First up is this run down of sorts of various issues tied to climate change from the New York Times ahead of the big get together in Copenhagen. It is a pretty tidy explanation of quite a few of the talking points but does not get into any real nitty gritty.
This issue really whips up a lot of passion ranging from complete hoax to immediate and imminent doom. Like most things the answer will probably be in the middle somewhere. We know that there is a natural cyclicality of some sort (the ice age) so the idea that there could be some observable movement (that is not life altering) over some 50 or 100 year period certainly seems plausible.
As far as man's contribution to speeding things up or not I am not certain but I do know that the summers in Phoenix are now hotter than when my wife was a little girl there. The number of square miles that are now paved to accommodate new houses and all that goes with them has grown exponentially. For anyone who knows Phoenix, when I first got there in 1990 the intersection of Hayden and Frank Lloyd Wright had one car dealer on one corner with nothing else near by and now that same intersection has essentially become downtown Scottsdale in terms of the commerce, highways and houses that have filled in.One knock against the concept I have heard is that the hottest year ever was in 1997 (or maybe 1998). It would seem to me that if this is real that it would happen at a glacial pace (insert knee slap) and more ebb and flow as opposed to go in one straight line.
One thing I've read many times and agree with completely is that ultimately money will talk here. When other forms of energy become universally cheaper than fossil fuels is when we will see meaningful change.
Next up is John Mauldin getting interviewed by Damien Hoffman over at Wall Street Cheatsheet via Barry Ritholtz. John offered up a couple of economic tidbits and a couple life nuggets. On the economic front he put together an argument for needing to create 17-20 million jobs to get the unemployment rate back down near 5% which sounds impossible to me but he believes that it can happen because it has to just like it did 30 years ago.
One thing that is true is that there will be some people who if they did nothing to pull themselves up by their own bootstraps would be permanently disenfranchised. What I mean by that is there are people who have lost their homes and stand to be permanently underemployed. Of this segment some portion will pull themselves up and accomplish great things and the other portion not. Mauldin appears to be betting on the former and I hope he's right.
Barron's Trader Column had one little item that resonated in an odd way. There was mention of some strategist "making a persuasive case" for the rally to continue. My immediate thought was "we're up 60%, I wouldn't want to try to make a persuasive case." I am quite happy to be mostly going a long for the ride while remaining skeptical. We have a some cash and a dash of SDS. The combined weight of these two has been shrinking as the market has gone higher and would increase if the market went down leaving us pretty close to the market right now which, given my belief on trying to add value over the entire stock market cycle, leaves me quite happy with about four weeks to go.
Last up was an article in the Washington Post about Neel Kashkari who has been living in a cabin somewhere in the vicinity of Lake Tahoe. He need to "de-tox" from Washington after leaving his job as TARP czar and is doing so by building a shed, chopping wood, losing 20 lbs and helping Hank (Henry Paulson) edit his book.
The article seemed to portray him as being happy there in the mountains doing things with his hands but it is clear that this is temporary and that he will go back to work somewhere in the business. It is very interesting to read what motivates people. Obviously the idea of staying in the mountains and letting the industry come to him is more interesting to me as it is the path I chose but of course life, career and markets are more complicated than that.
We had a little wildfire nearby during the week and then for firetraining yesterday we went on a hike all geared up to practice sizing up a fire and then scratching out a line. All the things Kashkari appears to love doing in Tahoe are similar to what I love doing here. There is no way I would give that up. It is truly fascinating what makes people tick.
The picture is inside the hoodoos in Bryce Canyon.
8 comments:
I also think the climate change issue will be somewhere "in the middle" but the 1997 'hottest year' and whether or not a particular place like Phoenix is hotter or colder are red herrings: The 200-century DMA global heat trend is relentlessly up, yearly spikes or troughs are basically 'daily' noise, and large-scale regional temperature changes up or down are mostly related to the oceanic heat-sink; e.g., increasing mid-Atlantic temperatures tend to stall the gulf stream which then delivers less warmth north to England/Western Europe causing them to become colder.
Shorter version: Don't short global climate change (it's probably real enough and, regardless, our energy independence does matter and that's where some money is going to go).
I'm not aware of many folks in the chattering class who can get this sort of thing even close to right and most get it wildly wrong which is why I only get my science 'news' from primary sources; e.g., refereed journals and information outlets managed by scientists in the field; e.g., http://www.iarc.uaf.edu/
Agree with Mauldin that the unemployment situation is drastic and absolutely must be ameliorated if the economic advance is to strengthen and sustain.
Good observations on weather and temperature fluctuating and not being a straight line. There are so many factors for weather and temperature that it seems silly to take one date and one location as proof/disproof of human made global warming.
We have put a lot of pollution into the air that wasn't there before in previous heating/cooling cycles. It has to have have some effect. Good, bad, and its extent will certainly be up for debate and continued research.
As far as economics there will be some new industries that pops up. Perhaps a REIT that invests in marshlands and bogs that absorbs carbon dioxide for pollution credits? I doubt we are close to the technology that can pull it out of the air but that would seem to eventually be a possibility too.
Either way I do have to agree with you Roger that whenever it provides more profit over oil is when we switch.
RW, are you going by raw climate data or the "value added" data of the recently discredited "scientists" at East Anglia University. As I recall, the gov't and scientists were warning of another ice age in the 1970s; don't know if they were using raw or "value added" data for those conclusions. It's not "settled." What is settled is that the economic consequences of moving forward with political solutions will decrease GDP by 1% or more.
I tend to discount the opinions of those with insufficient expertise and/or a demonstrated lack of accuracy (e.g. http://tinyurl.com/yju5juq) or penchant for strawmen; making up terms such as "value added data" by way of argument that a scientific source is "discredited" because someone accused them of dealing in it just wastes time.
Skip the innuendo and ad hominem, make a claim w/ cited sources in support, and maybe we'll get somewhere (or at least come up with some interesting investment themes which is what this blog is about, eh).
PS: The chattering class frequently reports scientific conjecture or a hypothesis in hyperbolic terms as if it were established. "Global cooling" and similar models were not established, they were attempts to explore the potential of a non-linear, climate system for catastrophic overshooting when more energy was added to it and this included the possibility that ocean-current stalling, increased polar precipitation and other effects could lead to persistent snowfalls w/ a positive feedback loop on global albedo AKA an "ice age.
PPS: A major energy initiative would more likely increase GDP growth for the same reasons other major infrastructure projects such as the interstate highway system and internet did; e.g., jobs, commerce, productivity, opportunity, markets, etc. Any notion that it will decrease GDP by 1% or any other increment calculated in the absence of an existing policy structure and/or valid economic model is simply fantasy; a hobgoblin.
I remember around 1975 we were blessed with a government, media and scientific community treatise on global "cooling". A new ice age cometh.
Climategate emphasises the scheme of global warming profiteers, who want to treat their view as a religion, not to be challenged through rigorous scientific process. Global warming is not settled science. Not by a long shot.
Most reasonable people endores the idea of minimizing our dependance upon foreign energy. Natural gas, cleaner coal and nuclear will serve the purpose when coupled with reasonable enegy conservation.
Had to post this one. Vanity plate owned by a Morgan STanley exec.
http://trueslant.com/matttaibbi/2009/12/03/the-ultimate-vanity-plate/
Another perspective:
http://humblestudentofthemarkets.blogspot.com/2009/12/consensus-shifts-ahead-of-copenhagen.html
MikeC: Primary sources are usually superior to someones selective abstractions and this is no exception; e.g, the original open letter posted by Dr. Curry at http://tinyurl.com/yenleqp makes it abundantly clear there is no evidence of scientific malfeasance in the stolen emails even as it strenuously argues for better strategies when addressing skepticism.
My dislike of ad hominem, strawman and poorly supported arguments aside I do admit to some ambivalence on a selfish level here because a serious PR dustup like this means more investors could turn against the climate change thesis and the pro-climate change trade was becoming crowded which made it more difficult to find good entry points for additional positions including one private placement in a cleantech firm that I would dearly love to see become less expensive (before it becomes more of course).
Post a Comment