Municipal Bonds and Code Red
Municipal Bonds and Code Red
We always seem to be behind the curve; always reacting, seldom proacting. Two very disparate pieces interest me: One an article, the other a report. Both have common elements, although it may be strange that I am yoking them together like some awkward sixteenth century metaphysical English poet.
The first is a disturbing article in Forbes regarding auctions of municipal bonds.
On Feb. 12, two muni auctions failed, and experts said that was the first time this had ever happened. Conditions have only worsened since then, they explained.
Municipalities will have to pay higher short-term interest rates. Not good. Fed lowers rates; mortgage rates go up. Municipalities will pay higher rates as well. “Conditions have only worsened since then,” we are told. I hesitate to say what this forebodes. Let spring come soon. We need to smell the flowers.
The second is an equally disturbing piece, a study at Carbon Equity entitled “Climate Code Red.”
Again, we are behind the curve. Scientific studies are always two to three years old before they find the light of day. Collect the data; test the hypothesis; send it to an editor; peer reviewed and challenged, emended, corrected.
Remember how I am always yammering that a prior IPCC report said Arctic Sea Ice Melt was decades a way (2030)? Yet, a year or two later, it seems to be occurring?
“Code Red” hammers this point home with additional force. This summer, we saw the disappearance of 460,000 square miles of sea ice, “roughly the size of California and Texas combined.”
As well, large areas of the Arctic sea-ice are now only one metre deep, which means the thickness of the ice has halved since 2001 (Bjornes, 2007), down from 3.5 metres in the early 1960s, and about 2.5 metres in the late 1980s and early 1990s (Blakemore and Sandell, 2006)….When the sea-ice thins to around half a metre in thickness, it will be subject to even more rapid disintegration
In addition, it now appears that winter sea-ice is not resetting fully. Mark Serreze told the AGU meeting that “We had always thought, that at least in the early stages of climate warming, that the Arctic sea-ice would recover in the autumn” because “after all even with the globally warmed world, winter happens in the Arctic, we’ll still have refreeze of that ice,” but “what we’re starting to see is that winter ice is not recovering any more… We see that at the end of November we have two-million square kilometres less ice than we should have in a typical year” (ABC, 2007c).
And now studies say King Penguin is having trouble. Waters are getting a bit too warm for his food to survive, apparently. (He’s at the other end of the earth, you know.) I just can’t go there. Bears and Penguins, Penguins and Bears…the more you know, the more you should care.
What is now even more disturbing is that the Arctic Sea melt could kick start Greenland, even without “without adding one more tonne of human emissions to the atmosphere.” Tipping points may be like close-standing dominoes. Touch one; touch all.
Economically, we seem to have arranged another precarious line of dominoes.
Municipal bonds are the latest. What will we learn from all this?