Family Notes For The Archives -- March 27, 2024

Locator: 46857ARCHIVES.

GDPNow: no change. Remains at 2.1%. Next update: Good Friday, later this week.

US oil production, exports: link here.

Hope springs eternal, link here. If I had a nickel for every story with this headline or something similar:

Re-fracking the Bakken: time to read this article again.

Carl Quintanilla: if you're not following Carl Q over on twitter you need to expand your horizon. Seriously. Liz Sonders or Carl Q? If I had to choose one over the other, it would be the latter. Carl Q. 

There are so many tweets I would like to post tonight but just don't have the time. But he certainly posts tweets that suggest the US economy is banging on all four cylinders. Speaking of which, Ford says the demise of the Chevy Camaro and Dodge Challenger -- both ceased production, December, 2023 -- opened the door for the Ford 8-cylinder.

I wonder if Andrew Ross Sorkin knows that an "8-cylinder" is an ICE, not an EV. It's my understanding ARS does not drive, nor does he have a driver's license. I think I heard him mention that some years ago. Don't know. Needs to be fact-checked. Good luck.

Disney: I've read a dozen or so headlines regarding the lawsuit involving Disney and the state of Florida. I've read the lede of several of those stories, and for the life of me, I can't figure out who won or lost.

I've long lost the bubble on this story, but my hunch is this: if DeSantis / state of Florida had lost, there would be a blaring headline at all sites. But the fact that there is no headline "DESANTIS LOSES" suggests that Disney / Bob Iger lost. I'll sort it out tomorrow. Maybe.

Later: here we go. This answers the question. But it really doesn't explain what DeSantis won / what Disney lost. Whatever.

Weather: incredibly nice weather for the next week, starting tomorrow. Amazing. 85°P on Easter Monday -- twelve degrees higher than normal for that date. 

Soccer: for the archives. This was truly one of the saddest days ever -- our granddaughter Olivia played her last competitive soccer game last night. Her team lost and won't advance in state playoffs. 

She started soccer at age four in Belmont / Boston, Massachusetts, before moving to Texas at age seven or thereabouts.

We drove her to 95% of all her practices and all her games from that age until two years ago when she got her driver's license. We lived and breathed soccer with her.

Despite being a captain for the team that won the Texas state championship last year, during her junior year, and probably among the top three players on her soccer team, she has no plans to continue with soccer in college. Here she is coming upstairs, coming home, after the last game. Wow, she was a great player. 

Sophia: Olivia's sister, Sophia, just a few months from turning ten years of age, is following Olivia's footsteps. I can't imagine Sophia ever being as good as Olivia but I won't sell her short. She has the same determination and has learned a lot from her older sister. So, we'll see.

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Dirty Blues

Link here.

Wednesday Evening -- Grayson Mill With Two New Permits -- Ten Permits Renewed -- March 27, 2024

Locator: 46856B.

I know I sound like a broken record (millennials and Gen Zers will have no idea what I'm talking about) but Amazon is simply amazing. I ordered two items late this afternoon and both items will arrive tomorrow.  And with the "cash-back" that has accumulated in my account, no additional charges to my credit card. Whoo-hoo!

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Back to the Bakken

WTI: $81.93. Trending toward $82. Again. Oil bulls would like to see higher prices, but $80-oil is pretty much in the sweet spot for everyone.

Active rigs: 39.

Two new permits, #40623 and #40624:

• Operator: Grayson Mill
• Field: South Tobacco Garden
• Comments:
• Grayson Mill has permits for two Skaar wells, NWNE 15-150-99,
• both to be sited 1519 FEL with one 372 FNL and the other 397 FNL

Active wells in this Grayson Mill Skaar wells in South Tobacco Garden are noted here. 

Ten permits renewed:

• Oasis (6): six Bud wells, McGregor, Williams County;
• Formentera Operations (4): two RNL1 and two FLX2 wells, NENW and SESW 7-163-90;

Four producing wells (DUCs) reported as completed:

• 39477, 271, Grayson Mill, Esther Hynek 10-11F 8H, Mountrail,
• 40074, 2,947, Grayson Mill, Edna 11-2-2H, McKenzie,
• 40075, 0 (no typo), Grayson Mill, Edna 11-2-7H, McKenzie,
• 40272, 3,521, Grayson Mill, Bill 14-23 XW 1H, McKenzie,

RMDs -- What No One Seems To Ever Mention -- 2024 Huge Year For IRAs -- See Why -- Originally Posted January 25, 2024 -- Re-Posted March 27, 2024

Locator: 46855INV.

The US market.

• S&P 500 closes at 5,248, a new all-time record.
  
• AAPL: up $3.60 today; up over 2%. See if you can connect the dots with this one below.
  
• This sure doesn't feel like an impending recession. CNBC analysts and talking heads have pushed concerns for a recession out to 2025.

Where's all this money coming from?

• Covid-19 stimulus money;
• Milton Friedman's velocity of money;
  
• my favorite chart;
• IRAs: see below
  
• southern surge: a $7 trillion gift
  
• (this would require a stand-alone blog -- but elevator speech: federal and state aid; a new agency within the Department of Homeland Security?) 
• TSA: $11 billion budget; 60,000 employees
• Citizenship and Immigration: <$1 billion; 4,000 employees
  

Baby boomer age wave theory: link here.

• baby boomers: note the size of this demographic at the link;
• who has all the money? who has all their medical care expenses paid for? whose houses are paid off?
• birth years: 1946 - 1964
• ages (2024): 60 years old - 78 years old; mid-range: 69 years old -- today, 2024
  
• IRS: RMDs -- about 4% annually

• ICYMI: in the box above, it's trillion with a "t." That's even more than Elon Musk's bank account.
  

Addictions:

• baby boomers: booze, cigarettes, gambling, muscle cars, sports, making money, malls, products,
• big families, extended families (inherited money diluted to "barely enough to live on"))
  
• millennials, Gen Zers: tech, travel, home delivery, services
• small families (inherited money remains concentrated)
  

Quick: name a time in the history of the US with the same data points, demographics, and addictions.

Updates

March 27, 2024: one year later ...

• "Max" chart:

Original Post
January 22, 2023

Key dates to remember with regard to IRAs:

• 1970
• 1981
• 1997

When did IRAs truly start to impact the economy? I would argue, 1995, to some extent, but then took off in 2007:

• 1970: traditional IRA introduced
• 1980: folks became comfortable with IRAs
• 1997: IRAs improved by a huge amount with the introduction of Roth IRAs
• 2007: another ten years of traditional IRA / Roth IRA growth in popularity

Now, look at this graph:

 Same chart with markers and comments:

Demographics, US:

Look at this, and no one seems to be mentioning this.

Age when one can start taking distributions from one's IRAs: 59.5 years of age.

IRA RMDs by demographic (note, data is somewhat old):

• silent generation: minimal impact on economy with regard to RMDs
• those who have IRAs are probably using RMDs for nursing home expenses
• baby boomers: biggest impact on economy with regard to RMDs
• those born in 1964: turn 78 years of age this year
• those born in 1946: turn 60 years of age
• in other words, every -- repeat, every baby boomer can now take RMDs
• my wife has been taking distributions before they were required and now RMDs for maybe ten years and despite the withdrawals year-after year, her IRA continues to grow
• I start taking my first RMDs this year 
  
• almost all baby boomers can now tap into their social security benefits
• almost all baby boomers are covered by Medicare. Medicare benefits got even better in 2024 (thank you, Mr Biden), seniors will spend less money on healthcare (all things being equal)
  
• 529s: a lot of baby boomers (GRANDPARENTS) are going to look for tax-advantage accounts to place RMDs they don't need for current expenses
• 529s have vastly improved starting this year (or last year?) making these investment vehicles look even better -- I'm having trouble finding a better place to re-invest my RMDs
• interestingly, one can argue that 529s are even better than IRAs
  
• generation X: will start to make impact this year but not much, but it will continue to grow every year for the next decade or so
• those born in 1980: turn 44 years old this year; no impact on economy with regard to RMDs but starting to hit max income / max productive years of their lives
• the younger Xers, now in the best years of their lives, financially, are now more likely to fund IRAs and that will help set a floor for the equity market; 
  
• those born in 1965: turn 59 years old this year!
  
• this is the biggie
• starting this year, generation X folks can start tapping their IRAs; it doesn't mean that they will but it means that if they don't, they have enough other income to offset any need for IRA distribution (meaning strong financial status for those folks)
  
• again, this is huge
• Roth IRAs have been around 27 years and the last 27 years have been great for investors, but
• even better: the way the market behaved last year and how the market is now behaving in the second half of January, 2024, a lot of folks are getting excited
• my hunch: a lot of folks are taking some / all of their RMDs this month; if not their entire RMD, taking a fourth to half of their annual RMD
• only a few more years and Xers will also be able to access social security benefits, also 
  

On top of all this, this "RMD story" is not going to go away. Year-after-year RMDs will increase in dollar amounts, but whether they increase or not, they will never quit.

And we haven't even begun to talk about "inherited RMDs":

• "inherited RMDs"? Reminder, oldest baby boomers turn 78 years of age this year -- IRS life expectancy for IRAs tend to trend toward 100 years of age -- taking only minimal RMDs, the vast majority of IRAs will still be funded and growing when their own dies.
  
• unlike owners of IRAs who can spread their RMDs over a life expectancy (26 years or longer), beneficiaries (those who inherit IRAs) must deplete those IRAs in ten years.
• one word: wow. 

S&P 500 Closes At A New Record High -- March 27, 2024

Locator: 46854INV.

S&P 500 closes at 5,248.

AAPL: up $3.60 today; up over 2%. 

This sure doesn't feel like an impending recession. CNBC analysts and talking heads have pushed concerns for a recession in 2025.

Cuts: on another note, a week or so ago, I opined that there will be no rate cut in 2024.  

Others are starting to come around to that thinking which makes today's S&P 500 record all that more remarkable. One wonders if, at this point in time, the Fed is relatively irrelevant to traders, and certainly irrelevant to long-term investors.

Wow, this gets tedious.

Breaking: now, at 4:26 p.m. CDT, March 27, 2024, panelists on "Fast Money" now suggest that traders are hoping there won't be a rate cut. If there's no ratee cut, that will suggest the US economy is still growing very fast. Very, very interesting.

Speaking Of Pensions -- March 27, 2024

Locator: 46853INV.

Tag: Gene Munster.

See this post. 

Now this. 

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Inflation Watch

What this analysis completely misses: the cost of taking care of your swimming pool.

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Robinhood Taking A Page From Apple's Playbook

Robinhood will issue a cash-back credit card.

R'hood is surging today.

Under EU rules, Apple has to market the "Robinhood Wallet" on its iPhones as a better alternative than "Apple Wallet" due to the "let's screw Apple rule." Needs to be fact-checked.

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Gene Muster

 Disingenuous. Has lost all his credibility. I won't pay attention to him any more. Link here.

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BNPL

Those who bought all their chocolate Easter candy last month, and paid using their BNPL credit cards, are beating chocolate inflation. And those who used cash-back cards are doing even better. 

Not an original thought -- borrowed from social media.

AAPL -- Note To Extended Family Member -- March 27, 2024

Locator: 46852INV.

A few days ago I posted my thoughts on AAPL per his / her request. My recommendations were to her / him specifically and no one else.

If you were to take my advice, today would be a great day to sell 10% of your AAPL holdings and buy BRK-B if you were to take that option. If I recall, I suggested two options.

On another note, as long as I've mentioned both AAPL and BRK in the same sentence, let's look how SNOW is doing.

SNOW:

TSM:

Connecting The Dots -- New England And Canadian Hydropower -- March 27, 2024

Locator: 46851NE.

 See this post. 

Now, see this WSJ article. See if you can connect the dots.

Truly amazing.

Bottom line: New England had no Plan B.

Time to watch a movie on TCM. 

Streaming:

Having talked to others and doing a lot of reading and a lot of surfing, I don't know if one can beat:

• ending all cable accounts;
• pick either YouTube, Hulu, or Hulu/Disney as your basic streaming service
• keep your Amazon Prime subscription (which includes Prime Video at no extra cost) with the Amazno fire Stick
• add Netflix, a la carte, if your spouse wants it. 

And, yes, Hulu gives you access to TCM. 

And now, recently announced, NFL awards Amazon Prime Video and Comcast's Peacock with "streaming-only games."

At no extra cost to get:

The National Football League announced two big games that will be available exclusively on streaming services this coming season—one on Amazon AMZN Prime Video and the other on Comcast CMCSA ’s Peacock.

The NFL said Tuesday that Amazon Prime, which already airs Thursday Night Football, will have the rights to stream a wild card playoff game in the 2024 season.

Without Peacock we might miss that one wild-card playoff game. We'll see. 

Anthropic -- Amazon -- Solar -- Texas -- March 27, 2024

Locator: 46850B.

Market, mid-day:

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Solar And Hail Don't Mix

Link here. 

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Anthropic

Folks may want to take a look.

Amazon added another $1.25 billion; now has invested a total of $4 billion. 

Amazon previously stated $4 billion was their plan.

This is the largest "outside" investment Amazon has ever done. Prior to this, the largest outside investment for Amazon: Rivian. 

WTI Holding At $81+ -- March 27, 2024

Locator: 46849B.

EIA weekly petroleum report: link here.

• crude oil inventories are 2% below the five-year average;
• crude oil inventories increased by 3.2 million bbls from previous week
• crude oil imports: 7% more than the same four-week period last year
• refiners: 88.7% of capacity
• distillates: 6% below the five-year average
• jet fuel supplied was up 0..4% compared with same four-week period last year

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Back to the Bakken

WTI: $81.39.

Thursday, March 28, 2024: 139 for the month; 198 for the quarter, 198 for the year
40113, conf, CLR, Lundberg Federal 7-8H,
39643, conf, Oasis, Streamsong 5502 11-17 3B,

Wednesday, March 27, 2024: 137 for the month; 196 for the quarter, 196 for the year
39722, conf, WPX, Bull Moose 28-27HS,
39642, conf, Oasis, Streamsong 5502 11-17 2B,
39249, conf, Whiting, S-Bar Carmen 5393 34-1 2B,

RBN Energy: US LNG projects face steep challenges in replacing coal abroad.

Many have argued that U.S.-sourced LNG can be instrumental in combating climate change by helping countries around the world replace coal-fired generation with natural gas-fired power. While this argument carries a lot of force in the eyes of many politicians and LNG marketers, the questions of exactly how — and to what extent — LNG can replace coal need to be asked. In today’s RBN blog, we’ll look at the challenges that the expanded use of LNG faces in countries with high coal utilization and the possible means of overcoming them.