Industrial Recession

  • Fedex is an early cyclical while TPG have their fingers in a lot of pies.
  • The industrial sector remains sluggish due to an inventory build-up and increased geopolitical trade tensions…US manufacturing PMI has been very weak this year. Given that our industrial production outlook is down 70 basis points from June currently at 0.9%.” Fedex CEO.
  • Certainly growth has slowed globally not going negative in terms of recessionary worries but we’re not seeing the sort of optimism and forward leaning behavior that we saw in our CEOs just a few years ago” – TPG Capital Co-CEO James Coulter, 23rd Sep, CNBC
  • h/t The Transcript

Help to Buy

  • It took the government 30 pages to come to the conclusion that was obvious from the start of the program.
  • Help to Buy was originally intended as a short-lived scheme but will now last for 10 years and consume over 8 times its original budget, yet the value achieved from its extension is uncertain.
  • Around three-fifths of buyers who took part in the scheme did not need its support to buy a property, and the large sums of money tied up could have been spent in different ways to address a wider set of housing priorities and focus more on those most in need.

Oil

  • A long but fascinating read about the interplay of technology and oil.
  • Exemplified by the Kern River oil field story – how technology renders even the best estimates wildly wrong.
  • From the beginning, it was evident that the Kern River field was rich with oil, millions upon millions of barrels. Wildcatters poured into the area, throwing up derricks, boring wells, and pulling out what they could. In 1949, after 50 years of drilling, analysts estimated that just 47 million barrels remained in reserves—a rounding error in the oil business. Kern River, it seemed, was nearly played out. Instead, oil companies removed 945 million barrels in the next 40 years. In 1989, analysts again estimated Kern reserves: 697 million barrels. By 2009, Kern had produced more than 1.3 billion additional barrels, and reserves were estimated to be almost 600 million barrels.
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