The US debate on climate change is heating up
Two different plans to attack the problem could be combined in a workable compromiso
Martin Wolf
Might the US move from being a laggard to a leader in tackling global climate change? Two recent announcements — the “economists’ statement on carbon dividends” and the Green New Deal — suggest that it might. Intellectually, these proposals are from different planets. But they could be a basis for something reasonable. More important, influential people at least agree that for the US to stand pat is unconscionable.
The economists’ statement has been signed by 3,333 US economists, including four former chairs of the Federal Reserve, 27 Nobel laureates and two former Treasury secretaries. It has four elements: a gradually increasing carbon fee, beginning at $40 a ton; a dividend paid “to the American people on an equal and quarterly basis”; border adjustments for the carbon content of imports and exports; and removal of unnecessary regulations. This plan is also to be proposed to “other leading greenhouse gas emitting countries”.
The Green New Deal comes from a group of House Democrats, led by Alexandria Ocasio-Cortez. It is a proposal to transform the US economy. Notable climate-related goals include “meeting 100 per cent of the power demand in the United States through clean, renewable, and zero-emission energy sources”, “building or upgrading to energy-efficient, distributed, and ‘smart’ power grids”, and “upgrading all existing buildings in the US and building new buildings to achieve maximum energy efficiency”.
The US is a pivotal actor in global climate change discussions for four reasons: it is the world’s second-largest emitter of greenhouse gases, accounting for 14 per cent of the total; its emissions per head are very high; it has exceptional technological resources; and it has been highly recalcitrant. In brief, US participation is a necessary, though not a sufficient, condition for addressing the climate threat.
Alas, that threat has become imminent, as the Green New Deal notes. The rise in average temperatures above pre-industrial levels is already 1C. It will take dramatic changes to keep it below 2C, let alone 1.5C. The higher it gets, the more unpredictable and dangerous these irreversible changes will become. Above all, the trend to higher emissions must reverse very soon if the rise in atmospheric concentrations is to halt.
This is one reason why reliance on the calibrated price incentives beloved by economists is inadequate. The challenges here are irreversible changes in climate with uncertain effects, on the one hand, and the imperfectly predictable consequences of carbon pricing on emissions, on the other hand. Quantitative objectives are inescapable. Moreover, the needed changes in the way the economy works will demand changes in spatial planning, in building regulations, in regulation of nuclear power, in spending on research and development, and in spreading new technologies across the world. The price mechanism is powerful. But, as a report from the Energy Transitions Commission makes clear, it will not be enough. The economists’ plan might have been adequate if implemented worldwide three decades ago. Now, it is almost certainly not.
The Green New Deal recognises the need for regulatory intervention and infrastructure investment. Unfortunately, it places no weight on incentives at all. A letter from activists in support of the Green New Deal states that “we will vigorously oppose any legislation that . . . [includes] market-based mechanisms and technology options such as carbon and emissions trading and offsets, carbon capture and storage, nuclear power, waste-to-energy and biomass energy”.
This looks like a dialogue of the deaf. But the economists just might recognise that the urgency of the Green New Deal and its focus on regulation and investment have some important things to offer. Activist proponents of the Green New Deal might realise that incentives matter and that the proceeds of a carbon tax might help buy public support. Above all, they might recognise that seeing every social ill through the lens of climate change guarantees that they will fail to achieve anything useful. As the British socialist Aneurin Bevan said, “the language of priorities is the religion of socialism”.
Only a broad coalition can tackle the climate challenge. So plans that have a chance of being politically workable will be compromises. A good plan must be a blend of price incentives with command and control, and investment in research and development. The fact that people with different policy approaches agree that climate is an urgent threat is a step forward. More Republicans might accept that the threat is not a hoax and join in.
The US cannot solve a global threat on its own. But it could combine the best of the economists’ plan and the Green New Deal. It would then need to make it global. This could be done by a combination of carrots — exporting technology freely and helping poor countries — with sticks — carbon border taxes. This could also be an area where the US, the EU and China might co-operate. Of course, nothing so forward-looking can be expected from the Trump administration. But at least people can plan for the day when he is gone.
Pessimism about humanity’s ability to address climate change is understandable. Time is limited, talk plentiful and action negligible. But we can only start from agreement that there is indeed a threat worth addressing. That may now be emerging, even in the US. Turning such a consensus into a workable, globally replicable and politically acceptable plan is going to be very hard. But despair is not an option. We can see some movement. Let us push hard for more.
THE U.S. DEBATE ON CLIMATE CHANGE IS HEATING UP / THE FINANCIAL TIMES OP EDITORIAL
BOND INVESTORS SHOULDN´T FIXATE TOO MUCH ON THE ALPHABET / THE WALL STREET JOURNAL
Bond Investors Shouldn’t Fixate Too Much on the Alphabet
Corporate debt graded BBB has become investors’ bogeyman, but higher-rated paper isn’t always safer
By Jon Sindreu
This week, ratings agency Moody’s placed Nissan Motor on review for a credit downgrade. Photo: Koji Sasahara/Associated Press
Just like a teapot that never whistles while you are looking at it, perhaps the most maligned bit of the corporate bond market isn’t where investors will get burned.
This week, ratings agency Moody’splaced Japanese auto maker Nissan Motoron review for a credit downgrade, amid trouble surrounding its former Chairman Carlos Ghosn and economic uncertainty affecting the automotive industry.
Analysts and investors have focused most of their concerns on the increasing amount of debt rated just a notch above “junk” status—a grade often called BBB. Yet S&P Global rates BBB bonds as only having an 11% probability of being downgraded. It is below that of higher-quality issuers—for example Nissan, which is graded single-A.
The fact that downgrade probabilities are low across the board is no guarantee: They were also low in 2006. What is different is that, back then, the worsening outlook for BBB debt warned of the impending debt crisis.
The global share of almost-junk bonds dropped after 2009, but it has now rebounded to a record high of almost 50%, according to the International Monetary Fund. It is the result of investors’ scramble for returns after a decade of ultralow interest rates and tax laws that benefit borrowing. But the outlook for these bonds isn’t worsening.
As Citigroup strategist Matt King points out, BBB firms are under so much scrutiny that they are less likely to be the ticking bombs they are assumed to be. Companies now trading at this level include General Electricand Ford Motor .These are large established firms in trouble that are willing to go to great lengths not to lose their investment-grade status—the only type of paper that many institutional money managers are allowed to buy.
By contrast, downgrades of single-A companies have received less attention, even though they are often the result of corporations happily spending cash. In October, International Business Machinesbought Red Hatand was downgraded to A from A-plus.
Single-A bonds don't outperformmuch in good times, but still sell off alot during the badAverage of yearly total returns forinvestment-grade corporate bondsSource: Bank of America Merrill Lynch (FactSet)Note: Data between 1991 and 2018
A recession in the U.S. would ripple through investment-grade bonds across all ratings. Even if BBB ones are likely to be among the hardest hit, single-A bonds typically lose almost as much in selloffs, and deliver less in rallies. Now they are trading much closer to debt issued by top-rated AAA firms—the few that are left—than they are to BBB paper, at levels that have historically suggested a reversal.
Despite recent weakness in the global economy, corporate debt might do better this year, after suffering in 2018 due in part to earlier overbuying and higher currency-hedging costs.
In either of the two scenarios, buyers of corporate paper should be as concerned about the first letter of the alphabet as they are about the second.
MIAMI BATTLES RISING SEAS / THE NEW YORK TIMES OP EDITORIAL
Miami Battles Rising Seas
In 2017, voters agreed to finance adaptation efforts through property taxes. Now the first phase of those projects is underway.
By Ban Ki-moon and Francis Suarez
Homes in North Miami, Fla., were damaged by floodwater from Hurricane Irma in 2017.CreditCreditKevin Hagen for The New York Times
Climate change is not a distant threat for Miami; it’s a daily presence in people’s lives. The city has been fighting to stay above water for decades. It knows that its future as a vibrant international hub for business, tourism, arts and culture depends on making the city more resilient to the impact of global warming.
That’s why the city of Miami is moving aggressively to adapt; in 2017, its citizens voted to tax themselves to build resilience against flooding and storm surges by approving a $400 million bond issue that is financing projects across the city.
Miami is not alone, of course, in facing these threats. Around the globe, some 800 million people in hundreds of coastal cities are at risk from storm surges and rising seas. We want to share what we have learned in building resilience against the changing climate.
One reality we have come to understand is this: Our current efforts to protect coastal cities will fall short of what will be required in decades to come. For in spite of global efforts to rein in carbon dioxide emissions that cause global warming, they continue to rise and expose coastal cities like Miami to more extreme weather events and rising seas. And yet, the world’s biggest economies invested only about $25 billion on adaptation overall in 2014, despite losing many times that amount to floods, storms, wildfires and droughts. Clearly, more investment is needed to build resilience, especially to protect the world’s coastal regions and cities.
We have also learned that there is strength in numbers. Miami can access a wealth of resources, including sea level rise projections, thanks to its membership in regional bodies like the Southeast Florida Regional Climate Change Compact. The city has also gained a broader perspective on urban resilience challenges and approaches by joining global networks such as the Global Commission on Climate Adaptation, where we both serve as board members, and 100 Resilient Cities.
Finally, we have learned that effective adaptation is a collective endeavor. It requires a holistic, long-term approach that takes into account the needs of our citizens today and in the future. This requires robust and meticulous long-term planning, informed investment in resilient infrastructure, adapting land use and building policies to address the climate challenge, advancing new transportation solutions, educating and informing citizens about climate change, training and mobilizing volunteers during emergencies, informing private property owners of climate risks, and forging partnerships with research institutions and business innovators. As this long list makes clear, there isn’t a single aspect of our daily lives that isn’t affected by climate change.
Perhaps one of the reasons there is so little investment in adaptation is the lack of financial incentives. Unlike a wind farm, for example, that can earn a steady return for investors, the monetary benefits of adaptation are less straightforward. Investing in resilience protects businesses and communities from devastating losses, so it must be measured in the lives saved and businesses that remain open. We are only now learning how to quantify these benefits to communities. Florida’s Division of Emergency Management, for example, calculated that projects to reduce wind and water damage avoided $81 million in losses when Hurricane Matthew struck in 2016, while costing only $19 million to carry out. The projects included raising buildings, improving drainage, and buying and demolishing properties in vulnerable areas.
That is why leadership, particularly from city governments like Miami’s, is so important in driving investment in adaptation. After Hurricane Irma in September 2017 — one of the costliest in United States history, leaving a $50 billion trail of destruction — there was both a moral and a fiscal obligation to act. That’s why two months later, Miami voters approved the $400 million Miami Forever Bond.
The program is the city’s answer to the shortfall of investment in adaptation. It brings together city planners, private sector innovators and citizens to build a stronger, more resilient future for Miami. Almost half this amount is being invested in flood defenses and other measures to combat the effects of rising sea levels. The remaining funds will be invested in affordable housing, tree planting, road work and an innovative approach to urban landscape design that will allow residents to continue enjoying waterfront access while improving drainage and sea wall defenses.
On Tuesday, we had the opportunity to visit resilience projects financed by the bond in the heart of Miami’s Brickell financial district. They include expanding drainage capacity to reduce flooding and new pumping stations to collect storm water runoff and discharge it into the Miami River and Biscayne Bay. In addition, a project along Brickell Bay Drive will raise the elevation of nearly one and a half miles of sea wall on Biscayne Bay to prevent flooding from storm surges, and a redesign of Jose Marti Park along the Miami River will reduce flood risk.
We hope that along with these projects, Miami’s resilience bond will become a catalyst for greater private sector investment and innovation in climate adaptation. We also hope it will spur similar initiatives in coastal cities around the globe.
Ban Ki-moon, a former secretary general of the United Nations, is a co-chairman of the Global Commission on Adaptation. Francis Suarez is the mayor of Miami.
I´M BUYING GOLD AND SILVER, BUT NOT FOR THE REASON YOU THINK / SEEKING ALPHA
I'm Buying Gold And Silver, But Not For The Reason You Think
by: Lyn Alden Schwartzer
Summary
- I consider gold to be fairly valued or mildly undervalued at the current time. Not necessarily deeply undervalued like some argue, but a good long-term risk/reward opportunity.
- Streaming/royalty companies are my preferred choice.
- Silver and platinum are historically undervalued.






INCREDIBLE PRICE ANOMALY SETUP IN THE NQ / THETECHNICALTRADERS.COM
Incredible Price Anomaly Setup in the NQ
The Technical Traders
Our research team has been alerting our followers to a potentially deep price retracement setting up in the NQ and other US stock market majors. Although the recent price activity has pushed to newer recent highs this week, as you will see in the chart below, our Adaptive Dynamic Learning (ADL) price modeling system is suggesting that a “price anomaly” has set up.
These types of price anomalies are indicative of when price moves in an extended way outside of or away from the ADL predicted price levels. On the chart below, of NQ (NASDAQ), you’ll see the current setup with the predicted price anomaly highlighted as a RED SQUARE. This NQ ADL price pattern consists of 13 unique previous ADL instances and suggests there is a greater than 65% likelihood the prices will fall towards the 6700 level in the NQ over the next few days.
Our ADL price modeling system also confirms this on the Weekly chart basis. With 84 unique instances of an ADL price pattern, we are expecting a 65 to 95% probability that prices will fall to below 6700 within the next 3 to 5 weeks.
Both the Daily and Weekly ADL predictive modeling systems are suggesting that the upside move is over. The price anomaly could continue for a few more days, we’ve seen it happen in the past where price continues to push away from the ADL levels – this is what makes a price anomaly so exciting.
When price moves away from levels that our ADL price modeling system suggests going to happen in the future, it allows us to set up trades expecting the price to REVERT back towards the ADL levels. So in this case, we can start setting up trades near 7300 for the NQ to retrace back to near 6700 – a 600 point swing.
Bienvenida
Les doy cordialmente la bienvenida a este Blog informativo con artículos, análisis y comentarios de publicaciones especializadas y especialmente seleccionadas, principalmente sobre temas económicos, financieros y políticos de actualidad, que esperamos y deseamos, sean de su máximo interés, utilidad y conveniencia.
Pensamos que solo comprendiendo cabalmente el presente, es que podemos proyectarnos acertadamente hacia el futuro.
Gonzalo Raffo de Lavalle
Las convicciones son mas peligrosos enemigos de la verdad que las mentiras.
Friedrich Nietzsche
Quien conoce su ignorancia revela la mas profunda sabiduría. Quien ignora su ignorancia vive en la mas profunda ilusión.
Lao Tse
“There are decades when nothing happens and there are weeks when decades happen.”
Vladimir Ilyich Lenin
You only find out who is swimming naked when the tide goes out.
Warren Buffett
No soy alguien que sabe, sino alguien que busca.
FOZ
Only Gold is money. Everything else is debt.
J.P. Morgan
Las grandes almas tienen voluntades; las débiles tan solo deseos.
Proverbio Chino
Quien no lo ha dado todo no ha dado nada.
Helenio Herrera
History repeats itself, first as tragedy, second as farce.
Karl Marx
If you know the other and know yourself, you need not fear the result of a hundred battles.
Sun Tzu
We are travelers on a cosmic journey, stardust, swirling and dancing in the eddies and whirlpools of infinity. Life is eternal. We have stopped for a moment to encounter each other, to meet, to love, to share.This is a precious moment. It is a little parenthesis in eternity.
Paulo Coelho

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