China. Despite some progress in loosening some controls, “It remains far from as open as the U.S., though, and the chances of any near-term relaxation look minimal given the economy’s current weakness. In a report last year, S&P Global Ratings estimated that external ownership of China’s bond market might reach 10% by the end of the decade. Foreign investors hold 35% of the U.S. Treasury market.” Moreover, there is a simple reason so many prefer the US dollar globally. As finance professor Michael Pettis points out, “The world uses the dollar because the United States has the deepest and most flexible financial markets, the clearest and most transparent corporate governance, and (in spite of recent sanctions) the least amount of discrimination between domestic residents and foreigners.” Unless and until China permits freer capital movement—likely to be a slow, gradual process over the course of many years, if not decades—the yuan’s overtaking the US dollar won’t occur any time soon. We would add that the US dollar’s reserve currency status isn’t as meaningful as many think—so the ascent of other currencies isn’t a worrisome development, in our view.
MarketMinder’s View: As the UK seeks free-trade agreements (FTAs), we think its latest efforts towards a pact with India provide a useful opportunity to discuss the limits of trade deals. Yes, removing barriers to commerce with a nation boasting rapid GDP growth sounds like an opportunity for a big economic boost for the UK. Yet reality is a wee bit more complex, not least because it takes two to tango. For even if the UK is willing to slash and remove tariffs on its end, “India has had a reputation as a protectionist nation that only unlocks access to its industries cautiously for many years, regularly blocking deals in the World Trade Organization. Bilateral agreements are also hard to come by. New Delhi has a trade deal with Switzerland, but not the EU or US, and many years of talks with Australia and New Zealand have generated an MoU [memorandum of understanding] but not a FTA, [British Chambers of Commerce trade policy head William] Bain said.” As the conclusion notes soberly, Trade Secretary Anne-Marie Trevelyan, “… has said she has a commitment from Delhi to double the current £22bn of trade between the countries by 2030. Cutting tariffs on exports of British-made cars and Scotch whisky are her priority. That appears possible, but a full trade deal seems many years away yet.” Sorry to be a wet blanket, but keeping expectations in check is critical in investing—and free-trade deals often aren’t the economic fillip many pols proclaim. Slashing tariffs is a good thing, don’t get us wrong. But it isn’t automatically assured to make trade rise—nor is it necessary for it, as burgeoning UK/US trade in recent years proves. For more, see Mary Wood’s column, “Let Them In(dia)!"
MarketMinder’s View: Here is a tidbit of positive economic news: The Conference Board’s Leading Economic Index (LEI) for the US rose 0.3% m/m in March, a tad better than some economists’ forecast of 0.2%. While this piece frets some well-known economic headwinds—e.g., high inflation and ongoing supply-chain bottlenecks—we think a look at the underlying data provides reasons for optimism about the US economy in the near future. For example, 7 out of 10 components contributed positively, with the yield spread and initial jobless claims adding the most. While the latter is backward-looking—labor data are lagging indicators—the former is a useful proxy for bank lending, which influences how much money is moving through the economy. Moreover, the trend matters more than month-to-month readings, and US LEI has been high and rising for a while now. While many experts discuss the prospect of a looming US recession, forward-looking data, including LEI, argue against that—suggesting reality has ample opportunity to surprise to the upside.
MarketMinder’s View: Pundits often view South Korean trade data as a bellwether for global commerce given its earlier release date and the country’s integral role in the global tech supply chain as a semiconductor and electronic goods producer. Now, supply chain bottlenecks and their related dislocations, especially in semiconductors, have skewed trade (and other economic data) for a while—an important, albeit well-known, caveat to keep in mind. That aside, April’s numbers highlighted the strength of demand globally. “Exports advanced 16.9% in the first 20 days of the month from a year earlier, led by semiconductors, the customs office reported Thursday. Exports to China, the biggest buyer of Korean goods, rose just 1.8% while shipments to the U.S. surged 29.1%.” China’s big slowdown is no surprise given the impact of COVID lockdowns in major economic hubs (e.g., Shanghai), but it was also more exception than rule—Korean exports to other regions grew more quickly, including the European Union (12.3% y/y) and Japan (9.6% y/y). Supply-chain issues may impact the data for a while still, but we think growthy trade numbers are a sign of the global economy working its way to a post-COVID normal.
MarketMinder’s View: So-called real (i.e., inflation-adjusted) Treasury yields are starting to peek above zero. As this article notes, this is a sign “bond markets have taken another step toward pre-pandemic normality, with benchmark inflation-adjusted Treasury yields climbing above zero.” So far, so good! But it then makes a gigantic leap, in our view, that this somehow dooms markets: “Back in positive territory for the first time in more than two years, the real yield move threatens to remove a key pillar of support for risk assets like stocks and credit and spark a reassessment of sovereign debt.” The underlying assumption: If you can’t earn a positive inflation-adjusted return in bonds, then “there is no alternative” (TINA) for investors but to venture into riskier assets (e.g., stocks). But once “safe” bonds feature positive real returns, watch out—investors will then ditch stocks and higher-yielding corporate bonds for Treasurys. Sounds intuitive, except history argues against the TINA hypothesis. Look back at the last time real rates flipped positive on June 7, 2013. Did stocks crash? On the contrary, the S&P 500 rose 16.8% to yearend (per FactSet). Note, too, that this article’s thesis depends on the notion bond markets know something stock and currency markets don’t—and are moving ahead of them. But all sufficiently liquid markets price in information at the same time, in our view. They may have different demand drivers, but one market isn’t more forward-looking than the other.
MarketMinder’s View: No, to answer the titular question. Supposedly, as this article argues, buybacks are a contrarian indicator—i.e., buybacks hitting fresh records last year could be signaling a toppy market, perhaps setting up lousy returns, if not a peak, this year. “Previous multiyear peaks were seen in the third quarter of 2007 and the first quarter of 2000 with year-over-year gains of 57% and 43%, respectively. Both quarters saw stocks hit a record and begin sliding into a bear market. By contrast, big retreats in buyback activity occurred in the second quarters of 2020 and 2009 with year-over-year drops of 46% and 73%, respectively. Both quarters saw bear-market bottoms.” One problem with this analysis is that it doesn’t scale the amount of buybacks to the stock market’s overall market capitalization. As we noted in 2018, though buybacks surged, they didn’t deviate much from their market cycle average as a percentage of total US market capitalization—then, buybacks were running about 0.8% of total market cap, which wasn’t terribly high. Using Q4 2021’s high-water mark of $270 billion (per S&P Global) and last year’s total US market cap of $52 trillion (per SIFMA), the buyback rate is just over 0.5%—nothing to write home about, in our view. While this piece goes on to acknowledge company share repurchases aren’t necessarily timing tools and reveal more about past winners than future ones, we would go further and dispute the conclusion that today’s big buybacks are reason to be nervous—when scaled properly, buybacks don’t signal anything worrisome, in our view.
MarketMinder’s View: As we have pointed out before, cryptocurrencies present a new Wild West frontier for those looking to strike it rich. While we aren’t for or against cryptocurrencies, buyer beware. Since there isn’t a legal authority to appeal to if something goes wrong, the risks of losing your investment without recourse are high. This article walks through a recent crypto “heist” (which we recently covered in this space), though there was nothing technically illegal about it. Siphoning off other cryptoholders’ cash was within bounds of how the “stablecoin” discussed here works. In cryptoland, there is no law against it: “... by the rules of the crypto world, it’s not entirely clear what wrongdoing was committed. The attacker acquired voting rights in a way explicitly allowed by the code of the project, voted for a proposal explicitly allowed by the code of the project, and took money in a way explicitly allowed by the code of the project. ... By the rules of the real world, there is almost certainly a crime here, although it’s not easy to identify which one. Maybe fraud? Probably you cannot hand someone computer code that says in quite clear English that it is a proposal to donate $250,000 to Ukraine but which actually donates $180m to you, and then when they run it, say ‘haha suckers’ and not get in some sort of legal trouble. But the deeper you get into the crypto sector, the less the rules of the real world apply. In the real world, you also cannot start a wildcat bank that mints its own currency to pay double digit interest rates out of customer funds.” While perhaps an extreme example, we think this episode offers a timely cautionary reminder: Make sure you employ thorough due diligence before committing any funds to any crypto-related endeavor.
MarketMinder’s View: This piece provides some concrete examples illustrating why the Brexit disruption pundits warned about since its inception has largely failed to materialize. Businesses (shockingly) want to do business, and any obstacles to commerce tends to get attention—with a fix or adjustment usually forthcoming in some fashion. Businesses are nothing if not practical—and adaptable. In this case, “An influx of British-based companies to the Netherlands has swelled as they struggle with the disruption of a customs border across the North Sea. More than 90 investors have built or rented distribution space since 2017, half of them in 2021, according to government agency Invest in Holland. ... Since 2017 the amount of warehouse space at the port has doubled to 4mn sq m, or 400 hectares. ‘There is a lot of demand, and Brexit is one of the factors,’ said Danny Levenswaard, director of break-bulk at the port. But he said many international companies also wanted ‘buffer stock’ because of the disruption to supply chains caused by the pandemic. Rotterdam, which had record container traffic of 15.3mn 20ft equivalents (TEUs) in 2021, was Brexit ready after updating its processing systems and educating traders. Truckers, freight forwarders and customs agents must register with Portbase, a non-profit company, which pre-clears all cargo. The only checks are on food and animals, and when customs spots something suspicious.” Is this environment ideal? No, but life rarely is. For markets, we think what matters is whether outcomes are likely to be better than expected. Investors focusing on that gap are likely better served than fretting worst-case scenarios playing out exactly as feared, as businesses often find ways to avoid the most dire outcomes from becoming reality.
MarketMinder’s View: This article references a few individual stocks, so please remember that MarketMinder doesn’t make individual security recommendations—those mentioned here are simply included to help illustrate a broader point. Pretty much every sentiment survey taken in recent months has shown consumers’ views of the economy absolutely tanked after Russia invaded Ukraine, which conventional wisdom says augurs poorly for spending ahead. And, since consumer spending is somewhere around two-thirds of US GDP, that is presumed to be bad for growth. Thing is, folks often say one thing and then do another. “Case in point: Credit Card spending. In their Q1 earnings reports, all of the big banks break out their customers’ card spending. The numbers are not reflective of dour consumers, but rather, of an economy that is on fire: Citigroup credit card spending is up 23%; Wells Fargo is 33% higher; JPMorgan Chase +29%. In fact, the WSJ reported that JPMorgan customers spending in Q1 were ‘37% higher than in the first quarter of 2019, and up 59% from its 2020 nadir.’ Chase’s credit card customers spent $236.4 billion ….” Now, this doesn’t mean consumer surveys are useless, in our view. They give you a snapshot of where sentiment is today, a helpful-if-imperfect gauge. But, as this notes, they don’t effectively predict behavior.
MarketMinder’s View: This article is a bit mixed, but one sensible point it effectively makes is this: Don’t buy stocks based on widely known theses, as they are likely to be reflected in stock prices already. As it pertains to defense stocks, “Those who value a historical perspective, however, should recognize another risk: buying at the peak of the wave. For the last 20 years, every big military conflict has triggered a jump in defense stocks, including Russia’s invasion of Crimea in 2014 and the North Korean nuclear crisis of 2017, as well as 9/11 in 2001. Yet these gains were often eventually erased, as the initial sense of danger dissipated. The same could happen now, particularly given Russia’s failure to achieve a swift victory.” Less sensibly, it goes on to claim that Russia’s invasion of Ukraine “seems more geopolitically game-changing than any recent conflict” so perhaps countries will allocate significantly more to defense spending than in the past. But that thesis seems more like speculation than anything. After all, if Russia fails to achieve its aims in Ukraine, does that suggest more advanced militaries—connected via a mutual defense treaty—will actually need to spend more? Or does it suggest they are a-ok? We don’t know the answer to this, but the presumption Ukraine is such a paradigm shift is unproven, and investing based on what governments may or may not do over the long run seems perilous.