In Between Times 10-6-2023
Carbon prices must reflect reality, McCarthy's fall, Google maps shows you exactly where to put solar panels on your house, Biden building a border wall
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The FT says: Global carbon pricing has a bright future
One issue that we’ve never seen addressed, and we have asked this exact question to leaders on the subject is, “What is the market price for carbon?” In other words what is the ACTUAL price of carbon? We’ve never gotten a clear answer.
We’ve seen some pretty good attempts to get at the number, like this effort from 8 Billion Trees, but finding the real, that is market rate for carbon emissions is tough. But it is key if we want to have a future carbon emissions market that is sustainable. If for instance there was suddenly some comprehensive declaration that the price on carbon was X, but X was far outside of the actual market rate, the market is doomed. Sooner or later the arbitrary price will crack and then trend toward the actual market rate.
Arbitrary price controls and setting always eventually implodes. Always.
But this isn’t to say that carbon can’t be priced, just that such a price must reflect market reality.
(From The FT)
It has been a couple of years since IMF head Kristalina Georgieva started banging the drum for a global floor on carbon prices. Despite the political allergy to anything smacking of carbon taxes in the IMF’s most influential member state, it once looked like the campaign could gain some traction. At the time, it could be cleverly analogised with the international corporate tax reform, a central pillar of which was a global floor on corporate tax rates. Even the US has shown interest in forming a “carbon club” in steel, which would come with the political gain of keeping high-emission Chinese steel out of America. The IMF has now developed a new argument, one that will stick in the throat of the centre-right political strategists trying to win voters over with economic arguments.
Click here for the article.
Google Maps can now tell exactly where solar panels should be installed
M. Bloomberg: Democrats share the blame for McCarthy’s fall
Despite some of the somewhat over the top language used by the billionaire and former New York mayor, his analysis is pretty dead on when it comes to how the Democrats acted with regard to McCarthy’s historic ouster. Bloomberg argues that the Dem leadership should have worked to help McCarthy retain the speakership because it was in their best interest to do so. McCarthy was as good (from the Dem perspective) as they were going to get.
The Democrats may, may have shot themselves in the foot.
Of course the calculus is that some of the American people, at least enough of the American people who are inclined toward Democrats, will just be utterly disgusted with the spectacle and so power will find its way back to the Dems in the next electoral cycle. But that is a very big roll of the dice. What the Dems may have just done is empowered those who could make life much harder for them than Speaker McCarthy. And if the Dems don’t win back the House in the next election this move by Hakeem Jeffries, the leader of the Democrats in the House, could look very foolish (or maybe much worse) for the party. On the other hand if it works out, Jeffries comes out looking pretty good.
(From The Washington Post)
McCarthy’s failure to reach out to Democrats was inexcusable, of course. But so too was Jeffries’ failure to extend an olive branch. Not only has it empowered the Republicans’ extreme right wing, but it also squandered an opportunity for Democrats to increase their influence.
Jeffries had a chance to use the crisis to push for a more bipartisan governing model in the House, one that would have given Democrats more involvement in crafting legislation and conducting oversight. It could have been a transformative moment for Congress and the country. But if any informal Democratic overture occurred, it was too little, too late.
Click here for the article.
The collapse in Treasury bonds now ranks among the worst market crashes in history
This could be the biggest story almost no one is paying attention too. As a former financial advisor your editor was aware of the broad decline in treasuries but he was not aware of the scale of the slide.
Of course now might be the time to pick up treasuries, and if you are an institutional investor you are probably looking for opportunities to move in. But maybe not. We are at inflection point. If confidence in the fundamental US economy continues to sour, and the treasury decline continues steadily for say another year, we could soon be talking about erosion in the deep financial underpinnings of the country. And that would not be a good thing.
Just something to keep an eye on.
(From The Business Insider)
The bond-market sell-off that's sending yields soaring is starting to eclipse some of the most extreme market meltdowns of past eras.
Bloomberg reported losses on Treasury bond with maturities of 10 years or more had notched 46% since March 2020, while the 30-year bond had plunged 53%.
Those losses are nearly in line with stock-market losses seen during the worst crashes of recent history — when equities slumped 49% after the dot-com bubble burst and 57% in the aftermath of 2008…
…Long-duration yields have climbed to their highest since 2007 as a result, with the 30-year note passing the 5% barrier for the first time in decades. Investors expect a similar path for the 10-year, which is hovering at just more than 4.7%. Well-known investors, including Bill Ackman, Ray Dalio, and Bill Gross see the 10-year hitting 5% in the near term.
Click here for the article.
Biden stuns allies with border wall bombshell
The chaos at the boarder appears to just be too much. Elon Musk’s much publicized highlighting of the problems along the US/Mexico border didn’t help the administration either. With the 2024 election within sight there was likely a sense within the White House that something had to be done, even it angered what some would call the “pro-illegal migration” constituency within the Democratic Party. According to Gallop, currently 39% of Americans consider the situation along the southern border to be a “crisis”. Another 33% consider it a “major problem”.
So Biden is building a wall.
(From The Hill)
President Biden’s decision this week to move forward with border wall construction that Democrats have long denounced shocked allies and immigration advocates.
The stunning reversal came just days after administration officials participated in an immigration roundtable at the Capitol featuring Congressional Hispanic Caucus (CHC) members and immigration advocates.
Click here for the article.
Event
October 9 @ 10:00 am - 11:00 am MDT
Forgiveness Conversation
Location: Online
The first of The Four Sacred Gifts is – Forgive the Unforgivable. Why? How? Must we? Forgiving wrongs, intentional, unintentional,
historic, big and small is not a simple thing. For many of us this can be very challenging. There are so many ways that we are hurt by others and that we hurt others in our lives. How we manage those hurts is a key part of shaping our lives internally and externally. How can forgiveness help us to become the the person we want to be?