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.