Investing in the hoax market
Trump says global warming is a scam and a hoax. He promises to cut federal funding for green programs and to ramp up fracking and drilling. He can certainly do the former, but business controls drilling and fracking, and the price of oil is dictated by international supply and demand, not the whims of the Trump administration.
“NGFS—the Network for Greening the Financial System—is a group of all the world’s central banks that tries to estimate the macroeconomic effects of climate change. They published their latest report this week, and it’s grim . . . they estimate that global GDP in 2050 will be 15% lower than it would be if there were no climate change. That’s only 25 years away.
“Note that this is not a bunch of lefty enviro rabble rousers. It’s central bankers, normally a fairly sober lot. But like insurance companies and the military, they’re starting to get pretty worried.”
So all the smart central bankers, insurance companies and the military planners who have skin in the game have been duped by the hoax, but Trump and his hacks know better. No wonder Trump’s businesses always seem to, er, go bankrupt.
I read where the Trumpenproletariat reaction to coastal flooding is that folks can just sell their houses and move inland. Sell . . . to whom? You see, in any sales transaction, there has to be a buyer; who buys uninsurable real estate? You can’t get a mortgage for it.
Hey, if you believe it’s all a hoax, put your money where your mouth is and start buying all that beach-front property! Who needs flood insurance when it’s all a scam? Monetize the hoax! Call it “Trump Beaches!” It’ll be Yuge! There is a whole entertainment empire just waiting to be built on the retreating shoreline. You could mint a fresh batch of commemorative trading cards, roll out a new sweeps cash casino platform for your followers, and sell oversized gold sneakers for wading through the flooded streets.
Bankers are worried about climate change—should you be?
Insurability and fracking aren’t very closely connected at this moment. That is, not fracking isn’t going to alter the insurance industry’s view of this problem in a timeframe that even buying a house usually involves. It’s dry hard to do, but purchasers are somewhat obligated to try and peer 20 years into the future if buying in places that insurance companies are already signaling are problematic. Like they won’t insure over there and this property is only 20” above that and much of the neighborhood is 10” lower. It saying that keeping on fossil fuels is great, but the next several decades of insurance decisions isn’t strongly linked to US production policies. My gut is that the strongest actions that might impact these in the next few decades involve reducing incipient solar radiant energy. Artificially increasing albedo, maybe putting shade objects at Lagrange 1. Otherwise and assuming no humongous global social disasters, I’m thinking timelines on zero carbon are much longer than being discussed now and returning to pre-industrial baselines is a couple centuries or so.
Meant “not saying”.
@Eric,
Can you translate this bafflegab into English for us? Even reading past all your many typos and semi-literate English, your comment seems irrelevant to me, and I was the one who wrote the post.
You do recall Trump’s “drill, baby, drill!” line, right? Part of the inducement to drill is the ease of access to potential sites. I foresee this bunch opening vast swaths of federal lands to exploration and production. That will include pipelines. When he has all three branches under Republican control, as seems likely, protests aren’t going to stop him.
@Jack,
The previous Trump administration opened federal lands to drilling. In most cases, there ended up being no wells sunk. Just like voter registration doesn’t mean voter fraud, drilling licenses don’t mean drilling. The Trump Administration wants to own the libs. The oil drilling industry only wants to make money. The petroleum market is global.
That’s the point of my post. Trump can call climate change a hoax, but everyone who has actual, you know, skin in the game says “fuck off.” If you disagree, put your money where your mouth is.
Not to put too fine a point on it, we live in Rhode Island, the “Ocean State.” If it were true that people with coastal property were selling and moving inland, our property should gain a lot in value in the next 20 years. There may be many looking to move inland, but if they don’t move soon, they won’t be selling.
Why did Harris bother to talk about her position on fracking? Is oil really so cheap that noone wants to produce or increase production of it? Are the pipeline projects discontinued?
@Jack,
My guess is because it’s a Democratic talking point. Or maybe because fracking causes earthquakes and groundwater pollution. Not clear to me why Americans should put up with that. Oil right now is cheap. I know, because I drive. YMMV.
In a free market, nobody increases production just because they can. They increase production because of increased market demand. Econ 101. The price of oil in America is not determined in America. Anyone in the oil business could tell you that.
Now maybe if Trump imposes a tariff on Canadian oil, that will change.
Harris didn’t lose because of her position on fracking. Harris lost because she’s a woman of color.
But all of this elides the point of my post. My point is that the people with skin in the game are betting on global warming. If you want to make the big bucks, bet against the market trend, right?
I also drive and buy gas to do so. My home is heated by natural gas. Corporations sell me these commodities for money and seem to be happy to continue to do so. If they couldn’t make money doing this it seems unlikely they would continue. The fact that their profits may fluctuate in value doesn’t mean they won’t continue to operate to make the profits they can. Part of that is likely to involve production.
@Jack,
Yes, of course. Not sure what your point is.
In a free market, nobody increases production just because they can. They increase production because of increased market demand. Econ 101. Hence, Trump bleating “drill, baby, drill” and handing out leases isn’t going to increase production.
But all of this elides the point of my post. My point is that the people with skin in the game are betting that global warming is real, not a hoax..
My point is that even if there is a reduced profit, if there is a sufficient demand to produce a profit, someone will prouce in order to obtain that profit which is better than no profit at all. Sellers can make money even when their margins shrink.
@Jack,
OK, so you’re agreeing with my comment. Producers only produce when there’s a market, unless they want to go bankrupt.
When the Trump I Administration opened public lands for drilling, oil companies didn’t bid on them. So simply being able to drill doesn’t compel oil companies to drill. Nobody pounced, Jack. Sellers who don’t make enough money when their margins shrink don’t produce. Econ 101. Ever wonder what happened to Victrola manufacturers and 78s?
Joel,
I’m not trying to be difficult. I’m simply observing that there is a market for oil and gas now and various producers are servicing it. If you’re saying there are ample supplies now, OK, but you were leaving the impression, at least to me, that they will only seek more product when the profits are maximum and not for “so-so” profits. That cuts against human nature. If there is a profit, usually someone will go for it even if it’s not the highest possible profit. “Profit” assumes a return in excess of the costs of production which may include drilling.
@Jack,
” . . .but you were leaving the impression, at least to me, that they will only seek more product when the profits are maximum and not for “so-so” profits.”
I had a feeling you misread my comment. I’m quite familiar with the meaning of the word “profit,” thanks. I am fluent in English.
let’s see what the atmosphere says:
Nov. 11, 2024
423.16 ppm
Nov. 10, 2023
419.44 ppm
1 Year Change
3.72 ppm (0.89%)
https://www.co2.earth/daily-co2
Data source: NOAA GML (Mauna Loa Observatory)
that’s down a bit; last week it was running more than 1% higher YoY