Chronicle of December 2023
A Year in Review
Let’s take a look back at our 2023 Chronicles and see how they’ve changed as the year wraps up. And check our book recommendation for an engaging holiday read.
U.S. Market Recap
Magnificent Seven stocks dominated the U.S. stock market in 2023, where those 7 stocks alone contributed more than 60% portion of the S&P 500 returns. Top sectors were IT, communication, and consumer discretionary, while energy and defensive sectors (healthcare, consumer staples, utilities) performed the worst.
Unintended consequences
Over the past decade, efforts to reduce oil consumption have led to unintended consequences. In our “Just Stop Oil," despite the stringent regulations on Alaskan oil mining in the name of environmental preservation, the outcome has been an increase in oil consumption, coupled with higher oil prices. Alaskan oil production hit a record low this year due to strict regulations. Paradoxically, the U.S. achieved a historic record in oil production last week, reaching 13.3 million barrels per day.
Low oil prices over the last decade have caused many offshore support vessels (OSVs) to shut down. In “Some Mining Facts that Make You Laugh," we joke that some OSVs turned into yachts. Now, day rates for OSVs are soaring, but it’s not just about the cost. Even if you can pay, finding an available OSV is a challenge.
Unexpected leaders are on the rise
Vivek Ramaswamy, a newcomer to politics, unexpectedly stole the show in the initial Republican presidential debate. In “Some Oddities This Week," Vivek briefly surpassed Trump in Google searches during the debate. Interestingly, despite trailing in polls, he dominates on the X platform (formerly Twitter). His simple campaign slogan, "Truth," offers a unique appeal to voters, especially with his pledge to significantly reduce government agencies, even proposing the abolition of the FBI.
Addressing the push for a smaller government, Javier Milei becomes the new president of Argentina. Milei’s campaign featured bold promises, such as scrapping the central bank, adopting the US dollar as legal tender, slashing government agencies, and deregulating. Whether he will succeed remains to be seen, given his party’s minority position in parliament.
Just several weeks into his term, Milei has already made significant moves by eliminating 12 out of 21 cabinet posts, firing 5,000 government employees, ending thousands of government regulations, and lifting export bans in the mining sector. Explore detailed accounts of Milei’s ideas in our articles, “Right-Wings, Mileinomics, and Dollarization” and “Is It Argentina’s Turnaround Moment?” A must-read.
Anti-war, pro small government libertarian leaders are on the rise.
Unplanned policy
Uranium is taking center stage. In our piece “Nuclear Power No More," we delve into the narrative of nuclear energy being sidelined for years, only for the U.S. government to urgently revive its prospects. It’s not just the U.S.; in “France’s Quest for Uranium," we explore how France, heavily dependent on nuclear power, is compelled to seek uranium suppliers near the border with China.
In our “Highlights from the Climate Conference," global leaders during the U.N. climate conference reached a consensus on the vital role of nuclear power in saving the earth from climate change. Yet, to triple nuclear generation, uranium miners require substantial price incentives. Year-to-date, uranium prices have surged by +77% due to the widening supply deficit. And the trend has not been broken.
It’s not just the U.N. that’s shifting policies. In “Poll and Pivot," we share the tale of Jerome Powell, the Fed governor, who has recently tempered his hawkish stance. Not too long ago, the Fed’s position was “higher (interest rates) for longer." However, this policy abruptly shifted when, coincidentally, Biden’s poll numbers took a hit. The latest dot plot indicates that Fed governors anticipate significant rate cuts in the near future.
Book recommendation
For an engaging holiday read, we suggest “The Liberal Approach to the Past.” The book offers insights into the intellectual perspectives of various classical liberal philosophers, such as Hayek, Mises, and Froude, providing a deeper understanding of their thoughts and ideas.