The infamous wall is really being built. Well, at least in theory. Donald Trump has promised a wall between the U.S. and Mexico since he announced his candidacy in June, 2015. And on Wednesday, he fulfilled his promise. Well, kind of. President Trump signed an executive order to expedite the building of his famous wall, but so far there are few details as to how that will actually happen? What’s next for the wall? And how can investors benefit from it?
Will Trump’s Wall Actually Get Built?
The border between the U.S. and Mexico is 2,000 miles long. And President Trump has promised his wall will be 35-40 feet high.
That’s a lot of concrete.
About 7 million cubic meters of concrete to be precise. Plus an additional 2.4 million tons of cement, according to investing firm Sanford C. Bernstein & Co.
What started as a promise by Trump that his wall could be built for $8 billion went up to $10 billion pretty quickly. Now that cost looks to be around $25 billion. And while Trump swears Mexico will pay for the wall, Mexico’s president, Enrique Peña Nieto adamantly swears that will never happen.
So who’s picking up the bill?
With no details presented by Trump, it looks like that cost falls squarely on U.S. taxpayers. But even if that happens to go through, there’s still the cost of maintaining the wall and the even bigger cost of manning the wall.
The U.S. Border Patrol is already short of being at full strength by 1,200 agents. And a wall without anyone to watch over it is worthless. So Trump would need to find funding for an understaffed, underfunded agency in addition to the cost of building and maintaining a 2,000 mile, 40 ft high, concrete wall.
Don’t forget about privately owned lands and environmental protection laws all along the border, not to mention that the landscape changes, with the Rio Grande changing depth and even direction throughout the year.
When you add it all up, the wall doesn’t sound extremely plausible. However, the fact remains that Trump promised a wall and now is working to expedite its construction.
Will the wall actually get built?
That all depends on who you ask, really. But one thing is clear, it’s time to invest in building. And right across the border is one of the world’s top cement producers in Mexico’s Cemex.
Cemex is the only North American company in the to 20 global cement producers. So if Trump wants to build his wall, it will need to be with Cemex’s help. That’s also good news for American factory workers, since Cemex has dozens of manufacturing sites in the U.S.and employs more than 10,000 U.S. workers. That means that if he were to leave Cemex out of the operation, he’d be hurting more than 10,000 U.S. middle class factory workers – his beloved fan base.
Watch the report from Sky News regarding the cost of Donald Trump’s wall on Mexican border:
Whether the wall gets built or not, it’s time to invest in Cemex. Shares of CEMEX, S.A.B. de C.V. (CX) have ticked UP on the news, and make a powerful value buy as the stock should continue to rise strongly.
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Stalemate Ends: Next Stimulus Bill Could Be Approved In The Coming Days
It appears the stalemate between Republicans and Democrats may be coming to an end soon. Both sides have reported progress towards another stimulus bill.
During an appearance on Fox Business last night, Treasury Secretary Steve Mnuchin said both sides have agreed to include another round of stimulus checks to American families in the next coronavirus relief package.
While speaking with Lou Dobbs, Mnuchin said the next relief bill would include a stimulus payment “similar” to the ones sent out last spring as part of the CARES Act.
It’s likely the same framework would be used for this round of checks. This means working adults would receive a check worth up to $1,200 and up to $500 for each dependent.
Stalemate Coming to an End
After a months-long stalemate, Secretary Mnuchin and House Speaker Nancy Pelosi spoke by phone yesterday. They will meet in person in the coming days. Mnuchin said he was “hopeful” both sides can reach an agreement. He also mentioned, “We still don’t have an agreement, but we have more work to do. And we’re going to see where we end up.”
The House speaker said she and Mnuchin had an “extensive conversation” and “found areas where we are seeking further clarification.”
With the news of a renewed effort to reach an agreement, Democratic leaders in the House postponed voting on a $2.2 trillion relief bill. Republicans had already indicated they would not approve a package with that price tag.
Mnuchin did indicate that President Trump has approved raising their original limit of $1 trillion for the next relief bill. He also suggested that Trump is comfortable with a price tag closer to $1.5 trillion.
Rep. Hakeem Jeffries, head of the Democratic caucus, said their Problem Solvers Proposal, put forth in mid-September with a price tag of $2 million, appears to be where Secretary Mnuchin will start negotiations.
“If you look at the Problem Solvers proposal, at the high end it’s approximately $2 trillion,” Jeffries told reporters in the Capitol. “And so I think that to the extent that Secretary Mnuchin has indicated that he will use the Problem Solver proposal as a basis for any counteroffer, actually brings us much closer to an agreement than we’ve ever been.”
The Problem Solvers Proposal includes about $500 billion in state and local relief. It also includes $1,200 stimulus checks and a replenishment for the Paycheck Protection Program. Republicans have said many times they won’t approve money to bail out poorly-run state and local municipalities.
House Majority Leader Steny Hoyer told reporters that the House would scrap a vote on their current plan and instead wait to vote on a bipartisan deal instead if it can be reached by Mnuchin and Pelosi.
“If we have a bipartisan deal … that is what we will move,” Hoyer told reporters.
PPP Bailout Money
Chinese firms got millions of PPP bailout money. The Paycheck Protection Program (PPP) provided relief for struggling small American businesses. With a $660 billion fund, help came to those who needed it, and it also arrived at some unintended recipients. Somehow, millions of dollars of forgivable loans went to Chinese-owned companies.
PPP Bailout Money | Chinese Firms Got Millions in Coronavirus
Consulting firm Horizon Advisory reviewed available PPP reports and found some interesting data. According to them, around 125 Chinese firms received between $192 to $419 million in PPP loans. The firms are either Chinese-owned or invested in Chinese financing. Among the borrowers were 32 companies that received more than $1 million each.
Small Business Relief
With a $2.2 trillion fund, the PPP provided loans to eligible firms during the pandemic. To qualify, firms must be small businesses with fewer than 500 employers. If they used 60% of the money for payroll, with some for rent and overhead, the loan becomes a grant instead. A program this big and well-funded will attract a lot of attention. Publicly traded firms applied and got approval for loans. As these companies got called out, many returned the money.
With the rules open for some interpretation, the PPP may have allowed some loopholes. Among the gaps was allowing American subsidies of foreign companies to apply.
Horizon Advisory co-founders Emily de La Bruyère and Nathan Picarsic noted the PPP’s lack of safeguards. They said that the “extent and nature of P.R.C.-owned, -invested and -connected entities among the P.P.P. loan recipients indicate that without appropriate policy guardrails, U.S. tax dollars intended for relief, recovery and growth of the U.S. economy — and small businesses in particular — risk supporting foreign competitors, namely China.”
Previously: PPP Recipients Revealed, 51 Million Jobs Saved
Companies that availed of the bailout include Continental Aerospace Technologies and Aviage Systems. Both are part of the Chinese military conglomerate Aviation Industry Corporation of China. CAT received $10 million in loans, while Aviage got $350,000.
HNA Group’s US subsidiaries HNA Group North America LLC and HNA Training Center NY got $1 million each. HNA Group is a Fortune Global 500 that deals in real estate, aviation, and financing.
Another one is BGI Americas Corporation, a subsidiary of China’s gene-testing BGI Group. When called out, BGIAC returned the money.
Biotech firm Dendreon Pharmaceuticals received a loan worth $5 million to $10 million. Its parent company, Nanjing Xinbai, is a state-invested company with ties to the CCP. These are the same organizations that President accuses of stealing intellectual property.
Mobile payment firm Citcon USA LLC received $150,000 to $350,000 in loan money. Its major investor, ZhenFund has ties to Alipay and WeChat, which are also targeted by Trump.
Fixing The PPP Bailout Money Loopholes
Horizon Advisory acknowledges that loans to Chinese companies saved American jobs. Butt, they also noted that these companies may have access to other sources of capital.
With the pandemic still wreaking havoc in the US, Congress is working on a second relief package. Republican lawmakers have submitted a provision that limits Chinese participation in future bailouts. Businesses owned in part or full by Chinese companies are not allowed to apply for loans. The same applies to companies with a Chinese resident on the board of directors.
Chinese companies receiving American tax dollars to continue operating on US soil? Companies owned by the same group of people accused by the President of stealing IP? The same country the President blames for the origin of the virus currently damaging the US? The irony is thick in this situation. The already shaky Sino-US relationship is facing yet another test.
Watch this video about the PPP Bailout Money:
Do you agree that PPP and other relief efforts should exclude Chinese companies? After all, they opened American offices and hired Americans during a global pandemic. Then again, they seem to operate under their own rules, and China is a US rival and competitor. Share what you think by leaving your comments below!
Moore: Republican’s Newest Stimulus Bill Has Fundamental Flaw
Stephen Moore says the Senate Republicans got most of the newest stimulus bill right but believes that it contains a “fundamental flaw” and President Trump shouldn’t sign it.
Moore, a member of President Trump’s economic recovery task force and an economist at FreedomWorks, says the plan put forward by Senate Majority Leader Mitch McConnell “isn’t half bad” and will help get the country back on track. He also says that we can “take solace in the fact that the price tag is “only” $1 trillion” compared to the HEROES ACT passed by Democrats and Speaker Nancy Pelosi that totalled a whopping $3 trillion.
Moore provided his thoughts on whether or not he sees a benefit from what he calls the “major planks” of the plan.
Another Round of $1,200 Stimulus Checks
Moore gives a “thumbs down” to this aspect of the bill. He believes it is counterproductive and rewards inactivity. He says “Dropping free money into people’s pockets is no road to prosperity. This isn’t a stimulus, it is a redistribution of money from producers to non-producers.”
Additional Funds For The Paycheck Protection Program
Moore says “let’s wait and see” how this plays out. It’s important that the government be repaid for these loans, and they don’t become forgivable grants, says Moore.
Unemployment benefits are reduced to $200 per week until states create their own plans that pay up to 70% of previous wages.
Letting the $600 per week unemployment benefits expire was “essential” says Moore, who gives this initiative a “thumbs up.” He says the CBO (Congressional Budget Office) found that five out of six workers were making more money staying unemployed than going back to work. He also points to a study by Casey Mulligan at the University of Chicago that found the additional unemployment benefits would reduce employment by almost 10 million jobs by the end of the year. Moore says “There is NO jobs recovery if this policy continues. No backing down.”
Liability Protection for Schools, Businesses, Churches, etc. As They Reopen
“Thumbs Up” says Moore. He says businesses that reopen need to be protected from frivolous lawsuits should someone get sick. Without liability protection, the Committee to Unleash Prosperity found that at least 500,000 jobs would be lost.
$100 Billion To Help Schools and Universities Reopen
Moore gives this a solid “thumbs down.” He says at the moment, most public schools have announced that they won’t be reopening in the fall, so what do they need the money for? “Any federal funding for schools this year and next should only be for schools that are open FULLTIME.”
Education Freedom Grants To Cover Scholarships For Private Schools and Payments To Parents For Homeschooling
“I feel like I’ve died and gone to heaven,” says Moore. He gives this a resounding “thumbs up.” He adds, “This will give potentially millions of parents, mostly with low incomes, a chance to send their kids to good schools this fall. Distance learning is a failure for at least half of the bottom half of children; they need in-class instruction.”
100% Deductibility For Business Meals and Entertainment
This gets a solid “thumbs down” from Moore. “What would a stimulus bill be without a few special interest giveaways to the corporate lobbyists?” he asks.
While Moore’s opinion of the bill is that they got it half right, he does point out what he believes is a fundamental flaw: a lack of a payroll tax cut through the rest of the year. He says it would help “150 million workers and nearly 30 million small businesses and self-employed business owners.”
Moore adds, “This would create up to 3 million jobs over the next six months and give a pay raise of 7.5 percent for every nurse, teacher, home care worker, construction worker, and police officer in America – the heroes of our economy.”
He worries that the bill that McConnell presented yesterday won’t survive negotiations with Democrats.
“All in all, a good bill. The problem is it will get much worse as Trump and McConnell begin to negotiate with Pelosi. There is not one single feature of the Pelosi bill that is positive for the economy,” says Moore.
His final thought is for the person who will eventually sign the bill into law.
“President Trump should not sign any final product without the payroll tax cut,” says Moore.
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