My Portfolio: 23Q2

Updated: Jul 8

This issue of My Portfolio is a summary of my financial situation for the 2023 Q2. The other posts (previous quarters) can be found at links at the bottom of the webpage, under Continue Reading. If there is anything you want to know feel free to ask in the comments.

Recap

It's going to be hard trying to keep up with inflation given that we're not in immediate control of our income. Not to mention the weakening dollar, economic war with China, and physical war in Europe. Honestly, none of these would be actual issues if individuals in government had common sense, empathy, and the ability of forethought we wouldn't have most of these problems. So, the everyday person will need to make more money (somehow) and begin to hedge. Right now, CD's and TIPs are still in favor, but as stated above, the currency is about to get rocked, but those are the only options many have. Continue to pay down debts, credit is tight right now with rates rising and defaults happening hand over fist. If you're paying your bank a fee, find a better bank, preferably a credit union. Diversify and start getting attentive of your funds and use them to multiply. Expect government to drain as much money as possible from you in order to float its currency, but I don't see that working until oil/ energy costs are placed under control. We've been in a recession since mid-2022, I'm worried about how deep, difficult, and long it's going to be. Even after the media and the commentators have accepted the Biden-Harris Administration's redefining of "recession", they are back to sounding the alarms. Going forward, attacking debts and allocating funds to high yielding assets are the main objectives.

Portfolio/ Investments

Buy, Sell, Watch

23Q1: I sold shares in AGM, SYF & AAPL; and added, USDC, ETH, T, DTEGY, ALLY, LAZ, OHI, STWD, VICI, & GOLD. Stocks on my watchlist: ALLY, BN, EMLC, VZ, STWD, DTEGY, GOLD, IBN, SCCO, AFL, AXP, DPGSY, USB, PNGAY & JPM.

23Q2: I sold my position in SYF; sold shares in USDC, JPM, DG, SBUX, MSFT, RTX, AAPL & AXP and added USDC, ETH, AGM, TG, DG, LEMB, & ALLY. Stocks on my watchlist: ALLY, BN, EMLC, LEMB, VZ, STWD, DTEGY, GOLD, IBN, SCCO, AFL, AXP, USB, PNGAY & JPM.

This quarter I decided to cash out on some gains and set up stop loss orders to prepare for further recession. This Quarter's total: $173.82, Previous Quarter: $159.32. This quarter's results (+9.10%): Apr. $42.63 (+11.95%), May $77.57 (+17.89%), & June $53.62 (+2.56%). Follow me on Twitter for tweet threads involving stocks.

Top 10 Allstars

23Q1: SCCO, CGW, TOLZ, MRK, AXP, EADSY, DPSGY, VZ, UL, & KO.

23Q2: SCCO, CGW, MRK, TOLZ, EADSY, DPSGY, ALLY, UL, AXP, & VZ.

EADSY can no longer be purchased on Robinhood, which must mean they're about to take off and HOOD can't lose anymore money to individual traders. I need to add funds to TOLZ, ALLY, UL, & AXP. I would say VZ, but I'm more for DTEGY.

Small Bets

23Q1 Tickers: SYF, RTX, & BYFC

23Q2 Tickers: RTX, BYFC, & WBD

This list is comprised of my smallest positions. Nothing has changed with the old bets. The list should stay the same for a few quarters.

Top Performers

23Q1 Tickers: AXP, VICI, & MRK

23Q2 Tickers: MRK, AGM, & AXP

Credit, gaming/ sports betting, and pharmaceuticals continue to be where the money is apparently, a view supported by Fed contact data. MRK and AXP switched places, VICI was knocked out by agri-loans, and there's a n insurance duck quacking to get in. MSFT would probably be higher but I've been selling profits.

Worst Performers

23Q1 Tickers: HOOD, VZ, SOFI, ALLY, & T.

23Q2 Tickers: HOOD, VZ, T, GOLD, & USB.

HOOD & SOFI has received good news from the government, they can get back to extracting capital from the public, enough so to get SOFI off the list. SOFI has been on a run lately, so it moved off the list and pushed on USB; and GOLD is back on the list, surprisingly. All-in-all, the list is composed of financials and telecommunication.

W.E.S. Rose & Shield

At the current time, WES:RS has 9 holdings. Estimated current market value (CMV) is $7,719.20. WES:RT market price is $371.91. Portfolio up +1.14% (+$161.63). The portfolio is stable, the same four holdings remain negative, therefore holding back the entire portfolio. More of the value is liquid (43.56% cash) to ensure distribution payments to ticket holders, uncertainty in markets, and overvalued stock prices. The main objective this year is to prepare for deepening recession (possible Depression), and hedge to protect distribution payments and grow portfolio income.

Multipolarity: Disarm the Buck

This is capitalism. We watch our governments spend recklessly and mismanage/ ruin relationships both domestically and internationally. The U.S. government has made plenty of enemies and lost just as many allies over the years. De-dollarization has been underway for at least a decade, kicked started by economic oppression through senseless sanctions. America’s desire to police the world through finance has upset powerful countries, which are often ignored due to them not being in the G7’s western establishment. Ironically, the main countries upset (BRICS+) are a part of the G20 instead. “Experts” go on media platforms and say de-dollarization is far off and (to some) impractical due to no replacement being available to handle the needs of the global financial system; the reporters/ journalists refuse to push back or even acknowledge that countries have been unloading USD for a least a decade, central banks around the world have been increasing their gold reserves, weaponization of the USD, BRICS development banks, and CBDCs.

In his recent visit to China, Brazilian President Luiz Inacio ‘Lula’ da Silva called for developing nations to abandon the U.S. dollar and for BRICS to establish a new currency, which will be debated at the next BRICS summit in August. Brazil posted a $11.4 billion trade surplus in May, marking a record for any given month since1989. Brazil also signed agreements to pursue semiconductor technology, renewable energy and satellite surveillance. The deals form part of its strategy of "active non- alignment", which resists taking sides between the west and China or Russia, including over the war in Ukraine.

25 countries are ready to join BRICS and accept a new currency for international trade; the countries that have shown interest to join the BRICS alliance are: Afghanistan, Algeria, Argentina, Bahrain, Bangladesh, Belarus, Egypt, Indonesia, Iran, Kazakhstan, Mexico, Nicaragua, Nigeria, Pakistan, Saudi Arabia, Senegal, Sudan, Syria, the United Arab Emirates, Thailand, Tunisia, Turkey, Uruguay, Venezuela, and Zimbabwe. Poor/ deteriorating relationships have led to a string of events that has resulted in our current crises. It could be argued that the 25+ countries ready to join and accept a BRICS currency are victims or collateral damage of our Federal government and its policies. The most impactful in my opinion (outside of core members) being Saudi Arabia, Mexico, Iran, Thailand, Turkey, Venezuela, and Nigeria. The BRICS alliance would become stronger after expansion as their GDPs would race ahead of the U.S. and other western powers; furthermore, the countries that are interested to join BRICS are also oil-rich nations. Therefore, the alliance could force European countries (i.e. France and Germany) to pay with the new currency for oil and not the dollar. 25 countries possibly conducting transactions in non-USD would significantly boost any economy whose currency is being used. Reports say the yuan, but if it all goes through the BRICS’s bank the members share equal stake, therefore all take equal share of all benefits from transactions. It’s a new world order.

Oil is currently one of the main levers the U.S. use to dictate or coerce other nations, which is why the world is determined to disarm the USD by retiring the petrodollar. Strangely enough, the main oil-rich nations are in the Middle East, South America, and Africa. Nations are settling their oil transactions in other ways, in order to cut out the U.S. Using the Shanghai Petroleum and National Gas Exchange as a platform to carry out yuan settlement of oil and gas trade, Saudi Aramco sells around 60% of its oil to Asia, resulting in more than 25% of China’s oil imports coming from Saudi Arabia. China and Russia have already started to conduct settlement transactions using the Chinese yuan, leveraging specially designated banks as clearing entities to facilitate these payments. China has developed a global payment system Cross-Border Interbank Payment System (CIPS) and Russia developed System for Transfers of Financial Messages (SPFS), both as alternatives to SWIFT. In addition, China imported $88 billion worth of major commodities from Russia in 2022, a 52% jump from 2021. I assumed S.A wanted China's money & manufacturing, and something told me to look into my old posts. It seems the universe was letting me know the news was gonna spin the block full circle. They want the weapons, money, and manufacturing power. I've always said they wanted to be an Eastern U.S. and it's coming true. News outlets don't report on the military enough, they're worried about Russia's military, when China is pulling a America, and selling weapons to everyone not wanting to be sanctioned. According to a new report from the Chinese state-backed outlet China Daily, the country’s central bank has inked deals with more than 40 countries and regions since 2016. China says it’s now signed $582.3 billion worth of global currency settlement agreements that will exclusively utilize the yuan. China is now the world’s second-largest economy, the largest trading nation and the largest trade partner to 120 countries, making it inevitable that the RMB will play a larger role in the international economy. The seize-up of dollar credit will accelerate the shift to a multipolar reserve system, with China's RMB as a competitor to the dollar. Beijing's aim is to institutionalize overseas demand for the yuan through resource extraction via processing facilities to produce goods that will be sold to China, in yuan, in the form of commerce with a focus on developing economies, Asian countries and members of Beijing's Belt and Road Initiative. More than 20 Latin American and Caribbean nations have joined China's Belt and Road infrastructure initiative and China has lent more than $136bn to Latin American governments and state companies since 2005. Chinese trade with Latin America has exploded this century from $12bn in 2000 to $495bn in 2022, making China South America's biggest trading partner. Chile, Costa Rica and Peru have free trade deals with Beijing, Ecuador inked its agreement this month and Panama and Uruguay are planning treaties. The leaders of 10 Southeast nations and the members of the Association of Southeast Asian Nations (ASEAN) have agreed to promote their native currencies for cross-border transactions. The 10 countries will reduce settling payments with the U.S. dollar and use their local currencies for transactions.

The United States of Sanctions

The economic tyranny the federal government specializes in is not sophisticated. It's tired. They did it to Black people (which then was expanded to the entire working class), and internationally during the last 20 years, to Iran, Russia, and China. The politicians thought they could copy the model they use on their Black population and apply it to the rest of the world. The playbook has plenty of names in it, but the game is the same. Whether they call it sanctions, tariffs, redlining, low credit, insufficient funds, or the like, at the end of it it's an economic tool used to exclude, oppress, or coerce. In times of war and conflict, it becomes even easier to showcase publicly the tool set. Recently, South Africa was accused of secretly supplying ammunition to Russia by a United States ambassador. The U.S. government will likely respond to the allegation by blocking South Africa’s access to American markets through the African Growth and Opportunity Act (AGOA) preferential duty-free market access to the US. Musk said earlier this quarter "If you weaponize currency enough times, other countries will stop using it."

All war is wrong, especially physical ones where innocents are slain. That being said, if the sanctions made sense I would and could understand and support them, but they don't. After the war started, Russia saw $330 billion worth of Russia’s gold and foreign exchange reserves frozen, preventing Moscow from transacting in dollar- or euro-based assets internationally; but as previously mentioned (and will be again) the west continues to buy oil from Russia through various ways. The TASS news agency reported Russian Central Bank Governor Elvira Nabiullina let it be known in May, Russia is building its international reserves with assets that cannot be targeted by Western sanctions. Russia and Iran are also finalizing an agreement to deepen their trade collaboration, avoiding the crippling sanctions that the U.S. has enacted against them. The Central Bank of Russia (CBR) has also previously said it considers gold, Chinese yuan and foreign currency held in cash as safe from possible further rounds of Western sanctions. Speaking of China, Beijing wasn't going to just sit there and do nothing as the US piled sanction upon sanction in hopes of crippling their economy, and many expected that China would retaliate by squeezing the west where it had the most leverage, namely by limiting exports of another key tech supply-chain product: rare earth metals, and where China is the world's dominant producer. Not too long-ago Treasury Sec. Yellen was praising the sanctions and oil caps, but it seems reality has finally set in. Yellen recognizes that such sanctions push countries like China, Iran, and Russia to seek alternatives to the U.S. dollar, in order to conduct trades even when affected by these sanctions. Ray Dalio said those sanctions "increased the perceived risk that those debt assets can be frozen in the way that they've been frozen for Russia."

Is This American Money?

Dimon has been in his element acting as Wall Street’s unofficial ambassador to Washington on the recent regional banking crisis and during the debt-ceiling debate. Last quarter Jamie Dimon (JMP CEO) wrote, higher capital requirements do not reflect “actual risk” in the system. Others who disagree and say it is actually a necessity, report just four banks in the U.S. control more than 85 percent of all the opaque derivatives in the banking system. We’re talking about JPMorgan Chase, Bank of America, Wells Fargo and Citigroup’s Citibank, just these four banks held 43 percent of all uninsured deposits out of 4,127 federally insured commercial banks in the U.S. as of year-end 2022. Small and regional banks are now focused on protecting their capital and tightening their lending services (something JMP started years ago), which will likely roll the economy over (further) into recession and affect nonprofits and charities as reported to the Fed. Goldman estimated that bank reserves would drop by $400 billion-$500 billion due to the Treasury rebuilding its cash balance, continued deposit outflows, and the Fed's ongoing quantitative tightening program. The acquisition of First Republic increases JPMorgan’s presence in wealth management, one of the few areas where it is not a dominant player. JPMorgan Chase raised a key performance target on the heels of its government-brokered takeover of First Republic earlier this month. The bank will generate about $84 billion in net interest income this year, New York-based JPMorgan said in an all-day investor presentation. In a research note, Wells Fargo analysts estimated JPMorgan's market capitalization could more than double within seven years to $1tn, reaching a level that has been the preserve of tech and oil companies.

Poor money management has resulted in losses across the financial sector and economy as a whole, resulting in a Banking Crisis. Treasury Sec. Yellen said last quarter that the U.S. banking system was stabilizing, and steps taken to guarantee depositors' savings in banks remain safe. She also said this after 3 banks collapsed and before 3 more collapsed. Now, supposedly suspicious activity is triggering abrupt account closures at US banks. She added that the situation was "very different" from the 2008-2009 global financial crisis, when subprime mortgage assets put many banks under stress, and that the financial system is "significantly stronger than it was 15 years ago." Chief economist of the WTO, Ralph Ossa, disagrees and said, sharp rises in borrowing costs by global central banks over the course of 2022 had also revealed weaknesses in banking systems that could lead to wider financial instability, if left unchecked and “Governments and regulators need to be alert to these and other financial risks in the coming months.” Fed Chair Powell mimicked the lies and claims of Sec. Yellen that the banking system is sound and stable. Inflation, under the Fed’s preferred measure, has declined but remains far above the central bank’s 2% annual target. The Fed’s Beige Book stated, Nonprofit organizations reported that heightened uncertainty in the banking sector limited their access to credit and delayed ongoing affordable housing and community support projects. Nonprofit organizations noted that recent banking developments led many corporations to cut back on charitable donations, which further constrained their ability to meet demand for basic needs, including shelter, rental and food assistance, and mental health services. Meaning their surveyors reported back to them that the uncertainty in the banking sector is preventing basic needs/ services to the neediest in society, and the Fed’s response to that is to put millions more out of work and raise credit costs.

Is this American money? I asked because every time I turn around something in the economy is breaking. Listening to the STWD earning call, I walked away with a new perspective. I realized that employment is the only thing keeping this economy afloat at the moment, and the Fed is determined to increase unemployment. Rents are rising and HUD is approving those rent increase requests from landlords. U.S. credit card debts now total nearly $1 trillion (or $986 billion, to be precise) as of the first quarter of 2023, according to the Federal Reserve Bank of New York. That marks the first time in 20 years balances have not fallen following the holiday season, according to the central bank's research. In my 21Q1 post, under Banking & Credit, I spoke on the new banking limitation I was experiencing. I mentioned the physical cash being moved out of the banks, companies and governments embracing digital currencies, the banking institutions adding restrictions on access to your money, and the inconvenience.

Big banks hold the majority of the risk, small and regional banks are hurt by raising borrowing rates, then when the sector is mismanaged, the government steps in and extracts capital from the population to bail them out. The public is already tapped out from various corporations providing services and essentials, so that forces the public to turn to those mismanaged banking institutions for credit or funds to fill in the budget gaps. It's a real catch-22. People are living paycheck to paycheck, how can they be expected to save, invest, or retire? Therefore, how are banks even sustainable? The answer is, they're not. Not only are deposits at commercial banks at the lowest in recent history, in addition, depositors appear to have pulled about $1 trillion out of the banking system so far this year. The weaponization of our currency has really decayed the foundation of international finance and economics for a lot of foreign entities and nations. China shed over $250 billion, or 30% of its holdings in four years. Ironically, when the Congressional Budget Office analyzed tax collections for the current fiscal year through April, the tally fell about $250 billion short of predictions from just a few months ago. The cost to insure US debt is now higher than the bonds of many emerging markets that have credit ratings well below that of the US.

Is That Your Friend?

It would appear India is positioning itself to be a major power, with ties to the US (& the West) along with its position in BRICS, it's going to profit nicely. Rosneft (Russian oil producer) plans to sell 11 million barrels every month, with optional quantities, to Indian Oil Corp. The oil will be sold on Dubai benchmark quotes and discounted to around $8-$10 per barrel. India’s refiner had a contract to purchase 3.0 million barrels of Urals crude in 2022-23. Based on the G7 price cap, Urals can only be traded in US dollars if sold below $60 per barrel. According to the Economic Times, India’s External Affairs Minister Subrahmanyam Jaishankar and Russia’s Deputy Prime Minister Denis Manturov are analyzing how the two countries can create new payment avenues that could circumvent financial sanctions levied against Moscow.

In this pursuit for power, we have obvious blind spots. I've already mentioned India's position in the matter. Others that we need to look at would be Mexico, France, Germany, and Japan. I personally don't blame Mexico for wanting to better itself by joining BRICS, but France and Germany they get the side eye. Energy and cheap manufactured goods imports leave them open for coercion from BRICS+. Amid the heightened China-U.S. tensions, both Washington and Tokyo are developing rare-earth supply chains that are less dependent on China. "Japan intends the endeavor to strengthen supply chains for critical minerals and other commodities," Japanese Chief Cabinet Secretary Hirokazu Matsuno told reporters. "We'll continue to closely monitor the institutional impact from China," Matsuno added. Japan is also the largest foreign holder of U.S. debt. Japan surpassed China as the top holder in 2019. Recently it's been made known that they are clearing transactions in other currencies, and still have ties with Russia and China.

Asian countries led by China, Japan and South Korea have been the main market for Qatar's gas, but it has been recently targeted by European countries since Russia's war on Ukraine threw supplies into doubt. Qatar's gas is among the cheapest to produce and has fueled an economic boom in the tiny Gulf emirate, which is now one of the world's wealthiest countries.

Storytime: Pirates & Krakens

Consider macroeconomics as the ocean, and personal finance as the land. Out in the ocean there are fish of all sizes, but the issue is over the past decade or so sharks and whales have evolved into krakens and other massive monsters. The slogan “eat the rich” has always been a way of life in business, companies merge, acquire, or simply buyout other companies all the time; in other words, bigger fish eating smaller fish. Now krakens are eating krakens. Instantly we think fewer monsters for us land-dwelling mortals, but it results in bigger, more dangerous krakens. Naturally, there should be a defense against these monsters and protect the land from being overtaken by the ocean and all its creatures, and naturally that defense would be titled government. Unfortunately, that same defense revealed itself to be nothing but pirates and mercenaries that loot the land and throw people into the sea to either drown or be devoured by the fish. The land-dweller must conquer the land first, make community with others that share and value the land, build a secured foundation to protect themselves and what’s theirs from the pirates; and when they approach the ocean, they master the coast before sailing out into the distance.

In Conclusion

All that to say, we need politicians and government to increase entitlements and provide guarantees of housing/ shelter, food/nutrition, childcare/ education, and transportation. The government should treat its citizens like it treats Wall Street executives and celebrities. Every citizen should be able to know the government is right there to bail them out on the road in pursuit of life, liberty, and happiness. Instead, we have a government that rather tax its citizens into poverty to line the pockets of politicians, donors, lobbyists, staffers, corporations, institutions, executives, and the already wealthy elite. If the government wants to continue taxing hard working individuals (working 40+ hours grossing $40k) more than millionaires or billionaires, then they should be subsidizing the working class. Give people the actual power to participate in a “free market economy,” because right now we do not have free markets. Today and for quite some time, we have been enslaved to monopolies strengthened by crony capitalism, people are forced to make decisions based on factors not of their control. Everything from the products on the shelves, the websites you see, the ads curated for consumerism, all are determined by some executives trying to extract capital to further personal gain. Resources in the hands of the working class is the only hedge the country has against other world powers, the corporations abandon the country as soon as the funds clears. No one or institution supports local areas and communities like the people working or living there, and that’s the truth all around the country.

It’s crazy that I have to say this but: none of this is investing advice and you should do your own research and never take the word of someone else without doing so. All investing involves risk, and only you can decide what to risk and is worth risking for. And you look stupid trying to sue someone because you followed blindly.

23Q2 A2 Report

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Works Cited

https://asiatimes.com/2023/06/yuan-is-internationalizing-more-than-meets-the-eye/

https://www.cnn.com/2023/06/20/business/inflation-vs-deflation-prices/index.html

https://www.businessinsider.com/bank-of-china-halts-cny-transfers-russia-us-eu-uk-2023-6

https://oilprice.com/Energy/Energy-General/Iraq-Gets-US-Approval-To-Clear-276-Billion-Gas-Debt-To-Iran.html

https://www.nbcnews.com/news/world/us-decides-rejoin-unesco-pay-back-dues-counter-chinese-influence-rcna88796

https://www.ukrinform.net/rubric-economy/3721275-uae-to-help-ukraine-create-sovereign-wealth-fund-zelenskys-office.html

https://www.bloomberg.com/news/articles/2023-06-01/russia-s-rupee-trap-is-adding-to-147-billion-hoard-stuck-abroad

https://gcaptain.com/top-shipper-of-russian-oil-secures-indian-cover-as-western-certifiers-exit/