Steve Bull's Blog, page 216
June 23, 2022
Think Only Good Thoughts
“Black and white creates a strange dreamscape that color never can.” – Jack Antonoff
The original iteration of Rod Serling’s The Twilight Zone is perhaps the most iconic television anthology in history. With 156 episodes aired over five seasons (1959-1964), the CBS show broke new ground with its unsettling mix of suspense, drama, horror, and moral provocations. At its core, the show was meant to make the viewer ponder deep philosophical questions by making them uncomfortable. After an unexpected reveal, the viewer was left with the confrontational rawness of each episode’s dilemma to work through – along with a powerful incentive to watch the next one. Contrary to the modern belief that weaponized clickbait is the key to durable engagement, people enjoy being made to think, and Serling tapped into this desire with brilliant flair.
In the 10th episode of the third season – The Midnight Sun – a prolific artist (Norma) and her elderly landlady (Mrs. Bronson) find themselves in an existential crisis: Earth has suddenly changed its orbit and is hurtling ever closer to the sun. The last residents in their New York apartment building, the pair are sweating out their final moments when confronted by a desperate looter looking to quench his ultimately unquenchable thirst. In a twist of perspective, the viewer learns that the entire episode has been a fever dream, and Norma wakes up to discover that Earth is moving away from the sun. Her imminent demise will be the result of global cooling, not warming. The episode was designed to demonstrate Earth’s fragility, couched in the context of a cold war threatening to turn hot and looming large in the collective attention of the day.
Norma and Mrs. Bronson | CBS…click on the above link to read the rest of the article…
June 22, 2022
Rabobank: It’s A Depressing Idea To Admit We Have No Ideas
It is said that small minds talk about people, average minds talk about events, and great minds talk about ideas – and I would add the smallest of minds talk about themselves.
The smallest-minded market view is what your individual asset class did yesterday. For example, I see across Bloomberg that ‘equities went up’, ‘bond yields went up’, and ‘oil went up’. No joined-up thinking as to what this means jointly.
The small-minded market view is President Biden telling the CEO of Chevron he was “mildly sensitive” for pointing out to the government how the energy market actually works, as oil rises again.
The average-minded market view is that the White House may cut gasoline taxes for 4 July. Yet even an average market mind should also be able to see this would be bad economics because it won’t help supply, while boosting demand. But careful now, that’s an idea!
The great-minded market view it is to accept what this Daily –and many others– have stressed repeatedly: that to raise rates means huge pain (and I add: and US geopolitical gain); and to cut rates means huge pain (and I add: and US geopolitical loss). There are no good choices. So, cheering equities going up while bond yields and energy also do makes no sense.
However, as Tom Hardy says to Leonardo DiCaprio in ‘Inception’, “Dream a little bigger, darling.”
I recently underlined that central banks have *never* been in real control of inflation. Their inflation-fighting success –or ‘over-success’ pre-Covid, when inflation was “too low”– was *always* reflected the local and global political-economic environments, neither of which they set. One can go back over history to show that fact very simply with a long-run CPI chart for the UK, transposing different local and global backdrops on top.
…click on the above link to read the rest of the article…
Why the World Economy Hasn’t Collapsed… Yet.
Dominos falling. Image credit: Charl Folscher via UnsplashIt has become more or less common sense that some sort of an economic meltdown is on the horizon. Inflation is soaring while consumers struggle to pay their bills around the world. Yet, despite all this, the world economy is still supposed to ‘grow’ this year… What is going on here? What is happening in the background?
Energy is everything
Before we unpack where we are headed, it is very important to understand the basics. Rule no.1: Energy is the most important input to our economy. In fact, energy is the economy. Without it our ‘machines become statues and our workforce turns into a corpse’. Contrary to modern beliefs though, it cannot be substituted: every energy source has it’s own place in the economy. Thus
energy price increases act like an additional tax burden: you have no other choice but to pay them, or go bust.
The problem is, at least for growth obsessed governments, that we have most probably reached peak oil extraction in 2018, and natural gas is about to be peaking soon. Any lost fossil fuel ‘production’ from this point (due to wars, accidents, embargoes, political turmoil and so on) will lead to further price hikes and volatility in all areas of our lives.
The problem is, for the rest of us, that we have built a civilization entirely on fossil fuels, and despite spending more then half a century on developing alternatives, like nuclear, solar and wind, we only fell deeper into our fossil fuel addiction. We are burning more fuel, and as a result, release more CO2 and methane year after year, with 2008/9 and Covid providing nothing but a short pause.
…click on the above link to read the rest of the article…
European Power Prices Spike As Heat Dome Strains Grid
European day-ahead power prices continue to soar for the third day due to an early-season heat wave driving up cooling demand, lack of renewable energy generation, declining nuclear power, and soaring natural gas costs.
Large swaths of Europe over the weekend experienced temperatures above 100 degrees Fahrenheit (38 Celsius). The hottest temperatures were from Spain to Germany to France.
Bloomberg notes power grids were under stress as wind generation in Germany and Italy plunged, forcing the need to increase the capacity of fossil fuel power generators to make up for the lost power. This placed a bid under electricity prices as the cost to generate power soars because of tightening supplies due to declining Russian flows.
“Already high gas prices, combined with low wind output will require less efficient, higher cost gas plants to fire up, pushing up prices,” BloombergNEF’s Andreas Gandolfo said.
Day-ahead power prices in France traded at 383.14 euros ($404.08) a megawatt-hour, up more than 64% from last week.
Besides tight fossil fuel supplies and a lack of renewable power from Germany and Italy, half of France’s 56 nuclear reactors are offline. France was the biggest net exporter of power last year, supplying many European countries.
French nuclear power is needed when renewable energy is lacking. Also, Brussels’ drive for net-zero carbon emissions and weening off Russian fossil fuels has made the energy crisis on the continent worse.
To avert a more profound crisis, German Vice-Chancellor and Economy Minister Robert Habeck said Sunday that the country is increasing coal generation to increase power output.
The decision comes just days after Russian gas company Gazprom announced that it was reducing supplies through the Nord Stream 1 pipeline for “technical reasons.”
…click on the above link to read the rest of the article…
June 21, 2022
Drought-Stricken Lake Mead Less Than 150 Feet From “Dead Pool”
The surface of Lake Mead, North America’s largest artificial reservoir, now stands at 1044 feet above sea level and is dropping fast. If Lake Mead’s water level falls another 149 feet, a dangerous level known as a “dead pool” could wreak havoc across Southwestern US.
Since the beginning of March, Lake Mead has dropped about 23 feet, and compared with the 5-year trend, the reservoir’s water levels are well below average, at the lowest point since the lake was filled nearly a century ago.
A graph might not do justice to visualizing just how fast the water level has fallen. So here are three pictures of a sunken speedboat in the lake and the corresponding date. Just in May, the boat was partially submerged. Now there’s no water.
If Lake Mead were to keep dropping, it could be a couple of years until a danger zone at 895 feet is reached, which is the point water would no longer pass through Hoover Dam to supply California, Arizona, and Mexico. Below 895 feet, the lake would be considered a “dead pool.”
For more context of what’s happened over the last three decades as a megadrought grips the US West, here’s a view of the spillway of the Hoover Dam in 1983 versus 2021.
Weather satellites have captured an absolutely stunning view of the lake rapidly shrinking in the last two years.
A lake observer on YouTuber shows how the water level has dangerously dropped in the last two weeks.
Last week, Tanya Trujillo, the Interior Department’s assistant secretary for water and science, said in a speech, “We have an urgent need to act now.”
If no drastic action is taken and the lake hits dead pool level (read: “The Real Deadpool: America’s Drought Is Worse Than You Think”), millions of people in Arizona, California, Nevada, and parts of Mexico could experience devastating water shortages.
What’s Really Happening in Ukraine? The Rules of Disinformation During Wartime
The front page from the Italian newspaper “La Stampa” on Oct 12, 1941. A good example of wartime propaganda. War is a complicated story with plenty of things happening at the same time. Not for nothing there is the term “fog of war,” and it may well be that even generals and leaders don’t know exactly what’s going on on the battlefield. Then, imagine how the media are reporting the situation to us: it is not just a fog that separates the news from the truth: it is a brick wall. Yet, the media remain a major source of information. Can we use them to learn at least something about what’s going on, discarding the lies and the exaggerations?
To start, we can look at how wartime news was reported in historical cases. As an exercise in applied history, I examined how Italians were (dis-)informed by their government during World War 2. I used the archive of “La Stampa” one of the major Italian newspapers of the time, still existing today. The other national newspapers weren’t reporting anything really different. Another advantage is that the archive of La Stampa is free to peruse.
The archive contains a huge amount of material (all in Italian, sorry). I don’t claim that I examined everything, but I did go through the decisive moments of the war, in 1941/43. It is a fascinating experience to imagine people reading the news of the time and trying to understand what was really going on. Could they figure it out? Probably not, at least for most of them. But let’s go into the details.
…click on the above link to read the rest of the article…
June 20, 2022
“Dangerous” Heat Dome Shifts Eastward, Triple-Digit Temps Expected For Southeast
A heat dome hovering over the northern Plains has begun to shift eastward early this week, expected to bring triple-digit temperatures across southern and eastern regions of the U.S.
“Dangerous heat will continue to make headlines from the central U.S. to the Southeast. One more day of well above normal, near-record and record-breaking heat is expected from the central Plains to the Upper Midwest.
“Excessive Heat Warnings remain in effect for the Red River Valley of the North and the greater Minneapolis area. High temperatures up to 100 degrees along with high humidity will lead to head indices into the mid-100s …
“The center of the heat wave begins to transition further east on Tuesday into the Great Lakes, with forecast highs in the mid- to upper 90s, up to 15-20 degrees above normal.
“In addition to hot high temperatures, very warm, near-record and record-breaking low temperatures in the 70s will provide little relief from the heat overnight. Temperatures will also warm up across the Southeast on Wednesday, with highs into the low 100s expected. Maximum heat indices may reach as high as 110 degrees along the central Gulf Coast when factoring in high humidity. High temperatures in general will be hot and a bit above normal across most of the central and eastern U.S. outside of the Northeast and Mid-Atlantic,” the National Weather Service wrote in an early morning weather outlook.
At 0800 ET, at least nine million people across eight northern and central U.S. states, including Minnesota, Iowa, North Dakota, South Dakota, Michigan, Wisconsin, Nebraska, and Kansas, were under heat alerts. That number should exponentially increase as the heat dome moves eastward.
Summer begins Tuesday, and large swaths of the Central and southern parts of the country could see above-average max temperatures through the end of the month.
Above-average weather will increase cooling demand from households and businesses, may strain power grids, and result in higher electricity costs for tens of millions of Americans, or worst, power blackouts.
What are our leaders doing?
What force is powerful enough to synchronize every leader in almost every country to do the wrong thing on almost every covid action without assuming every leader is evil and/or stupid?
Why has no one figured out what’s going on, including normally intelligent alt-media?
Let’s assume that most of our leaders are normal people, of average intelligence, with good intentions, and they care about the future of their children.
By normal I mean they are decent people with flaws, just like you and I.
By average intelligence I mean they probably have some high school level science, have read a few popular books, and maybe watched a few documentaries, but are not well grounded in the laws of physics, and their mathematics skills are modest at best. Like most people, they do not have a good understanding of energy and its relationship with everything, nor do they have a good grasp of what is technically feasible.
By good intentions I mean they want to do a good job for the people that elected them, while of course making a living, and perhaps providing some extras for their family if a benign opportunity arises, just as you or I would.
By caring about their children I mean they are genuinely worried about:
The threat of an economic crash caused by unsustainable debt and its associated everything bubble that is now flashing red and impossible to ignore.The reality and threat of climate change that is now obvious to anyone that has been alive for more than a few decades.…click on the above link to read the rest of the article…
The 1970s Again?
For the United States and much of the rest of the world, the 1970s were a time of high oil prices, surging inflation, stock market swoons, political upheaval, and geopolitical tension. Add pandemic and climate change to the list, and it also sounds like a fair description of the world today, a half-century later.Psychoanalyst Theodor Reik once wrote, “It has been said that history repeats itself. This is perhaps not quite correct; it merely rhymes.” So, just how much do the 1970s and the 2020s rhyme?Quick Takeaway: Some Similarities, Big Differences
Many commentators have based “1970s redux” analyses primarily on what was then called “stagflation”—inflation in the context of a stagnant economy. After World War II, the US economic growth rate achieved sustained, unprecedented highs. But then, in the 1970s, growth stalled. That’s partly because energy production also stalled (energy is, after all, the irreducible basis of all economic activity). US oil extraction rates started a long decline, the economic effects of which were greatly amplified by the Arab embargo of 1972 and the 1979 Iranian revolution, which sent oil prices soaring. Inflation surged. Averaged economic growth rates fell by half for the decades after 1980 compared to the two decades before, and interest rates topped out at nearly 17 percent in 1981.
But much is different now. Today’s global energy crisis is actually much worse, affecting not just oil but gas and electricity as well. As in the ’70s, high fuel prices are due both to resource depletion (then, declining US oil production; today, declining global production of conventional oil) and to geopolitical events (then, events in the Middle East; now, the Russia-Ukraine war). The ’70s energy crisis was eventually defused by increased petroleum production in places like the North Sea, Alaska, Mexico, and China….
…click on the above link to read the rest of the article…
Australia invokes emergency powers to block coal exports in energy crisis
Australian authorities have given themselves the power to block coal exports if the resource is needed to ease the country’s crippling power crisis in the latest measure taken to avert the risk of blackouts.
Rising coal and gas prices, coupled with outages at ageing coal-fired power stations, have plunged the market into turmoil this week, forcing the Australian Energy Market Operator to take control of the wholesale market to ensure reliable supply of electricity to eastern states.
The government of New South Wales invoked emergency powers on Friday to oblige miners operating in the state to redirect coal heading overseas to local generators. The precautionary move was taken to strengthen energy security on the advice of AEMO.
“We’re just giving ourselves all the levers we need to give the community certainty that we’re doing everything we can to keep the system going,” said Matt Kean, the energy minister and treasurer for New South Wales, the country’s most populous state.
The energy crisis has highlighted the failure of Australia, one of the world’s largest producers of fossil fuels, to prepare for the transition to renewable energy sources by investing in modernising the country’s electricity infrastructure, analysts say.
“We are in an invidious position. It is a global story as there is a gas shortage and prices are skyrocketing but for Australia it is combined with coal-fired power stations going offline,” said Ben Oquist, executive director of the Australia Institute think-tank. The crisis has highlighted how a failure to prepare for renewable energy becoming a larger part of domestic supply was hitting the country’s consumers in the form of higher bills and potential blackouts, he added.
…click on the above link to read the rest of the article…
