Welcome back to the Friday Wrap Up.
A lot of big news this week…
IN THE NEWS
Welp. It seems it’s still possible for a bank to crumble in less than 48 hours. X
I consider it unlikely that any depositors will be left without funds once the dust settles. But it’s still a scary prospect — and disruption, even if it’s only a few days (or a few weeks at most) is still costly. Napa vineyards, tech startups, and venture capitalists are the primary market for the bank, and they’ll be the ones left waiting it out. Over the next week we’ll keep you updated on how best to handle banking’s setbacks.
Big Energy’s biggest conference is happening this week in Houston, Texas. Energy security has so far been the top subject — in a room filled with powerful Americans in suits and ties (Energy Secretary Granholm, John Kerry, Joe Manchin) and powerful Middle Eastern magnates in dishdashas and ghutras, all collectively referenced the threat posed by Russia. And the tension has pushed everyone to a conclusion: more oil and gas support. This is a shift in America’s policy and in Biden’s stance, where it now seems that oil and gas expansion is okay if it hurts Putin. But make no mistake, while this staves off the oil pullback from a policy level, EVs and renewables are still the safest way out of the geopolitical energy trap.
Case and point: During the conference, Shell barely talked about oil, and instead flexed how they were using record oil profits from 2022 to reinvest in renewables on a multi-billion-dollar scale that’s bigger than anything they’ve ever done before. Shell is in full pivot toward an electric and zero-carbon future. The most surprising part of their announcement: executive bonuses are now tied to metrics on zero-carbon initiatives. No bonus green if they don’t go green. The rudder on that oil tanker has officially shifted. And why more reason why our Macro Markers are keeping lithium and copper in the BUY category.
FRIDAY FEATURE
Toyota has some big changes ahead. They’ve been too slow to embrace the EV future — and investors have noticed.
It’s ironic that the manufacturer of the Prius, which is the first mass-produced vehicle to truly kick off the EV revolution, should now find itself so far behind.
But the hybrid technology that made the Prius the vanguard of EVs is also what’s held Toyota back. Hybrids are only a half-step, after all, and while they’ve offered a flexible way for consumers to dip their toe in the water, they don’t offer any of the powerful features that are driving EV sales today.
Toyota’s heir and President Akio Toyoda has announced that he’s stepping down soon — and it’s largely because of EVs. He’s famously remained skeptical about the true breadth of the EV revolution. One can hardly blame him, in some ways. Toyota’s position as the global leader also makes it the most entrenched to the old ways of doing things.
And you have to admire the man who, while a billionaire and a race car driver (Toyoda is both a Master Tester and has won many racing awards), still personally drove a Toyota Yaris in his everyday life. He designed the Yaris to be cheap, functional, and above all: efficient. He’s said for decades that Americans need to drive smaller cars if they want more efficient transportation (and has been critical of American parking lots full of trucks and SUVs).
But while I agree with Toyoda’s sentiment that small and efficient is one way to reduce consumption, the practical reality is that little cars aren’t the fix-all he claims…
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Enjoy your weekend!
