Energy Bills Liquidating Pubs and Cafes in the UK and Ireland

Is this how it starts?

You know. 

IT.

DID I NOT TELL YOU IT WOULD BE ABOUT ENERGY?

SO, WHAT DO ALL OF THESE PEOPLE DO NOW?

GO ON THE DOLE?

THE SYSTEM REQUIRES EXQUISITELY PRECISE BALANCE.

BUT WHAT ARE WE NOW SEEING?

GROTESQUE IMBALANCES.

NOT GOOD.

Ann Coulter Returns to New York

And it’s not a HAPPY HOMECOMING.

Yet, as a veteran of the chaotic Beame and Dinkins years as well as the ROUND-‘EM-UP Giuliani and Bloomberg administrations, I CAN’T TAKE ISSUE WITH A SINGLE WORD of Coulter’s description of what POST-COVID MANHATTAN has BECOME.

We’re back with Beame and Dinkins, no question, when what we need is EARLY RUDY and/or HANDS-ON MIKE.

ERIC ADAMS, ARE YOU LISTENING?

But let Coulter tell it.

SHE GETS IT.

My New York Nightmare

The EV Negatives Ignored . . .

. . . by California’s Car Ban

From PowertheFuture.com:

10 Things You Should Know about California’s Car Ban

Particularly, if you’re a GREEN ZEALOT.

Here’s a slightly condensed version:

  1. EVs are powered by fossil fuels.
  2. The batteries of EVs rely on cobalt.
  3. A study released earlier this year by an environmental group showed nearly 1/3 of San Francisco’s electric charging stations were non-functioning.
  4. Supporters of the California law admit there will be a 40 percent increase in demand for electricity, adding further strain to the grid and requiring increased costs for power and infrastructure.
  5. According to one researcher, the strain of adding an EV is similar to adding “1 or 2 air conditioners”  to your home, except an EV requires power year-round.
  6. Today, 20 million American families, or 1 in 6 have fallen behind on their electric bills, the highest amount ever.
  7. Utility companies will need to add $5,800 in upgrades for every new EV for the next 8 years in order to compensate for the demand in power.
  8. The average price for an electric vehicle is currently $66,000, up more than 13 percent in just the last year, costing an average of more than the average combustible engine.
  9. A 2022 study found that the majority of EV charging occurs at home, leaving those who live in multi-family dwellings (apartments) at a real disadvantage for charging.
  10. The same study also noted that many charge their EVs overnight when solar power is less available on the grid.

AS KYLE BASS RECENTLY POINTED OUT, THE VIEWS OF A 19 YEAR-OLD SWEDISH WOMAN ARE NO SUBSTITUTE FOR ENERGY TRANSITION POLICY.

THERE’S MORE TO THIS CLIMATE/ENERGY ISSUE THAN MEETS THE EYE.  AND IT’S IN NO WAY A BINARY CHOICE BETWEEN THIS OR THAT.

WE LIVE IN A HIGHLY HYPER-COMPLEX SOCIETY, AND ACTIONS TAKEN IN ANY DIRECTION WILL OF NECESSITY RESULT IN UNINTENDED CONSEQUENCES.

WE NEED TO RETHINK THIS ENTIRE DILEMMA . . . BUT MINUS THE MORAL POSTURING.

What Comes Next

From Bill Blain:

“What comes next isn’t pretty. 

“Since 1985 I’ve experienced a number of market crashes. They have been shocking, sharp and surprising. In every case they were caused by a blindingly obvious financial market imbalance – like consumer lending risks, over-exuberance, unsustainable expectations, etc. The coming crisis is very different – it’s been a series of exogenous shocks; Covid, and now Energy and Ukraine. It feels more fundamental that the simple market mispricing’s that triggered some form of market crash every 6-7 years. These were short, and we quickly recovered.

“What is coming is something worse. This may be a once in a century storm . . . .”

Blain continues:

“This is developing into something with a smattering of 1929 – unravelling massive financial mispricing’s – together with the exogenous effects of the wartime shocks in 1914 and from 1939. Forget inflation and growth, but consider issues like expertise, experience, groupthink, panic and fear, and the crushing of small investors trying to figure out where this might go next . . . .”

THOSE WHO PAY ATTENTION TO THINGS KNOW IN THEIR HEART THAT HE’S RIGHT.

Adam Taggart Talks to Kyle Bass

This is a good one.

Kyle Bass — who was a) one of the few who made a TON shorting the housing market and b) did it after telling Bear Stearns they were headed off a cliff — is always interesting to listen to as he INVARIABLY has a FRESH ANGLE.

He also understands CHINA risk as well as anyone out there.

In this first-rate WEALTHION interview, Adam Taggart asks Bass ALL OF THE RIGHT QUESTIONS, and as is typical, BASS STRAIGHTFORWARDLY RESPONDS.

Plus, here is my in-depth summary of Bass’s comments:

THE ECONOMY IN GENERAL

  • Business capex and job numbers make it clear there will be a recession.
  • China’s consumer impulse is not responding to lower rates.
  • $38 trillion has been withdrawn from US stock and bond markets.
  • The Fed will stay aggressive and continue hiking rates INTO a recession.
  • July’s real estate stats were ALARMING as Multiple Listing Services (MLS) reported the second lowest number of house closings in history.
  • All current US economic indicators POINT DOWN, and it will be a year before the Fed CUTS RATES.
  • Only the July 2007 housing numbers have been worse.
  • The median sales price for housing was down four and a half percent.
  • We’re probably already in a recession as there has been zero productivity increase despite the addition of 3 and half million new jobs.
  • Problem is, these additions have been mainly compliance and diversity jobs which actually cost money and are COUNTERPRODUCTIVE to the economy.
  • Some are touting the high payroll number as evidence of US economic resiliency, but, IN FACT, payroll data is the last item to turn entering an inflationary recession and is the wrong indicator to be using as an economic barometer.
  • The downward turn in payrolls will occur within a year.
  • The money supply (M2) has increased 40% since COVID started, and ALL of that money is still in the system.
  • As the Fed begins REMOVING MONEY from the system, the MARKET WILL DROP.
  • Auto loan data is abysmal.
  • Housing will come to a grinding halt as prices drop 10% to 12%.
  • So, it’s NOT THE TIME TO INVEST. 
  • A sharp recession will be followed by an IMMEDIATE FED PAUSE IN RATE HIKES.

THE ENERGY CONNECTION

  • The Fed can control the credit impulse but not supply side problems driven by bad policy.
  • We don’t have a viable ENERGY TRANSITION POLICY.
  • This is the result of POOR PLANNING.
  • German energy prices are up 14 times
  • The energy supply side needs to be fixed but depends completely on pricing.
  • The Fed can’t change the price of hydrocarbons.
  • Money needs to go into hydrocarbon capex; people have been “fat-shamed” into not investing in hydrocarbons.
  • In other words, THE ENERGY CONUNDRUM is the hard part of this.
  • Best case scenario: Slow growth baseline in US and multi-year recession in Europe.
  • We need to develop modular nuclear, but the he first US plant won’t be ready for installation at Jackson Hole for 7 more years.

THE CHINA CONNECTION

  • China’s housing volume is down 30%, sales are down 7%, and since housing represents 40% of China’s GDP, that, too, is down 3%.
  • The IMF’s projection of 3% growth in 2023 is a PIPEDREAM.
  • Europe will continue with the enormity of its power crisis, so the US is still the best market available, though not immediately as its reaction to rate hikes is still uncertain.
  • Xi looks like he’ll be emperor for life though he could be threatened by inflation, popular uprising and/or low birth rates.
  • Median house prices in China were allowed to reach 36 times median income.
  • Chinese men are graduating and living in their parents’ basements.
  • They’re not marrying or procreating.
  • Demographics are FALLING OFF A CLIFF.
  • Xi will stomp out residential real estate speculation.
  • China’s real estate market has to come WAY DOWN for its economy to work.
  • There is no evidence that the country’s credit impulse is returning any time soon.
  • The anticipated slowdown in consumer spending will DECIMATE the overall economy.
  • Housing volume will drop 50% and prices, 15% while at the same time, China’s banking system is 3 and half times more leveraged than the US’s was going into the Financial Crisis.
  • If China is having financial difficulties internally, how will it be able to function in the external economy?
  • If China moves on Taiwan, their economy will “FALL DIRECTLY INTO THE TOILET.”
  • The US military thinks it is more than 50% probable that China will move on Taiwan in the next year or two.
  • China is going from defensive to offensive in the Taiwan Straits.
  • People need to liquidate their investments in Chinese companies.
  • The China/Russia partnership is completely OPEN-ENDED.
  • Xi supports Russia’s Ukraine efforts while Putin backs China on Taiwan.
  • China and the US could get into a HOT WAR over Taiwan.
  • Such a war wouldn’t involve sending in US carrier strike forces as a Chinese anti-carrier missile could take out 5,000 US service personnel at a time.
  • The US has a “nuclear” option re China as 85% of Chinese cross-border transactions are denominated in US Dollars.
  • If the US pulls China’s banks off the SWIFT SYSTEM, China’s economy collapses in a number of weeks.
  • But China has its own “nuclear” option as well as when the US wanted to investigate COVID, China threatened to withhold antibiotics.
  • Fact is, 95% of US antibiotics are MADE IN WUHAN while 100% of our blood pressure medication is made in China as well.
  • China also controls the production of Ibuprofen used in Advil and Tylenol.
  • China also has recently enacted laws that permit it to nationalize US investments in China.
  • That’s a TON OF US CAPITAL INVESTED IN CHINA.
  • When Putin invaded Ukraine, hundreds of millions of US Dollars had to be written down to ZERO.
  • In China, it would be TENS OF BILLIONS of dollars.
  • Chinese equities have been FLAT for the past 10 years while S&P returns have been about 12% annualized, so there’s no reason to be taking CHINA-RISK NOW.

PLENTY TO THINK ABOUT.

Grid Instability in Germany?

The authors of the linked piece below see it as a DEFINITE THREAT.

German Experts Warn of Grid Instability . . . .

A few snippets:

  • “Germany’s massive, subsidized expansion of electricity generation from renewable sources has squeezed out conventional generation units out of the market.”
  •  Here, reality clashes with the wishful thinking of some green energy protagonists who think there is enough storage and that all that needs to be done is to change the ‘mindset . . . .’”
  • “As long as economic energy storage systems are not established, even proponents of the current direction of Germany’s energy transition will have to admit that reliable conventional power plants will be needed for a long time to come.”
  • “The importance of nuclear power plants for security of supply in base-load operation and their and their ability to operate the grid in parallel with renewable renewable energies have been demonstrated.”

THERE’S NO GREEN TRANSITION WITHOUT NUKES AS A BRIDGE.