British humour at its finest. Spitting Image takes a potshot at Greta Thunberg.
British humour at its finest. Spitting Image takes a potshot at Greta Thunberg.
The beauty of being young is that any manner of words can come out of the mouth and be automatically assumed to be fact or truth. Anyone with teenagers knows this.
How sorry we feel for the high priestess of woke, NZ PM Jacinda Ardern, to be chastised by the infamous Swedish teenage truant for not doing enough on climate change. We should prepare ourselves in the future for Greta Thunberg as UN Secretary General because she is gifted in the ways of admonishing those that stray from the preordained orthodoxy.
Now that COVID19 is almost behind us and Joe Biden has officially been nominated president-elect by the electoral college we should expect to see the coronavirus restrictions/cases to disappear and climate change to regain its rightful place at the top of the liberal agenda.
We’ve always held the Paris Accord as an absolute joke. Self-declared developing nation, China, as the world’s biggest polluter by a minimum factor of two, is free to increase emissions out to 2030 while the rest of the developed world must self-flagellate. No matter what strides are made by nations on emissions abatement, it is never enough. Thank God we have all those elites who fly by private jet to global summits to tell mothers who drive their kids to soccer practice in second hand SUVs will burn in hell if they don’t quit their selfish behavior.
No doubt Greta will praise China’s net zero emissions commitment by 2060 as she’ll probably be one of the few that will be around to validate the promise.
Now that peons around the world have proved their obedience during lockdowns, ramming the global warming agenda should be a piece of cake. Maybe those who rationally want to see fair minded cost benefit analysis of going 100% renewable will risk being arrested by the apparatchiks and charged with hate crimes, as has previously been promote by the more radical climate alarmists.
Before they do that, we always have green pioneer Germany to guide us with the massive costs of decommissioning wind farms that have outlived subsidies. None of it factored into the modeling but you aren’t allowed to question this additional burden.
Rest assured global central banks have extended their expertise from monetary policy to saving the planet. We are in safe hands. Treasury Secretary-elect Janet Yellen has told us as much. After all, she claimed as Fed Chair that we’d never see another depression in our lifetime. Hmm.
Now that we are presented with negative sovereign yields for Portuguese, Italian or Greek debt despite the fact much of it will never be repaid, we know these geniuses have got Frankenstein under control. Just trust them, the media and ignore our thoughts. It’s above our pay grade and intelligence. So shhhhh. We’re in safe hands. School skipping teenagers know best.
Adam Anderson, CEO of Innovex, an oil & gas company, wanted to get his staff The North Face (TNF) down jackets with the company logo emblazoned on it for Christmas.
Unfortunately, the apparel maker rejected the request on the basis that fossil fuel companies, like Innovex, didn’t reflect TNF’s core values – the same standard it applies to porn and tobacco companies.
So Anderson returned fire in a 4 page letter here:
“The recreational activities they encourage are all ones that require hydrocarbons to make the products, to provide the means to get to whatever activity folks want to perform…It’s just so intertwined with everything that we do…
…The irony in this statement is your jackets are made from the oil and gas products the hardworking men and women of our industry produce. I think this stance by your company is counterproductive virtue signaling, and I would appreciate you re-considering this stance. We should be celebrating the benefits of what oil and gas do to enable the outdoors lifestyle your brands embrace. Without Oil and Gas there would be no market for nor ability to create the products your company sells…
…“Low-cost, reliable energy is critical to enable humans to flourish. Oil and natural gas are the two primary resources humanity can use to create low-cost and reliable energy. The work of my company and our industry more broadly enables humans to have a quality of life and life expectancy that were unfathomable only a century ago.”
The ultimate irony with all this woke corporate virtue signaling is that these social justice warriors often get shown up for a complete lack of understanding about the very subject the publicly protest about.
We met a staffer from an Aussie bank the other week who proudly boasted it was stopping lending to companies that haven’t committed to reduce emissions by a certain amount. The argument was that shareholders are demanding it. We retorted that a small select number of activist industry funds who often don’t meet the very requirements they try to enforce on others, are trying to promote the sale of SRI/ESG funds because of the higher fees they can get by appealing to investors who think they’re making a difference when in reality they aren’t.
We did a more conclusive study during a business school lecture. Three funds with three different results were presented in a chart over 10 years. The students didn’t know which fund was what but all selected the one with the highest returns. Naturally.
Before the different funds were revealed we asked whether people would invest in a socially responsible investment fund to feel better about themselves? When it was revealed the SRI fund had the worst performance and the best performing fund rejected such virtue signaling, all still wanted the highest return in retirement. Who knew?
John Kerry: Joe Biden’s pick for Climate Envoy. The hypocrisy of being lectured to by a man who is hardly setting the example.
And so the path to globalism marches on.
Former Secretary of State John Kerry will be the new climate envoy in a Biden administration, assuming the high probability he takes office in this still contested election.
Expect more blovating nonsense on climate change to satiate salivating crony capitalists. If COVID doesn’t kill you, climate change will! Got that, peasant?
Kerry is another career politician. He is the man who said peace in the Middle East was impossible. 3 peace deals later under a different administration and how stupid does he look? So should we believe his pontificating around climate change? Of course not.
Seriously, if politicians were surgeons there is no way you would ask them to operate on you given a glance at their win/loss ratio. Yet, Kerry will be afforded all of the media puff pieces on how he’ll be pivotal to saving us all despite reading geopolitics so poorly.
We await the grandiose statements about how close to doom we are. We await more nonsense around the Paris Accords – which grants China the ability to pollute as it pleases til 2030 – while the rest of us tip into the UN jar to misallocate resources for political favours.
You have to hand it to the political class. Await slower growth, higher electricity prices and more inefficiency which will end up in more debt fueled big government.
We’ll leave you with how the scientists believe in the science in a wonderful report compiled by the UN on its own processes. Donna Laframboise noted in her book, “The Delinquent Teenager” the following,
“In early 2010 the InterAcademy Council, an organization comprised of science bodies from around the world, took an historic step. It established a committee whose purpose was to investigate IPCC policies and procedures.
The committee posted a questionnaire on its website and invited interested parties to respond. Answers to those questionnaires were eventually made public after the names of the respondents had been removed. Those provided by IPCC insiders can be separated from the ones submitted by concerned citizens because the questionnaire begins by asking what role the respondent has played in the IPCC.
People with direct experience of this organization were remarkably frank in their feedback. According to them, scientific excellence isn’t the only reason individuals are invited to participate in the IPCC.
Remember, this is a UN body. It therefore cares about the same things other UN bodies care about. Things like diversity. Gender balance. Regional representation. The degree to which developing countries are represented compared to developed countries.
The collected answers to the questionnaire total 678 pages. As early as page 16, someone complains that:
“some of the lead authors…are clearly not qualified to be lead authors.”
Here are other direct quotes:
“There are far too many politically correct appointments, so that developing country scientists are appointed who have insufficient scientific competence to do anything useful. This is reasonable if it is regarded as a learning experience, but in my chapter…we had half of the [lead authors] who were not competent.” (p. 138)
“The whole process…[is] flawed by an excessive concern for geographical balance. All decisions are political before being scientific.” (p. 554)
“half of the authors are there for simply representing different parts of the world.” (p. 296)
Lest anyone think that people from less affluent countries were being unjustly stereotyped, the person whose comments appear on page 330 agrees:
“The team members from the developing countries (including myself) were made to feel welcome and accepted as part of the team. In reality we were out of our intellectual depth as meaningful contributors to the process.”
Remember we are told to believe the IPCC is the final word in climate change science. Look forward to shared misery.
UN Secretary General António Guterres has announced a new group of youth climate leaders, aged 18 to 28, to advise him on climate action.
Never mind using facts and logic. Forget getting the brightest minds with decades of experience to objectively look at the data. Just hand pick brainwashed kids who will parrot whatever is required by Dear Leader.
Can you imagine the amount of group think? Why bother having meetings at all? Will Guterres get any dissenting voices? Not on your life.
We guess that after all of the decades of doom and gloom forecasts made by the IPCC, next to none of which got even close to the mark, it is best use kids as human shields to peddle the nonsense because it is not cool to attack them.
Why stop at climate change? Perhaps they should be advising WHO? After all Greta Thunberg is a renowned expert on coronavirus and it is fair to say she couldn’t do a worse job that Dr Tedros has done so far. Come to think of it, where is Greta?
Close down our universities immediately. Climate activist Greta Thunberg proves that a 17yo truant can be an expert on pandemics too. Who needs a tertiary education? At least the only thing we learnt is that CNN has even less credibility.
It has been refreshing hardly seeing our 17-yo truant in chief, Greta Thunberg being exploited by her climate change doomsayers during this coronacrisis. Unfortunately, she caved to the attention deficit by feeling compelled to say she had contracted COVID19 despite not being tested for it. Not atypical of social media-obsessed kids these days.
Alas, the 50th Anniversary of Earth Day came for her to come out of hibernation and tell us,
“Whether we like it or not, the world has changed. It looks completely different now from how it did a few months ago. It may never look the same again. We have to choose a new way forward”
Indeed it has changed and will change. However, we believe that the coming economic depression won’t lend itself kindly to the untested prospect of a “green jobs” boom. This idea that we can sit back and flood the world with renewables to save us all. It is unworkable in practice. Why?
Let’s take the CSIRO, Australia’s chief government science body.
Why hasn’t Greta made a b-line to reference our CSIRO’s energy transition costings for Australia which exceed $1 trillion with a “T” out to 2050 (p.135)? Note this report isn’t a net-zero study – just lower emissions. So by that logic, net-zero will cost even more. c.100% of GDP. Just as tax revenues are about to go through the floor.
You will feel even warm and fuzzier after reading the next sentence.
CSIRO assures us that “these costs do not include the full integration costs of renewables, but that these costs are expected to be significantly less than $175 billion.” Who cares about billions in a world of trillions? Significantly less?
Why aren’t politicians and Greta looking at the world’s biggest renewable crash test dummy?
As we wrote, “Germany’s Federal Court of Auditors was even more forthright about the failures of renewables…The shift to renewables, the federal auditors say, has cost at least 160 billion euros in the last five years. Meanwhile, the expenditures “are in extreme disproportion to the results…”
Note 330,000 German households are in a state of energy poverty and have had their electricity provider cut them off. That is what happens when projected electricity prices at the time of the hysteria end up double that of the initial costings. Oops.
Yet, how eager are supposed activists willing to sign up to the green movement in practice?
We have a home-grown movement to reference commitment to climate change. 98.9% of households in the electorate of Warringah, that supposedly voted Zali Steggall OAM MP in on a climate change ticket, still haven’t signed up to her ‘Roadmap to Zero’ plans. Given their high powered V8 SUVs are getting one month to the gallon these devout climate change alarmists don’t seem that interested.
What about those on the front lines of the climate crisis? Surely they know best?
When we studied the language within the last 10 years of annual reports of the state fire services around Australia, why was ‘climate change‘, the words that 29 former fire chiefs told us is such a big factor, barely mentioned, if at all? Take Fire & Rescue NSW’s only mention of ‘climate change‘ on p.81 of its 2018/19 Annual Report,
“Where practicable, FRNSW crews were encouraged to turn off all non-essential lights on 30 March 2019 from 8:30pm until 9:30pm, joining millions of people worldwide in showing their commitment to tackling climate change and inspiring all generations to support environmental initiatives and sustainable climate policy.”
That will do it!
Then what of green jobs?
We keep on hearing about a huge surge in “green jobs”. The ABS reported that after 5 years of straight declines, rooftop solar has been the driver of the rise in the past two years.
“Annual direct FTE employment in renewable energy activities in Australia was estimated at 17,740 jobs in 2017-18, an increase of 3,890 jobs in FTE employment (28%) from the previous year (2016-17) and represents the highest level of FTE employment in renewable energy activities since 2011-12...driven by an increase in construction activity for large scale solar photovoltaic (PV) systems (1,950 additional FTE jobs) and roof-top solar PV (1,720 additional FTE jobs). Together, these two renewable energy types accounted for 94% of this increase in FTE employment in renewable energy.”
The ABS notes there are 12,500,000 Aussies employed. Therefore full-time green jobs make up 0.14% of the total. Construction makes up 1.056m jobs. Manufacturing employs 770,000. Combined, these sectors make up 15% of all employed.
So our two biggest sectors employ 107x more than the peak in renewables FT employment.
While Democrat Congresswoman Alexandra Ocasio-Cortez brainlessly tweeted “you love to see it“ when referring to the recent trend in negative oil prices, restless natives around the globe will not tolerate governments that pursue green policies that prolong their unemployment pain. They want jobs, not spoon-fed ideological alarmism as their saviour.
This global lockdown is doing one important thing – waking us up to unpleasant truths. Comforting lies surrounding renewables investment will have no place other than the dining tables of crony capitalists who aren’t dealing with lived experience of scraping by without work. That is not to say we won’t get governments trying to prescribing a “reset” but it will be a one-way ticket to being kicked out of office when the results don’t live up to the promises.
Over three decades ago, the Japanese introduced a TV programme titled, ‘Za Gaman‘ which stood for ‘endurance‘. It gathered a whole bunch of male university students who were challenged with barbaric events which tested their ability to endure pain because the producer thought these kids were too soft and self-entitled. Games included being chained to a truck and dragged along a gravel road with only one’s bare buttocks. Another was to be suspended upside down in an Egyptian desert where men with magnifying glasses trained the sun’s beam on their nipples while burning hot sand was tossed on them. The winner was the one who could last the longest.
Since the Japanese bubble collapsed in the early 1990s, a plethora of think tanks and central banks have run scenario analyses on how to avoid the pitfalls of a protracted period of deflation and low growth that plagued Japan’s lost decades. They think they could do far better. We disagree.
There is one absolutely fatal flaw with all arguments made by the West. The Japanese are conditioned in shared suffering. Of course, it comes with a large slice of reluctance but when presented with the alternatives the government knew ‘gaman’ would be accepted by the nation. It was right.
We like to think of Japan, not as capitalism with warts but socialism with beauty spots. Having lived there for twenty years we have to commend such commitment to social adhesion. It is a large part of the fabric of Japanese culture which is steeped in mutual respect. If the West had one lesson to learn from Japan it would be this. Unfortunately, greed, individualism and self-entitlement will be our Achilles’ heels.
It is worth noting that even Japan has its limits. At a grassroots level, we are witnessing the accelerated fraying of that social kimono. Here are 10 facts taken from our ‘Crime in Japan‘ series – ‘Geriatric Jailbirds‘, ‘Breakup of the Nuclear Family‘ and the ‘Fraud, Drugs, Murders, Yakuza and the Police‘ which point to that old adage that ‘all is not what it seems!‘
These pressures were occurring well before the introduction of Abenomics – the three arrow strategy of PM Shinzo Abe – 1) aggressive monetary policy, 2) fiscal consolidation and 3) structural reform.
Since 2013, Abenomics seemed to be working. Economic growth picked up nicely and even inflation seemed like it might hit a sustainable trajectory. Luckily, Japan had the benefit of a debt-fueled global economy to tow it along. This is something the West and Japan will not have the luxury of when the coronavirus economic shutdown ends.
However, Japan’s ageing society is having an impact on the social contract, especially in the regional areas. We wrote a piece in February 2017, titled ‘Make Japan Great Again‘ where we analysed the mass exodus from the regions to the big cities in order to escape the rapidly deteriorating economic prospects in the countryside.
Almost 25 years ago, the Japanese government embarked on a program known as
‘shichosongappei’ （市町村合併）which loosely translates as mergers of cities and towns. The total number of towns halved in that period so local governments could consolidate services, schools and local hospitals. Not dissimilar to a business downsizing during a recession.
While the population growth of some Western economies might look promising versus Japan, we are kidding ourselves to think we can copy and paste what Nippon accomplished when we have relatively little social cohesion. What worked for them won’t necessarily apply with our more mercenary approach to economic systems, financial risk and social values.
Sure, we can embark on a path that racks up huge debts. We can buy up distressed debt and repackage it as investment grade but there is a terminal velocity with this approach.
The Bank of Japan is a canary in the coalmine. It has bought 58% of all ETFs outstanding which makes up 25% of the market. This is unsustainable. The BoJ is now a top 10 shareholder of over half of all listed stocks on the index. At what point will investors be able to adequately price risk when the BoJ sits like a lead balloon on the shareholder registry of Mitsui Bussan or Panasonic?
Will Boeing investors start to question their investment when the US Fed (we think it eventually gets approval to buy stocks) becomes the largest shareholder via the back door? Is the cradle of capitalism prepared to accept quasi state-owned enterprises? Are we to blindly sit back and just accept this fate despite this reduction in liquidity?
This is what 7 years of Abenomics has brought us. The BoJ already has in excess of 100% of GDP in assets on its balance sheet, up from c.20% when the first arrow was fired. We shouldn’t forget that there have been discussions to buy all ¥1,000 trillion of outstanding Japanese Government Bonds (JGBs) and convert them into zero-coupon perpetual bonds with a mild administration fee to legitimise the asset. Will global markets take nicely to erasing 2 years worth of GDP with a printing press?
Who will determine the value of those assets when the BoJ or any other central bank for that matter is both the buyer and seller. If the private sector was caught in this scale of market manipulation they’d be fined billions and the perpetrators would end up serving long jail sentences.
Can we honestly accept continual debt financing of our own budget deficit? Japan has a ¥100 trillion national budget. ¥60 trillion is funded by taxes. The remainder of ¥40 trillion (US$400 billion) is debt-financed every single year. Can we accept the RBA printing off whatever we need every year to close the deficit for decade upon decade?
In a nutshell, we can be assured that central banks and treasuries around the world will be dusting off the old reports of how to escape the malaise we are in. Our view is that they will fail.
What will start off as a promising execution of Modern Monetary Theory (MMT), rational economics will dictate that the gap between the haves and the have nots will grow even wider. Someone will miss out. Governments will act like novice plate spinners with all of the expected consequences.
In our opinion, the world will change in ways most are not prepared for. We think the power of populism has only started. National interests will be all that matters. Political correctness will cease. Identity politics will die. All the average punter will care about is whether they can feed their family. Nothing else will matter. Climate change will be a footnote in history as evidenced by the apparition that was Greta Thunberg who had to tell the world she caught COVID19 even though she was never tested.
Moving forward, our political class will no longer be able to duck and weave. Only those that are prepared to tell it like it is will survive going forward. The constituents won’t settle for anything else. Treat them as mugs and face the consequences, just like we saw with Boris Johnson’s landslide to push through Brexit.
The upcoming 2020 presidential election will shake America to its foundations. Do voters want to go back to the safety of a known quantity that didn’t deliver for decades under previous administrations and elect Biden or still chance Project Molotov Cocktail with Trump?
What we know for sure is that Trump would never have seen the light of day had decades of previous administrations competently managed the economy. COVID19 may ultimately work in Trump’s favour because his record, as we fact-checked at the time of SOTU, was making a considerable difference.
Whatever the result, prepare to gaman!
If global warming alarmists ever wanted to pick an industry as steeped in unreliable forecasts as climate scientists, one would find it hard to beat investment banking. Having been in that industry for two decades, the list of woefully misguided and poorly researched puff pieces is endless. There is a reason global banks are trading at fractions of their former peaks. They don’t add much value and most never picked the GFC of 2008. If they were smarter, greed wouldn’t require recessions.
Never mind. When JP Morgan economists are portending climate doom, why not hitch them to your global warming wagon? There is a kind of conflict of interest. Evil, greedy fat bonus paying tax avoiding corporates preaching virtue on climate.
By the way, you won’t find a research analyst who believes they don’t deserve air travel at the pointy end and luxury limousine transfers to and from the airport.
Yet they are aligned with the hypocrites at the Bank for International Settlements (BIS) which told us at the 1500 private jet junket at Davos that it’s central bank members are “climate rescuers of last resort.” This despite their monetary policies having played a major part in fueling overconsumption via the debt bubble. Ultra low interest rates will ultimately have a profound effect on carbon emissions – a global economic crisis of epic proportions which won’t require one wind turbine or solar farm to achieve. They’ll save the climate by destroying the wellbeing of so many in the process.
On the one hand, JP Morgan can now claim some kudos for allowing such free thinking which isn’t at the behest of the investment banking team.
Maybe it’s worth pointing out that most banks keep meticulous (but useless) data on the readership of such reports. Much like the media chasing advertising dollars through clickbait, research analysts strive for internal point scoring to boost their year end review chances to push for bigger bonuses to their excel spreadsheet obsessed line managers who look at quantity, not quality. So if a warmest piece can create noise, irrespective of the quality of the content, then that serves a purpose for internal bosses.
Such has been the hollowing out of investment banking research teams, the last remaining life jackets are in short supply. It was only last year that Deutsche Bank closed its entire global equity platform. While regulation is part of the problem, there is simply very little value add to convince clients to pay for.
While the report supposedly chastised the bank’s lending of $75bn to the fossil fuel industry, in a world of ESG, which puts ideology ahead of risk assessment, JP Morgan can now claim it has seen the light so it can hopefully fool green tech companies in need of cash that they are worthy environmentally friendly financiers. This will also give the public relations team a welcome talking piece to the media and ESG retirement fund managers that they practice social responsibility.
Back to the report. On what pretense do the JP Morgan analysts have for the climate crisis threatening the human race? Citing the IPCC (where scientists have slammed the processes which prioritize gender and ethnicity over ability and qualification) and the IMF (which couldn’t pick economic growth it it tried) are hardly the sort of data one would gladly source as gospel to compile a report.
It seems everyone is an expert on climate change nowadays. Central banks, ASIC, APRA, RBA, the Australian Medical Association and now investment banks. As we pointed out earlier in the week, where were the scientists who made a b-line to speak at the National Climate Emergency summit in Melbourne? That’s right 2/3rds were activists, lobbyists, left-wing media and academics with no scientific background.
You know when alarmists are channeling bankers, that they are running out of credible evidence. Even worse, most banks have an uncanny ability to act as contrarian indicators.
We can be sure that a whole lot of malinvestment will continue thanks to governments trying to declare emergencies to justify infrastructure spending to replace sensible business friendly structural reforms that would have a far better chance of keeping them in power for longer.
In closing, it seems even the media has lost faith in investment bank research, choosing to channel NY Mets baseball pitchers for commentary on stocks instead.