Lights out
The transformer shortage
Good morning, bright sparks. This is your Stock Market Rundown for June 27, 2023.
TODAY’S TOP STORY: ZAPPED ⚡
America has a serious problem with transformers, and it has nothing to do with Optimus Prime, the Decepticons, or any other nerd nonsense.
Transformers are a key component of the electrical grid, managing power that passes through transmission and distribution lines. And right now they’re in such short supply that utilities are freaking out, worried temperatures spikes this summer could lead to crippling blackouts.
How did we get here? The average age of US transformers is a doddering forty years old, versus the ideal age of twenty. Metaphorically speaking, you want your power grid to have a Zoomer perm, not creaky arthritis knees.
Eighteen-month waits for transformers are putting a wrench in the plans of everybody from utilities, to homebuilders who can’t complete construction on some new houses. At this rate Jaden is never going to be able to move out.
A choke point in the transformer supply chain is the specialized electrical steel required as an input. The US only has one domestic manufacturer of that steel, Cleveland-Cliffs, and the boys in Ohio can’t roll enough to keep up with demand.
Be advised, this isn’t a stock tip—personally I’d jump off a cliff before investing in a steel company, given cray-cray pricing volatility for the commodity products they manufacture.
Anyway, get prepared for possible blackouts this summer—grab some fresh batteries for your flashlights, and thank me later.
SO WHAT ELSE IS GOING ON?
Butt getting big? Good luck getting your employer to pay for weight-loss drugs—big corps are cheaping out on coverage that isn’t medically valid.
Rich again, anon! Your li’l crypto coin is at a 52-week high.
Inflation-pinched consumers are trading down from name brand to store brand. Great Value Ketchup is okay, but let’s pray we’re not forced to resort to one-ply toilet paper.
Wife wants to move? How about painting an accent wall for a pop of colour instead? Rising rates are making homeowners feel like they’re handcuffed to the radiator.
A guy was planning to go on the doomed mini-sub, but bailed at the last minute. I’m imagining a Final Destination scenario where he ends up falling in the orca tank at Sea World and being eaten by Shamu.
The CEO of Softbank said he “had a big cry” due to feeling “emptiness” over his career not being fulfilling enough. Usually when I need to purge negative emotions, I do it over a beer with friends. Not during an investor presentation. But maybe that’s why he’s a billionaire and I’m not.
That’s it for today, see you bright and early tomorrow. Yours in capitalism, The Axe