Electricity won’t save us from our oil problems

Almost everyone seems to believe that our energy problems are primarily oil-related. Electricity will save us.

I recently gave a talk to a group of IEEE electricity researchers (primarily engineers) about the current energy situation and how welcoming it is for new technologies. Needless to say, this group did not come with the standard mindset. They wanted to understand what the electricity situation really is. They are very aware that intermittent renewables, including wind and solar, present many challenges. They didn’t come with the preconceived notion that oil is the problem and electricity will save us.

It wasn’t until I sat down and looked at the electricity situation that I realized how worrying it really is. Intermittent wind and solar cannot stand on their own. They also cannot scale up to the necessary level in the required time period. Instead, the way they are added to the grid artificially depresses wholesale electricity prices, driving other forms of generation out of business. While intermittent wind and solar may sound sustainable, the way that they are added to the electric grid tends to push the overall electrical system toward collapse. They act like parasites on the system.

We end up with an electricity situation parallel to the chronic low-price problem we have for oil. Prices for producers, all along the electricity supply chain, fall too low. Of course, consumers don’t complain about this problem. The electricity system also becomes more fragile, as we depend to an ever greater extent on electricity supplies that may or may not be available at a reasonable price at a given point in time. The full extent of the problem doesn’t become apparent immediately, either. We end up with both the electrical and oil systems speeding in the direction of collapse, while most observers are saying, “But prices aren’t high. How can there possibly be a problem?”

Simply removing the subsidies that come from Production Tax Credits doesn’t fix the situation either. In one sense, the problem reflects a combination of many types of direct and indirect subsidies, including state mandates and the requirement that intermittent renewables be allowed to go first. In another sense, the problem is that, in a self-organizing economy, energy prices (including electricity prices) can only rise temporarily. The increase in energy prices is made possible by a growing debt bubble. At some point, this debt bubble collapses. Raising interest rates, as the US is doing now, is a good way of collapsing the debt bubble.

Furthermore, the subsidies for intermittent wind and solar discourage other innovation because they lead to terribly low wholesale prices for innovators to compete against, particularly in areas where hour by hour competitive rating is done. The ultimate problem is that if one type of electricity production is subsidized (even if in subtle ways), all electricity producers must be subsidized. Governments cannot possibly afford such widespread subsidies.

A PDF of my presentation can be found at this link: An Electricity Perspective on the Fragile State of the Economy. In this article, I offer some comments on these slides.

Slide 2.

Slide 3.

Slide 4.

We have all heard the story on Slide 4 so many times that few people stop to question whether the story is really true. My analysis suggests that it may be mostly wrong.

Slide 5.

The big take-away from this slide is that electricity companies planning for new generation should expect much higher electricity prices in the future. I discuss some of these items separately, on Slide 6.

By way of background, the US Energy Information Administration publishes “levelized cost of electricity” estimates that companies producing electricity are expected to use for planning purposes. When new generating capacity is added, planning needs to be started several years in advance. This is why what is being published now is the EIA’s calculation of expected wholesale costs (at a 2017 price level) for 2022.

Current wholesale prices for “dispatchable” electricity (the opposite of intermittent electricity) seem to be in the 3 to 4 cents per kWh range in the continental US, so all of the amounts shown assume that electricity prices will be much higher in the future. This thinking is in parallel with the “high oil prices will save the oil industry in the future” view that is prevalent in the oil industry. This thinking has helped keep the prices of shares of energy stocks up: “Even if there are problems now,” the thinking goes, “certainly higher prices in the future will fix the situation.”

CCS = Carbon Capture and Storage. CCS techniques are designed to remove a specified percentage of the CO2 generated when coal or natural gas is burned to provide electricity. The unwanted CO2 is stored underground. If the CO2 escapes, it can suffocate the population in the surrounding area. I would not make bets on the technique’s widespread adoption.

Slide 6.

Slide 6 shows a wholesale cost comparison for some particular pieces from Slide 5. All of the costs shown are very high compared to current prices. Wholesale prices tend to be in the 3 to 4 cents per kWh range because of the low cost of fuel (2 to 3 cents per kWh) and the low cost of already built generation. With recent changes in regulations, new generation is expected to be very expensive.

With respect to wind, there are two reasons why variable wind can be sold in Power Purchasing Agreements (PPAs) for 2 to 3 cents per kWh. The first is the substantial subsidies that have been available, making this pricing arrangement profitable to wind producers. The second is the low value that intermittent electricity provides to the grid. In fact, prices locked into these PPAs are slightly below the bottom of the range of expected future natural gas prices (Figure 1, below). This suggests that the primary value of wind generation is to replace natural gas as a future fuel.

Figure 1. Median PPA prices compared to forecast future natural gas prices. Chart by Department of Energy (Chart 54) in its 2017 Wind Technologies Market Report.

Somehow, miraculously, the EIA forecasts that the value of this intermittent wind will rise to 4.1 – 7.8 cents per kWh. In Figure 1, above, this would compare to 41 to 78 $/MWh, which is above the forecast gas price range.

Slide 7.

Notice how low and stable the green coal line is, compared to natural gas prices.

Natural gas comes from two types of producers: (1) those drilling specifically for natural gas, and (2) those drilling primarily for oil, and producing natural gas as a (mostly unwanted) low-value byproduct from drilling for oil. The second type of producer is willing to almost give away natural gas. If it becomes necessary to rely on production from companies whose primary focus is on natural gas production, prices will need to be higher.

Slide 8.

These are all very important assumptions that are not really true.

There is one reason why it might make sense to somewhat believe the first item, “Rising cost of electricity production will be no problem.” This has to do with the cost-plus type of electricity pricing (“regulated pricing”) that is used in some states of the United States. When cost-plus pricing is used, higher costs can, in theory, be passed on to consumers. The catch is that higher electricity prices tend to raise the price of finished goods and services. If wages are not rising rapidly enough, this can lead to an affordability problem. Industrial users of electricity are especially likely to cut back their electricity demand because higher prices make their products less competitive in the world economy.

After the talk, I decided to look at this situation a bit more closely. This analysis strongly suggests that since 2000, increased globalization has been playing a major role in holding down US demand for electricity. If there is an opportunity, industrial production will move to jurisdictions where the total cost of production (including wages, benefits, electricity costs, and other costs) is lower, even if there has not been a big increase in industrial electricity prices.

If we analyze US electricity consumption by type of user (Figure 2), we see that industrial electricity consumption rose rapidly until the late 1970s, plateaued between 1980 and 1999, and began falling in 2000. This pattern suggests that globalization is an issue. Early globalization sent US manufacturing to Western Europe and Japan. Later globalization sent manufacturing to lower-wage countries, predominantly coal-consuming countries of Asia.

Figure 2. US Electricity Consumption Per Capita, by Type of User, based on EIA data.

US labor force participation rates started dropping about 2000, similar to the drop in industrial demand for electricity. Thus, in recent years, globalization seems to be affecting residential consumers as well as industrial consumers. The impact on residential consumers is indirect, through job competition with global markets.

If analysts who estimate the required quantity of new generating capacity ignore the impact of globalization, their models are likely to give high estimates of the amount of new capacity to be added. If more generating capacity is added than is needed, it can be expected to push electricity prices downward, especially in competitive rating jurisdictions.

Slide 9.

As I will discuss later in this presentation, the economy operates based on the laws of physics. Because of this, it is impossible for the economy to change in ways that politicians would like.

Slide 10.

Slide 11.

Most of us have seen stories in the news about Macron and the Yellow Jackets. Can we really assume that citizens will accept higher carbon taxes, without protest?

Slide 12.

Industries get very unhappy when their electricity rates rise, making them uncompetitive with producers in other countries. The rates we are discussing are UK industrial electricity rates, so are a little higher (perhaps 1.5 times higher) than the wholesale prices discussed on Slides 5 and 6. If the price of 8.3 cents per kWh for industrial electricity is a big problem today, how can countries possibly withstand much higher rates, based on higher carbon prices or based on required technology that is much more expensive?

Slide 13.

Suppose a worker gathers reeds and uses them to make baskets. If his production per hour falls, he will have fewer baskets to sell in the marketplace. He cannot expect the price of each basket to rise to make up for his lower production.

For some reason, economists seem to have overlooked this obvious problem. There is no reason to expect that the buyer will be penalized for the higher costs of the energy industry. These higher costs look much like growing inefficiency. In the real world, the seller is generally penalized for falling efficiency. Why do we have so much confidence that the price per barrel of oil can rise, or the price per kWh of electricity can rise, if the price of baskets that a less-efficient worker makes doesn’t rise?

Slide 14. Chart by EIA. More detail on Renewable Energy available on Slide 18.

Slide 14 (made by the EIA) disturbs me. Coal production is dropping off rapidly, but the replacements we have are far from ideal.

Slide 15.

Coal (and nuclear) are the products that have historically kept US electricity prices low. Replacing coal with fuels that are much higher in cost and more variable in availability seems likely to be problematic. Industrial users are likely to be especially distressed.

Slide 16.

The United States has been fortunate enough to have very low natural gas prices recently. A major problem is that these prices are not really high enough for companies extracting natural gas as their primary business. If we really need to depend on natural gas, we will likely need much higher prices. In particular, natural gas prices will need to be high enough for natural gas companies to have bond ratings that are above junk ratings.

The question comes back to, “Can electricity prices really rise very much, without causing major problems?”

Slide 17.

Nuclear power represents a surprisingly large share of electricity generation. Slide 14 shows that in the US, its generation is higher than the sum of all types of renewables combined and almost as high as that produced by natural gas.

Yet nuclear has a lot of problems. It is perceived as dangerous (probably correctly so). Trying to correct the problems with being dangerous leads to a huge increase in the cost of new generation. Businesses in this field, such as Westinghouse, have gone bankrupt. The question of how to dispose of all the spent fuel is still a problem. Also, the many aging reactors will be difficult to replace.

There is also a problem with wholesale rates being too low for nuclear, when electricity rates are competitively set. To work around this problem, some areas use capacity auctions, which are intended to offset the inadequate funding for electricity providers providing backup electricity capacity. One catch is that a capacity auction is, in some sense, needed for every member of the supply chain. Just asking electricity generating companies to bid on providing capacity doesn’t guarantee that the full supply chain will be available.

For example, for natural gas, the capacity auction bid would typically reflect the cost of adding new units for creating electricity from natural gas; such capacity is inexpensive. A more expensive part of the supply chain would be the cost of adding extra natural gas pipeline capacity that is used only a few days a year, when it is very cold or hot. Furthermore, natural gas providers need to be profitable enough to continue to obtain loans at reasonable interest rates. So, even if capacity auctions are provided, they aren’t designed to fix the problems of the whole supply chain.

Furthermore, there has been a recent court ruling that these capacity payments are illegal. I mention in Slide 17 that the UK is affected. In fact, it is the entire European Union that is affected by this ruling. So, even with the best of intentions, member countries of the European Union cannot collect capacity charges to try to offset the underfunding problems caused by giving intermittent renewables grid priority and other subsidies.

Slide 18.

Slide 18 shows that in the US, the only types of renewable generation growing to any significant extent are intermittent wind and solar. Very high subsidies have helped push these types of generation along.

Parts of these subsidies are being phased out, but other, less visible subsidies remain. The fact that intermittent wind and solar are given priority on the grid, when they happen to be available, is a huge subsidy. Also, renewable mandates mean that generation is being added that is not really needed, lowering prices that the self-organizing competitive pricing system creates for backup electricity providers. This is part of the reason for the unprofitability of many natural gas, coal, and nuclear companies.

Slide 19.

In order for intermittent wind and solar to truly be dispatchable, the way other electricity providers are, there needs to be long-term storage for intermittent providers. A big part of the problem is seasonal matching of generation. For example, in a northern area, the main need may be for heat in winter, while intermittent generation may occur primarily in summer. Somehow, the variable wind/solar will need to be stored from summer to winter.

A post by Roger Andrews gives an idea of what the cost of the battery backup needed to solve this seasonal matching problem would be. His calculations indicate that adding sufficient batteries for seasonal matching can be expected to raise generation costs by more than an order of magnitude.

Slide 20.

Slide 21.

Most of the things we associate with rising energy consumption per capita are things we associate with a growing economy. Most people want these things.

Slide 22.

Slide 22 shows amounts I calculated from information from various published sources. These include energy consumption estimates by Vaclav Smil in Energy Transitions: History, Requirements and Prospects for older years and BP Statistical Review of World Energy amounts for more recent years. Population estimates are by Angus Maddison.

Based on this slide, most of the growth in world energy consumption ends up being reflected as population growth. It is only when energy consumption growth is very high that the living standards portion (in other words, the energy consumption per capita portion) grows very much.

Slide 23.

The big economic growth bulges that the world economy has experienced are easy to see on Slide 23. One of these is centered around 1910; another is centered around 1970. A third, smaller bulge is centered around 2010; it already seems to be disappearing. This growth bulge was made possible by China and other Asian countries as they ramped up coal production. Now this growth in Asian coal supplies is fading.

Slide 24.

The troughs, where the growth in per capita energy consumption falls to zero or slightly below, represent major problem times for the world economy.

Slide 25.

When a person looks back, the times when oil prices were high (1974-1980, 2008 and 2011) were near energy consumption per capita growth peaks. They were in times of high energy supply, not low. Many favorable outcomes occurred at peak times, including increased cooperation and higher returns on investments.

Slide 26.

Collapses of all kinds occur near troughs in energy prices. Often, these collapses are followed by wars that might be interpreted as resource wars.

Slide 27.

Many of these signs are ones we have been seeing lately. There were calls for tariffs before the US Civil War. Tariffs were increased in the 1920s, to try to reduce competition from abroad. Limits were also placed on immigration during the 1920s.

Slide 28.

When I talk about a vector, I am talking about a combination (really, a weighted average) of many different kinds of somewhat similar inputs. Thus, the energy vector reflects the combination of energy of many types, including human labor sold as labor, in a particular economy. The complexity vector represents the many types of specialization and growing complexity that allows resources (including energy resources) to be used by the economy. The debt vector indirectly represents promises of future goods and services made with energy products. Much of the debt vector needs to be repaid with interest. If the economy is growing rapidly, this is not difficult. If the economy is stagnant, this becomes a problem.

Many people think that oil or crude oil has particular significance. I see the economy operating as an overall whole. Each machine needs to have the particular fuel it uses. Companies decide to build factories in a particular part of the world based on an area’s overall cost level and the stability of its supplies, not based on the price of a single fuel.

Slide 29.

Slide 29 shows my view of how the economy works. As long as the debt level is growing rapidly enough, commodity price levels can be bid up to a high level, allowing increasingly complex goods and services to be produced, using an increasingly complex delivery system. At some point, the increasingly complex system for producing goods and services produces an excessive amount of wage disparity. About the same time, the cost of production tends to rise, as diminishing returns becomes an increasing problem.

The combination of rising production costs and an increasing share of the population with low wages soon creates a variety of problems. The economy tends to grow too slowly, so that debt cannot be repaid with interest. At the same time, the increasingly impoverished non-elite workers cut back on the goods and services they purchase. This might happen if young people find that they need to live with their parents longer, for example.

If interest rates are raised, this speeds up the failure of the system. Eventually, the economy, or a major portion of the economy, tends to collapse.

The big issue that tends to bring an end to economies is the increasing wage and wealth disparity that comes with growing complexity. As long as everyone is fairly equal, no one is squeezed out of buying goods such as homes, vehicles, and other expensive purchases. As businesses and governments get larger and more hierarchical, an increasing share of workers find themselves with low wages. These low wages adversely affect the economy in many ways:

  • It becomes difficult for governments to collect enough taxes.
  • Demand for commodities (such as those used to make homes and vehicles) tends to fall too low, leading to low prices for commodities.
  • Overthrown governments become more common.
  • Low-wage individuals become susceptible to epidemics because they do not eat well.

Slide 31.

The orange Energy Services line in the chart at the right shows the UK’s trend in the price of energy services since 1700, on an inflation-adjusted, efficiency-adjusted basis. The trend in these prices has been almost continuously downward. As long as the cost of energy services is downward, it is possible to add increasing amounts of these energy services, because they become ever more affordable. These energy services allow more goods and services to be produced. This seems to be a major factor underlying economic growth.

Diminishing returns, with a resulting increase in the cost of energy services, tends to be the “spoiler” in this system. In theory, rising complexity can be used to work around these higher costs. In fact, increasing complexity is helpful for a time. Eventually, however, the growing wage and wealth disparity that comes with increasing complexity tends to bring the system down. With the growing complexity, the system no longer has enough high-wage workers who can afford the finished products that the system creates. The many low-wage workers cannot make up for this lack of affordability. The number of new homes and new vehicles sold begins to fall, as a result.

Slide 32.

Interest rates, as well as the debt that is available because of low interest rates, play a surprisingly large role in commodity prices. The issue seems to be that debt is used to finance most large purchases, such as factories, schools, homes, and vehicles. If interest rates are low, it is possible for consumers to afford many more of these large purchases than they could otherwise. Once interest rates rise, the entire economy tends to shrink back. Debt bubbles tend to collapse.

Slide 33.

Slide 34.

Research into complex systems that seem to grow without outside help is a fairly new field. Clearly the economy is such a system. New businesses are added, as individuals see the need for a new product and a way of producing that product in a way that consumers can afford it. New consumers are added over time, as young people grow older and set up their own homes. Governments gradually add laws to regulate the system. Taxes are an important part of the system as well, and tax laws also change over time.

The thing that people don’t stop to think about is the fact that the system cannot really go backward. If a product is no longer needed (buggy whips, for example, for horse drawn carriages), it will no longer be produced. So, the situation is a little like removing the lower rungs of a ladder, as a person climbs up the ladder. This inability to go backward makes it difficult to adapt to falling supplies of any kind of commodity, including energy commodities.

Slide 35.

The vast majority of researchers do not understand the important role that energy plays in operating the economy and making it grow. These self-organizing systems (dissipative structures) absolutely depend on energy consumption. In fact, economies seem to depend upon increasing energy consumption per capita.

At some point, all dissipative structures (including hurricanes, plants and animals, economies and many others) come to an end. This is the way that a finite world can keep adapting and changing. New dissipative structures form and indirectly take the place of the previous dissipative structures. These new structures vary in structure from the previous dissipative structures. If the new structures are not well adapted, they quickly collapse, allowing room for yet other dissipative structures to form. The replacement of economies in this manner acts as a form of evolution, just as plants and animals evolve.

Slide 36.

Researchers tend to create models that fit their own preconceived notions of how the economy should work. This approach, plus the peer review process, tends to produce a lot of papers with the same (often wrong) assumptions.

Slide 37.

These should be fairly self-explanatory.

Slide 38.

This is probably the most important reason that economies tend to collapse. Most people miss the affordability connection because they interpret “Demand” to be something that anyone can do, without thinking about the affordability aspect. Without sufficient income, a person cannot demand a new home or new car, or gasoline from a fuel station.

Slide 39.

There have been many articles written in recent years about growing wage and wealth disparity. In fact, in the US, wage disparity seems to be back at the level it was before the Great Depression of the 1930s.

Slide 40.

Slide 40 tries to explain a paradox. Energy prices don’t really rise, as production falls too low. Instead, the complex system behaves in a strange way, causing commodity prices to fall because of growing wage disparity and debt bubble collapses.

One way of understanding the situation is by understanding that energy consumption is required for jobs that pay well. If insufficient energy supplies are available at a low price, the vast majority of jobs available will be low-paid service jobs. There will, of course, be a few managers and business owners. But these few managers and owners cannot, by themselves, generate enough Demand for goods and services made with energy products to keep commodity prices up. This is why the system tends to fail.

Slide 41.

I have been following oil since 2005, so I have had a chance to hear the discussion evolve. Oil prices were clearly too high for some consumers back in July 2008, when the sub-prime housing debt bubble popped in the United States. By early 2014, I started hearing that oil companies were very unhappy about the low price level available in 2013. In fact, some companies were sufficiently unhappy that they began cutting back on investment in new fields. It was not much later that oil prices dropped further, making the low-price problem even worse for producers.

Slide 42.

It is surprising how large and long-lasting an impact the collapse of the central government of the Soviet Union in 1991 had on its long term energy consumption. The collapse wiped out a large share of the industry of the Soviet Union and its close affiliates. The Soviet Union was an oil exporter, so the low oil prices of the 1980s were one reason for its collapse. Prices were not high enough for adequate reinvestment in new fields.

Slide 43.

One common inaccurate assumption is that oil prices rise primarily in response to the rising cost of oil production. If a person looks at the data, it becomes clear that interest rates have a huge impact on prices. This seems to happen because the purchase of high-value goods with debt (such as factories, homes, cars, and buildings of all kinds) seems to have a very significant impact on total Demand. Lower interest rates make these high-value goods more affordable. (Quantitative Easing (QE) is a way of reducing long-term interest rates; it also seems to affect oil prices.)

Slide 44.

Since I made up this list, I can add another model to the list that seems to be wrong. The Human and Nature Dynamics (HANDY) model of Safa Motesharrei gives an inaccurate assessment of the likely future path of the economy because it leaves out both diminishing returns and long-term population growth.

In every case, the researchers put together models that represent only a part of the way the world’s self-organizing economy actually works. They pick out a few aspects that they think are important, but they miss other important aspects. This selection significantly affects the outcomes predicted by their models.

Slide 45.

Some readers may be familiar with the Energy Returned on Energy Invested (EROEI) model. This is a model that is sometimes used to justify the reasonableness of selecting certain substitutes for oil, such as the use of intermittent wind and solar. As with all of the other models, the model gets some things right, but it also gets a lot of things wrong. Without understanding how the economic system really works, it is hard to see what goes wrong with the model.

Slide 46.

Slide 47.

These are all disturbing signs.

Slide 48.

World leaders act in ways that they feel that those who vote for them would like. In some sense, they are trying to save their own part of the world, even if they create increasing problems elsewhere.

Slide 49.

It is difficult for any new technology to get a foothold in a situation where energy prices of all kinds tend to be low. In addition, the pressure seems to be in the direction of reducing energy prices further, even if this means less energy production of all kinds.

Slide 50.

The world has become increasingly globalized in the last thirty years. Because of the greater interconnectedness, if a collapse occurs in the near future, it could be much worse and more widespread than prior collapses. The adverse results could exceed those of the Depression of the 1930s or the Great Recession of 2008-2009. We have no guarantee of being able to preserve either the oil system or the electricity system. The population of the world could fall dramatically; the economy may need to organize again in a new way without either oil or electricity. We live in interesting times.

About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
This entry was posted in Financial Implications and tagged electricity, globalization, oil prices, renewable energy, wind energy. Bookmark the permalink.

2,042 Responses to Electricity won’t save us from our oil problems

  1. kakatoa
    Mark Miller says:

    Happy New Year Gail,

    Roger Andrews has an update on El Hierro’s performance that you likely have already seen…. but just in case you haven’t the comments in the post are very informative-

    http://euanmearns.com/el-hierro-fourth-quarter-2018-performance-update/#comment-44660

    Your “While intermittent wind and solar may sound sustainable, the way that they are added to the electric grid tends to push the overall electrical system toward collapse. They act like parasites on the system.” comment has been played out on the island over the last few years.

  2. Baby Doomer says:

    Problems for US Producers at $50

    U.S. producers can’t generate cashflow and production growth at $50 per barrel oil.

    “$50 oil is not a level at which U.S. producers can generate cashflow and production growth, so we do expect a slowdown there, and that’s going to set up for a constructive second half of the year we think,” Chauhan told CNBC in the interview.

    “I think there are select companies which will survive but as an industry … certainly at $50 per barrel the [shale] industry does not generate enough cashflow to be able to entice investors,” he added.

    https://www.rigzone.com/news/problems_for_us_producers_at_50-09-jan-2019-157873-article/

    • Gail Tverberg – My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
      Gail Tverberg says:

      This is a big “oops.” Rig counts can be expected to fall with $50 oil.

  3. “A gauge of overall demand at a U.S. three-year government debt auction fell to its weakest level since early 2009 with the yield on the three-year supply sold at the lowest level since April, Treasury data showed on Tuesday.”

    https://uk.reuters.com/article/usa-auction-3year/demand-for-us-3-year-notes-lowest-since-2009-idUKL1N1Z810K

  4. “It is becoming ever clearer that the smartphone market is in a recession. The contraction trend first became apparent in November…

    “According to the state-run China Academy of Information and Communications Technology (CAICT), 2018’s smartphone shipments in the country were down by a worrisome 15.5%. As reported by Reuters, shipments were down 17% year-on-year.”

    http://fortune.com/2019/01/08/china-smartphone-shipments-2018/?xid=gn_editorspicks

    • “As China’s household debt continues to build up despite government-led deleveraging efforts, experts are warning against an accumulation of risks similar to the 2008 subprime mortgage crisis in the U.S. that led to the Great Recession…

      “Research by Industrial Securities also found a correlation between consumer loan growth and housing sales. Despite tightening controls on mortgage loans to rein in a property price surge, down payments made by Chinese home buyers increased by 70% in 2017 from the previous year. During the same period, consumer borrowing nearly quadrupled to 3.9 trillion yuan, the research found.”

      https://www.caixinglobal.com/2019-01-09/subprime-risks-are-rising-in-china-experts-warn-101367820.html

      • “Sixty-five million apartments, one in five, lie empty in China’s cities…

        “The development of a housing glut, driven by a slowdown in speculative purchasing, a slowdown in rural-to-urban transition, and the continuing construction of massive apartment complexes therefore has serious practical implications for the Chinese people and the general Chinese economy. The stagnation and in many cases decline of property values has devastated consumer confidence in China.”

        http://www.thesaint-online.com/2019/01/the-chinese-housing-crisis/

  5. “Europe’s largest economy may be in recession for the first time since the region’s debt crisis.

    “A shock plunge in industrial output in November suggests Germany may have suffered a second consecutive quarter of economic contraction at the end of 2018.

    “Industrial production in Germany plummeted 1.9% compared to the previous month, according to data published Tuesday. That’s much worse than the 0.3% uptick economists polled by Reuters had expected…

    “”The big picture is that the German economy — and the eurozone more generally — has clearly shifted down a gear,” said Jack Allen, senior European economist at Capital Economics.

    “A recession in Germany would be another major worry for investors who have been unnerved by the prospect of weaker economic growth this year in the United States and China…

    “The slowdown could create a major headache for the European Central Bank, which completed a huge stimulus program in December and was planning to start raising interest rates later this year.

    “If growth slows further, it will have to reconsider.”

    https://edition.cnn.com/2019/01/08/economy/germany-economy-recession-fears/index.html

    • “Italy’s populist government has offered to shore up an ailing bank with public money, in a sharp U-turn after attacking mainstream politicians for years for bailing out banks with taxpayers’ money.

      “The country’s embattled banking sector will provide a delicate test for the new government, as Italian lenders—whose bondholders include many ordinary savers—struggle to digest billions in bad loans accumulated during the financial crisis and shore up their fragile finances.”

      https://www.wsj.com/articles/italy-offers-bank-bailout-despite-past-pledges-11546954204

      • “A smiling construction worker, a grinning farmer and a jolly pensioner: these are the cartoon faces the government is using to try to reassure Britons that the country can cope with a no-deal Brexit.

        “A cheery illustrated banner on a new government website sits atop links to information on how to prepare for a no-deal Brexit that critics have said could cause food and medicine shortages, long border delays and widespread economic disruption.

        “On Tuesday, the government launched the eu exit campaign site with a low-key public information campaign consisting of adverts on commercial radio stations and tweets from some government departments.”

        https://uk.reuters.com/article/uk-britain-eu-adverts/brexit-with-a-smile-uk-launches-eu-exit-preparedness-campaign-idUKKCN1P215A

        • xabier says:

          Britain tweeting into oblivion: not quite Churchill, is it?

          Would anyone in their right mind place the slightest faith in a positive message from this government, at so late a date?

  6. Baby Doomer says:

    Prince Charles once took a commercial flight instead of a private plane to accept an environmental award. He later admitted he found first class very uncomfortable.

    https://www.businessinsider.com/prince-charles-first-class-flight-uncomfortable-2017-4?r=UK&IR=T

    • Rodster says:

      Too bad Al Gore doesn’t feel any shame spending thousands of dollars per month on his electricity bill powering his Glo.bal War.ming McMansion.

  7. Baby Doomer says:

    Record-Breaking Number Of Americans Want To Get Out Of U.S. Forever

    https://news.yahoo.com/record-breaking-number-americans-want-074047451.html?.tsrc=daily_mail&uh_test=1_11&fbclid=IwAR0A8thG651w6gWtAL0MVR037BV7Yjh_pyFgNBYqft8QnHFNVxOAgzbUnMg

  8. I had a thought today!

    sorta out of the blue…

    perhaps Capitalism was “better” as the world was growing with abundant cheap FF…

    and perhaps Socialism will be “better” as the world “de-grows” with depleting FF…

    ?

    • adonis says:

      and the socialist system is good for peace as the wealth should be distributed fairly

    • Duncan Idaho says:

      Yep, the capitalist will sell us the rope we will hang them with.

    • cottontailhops
      Fasting Odddity says:

      Capitalism is/was functional due to definitive faith in abundant energy from max resource density in form oil. Didn’t they discard (or combust) gasoline when they wanted to produce kerosene? Socialism is inevitable as resource distribution feasibility decreases due to inflation of demand with diminished supply of functionally dense energy. #WonkaPiercer

    • worldofhanumanotg
      worldofhanumanotg says:

      That”s interesting concept with some real corroboration in our reality.
      Nevertheless I found the current young and especially the nascent generation (teens) of socialist to show some sort of signs of calm autism, in comparison to the previous generations, no offense. They are complete JITsers..

      How is this going to play against hard core surivalists types from mil, rescue, swat, private armies circles and what have you (not mentioning fin/loan-debt shark mobsters)?
      I don’t see much lasting success there. Yes, sorry I’m again reviving my pet theory we are trending long term to regression into openly feudal in the future.

      But these ‘new young socialists’ are going to mess a lot with ordinary people’s life, especially in urban setting as they staff most of the municipal positions, actually we can witness that at many places already, so if you can move out of the urban areas do it now or ASAP.

      • xabier says:

        How true: I read the tweets my sister and her radical friends send one another as a way of staying connected with that generation of young Left-voters. Not exactly Bolsheviks, just i-phone ‘radicals’. I have to say, though, that their complete ignorance of history and how the world actually functions is astounding. They will however aspire to micro-manage citizens – above all speech – according to ideology, I quite agree.

    • Hubbs says:

      Probably have to sort out causation vs correlation vs coincidence.
      Even assuming FF supply /cost unchanged for purposes of argument, Socialism will destroy wealth. Thus the need for energy decreases. Which force causes the economy to “degrow” more quickly? Lack of cheap energy or socialism?

      • Gail Tverberg – My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
        Gail Tverberg says:

        Socialism rewards inefficient members of the economy. It expect it leads to early collapse, and the possibility of collapsing government. Governments seem likely to hold up better, if they reward only those who are actively supplying their services to the economy. From this point of view, the US seems to be in better shape than Europe or China (with all of its state-owned enterprises, providing welfare for businesses).

        I could be wrong about this, for China, however. The funding of state-owned enterprises indirectly adds debt, keeping the system going.

  9. Duncan Idaho says:

    “Humanity has a lot of problems these days. Climate change, increasing economic inequality, crashing biodiversity, political polarization, and a global debt bubble are just a few of our worries. None of these trends can continue indefinitely without leading to a serious failure of our civilization’s ability to maintain itself. Taken together, these metastasizing problems suggest we are headed toward some kind of historic discontinuity.”

  10. Uncle Bill says:

    Oh my, looks like Doom is postponed for now…

    BP discovers 1 billion barrels of oil at its Thunder Horse field in the Gulf of Mexico.
    The oil giant also says it will spend $1.3 billion to develop a third phase of its Atlantis offshore field south of New Orleans.
    BP credits its investment in advanced seismic technology for speeding up its ability to confirm the discoveries.
    https://www.cnbc.com/amp/2019/01/08/bp-just-discovered-a-billion-barrels-of-oil-in-gulf-of-mexico.html

    Executives are crediting their investment in advanced seismic technology and data processing for speeding up the company’s ability to confirm the discoveries at Atlantis and Thunder Horse. BP says it once would have taken a year to analyze the Thunder Horse data, but it now takes just weeks.

    “We are building on our world-class position, upgrading the resources at our fields through technology, productivity and exploration success,” Bernard Looney, BP’s chief executive for production and exploration, said in a statement

    Can’t wait for the Deep Water Horizon sequel movie….thanks Mister Trump for deregulation!!!

    • Jan Steinman says:

      BP discovers 1 billion barrels of oil… it will spend $1.3 billion to develop

      I find those numbers suspect!

      Do they really expect to get that oil for $1.30 a barrel?

      • Sheila chambers – Brookings, Oregon USA – I'm a lover of SCIENCE, TRUTH & I can't stand RELIGION as it's just lies used to frighten & control us. I love wildlife, what there is left of it, photography, learning & of course the internet. I'm currently a 78yo female so I can't get around as much as in the past, I have no family & live alone but I do have a loaded gun for self protection which I needed last winter when a home invader was in my home, he was lucky I didn't shoot him. He was too STUPID to be worth the lead & I also didn't want to have to clean up the mess afterwards!
        Sheila chambers says:

        Do we have enough popcorn for when that blows up?
        So they found it but can it be developed & AFFORDABLY extracted?
        How much of the billion is resource & not reserves?
        Sounds like their grasping at straws here.

      • Mike Roberts
        Mike Roberts says:

        Jan, that would be a $1.3B spend to develop the field, not to also produce all of the oil. That would take more investment. Still, if oil gets as low as $1.30 per barrel, you can pretty much bet on those 1 billion barrels not being produced!

    • “BP discovers 1 billion barrels of oil…”

      doesn’t the world use that much in 10 days?

    • Chrome Mags says:

      365 days in a year divided by 34 billion barrels consumed annually = 10.73 days for every 1 billion barrels. So this big discovery buys us nearly 11 days more if the find actually pans out as much as they suggest.

  11. Uncle Bill says:

    I like going to Dollar Tree….but it’s Dollar days look like nearing an end…
    Dollar Tree has kept its prices at $1.00 since its founding thirty years ago, despite the fact that $1.00 in 1986 is worth approximately $2.30 today, due to inflation,” Smith wrote.
    “However, the value that Dollar Tree has offered its customers has deteriorated because of the need to fit everything into a $1.00 price point. Products today are smaller or of lower quality than they were five, ten, and certainly thirty years ago,” Smith added.
    Starboard also wants Dollar Tree to consider selling Family Dollar, a struggling chain of stores that it bought in 2015.
    https://www.cnn.com/2019/01/07/investing/dollar-tree-family-dollar-starboard/index.html

    Activist wants Dollar Tree to sell stuff for more than $1

  12. Duncan Idaho says:

    “i am in favor of these united states, here is
    a land baptized & broken. here are the rising
    foundations for the spartan existence. the family
    will no longer control the western hemisphere. it
    will exist in its pleasure but not in its tyranny.
    our lungs will extol the notes of a pure, more
    powerful democracy intricate in its simplistics
    a leadership of snowflakes. ”

    — Patti Smith, from “combe”, in Early Work, 1970-1979

    • Jesus Christ! But I understand: poetry is the art of piling up contradictions. And I looked up what she presumly meens by «a leadership of snowflakes»: «It probably comes as no surprise that her leadership style was the inspiration for my own approach, developed over time, and what I like to call The Snowflake Philosophy of Team Leadership. My professional experience tells me that when applied consistently over time, this leadership philosophy brings out the best in each person on the team.

      I try to evangelize the fundamentals of this philosophy at every opportunity, which include paragons like; great ideas can come from anyone, listen to what people around you are saying, be conservative with criticism and liberal with compliments, and respect your assets. There is obviously much more to developing and employing this philosophy, but effective leadership always starts with the golden rule; Do unto others, as you would have them do unto you.» Amen! https://www.linkedin.com/pulse/snowflake-philosophy-team-leadership-xavier-armanno
      And of course no coincidence that Patti Smith wrote this a long time ago.

  13. “Gas and electricity supplier Economy Energy has gone bust after its quest to secure rescue funding failed.

    “The Coventry-based company [UK], which supplied energy to 235,000 customers, is the ninth small energy firm to go out of business in the last 12 months.

    “As reported by Sky News, Economy Energy began seeking rescue funds to avoid collapse last month, as the crisis that has engulfed the sector in the last year gained pace.”

    https://news.sky.com/story/economy-energy-collapse-hundreds-of-thousands-of-customers-in-limbo-as-firm-goes-bust-11601960

    • Gail Tverberg – My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
      Gail Tverberg says:

      The company seems to be on the distribution end for electricity and gas. It advertises low prices.

    • Greg Machala says:

      Looks like US rig count is fixing to take a nose-dive.

      • Yoshua says:

        The stock market plunged with the WTI in unison last year.

        The trigger is the the rising yield on corporate bonds?

      • Gail Tverberg – My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
        Gail Tverberg says:

        You are right, Greg.

  14. Baby Doomer says:

    California Governor Newsom Vows ‘Sanctuary To All Who Seek It’ In Inauguration Speech

    https://losangeles.cbslocal.com/2019/01/07/gavin-newsom-california-governor-2/amp/

    • jupiviv
      jupiviv says:

      So will he allow all 100 mns of starving Africans to emigrate there? The Dems do themselves a great disservice by claiming ownership of rhetoric so easily discreditable.

    • Chrome Mags says:

      I think I’m going to be sick to my stomach, since I live in CA. It’s a state for people that have something going job wise, because it’s so expensive to live here. High rent/house values, higher fuel costs, higher just about everything, so allowing millions more will just mean more pressure on State costs, education, housing and a lot more desperate people walking the streets asking for handouts.

    • Sheila chambers – Brookings, Oregon USA – I'm a lover of SCIENCE, TRUTH & I can't stand RELIGION as it's just lies used to frighten & control us. I love wildlife, what there is left of it, photography, learning & of course the internet. I'm currently a 78yo female so I can't get around as much as in the past, I have no family & live alone but I do have a loaded gun for self protection which I needed last winter when a home invader was in my home, he was lucky I didn't shoot him. He was too STUPID to be worth the lead & I also didn't want to have to clean up the mess afterwards!
      Sheila chambers says:

      I’m glad I don’t live in Cali any longer, Gov. Newsom is nuts!
      Sanctuary to all who seek it!” That’s a recipe for DISASTER! Cali is mostly DESERT, it has too dam many people, not enough water & he wants to invite HORDES of migrants to come & live there!
      How will they be housed? How will they be FED? Who will give them JOBS, OUR JOBS!
      Cali has the largest HOMELESS population in the country, so he want’s MORE HOMELESS? MORE POVERTY? MORE CRIME?
      Too bad Oregon is also a stupid sanctuary state, I tried to vote that nonsense out but it lost or so “they” say but as corrupt as our “elections” are, I have my doubts that so many people would vote against their interests.
      I hope those working stiffs that “voted” against that measure have illegal immigrants taking THEIR JOBS on the cheap & they end up homeless, serves them right for being so stupid!

  15. A fascinating and in-depth look back at the crisis of 2008 and the manner in which political differences were set aside to stave off financial collapse:

    https://www.theatlantic.com/ideas/archive/2019/01/john-lawrence-inside-2008-financial-crash/576574/

  16. “Millions are set to walk out across India tomorrow as a two-day national strike begins against the neoliberal policies of Prime Minister Narendra Modi’s right-wing regime…

    “Farmers and agricultural workers promised to block roads across the country, bringing India to a standstill amid growing anger over poverty and rising prices.”

    https://www.peoplesworld.org/article/millions-to-strike-across-india-against-modis-neoliberal-economic-crisis/

    • xabier says:

      Gosh, it’s all so grim: are we all doomed?

      The videos on ‘How to survive the night wrapped only in a Highland plaid ‘ may well be of use, I fear.

      The Highland porridge spoon (family size) can also be a fearful weapon of defence, and is entirely legal, even in the UK. 🙂

      • Doomed soon enough, I fear, but in the meantime life is good and there is plenty of salted porridge for my collection of murderous spoons, which I use much in the manner of a Spetsnaz MPL-50 throwing spade.

        “The videos on ‘How to survive the night wrapped only in a Highland plaid ‘ may well be of use, I fear.”

        Xabier, I gather that such feats may be accomplished via Tibetan Inner Fire Meditation or ‘Tummo’:

        “Studies on Tibetan monks and Western control group have demonstrated the effect of increased thermal power output using the forceful breath technique that depends in part on meditative visualization.

        A 1982 study of the physiological effects of Tummo has been made by Benson and colleagues, who studied Indo-Tibetan Yogis in the Himalayas and in India in the 1980s. Conducted in Upper Dharamsala in India, it found that the subjects, three monks, exhibited the capacity to increase the temperature of their fingers and toes by as much as 8.3 °C.

        “In a 2002 experiment reported by the Harvard Gazette, conducted in Normandy, France, two monks from the Buddhist tradition wore sensors that recorded changes in heat production and metabolism.”

        https://en.wikipedia.org/wiki/Tummo

        A very Happy New Year to you, and indeed to all at OFW. 😀

      • worldofhanumanotg
        worldofhanumanotg says:

        How do you read the chances of UK govs eventually weaseling out of ‘hard brexit’ into either delay tactics (leaked today in the news) or perhaps mid-longer term even complete turn around by some gov-judicial lite coup, new referendum etc.. ?

        • WoH, I have no idea how this will turn out. I can see that Germany has just emphatically declared that there can be no extension, so a delay might be tricky. But as it stands, there is no way that Theresa May can get this deal through the house of commons.

          Furthermore, a large, cross-party group of MP’s has said that they will precipitate a Trump-style government shutdown if it looks like the UK is going to crash out without a deal by tabling an amendment to the Finance Bill that cuts of May’s ability to fund contingency measures, so political paralysis is not impossible.

          Re a second referendum, I understand that there are precedents in Europe but it would be a subversion of the democratic process and, at this time of heightened emotion in the UK, dangerously inflammatory IMO. And there is no guarantee that the result will not be the same.

    • Gail Tverberg – My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
      Gail Tverberg says:

      When there is not enough to go around, neo-liberal policies become unpopular!

    • jupiviv
      jupiviv says:

      Collapse tremors in India and/or China is one of my 2019 predictions!

  17. “The two leaders of Italy’s ruling populist coalition on Monday threw their support behind the “yellow vest” protesters roiling neighbouring France.

    “Yellow vests, do not weaken!” Deputy Prime Minister Luigi Di Maio, who heads the anti-establishment Five Star Movement (M5S), wrote on his party’s blog.

    “He denounced the French government for protecting the elite and the privileged, saying “a new Europe is being born. Of the ‘yellow vests’, of movements, of direct democracy” ahead of European parliamentary elections in May.

    “Matteo Salvini, his counterpart from the far-right, the anti-immigrant League, also backed the “yellow vest” protesters.”

    https://au.news.yahoo.com/italy-populist-leaders-back-france-yellow-vest-protests-153355130–spt.html

  18. “Brexit hasn’t happened yet but it’s already shrinking the United Kingdom’s financial services industry. Banks and other financial companies have shifted at least £800 billion ($1 trillion) worth of assets out of the country and into the European Union because of Brexit, EY said in a report published Monday.

    “Many banks have set up new offices elsewhere in the European Union to safeguard their regional operations after Brexit, which means they also have to move substantial assets there to satisfy EU regulators.”

    https://edition.cnn.com/2019/01/07/investing/brexit-banks-moving-assets/index.html

    • Gail Tverberg – My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
      Gail Tverberg says:

      I am sure that the EU wants to discourage anyone who even thinks about leaving the EU.

  19. “In developing our forecast for the [US auto] industry for 2019, the outlook appears grim. Economic indicators are pointing to contraction for the entire auto industry, which can be magnified if trade conditions worsen.

    “The question will be less about how the industry will perform, but rather how automakers should respond to market conditions.”

    https://www.forbes.com/sites/forbesfinancecouncil/2019/01/07/why-automakers-must-start-planning-for-a-challenging-year-in-2019/#1044e4c8ca24

    • “Home purchase contracts in the U.S. fell 7.7 per cent in November, according to a National Association of Realtors index. Consumer confidence dropped in December.

      “And a gauge of U.S. manufacturing plunged by the most since 2008, only a day after Apple cut its sales outlook, prompting investor worries about a global growth slowdown.”

      https://business.financialpost.com/real-estate/housing-bear-who-called-2018-slowdown-says-worst-yet-to-come

      • Gail Tverberg – My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
        Gail Tverberg says:

        It is fortunate that long-term interest rates (which are self-organizing) have headed downward recently. Recent mortgage interest rates are lower, as a result. The catch is that the spread between short- and long-term interest rates becomes too low or negative, hurting banks profitability since they “borrow short and lend long.”

    • Gail Tverberg – My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
      Gail Tverberg says:

      If US auto miles driven have risen less than 1%, as this article indicates, then auto miles driven are likely rising less than population. This is a sign of some would-be drivers being squeezed out of the market. Perhaps young people are waiting longer to buy their first cars.

    • Greg Machala says:

      I don’t know about where you live but, here in the south, low gas prices have created a boom of big trucks. People here have coined the phrase “brodozers” for them. They cannot give away sedans right now.

  20. “…credit spreads have widened considerably, commodity prices have softened and investors have started demanding higher yields for short-term US bonds than for those with longer terms. Unlike equity markets, “yield curve inversions” have not historically tended to produce false recession predictions. The overall judgement of financial markets is that recession is significantly more likely than not in the next two years.

    “Real economic indicators for the world’s largest economies, China and the US, also suggest considerable cause for concern. Almost every Chinese indicator in the last few months has come in below expectations.

    “Perhaps the US economy will enjoy a soft landing… But… given that we are starting from very high debt levels and low unemployment, a recession is the more likely outcome.

    “It is almost inconceivable that the global economy will remain healthy in the face of serious economic problems in both China and the US, even leaving aside their conflicts over trade and technology. Europe lacks economic energy and the uncertainties associated with Brexit, French protests, German political transition and Italian populism mean the continent is more likely to be a source of problems than a solution.

    “The Fed should signal that it is determined to avoid a downturn that would assure another decade of below target inflation. The People’s Bank of China and other central banks should also make clear that they recognise that avoiding another recession is the most important thing they can contribute to financial stability.

    “Fiscal policymakers should realise the very low real yield on government bonds is a signal that more debt can be absorbed. It is not too soon to begin plans to launch large-scale infrastructure projects if a downturn comes. The largest economies should try to limit trade frictions and signal that they are committed to co-operating to support global growth by assuring adequate capital flows to emerging markets and avoiding a cycle of protectionism.

    “Even if my recession fears are excessive, a shift towards emphasising growth will contribute to bringing inflation up to target levels and can be reversed. If I am proved right, the costs of delay in the policy response could be catastrophic.”

    https://www.ft.com/content/226a58e0-125b-11e9-a168-d45595ad076d

  21. “Shares of California utility PG&E tumbled Monday, because investors are worried it may go bankrupt.

    “PG&E (PCG) could be on the hook for tens of billions of dollars for its potential role in California’s devastating Camp Fire last year — the deadliest and most destructive wildfire in the state’s history. The company has indicated it does not have the cash or assets to pay anything close to that amount.

    “The utility, which provides electricity to about 16 million Californians, is contemplating filing for bankruptcy protection, Reuters reports. The stock fell 21% by midday Monday.

    “”The bankruptcy preparations could be designed to put pressure on the government to find a solution; however, we view the possibility of any legislation becoming law as uncertain,” said Christopher Muir, analyst at CFRA.”

    https://edition.cnn.com/2019/01/07/investing/pge-stock/index.html

    • Gail Tverberg – My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
      Gail Tverberg says:

      “PG&E is asking for a rate hike of almost $2 billion from customers, saying more than half will go toward wildfire safety.”

      California already has extremely high electricity rates. Another big surcharge will make them even higher, relative to other states, and put more strain on the income of electricity purchasers.

      A big part of California’s problem is its insistence on importing a significant share of its electricity from out of state, particularly the state of Washington, where rates seem to be lower. The catch is that there are real costs to having all of this long-distance transmission in place. One of them is that these lines tend to cause fires, if it is dry or windy. Burying the wires is a theoretical solution, but it sends costs sky-high.

      https://gailtheactuary.files.wordpress.com/2018/07/california-electricity-production-and-consumption-through-2017.png

      The extremely variable output of California’s hydroelectric contributes to its problems. Let’s hope it doesn’t have a low year again soon.

      https://gailtheactuary.files.wordpress.com/2018/08/california-annual-hydroelectric-production.png

      • Bruce Steele says:

        Also remember that PG&E Diablo Nuclear Plant is scheduled for shutdown and decommissioning in 2024 . I have seen initial cost estimates at $1.7 billion for the two Diablo reactors but remember that SCG&E San Onofre Nuclear shutdown 2014 and the decommissioning estimates are over $10 billion with about $ 4 billion already paid by ratepayers in advance. So I would expect Diablos costs to rise substantially.
        Also Calif. is still expanding commercial solar and there is already a large residential solar adoption rate . So for someone like me that already has solar and will see large rate increases to pay for “fire” risks plus decommissioning risks that the utilities will undoubtably add on to my rates that already have an annual meter fee that is about as high as my electric use bill there will be a strong temptation to just go totally off-grid. Those customers who want to go off-grid can collect a tax rebate for a tesla power wall or other battery options already on the market. So the utility companies are facing increased costs for Nuclear decommissioning, renewable mandates, potential customers pulling out of market, fire costs, endless lawsuits, and at some point maybe increased natural gas costs,
        The poor( yes there are poor people ) who can’t put up solar or batteries and that live in apartments or trailers will somehow be asked to pay much higher bills and they will figure out how to use less. New construction in Calif. already will have a solar requirement starting soon . So if anyone thinks PG&E is bluffing they should pencil out the numbers first.
        If the state is stratled with all these costs you gotta remember we just elected the most liberal governor we have ever had and he is very very green. So the state won’t back down on solar rebates, new construction solar mandates, or other efforts to choke off existing revenue streams from fishing, lumber, mining, or brown generating options like gas fired generating plants. Also a large coal generator in Arizona that used to send us electricity is shutting down.

        • Duncan Idaho says:

          I put my body on the line to try and stop Diablo, but they got it done, awash in government money and enforcement.
          Karma—

        • Greg Machala says:

          “Those customers who want to go off-grid can collect a tax rebate for a tesla power wall or other battery options already on the market.” – How can the gov’t afford to do this indefinitely?

        • worldofhanumanotg
          worldofhanumanotg says:

          Yes, I predicted such move some time ago, that in select markets with super expensive electric power rates, certain segments of population would turn into self generation mode coupled with storage at specific zone – threshold of affordability and tech capability, which seems to be about now. For the upper ~5-15-20% caste this is trivial task like not exchanging all their cars for newer model so often (5yrs instead of 3yrs), it’s manageable expense to go completely off grid in their residencies, plus it will quickly become must have social status symbol of their class.

          This flight of customers would bite back the utilities and also increase tension across the society since on the other end of the income spectrum people would be captured to high rates no matter what, obviously ricocheting into their lower overall consumption patterns, higher indebtedness etc.

          These trends seem to intersect and collude into predictable outcome: mid-term future of grid instability starting resemble 2.5-3rd world like conditions. All in all it’s the sign of system eating out itself, slow collapse, inner triage, ..

          Nevertheless it will be interesting to watch how US vs. Europe vs. Asia going to perform on this issue, the timing and severity will be likely different as the cultures and gov styles /goals differ.

          And remember he who keeps the grid operational longest for most of their pop wins (for the moment)..

        • Gail Tverberg – My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
          Gail Tverberg says:

          I am glad I don’t live in California!

          I expect more people will be leaving the state and fewer moving in. Except perhaps people that other states don’t want and the very rich.

          • Jan Steinman says:

            I expect more people will be leaving the state [California] and fewer moving in.

            Except that I think that California is a net benefit to the Federal Government, taking in more Federal revenue than it gets back in grants, etc.

            My guess is that California will secede from the US within a decade. On its own, it would be the world’s 6th biggest economy, but as it stands, it’s just a big bag of electoral votes, generally ignored by the Feds, except every four years.

          • Bruce Steele says:

            I like it here. Fifth generation. I like the Mexicans. I love the ocean with the very real wilderness that the chaparel scrub coastal range offers. Ya there’s way to many humans but when things finally go haywire our nuclear plants will already be mothballed . We are spitting out so much solar that we sometimes pay Arizona to take the excess. So there isn’t any way to really feed all these people even if we do have some of the most productive yesr round agriculture in the world but for now we have tropical fruits, citrus, vegetables, seafood,and all the variety anyone could wish for. The climate is mild , the sun almost always shines and although our aquifers are stressed we have some very deep fresh water reserves. It will be paradise as long as it lasts ( except in the cities ) and there really isn’t anywhere to run anyhow.
            On the edge and from my experiance nobody wants us anyhow. So hanging on till it goes bust.
            I checked and a tesla power wall state rebate is ~$3,400 with another ~$3,400 tax break from the Feds but it really doesn’t get you off the grid because it needs to cycle on the grid to get the rebates. Does buy you a little security if the grid starts to experiance brown outs. The objective is to smooth out the peak energy demand hours and reduce needs
            for extra power plants for peak hours. Installed it will cost you about $8,000 after rebates.

            • MG says:

              The Tesla Power Wall is a horribly costly uninterrupted power suply (UPS) for terribly poor energy supply of the Age of Intermittency. It is like pushing the burden of the quality energy supply from the companies to the individuals. The more there are batteries at homes, the more intermittent energy can be distributed via the grid. No wonder, that the price of such energy will go down. But who will do installation and servicing of all those home UPSs and additional home solar panels, wind turbines and the grid etc.?

              It is nothing else than another step away from simple and reliable energy supply: the distribution of the risk to consumers that requires securing and delivery of spare parts to individual homes, visits of technicians, the maintenance of the grid etc.

              It is cheaper to have all those batteries in one place, not at homes. But then all looks like costly energy from the grid. When you purchase the batter and have it at home, it looks like you have some kind of independency and cheaper energy. But NO, you are more dependent on the outside help and the energy costs you more, too. The grid distribution is always cheaper, as the various circumstances, like insufficient production capacities at the distant spare parts production facilities, the dysfunctional roads due to heavy snowfall etc. constitute further risks.

              The functional and good quality underground natural gas pipes are the most reliable power supply to your home. (No grids are safe in the areas with the seismic activity.)

            • Bruce Steele says:

              MG, Of course it is terribly expensive but it is a way to insure against interrupted supplies. Our utility supplier may have huge liabilities for fires that nobody can prevent from happening. Earthquakes may be some sort of black swan event but nobody knows when. A relatively small generator would keep the water and a refrigerator going at least for awhile. In a litigious society the fires are probably a larger risk because there are wires everywhere and nobody wants to cut down all the trees. So I am trying to cover the bases from grid energy band aids, to pig fat fueled tractors. From farming to foraging, dry food storage and a deep knowledge of backcountry water and food resources. How am I suppose to know what comes around the next corner? My solar array will have payed back it’s installation costs in ten years of use. I am about four years in and so far it is working without need for any technicians after installation . Maybe the tesla power wall will also work for a similar amount of time? At this point I wouldn’t bet on PG&E lasting that long. Cheap gas is also a dubious bet but it is a good deal right now.
              City utility users are dependent upon water and sanitation services so they can never really get anywhere near off-grid. Keeping a farm running is crazy expensive also but some of us are willing to pay for our independence even if it is an illusion.

            • MG says:

              Dear Bruce, yes, I also live in the countryside, although in the populated area with various energy grids. The point is that the colder areas that are impacted by various negative influences which periodically destroy the grids are more prone to depopulation, as the example of Japan shows.

            • worldofhanumanotg
              worldofhanumanotg says:

              TSLA Powerwall is no longer the only option there, the availability and variety of these storage devices is exploding as we speak and while on some you can’t receive any tax incentives the higher – less restrained functionality pays for itself eventually..

            • worldofhanumanotg
              worldofhanumanotg says:

              Bruce> on “litigious society” yes that’s a very peculiar strange thing going on in Cali.. with power utilities and fires, very few collapse theoretician listed these on the top score board for incentives bringing the fall of civ sooner..

              Must be completely surprising and incomprehensible at first to outside watchers like China/Russia, although they face in their centralized empires different set of issues.

            • JesseJames says:

              I agree with your strategy Bruce, but getting off grid will not insulate you from the utility costs. Ultimately they will tax everyone to pay for it, whether you are on grid or off.

            • Gail Tverberg – My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
              Gail Tverberg says:

              We all use goods from businesses. Industrial use of electricity cannot possibly bear all of the costs of the grid. It needs to be supported by individuals paying their share.

              This is the same issue as with the Internet. Getting rid of all of the gamers and the movie watchers would leave too little revenue to support the Internet with just business users.

            • DJ says:

              Isn’t the most likely stair case pattern that gvmt service will be more and more gone in rural areas, irrespective if cold.

              So people will more and more move to cities, where electricity and plumbing and sickcare is functioning.

              A few steps down gvmt services stops working and then cities become death traps.

            • Greg Machala says:

              The problem with battery backups and rebates is everyone is not going to get the rebate. Once a certain “off-grid” penetration is reached, electric costs are going to skyrocket and the rebates will be discontinued. So, if you want the rebate, you better install it now.

            • Bruce Steele says:

              The urban verses rural aspects of utilities and how their costs are distributed may be drivers of the staircase to be sure. The fire risk in Calif. has been almost exclusively a risk for high end real estate and but costs of rebuilding the power poles ,grid connections ,and lawsuits are distributed/ shared by the urban rate payers. In Calif. many of these rural users are not agricultural producers. In the central parts of the country the large distance between power users does at least service agricultural operations we are all dependent upon for food. Without delving to deeply into how different regions cost distributions differ it seems to me people should think about when their personal interests and societies interests benefit each other as a functioning Union and when certain segments of society begin to parasitize other members of society.
              As the central part of the US has been hollowed out by corporate agriculture there has been a lot of anger building up. People there are angry in part I believe because their contributions to society at large aren’t appreciated or fairly compensated. If Calif. starts to become fractionalized over a sense of unfairness re. the rural / urban divide much of the rural population may have to face up to what their contribution to society really is. The Central Valley is already showing lots of signs of collapse and poverty in the urban areas so maybe parts of Calif. are already becoming more like the Midwest.

    • Yoshua says:

      Geely Automobile opens 7.6% down in HK at NEW LOW since May 2017, after the company said its car sales in Dec 2018 slumped 39% y/y, in particular, sales in China tumbled 44% y/y

      • Gail Tverberg – My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
        Gail Tverberg says:

        Ouch!

    • Gail Tverberg – My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
      Gail Tverberg says:

      Oops!

  22. Baby Doomer says:

    The Heritability of Fertility Makes World Population Stabilization Unlikely in the Foreseeable Future (Collins 2019)

    Rather than stabilizing around a long-term level for post-demographic transition countries, fertility tends to increase as children from larger families represent a larger share of the population and partly share their parents’ trait of having more offspring. Our results suggest that world population will grow larger in the future than currently anticipated.

    https://www.sciencedirect.com/science/article/pii/S1090513817302799

    • Uncle Bill says:

      What goes around, comes around! I was thinking the same thing myself….nature (life) always finds a way…..
      https://m.youtube.com/watch?v=oijEsqT2QKQ

      Oh well, some much for refraining to populate…others will fill the void

    • Sheila chambers – Brookings, Oregon USA – I'm a lover of SCIENCE, TRUTH & I can't stand RELIGION as it's just lies used to frighten & control us. I love wildlife, what there is left of it, photography, learning & of course the internet. I'm currently a 78yo female so I can't get around as much as in the past, I have no family & live alone but I do have a loaded gun for self protection which I needed last winter when a home invader was in my home, he was lucky I didn't shoot him. He was too STUPID to be worth the lead & I also didn't want to have to clean up the mess afterwards!
      Sheila chambers says:

      GROWTH MUST GET FED, when the food runs out, so growth of population will also end no matter how “fertile” they might be.
      There are LIMITS!
      We currently feed 7.6 BILLION humans thanks to fossil resources but that’s going away & there is no way we can feed so many humans without OIL & NATURAL GAS.
      “Nature” will cull the masses because we are too dam STUPID & infested with religion to control our fertility.
      I feel very sorry for all the little children who will end up dying from starvation & disease because their parents were unable or unwilling to control their fertility.

      • Gail Tverberg – My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
        Gail Tverberg says:

        Some of these children will be from one-child families in China. Others will be from one-child families in Japan. I would not blame the parents. It is the laws of physics, and the way the self-organized economy operates that mandates that somewhere, more children will be born, and more antibiotics will be distributed so that those who are already alive can live longer. A large share of our current population bulge comes from people living longer, rather than more birds. Campaign against sending malaria nets to Africa!

        • Sheila chambers – Brookings, Oregon USA – I'm a lover of SCIENCE, TRUTH & I can't stand RELIGION as it's just lies used to frighten & control us. I love wildlife, what there is left of it, photography, learning & of course the internet. I'm currently a 78yo female so I can't get around as much as in the past, I have no family & live alone but I do have a loaded gun for self protection which I needed last winter when a home invader was in my home, he was lucky I didn't shoot him. He was too STUPID to be worth the lead & I also didn't want to have to clean up the mess afterwards!
          Sheila chambers says:

          Send Africa & other malaria areas malaria nets but also send them birth control, work in giving women more control over their bodies, provide more health care for their children & a better education so they will have fewer.
          With education, female equality, well baby clinics & birth control, they will want to have fewer children because fewer of them will be dying. A high infant death rate encourages a higher birth rate.
          In the US, it’s the most religious & least educated who have the largest families, I expect that’s the same for other parts of the world.
          Religion is the enemy of rationality.

          • Artleads says:

            I don’t say the religion is the enemy of rationality. Rationality isn’t wired in any more than the impulse to religion, I would believe. I wonder if we aren’t all tied up in religious thinking of some sort, even if it’s so called rationality. This is all very puzzling. Does religion accord with rationality in some times and placed and not in others? I could see religious sentiment seriously empowering your appealing African/female perspective above. Much more so than “rationality” and laws maybe. Appeal to the impulse to righteousness.

            • Gail Tverberg – My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
              Gail Tverberg says:

              The new religion seems to be “He who dies with the most toys wins.” High priests are economists.

              We have constructed in our minds what God must look like, based on a Progressive view of how the world works. Based on that view, God can’t exist. The problem is that our mental view of what God must be like is wrong. God is the God of the laws of physics and of dissipative structures. The system does not always seem to move forward. Different religions are self-organized over time, to meet the needs at a particular time.

            • hkeithhenson
              hkeithhenson says:

              “Does religion accord with rationality in some times and placed and not in others?”

              I make a case that they are deeply connected. The cycle for hundreds of thousands of years was for the population to grow until it reached resource limits. Humans detected “bleak times” ahead. Xenophobic memes built up and war reduced the population back to where the environment could support them.

              The oddest thing about this cycle is a conflict between humans and their genes. It is rational to go to war (under some circumstances) for the genes but not the humans. So the genes have been selected that foster irrationality and the support for irrational leaders under times of economic/ecological stress. https://www.academia.edu/777381/Evolutionary_psychology_memes_and_the_origin_of_war

              I have an unpublished math model of how well genes do in wars and staying out of wars. Genes do better in wars (under some circumstances) because of the copies of genes carried by the young women of the defeated tribe. The young women usually become wives or extra wives for the victors in the war. From the genes viewpoint, this limits the downside of going to war even if defeated and killed.

            • religions promise that gods will deliver abundance forever

              this is a lie of course

              so wars start when resources fall to a critical low, encouraged by priests who insist that god has sanctioned it, because ”others’ have what does not belong to them—ie their god is a false god

              god is always on ”our” side

              therefore ”we” cannot lose.

              If by chance we do lose—it can only be because we sin too much, didnt pray hard enough–or god just had an off day

              if we have a succession of wins, then our god must be all powerful, and opposing enemies come to believe it well, for a while

    • this is a myopic half story of epic proportions…

      “As a result of the world total fertility rate remaining above the replacement rate, our analysis shows that not only will world population stabilization not occur this century, but population growth in post-transition countries will increase toward the end of the century. There is less than a 5% chance of world population stabilization. Our median projections indicate that world population may increase from 7.4 billion people in 2015 to 9.8 billion people in 2050 and 12.4 billion in 2100, a material increase on the 11.3 billion people in 2100 estimated from fertility projections in the base model (Fig. 2). A critical insight of this approach for forecast future population growth is that beyond this horizon, there is no particular reason to expect the world population to stabilize by itself at a sustainable level.”

      so their field of expertise is “fertility”…

      they give zero weight to the resources needed to support the higher population…

      “There is less than a 5% chance of world population stabilization.”

      this is their myopia talking…

      resource depletion and diminishing returns will far outweigh any increasing fertility…

      there is greater than a 95% chance of a permanent post peak human population in the year 2100…

      • doomphd – Honolulu – I really hold a doctor of philosophy (phd) in geological sciences and study pretty doomy topics like giant landslides, volcanic eruptions and megatsunamis.
        doomphd says:

        a Science article, very pinnacle type stuff. topic is like worrying about rainfall forecast at bottom of ocean. they should familiarize themselves with the term ‘overshoot’.

      • Gail Tverberg – My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
        Gail Tverberg says:

        Lots of linear models without enough variables. These models seem to be used throughout “science” today.

        • there was a prog on UK radio this morning about world population, and developed countries not having enough babies

          Norway was held up as the example of how to keep things in perfect balance through incentives, but as they pointed out, Norway is wealthy enough to be able to afford it

    • Tim Groves – Japan
      Tim Groves says:

      Personally I’d feel a lot safer in a good old fashioned car driven by an android chauffeur.

    • Gail Tverberg – My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
      Gail Tverberg says:

      Very interesting article! Conclusion seems to be: Forget self-driving automobiles, considerable evidence shows that the technology to produce true self-driving cars is too far away; lets think more about bicycles.

      If the technology to build true self-driving cars is too far away, then I think that it may be an indication that the technology to put solar panels in space using robots is too far away to even consider this option. Any space options perhaps that are considered perhaps need to be scaled back to reflect the true difficulty of making robots that work in all conditions.

  23. “Renata is just one of 863,000 Czechs – out of a population of 10.6 million – facing paralysing demands after debt collectors ordered their bank accounts frozen and their incomes slashed on behalf of creditors determined to pursue outstanding dues regardless of ability to pay.

    “Some 150,000 people have 10 or more outstanding debts for amounts they can never hope to pay. Many face inflated fines for not having valid tickets on public transport, often when they were children.”

    https://www.theguardian.com/world/2019/jan/06/czech-democracy-threat-debt-crisis

    • Greg Machala says:

      Somebody has to be left holding the bag. All the debts and promises that were made to kick-the-can-down-the-road are coming due at some point. Either the energy to make good on those promises will be there (and be cheap and profitable) – or it won’t. Many of the debt promises will be unfulfilled.

      • Duncan Idaho says:

        “Now we are trying to get unemployment to go up & I think we’re going to succeed”

        — Ronald Reagan, precursor to the half-wit George Bush (Sr., Jr., etc.)

      • psile
        psile says:

        The policy of politicians to have the poor shoulder the burden of austerity, debt and elite malfeasance, whilst giving the rich a free pass, is coming to an end.

        https://www.democracynow.org/images/headlines/97/45497/quarter_hd/h6-yellow-vests.jpg

        • Duncan Idaho says:

          “To state the obvious: Mr. Trump is a thin-skinned narcissistic ignoramus. He tries to make everything about himself. He thinks he knows everything better than everyone else. He reacts viciously to the slightest criticism. And he stopped reading and studying decades ago. Not a good combination of traits. “

          • JesseJames says:

            I am trying to figure out how your post relates to the previous post.
            Of course Trump is full of himself…as have all,of our past leaders.

            Duncan, have you taken too much of the Melange?

          • Tim Groves – Japan
            Tim Groves says:

            Duncan and many others are affected with a severe strain of Trump Derangement Syndrome, probably due to their own extremely thin and sensitive skin.

            We get it Duncan. We get it that you and half the US population don’t like Trump. You don’t like Trump even more than you didn’t like Hillary or Bill or Michelle or Barrack or Dubya or Dubya’s dad or Ronnie or Jimmy or Gerald (remember him?) or ricky Dicky or LBJ or JFK. We get that you don’t like Trump loud and clear. We also get it that his election to the presidency rankles you more than the election of any previous POTUS in your lifetime.

            That’s tough Duncan. It really sucks. And it’s going to keep sucking for a while yet because there’s a very strong possibility that Trump is going to be Tweeting and smirking from the White House for six more years.

            From personal experience I can totally understand how someone might be driven to derangement by a political leader they don’t like. Thatcher never appealed to me and neither did Blair. The combination of Blair and Bush strutting together on the world stage was enough to make me reach for the suck bucket. Totally irrational I know, but that’s how they affected me.

            Obama I found transparently insincere and morally repulsive, and Hillary I see as a walking serial criminal who needs to be dealt with to the full extent of the law. I hate the way both Obama and Hillary attempt to talk down to their audiences and wax morally superior. I find it damn offensive. I find it refreshing the way Trump doesn’t do that. I enjoy the way he trolls his opponents and makes up depreciating nicknames for them. I love the way he points out their hypocrisy and their double standards. I’m pleasantly surprised at how he manages to sail on past the vicious criticism and condemnation leveled at him from the media and the celebosphere as if he was an icebreaker cruising the Arctic seas.

            Have you noticed generally how people who happen to strongly dislike Obama or Bush or Clinton are generally able to suppress the urge to rant on about their dislike in public forums when it’s OFF topic and to keep their dislike within the bounds of decency when it’s ON topic?

            And have you noticed how people who happen to strongly dislike Trump are generally unable to do this? The Trump haters have a Pavlovian response to the man’s voice, face and name, and even to thoughts about the man that bubble up from the depths of their imagination. They are obsessed. They are possessed. They are deranged. Trump has taken up residence in their minds like an occupying force. It’s very sad; no, it’s worse than very sad; it’s pathetic.

            https://i.pinimg.com/originals/f3/15/8a/f3158ad75a6cfb1687f45fa40c98aabc.jpg

            • Gail Tverberg – My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
              Gail Tverberg says:

              I noticed that on Reverse Engineer’s site, he listed OFW as one place where there is not a strong Republican or Democrat bias. Politics generally stays out of the discussion. I tend to view Republican goings-on, and well as Democrat’s views, as reflecting symptoms of the physics of our economy. The are interesting, but changing the players will not fix the underlying problems causing the political views.

            • one can only assume that your response was laced through with irony

              often difficult to pick up on here sometimes

            • DJ says:

              I don’t suspect irony, everything is true.

            • Ed – I am interested in energy issues.
              Ed says:

              Tim, ++++++++

        • Gail Tverberg – My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
          Gail Tverberg says:

          The laws of physics seems to say the opposite: if there is not enough to go around, the poor get frozen out; the goods and services that are available rise to the top, like steam. We may not like/choose this outcome, but this is the outcome nature selects, because it guarantees that at least part of the population will be able to carry on, if there is some type of short-term bottle neck, such as a climate fluctuation. This is the way both ecosystems and economies work.

          • psile
            psile says:

            Yes, in the long run, we’re all dead. But in the meantime, we’ll get things like this occurring. Some countries will revolt, some will crack down, others will disappear entirely, and at an ever faster rate.

    • MG says:

      They have reformed the personal bankruptcy law in Slovakia in such a way, that the number of the personal bankruptcies skyrocketed:

      https://spectator.sme.sk/c/20654869/number-of-personal-bankruptcies-skyrocketing-in-slovakia.html

      13,848 Slovaks Went Bankrupt in 2018, Up 164.33 percent Y-o-y
      https://newsnow.tasr.sk/economy/13848-slovaks-went-bankrupt-in-2018-up-164-33-percent-y-o-y/

      The problem is that when you have horrible debts, they crush you so much that you have no motivation to work and earn money, as the distrainors take it almost all. You are like paralyzed.

      “Voluntary choice of distrainors eliminated

      Until recently, Slovak legislation allowed those claiming debt recovery to select a specific distrainor, which led to low efficiency and millions of outstanding distrainment proceedings. Such cases should no longer arise.”

      https://spectator.sme.sk/c/20540159/voluntary-choice-of-distrainors-eliminated.html

      • kulmthestatusquo
        kulmthestatusquo says:

        You know Elizabeth Bathory owned the Slovak girls she killed, right? We are going back to these days. There was no poetic justice for her descendants; the last male descendant of hers died in 2013, and there are numerous female descendants still in the highest echelon of Hungary.

        • MG says:

          You should tell this e.g. to an ordinary worker in a machinery company: he thinks it is the people who own the company who suck his blood, as these owners constantly change the management in order to get the profits as the profits are declining. Telling him that he does not work enough and deserves no benefits or wage rise…

      • Duncan Idaho says:

        Sounds like a US system.
        Of course, it costs 1/5 as much.

      • DJ says:

        If you have debt but no income in Slovakia, how do you eat? Where do you live?

        • MG says:

          You get some minimum social benefits or such people earn a living via undeclared, black work.

          • DJ says:

            I see potential to incentivize these people.

            But maybe was the purpose keeping growth going, not that debts would ever get repaid.

            • MG says:

              There must be some way of getting rid of the debts: that is why also Christianity contains the teachings regarding the absolutions of sins. It seems that it is better when not the people get into debts, but the institutions: the states, the companies… Otherwise the system paralyzes.

            • Gail Tverberg – My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
              Gail Tverberg says:

              “Forgive us our debts, as we forgive our debtors.”

              Clearly, debt was a big problem, back 2000 years ago.

            • MG says:

              Since 2008, the debts of the households went down, but the debts of the governments significantly rose (the article in Slovak: https://finweb.hnonline.sk/komentare-a-analyzy/1870013-svet-je-nebezpecne-nepripraveny-na-dalsiu-krizu).

              Well, the answer to too high debts of the citizens in 2008 was to solve it the other way…

            • Gail Tverberg – My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
              Gail Tverberg says:

              In the US, I think we are seeing a similar pattern. For example, there are now more corporate owners of stand-alone homes, and lower income people are renting them. Now the corporation has the debt, rather than the family. If there is asset appreciation, the corporation will benefit. If it goes the other way, the corporation will lose out.

      • Greg Machala says:

        The reality is there are just not enough resource to go around. Abundance has turned to shortage – partly as a result of rising populations from the “Green Revolution”. The danger with policy-makers is they seem to see energy and resources as a given. Cheap and readily available. They have not considered the finite nature of these things. Thus, draconian polices are implemented thinking that they will re-stabillize/restore the system to its previous glory for the elite. They do not yet understand that “de-growth” is a fatal disease who’s only cure is cheap resources per capita. Passing the debt for past blunders to those least able to pay is not going to do anything positive and may well instigate riot. The thinking seems to be that one can create prosperity by creating despair.

          • Greg Machala says:

            Yes we need more revolutionary breakthroughs to keep producing more food with less and less input. Until we get free (as in beer) food!!!!

            • Sheila chambers – Brookings, Oregon USA – I'm a lover of SCIENCE, TRUTH & I can't stand RELIGION as it's just lies used to frighten & control us. I love wildlife, what there is left of it, photography, learning & of course the internet. I'm currently a 78yo female so I can't get around as much as in the past, I have no family & live alone but I do have a loaded gun for self protection which I needed last winter when a home invader was in my home, he was lucky I didn't shoot him. He was too STUPID to be worth the lead & I also didn't want to have to clean up the mess afterwards!
              Sheila chambers says:

              No we do not “need” to grow more food to feed even more humans!
              We have already been down that road, the result was MORE HUNGRY HUMANS!
              We must STOP trying to feed more people, that’s running the “Red Queens race” & you can never “win” such a “race”. The excess humans will have to STARVE down to what can be sustained without fossil resource inputs because we are too dam stupid to do so with intelligence.
              (WordPress needs to stop getting it’s “undies” in a bunch about the word “dam” when there is no “god” before it.)

            • MG says:

              Food is not the most important issue. It is the energy for the protection of the naked human species against other species and the harsh hot and cold environments, which is not so easily achievable.

              Basically, firstly humans need to be protected, then they can proceed, also with higher food production. It was the higher hygiene (i.e. protection from the germs) that allowed for the population growth and higher food production and consumption. That is why humans live in the houses with narrow interior temperature limits. The house is not a bird nest or a bear pit or similar.

            • Jan Steinman
              Jan Steinman says:

              Food is not the most important issue.

              While I tend to disagree, you may have a point.

              Mitochondrial DNA evidence strongly suggests that humans went through a “bottleneck event” just some 70,000 years ago, when there may have been fewer than 1,000 breeding pairs. That was well after the domestic use of fire, but about the time when humans began constructing shelters, rather than living in “found” shelters, like caves.

              On the other hand, one can live in a snow cave, based only upon the somatic energy you produce, if you have enough high-quality food. Add fire to the mix, and one can live in a wide range of found or minimally-constructed shelters.

              It was the higher hygiene (i.e. protection from the germs) that allowed for the population growth and higher food production and consumption.

              I don’t think so. Certainly, our longevity has increased due to improved hygiene, and it reduces infant mortality by a small amount, but ecologists and biologists agree that it is basically food that makes more humans.

            • MG says:

              And that is a mistake, if some ecologists and biologists think that food is most important for the human species. You can not live naked in an ice cave, you need some protective layers of clothes stolen from other species or artificially produced with the help of the external energy. I am affraid that such ecologists and biologists who put food over energy are deeply mistaken. We are not apes, we are naked. It was the additional energy that allowed ape like human ancestors to penetrate into colder areas.

              The Bible with its description of the original sin and the realization of the humans that they are naked makes this clear: the humans wanted more food, but they needed some body covering (fig leaves in the Bible), when they entered the areas with the food that was beyond their reach, i.e. in the colder areas.

          • Jan Steinman says:

            Thank you Haber—

            Don’t forget Bosch!

            We fix nitrogen the old-fashioned way. It’s been in continuous development for some 2,000,000,000 years, compared to Haber’s and Bosch’s mere decades.

            But then, there are other ways not mentioned in the article. We don’t really have to re-engineer nitrogen-fixing bacteria. All we need to do is pee on plants! Your urine contains about 11% bio-available nitrogen.

            I try to do this as often as I can. In fact, if I’m forced by common decency to use a washroom, I murmur an apology to Mother Earth, because the nutrition in your urine is actually destroyed in sewage treatment, because too much of it causes algal blooms in surface water.

            Want to get rid of Haber-Bosch? Pee on your plants!

            I realize this is vastly easier for those of us with the proper plumbing. But the poor, deprived others can carry around one of these in order to to do their duty in bringing down the natural gas industry!

          • Sheila chambers – Brookings, Oregon USA – I'm a lover of SCIENCE, TRUTH & I can't stand RELIGION as it's just lies used to frighten & control us. I love wildlife, what there is left of it, photography, learning & of course the internet. I'm currently a 78yo female so I can't get around as much as in the past, I have no family & live alone but I do have a loaded gun for self protection which I needed last winter when a home invader was in my home, he was lucky I didn't shoot him. He was too STUPID to be worth the lead & I also didn't want to have to clean up the mess afterwards!
            Sheila chambers says:

            We won’t always have the resources to make nitrogen from natural gas or any other synthetic nitrogen & yet each day all of us piss nitrogen down the toilet along with phosphorous another essential nutrient for plants we have all be flushing into the oceans leading to dead zones & putrid pollution.
            Where are the “night soil” collectors when we need them?

            Not only do we need to educate & train millions of people to be organic farmers, we will also need millions of farm workers & “night soil” piss & poo collectors.

            ALL of our organic “waste” needs to be returned to the soil. Too bad we can’t recover the millions of tons of fertilizer that now lies in the deltas to rivers or in our large lakes.
            What a waste of “waste” that has been!
            As we collapse, there will be

            • Sheila chambers – Brookings, Oregon USA – I'm a lover of SCIENCE, TRUTH & I can't stand RELIGION as it's just lies used to frighten & control us. I love wildlife, what there is left of it, photography, learning & of course the internet. I'm currently a 78yo female so I can't get around as much as in the past, I have no family & live alone but I do have a loaded gun for self protection which I needed last winter when a home invader was in my home, he was lucky I didn't shoot him. He was too STUPID to be worth the lead & I also didn't want to have to clean up the mess afterwards!
              Sheila chambers says:

              DAM I did NOT post that!!! WTF is wrong with WordPresses software?

              After “there will be” billions of human bodies that will need to be buried, why not bury them under our farmland with it’s poor depleted soils?
              I for one want to be dumped into an unmarked grave, why not get buried under the land of a farm? Instead of “pushing up” inedible “daisies” why not let our dead bodies push up food for the living?
              WordPress needs to add an “EDIT” button! PLEASE!!!

            • Gail Tverberg – My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
              Gail Tverberg says:

              Or are many people’s bodies too polluted by all of the drugs that they are taking, and all of the insecticides and other products that get into the system through the meat we are eating, for this to be a good solution?

              I am not a chemist. This is question for someone with more chemical knowledge than me.

            • Mike Roberts
              Mike Roberts says:

              Well said (eventually!).

        • doomphd – Honolulu – I really hold a doctor of philosophy (phd) in geological sciences and study pretty doomy topics like giant landslides, volcanic eruptions and megatsunamis.
          doomphd says:

          Greg, you make many good points, but why should human population growth in the third world bring down the system? Isn’t the problem with the 5% of human population in the US and say, China and the EU, that use 25-50% of the available energy? It’s that use that is coming under resource limits pressure, more so than the remaining 50% left over for everyone else? in other words, if Africa, say, adds 80 million more people last year, what’s the effect other than more asking for more charity to avoid starvation? what we in the first world see as looming disaster may not even register in the third world. you can be killed only so dead.

          • Sheila chambers – Brookings, Oregon USA – I'm a lover of SCIENCE, TRUTH & I can't stand RELIGION as it's just lies used to frighten & control us. I love wildlife, what there is left of it, photography, learning & of course the internet. I'm currently a 78yo female so I can't get around as much as in the past, I have no family & live alone but I do have a loaded gun for self protection which I needed last winter when a home invader was in my home, he was lucky I didn't shoot him. He was too STUPID to be worth the lead & I also didn't want to have to clean up the mess afterwards!
            Sheila chambers says:

            The problem won’t stay in the 3rd world or haven’t you noticed all those tens of thousands of Africans MIGRATING to Europe? The come in boats, they walk, they sneak rides on trucks or ships, they will arrive unbidden at YOUR border DEMANDING to be let in so as to take advantage of your welfare system, housing, food & your JOBS.

            When life becomes impossible where they are now, they will LEAVE & MIGRATE to where they believe things are better.
            The “inn” is full, there is no more room for more migrants.

            I expect to see violent border wars when the hordes become too large for other countries to assimulate, they will be deported, they will be blocked, they will be gassed, they will end up being SHOT DEAD at the fence, wall & borders.
            Countries will be forced to defend their countries borders or lose their countries to desperate invaders. I would hate to be one of those migrants but there are simply too many of them & more are on the way.

            • Tim Groves – Japan
              Tim Groves says:

              Strong words, dear lady!

              Lerchio, I’ve written an ode to open borders.
              Shall I read it to you?

              Imagine there’s no borders
              I wonder if you can
              No more customs or immigration
              A siblinghood of man
              Imagine all the people
              Migrating freely to other lands

              Hu Ho Huuu!
              You may say I’m a dreamer
              But I’m not the only one
              Millions of Democrats have joined us
              And the media, the Koch Brothers and George Soros want the world to be one

            • doomphd – Honolulu – I really hold a doctor of philosophy (phd) in geological sciences and study pretty doomy topics like giant landslides, volcanic eruptions and megatsunamis.
              doomphd says:

              that’s why border security is a big deal to the present US administration. they anticipate all the points you raised, for North America, by reinforcing the southern border with Mexico. that will hopefully slow or staunch the flow, already in progress and with prospects worsening in future. the EU has a similar problem on their southern border. their recent disasterous moves to assimilate the MENA refugees have been described as ‘cultural suicide’ by Russian observers (Putin). they seem to forget the close calls they’ve survived at the gates of Vienna.

            • yes, Tim…

              those who support open borders are doomed to suffer its consequences…

              Immigrant Karma’s gonna get you
              Gonna knock you off your feet
              Better recognize your brothers
              Ev’ryone you meet
              Why in the world are we here
              Surely not to live in immigrant fear
              Why on earth are you there
              When you’re ev’rywhere
              Come HERE and get your share

              Well we all shine on
              Like the moon and the stars and the sun
              Yeah we all shine on
              Come on in and in and in come on

            • Tim Groves – Japan
              Tim Groves says:

              It was 1982 and I was selling my terrace house in a London suburb as a prelude to moving abroad. My neighbors on one side were an Indian family who had been in the UK for about 10 years. The husband was a taxi driver and the wife stayed at home and wore a sari. They were a nice ordinary couple and my wife and I ate Indian food at their place on several occasions.

              My neighbor on the other side was an indigenous Cockney lady, a widow in her seventies who’s husband had died. She had lived in the street for 50 years and was always washing and cleaning. She boasted to me that she didn’t have a washing machine and didn’t need one as washing by hand was a pleasure.

              While I was trying to sell the house, the estate agent visited with a West Indian couple who were interested in buying the place. The Cockney lady saw them, and later came round to ask me a favor: “Please don’t sell up to one of “them” because I don’t want “them” living next door to me.” I was actually quite shocked at the audacity with which she spoke. I didn’t approve of her attitude, but I felt sorry for her as she was in obvious distress.

              At the same time, I had sympathy with the position of the immigrants who faced all kinds of discrimination at the UK of that time. To be frank, I would have sold to the West Indian family despite the Cockney lady’s request, but as it happened, the West Indian family were unable to meet my price. They signed an initial contract agreeing to the price, and then after the ink was dry, they asked for a discount because they claimed they were unable to afford what they had earlier agreed to pay. I refused to agree to their request and the deal fell through. Then I sold the place to an indigenous young Cockney couple much to the delight of my elderly neighbor.

              The house sold for 24,250 pounds. It is worth ten times that now in pounds. But the pound’s worth a lot less in terms of Mars Bars now than it used to be.

            • Sheila chambers – Brookings, Oregon USA – I'm a lover of SCIENCE, TRUTH & I can't stand RELIGION as it's just lies used to frighten & control us. I love wildlife, what there is left of it, photography, learning & of course the internet. I'm currently a 78yo female so I can't get around as much as in the past, I have no family & live alone but I do have a loaded gun for self protection which I needed last winter when a home invader was in my home, he was lucky I didn't shoot him. He was too STUPID to be worth the lead & I also didn't want to have to clean up the mess afterwards!
              Sheila chambers says:

              The problem with migrants isn’t where they are from, I would be glad to have an Indian family living next door or a person from Cameroon, the problem is NUMBERS not “race”. If their here legally, there are few problems but we need to end all immigration not because of where they are from but because we already have more people than can be sustained, we already have millions of homeless, jobless & poor here, we don’t have enough jobs, we don’t have enough housing, our health “care” is too expensive for millions of us & we now have people DYING because they can’t afford their INSULIN.
              We really don’t need any more people no matter where they are from, I would have the same problem with white, blue eyed, blond haired English speaking Norwegians as I would have with “black” Nigerians, we already have too many people & we all have the same basic needs.

              BTW, we are ALL AFRICANS! ALL our ancestors originated in Africa so “racism” should have no place in any discussion about immigration, it should just be about NUMBERS & lack of enough RESOURCES.

          • DJ says:

            In which extent is the poorer 2/3 of the world dependent on inputs from the richer 1/3?

            If nothing else piggybacking on research and development.

            I would not be so sure billions of poor could continue in a world made by hand without seeds, fertilizer, pesticides, water pumps, transport, machines.

          • Gail Tverberg – My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
            Gail Tverberg says:

            “Immigration” is the one-word answer.

            The third world cannot feed all of these people.

            • Sheila chambers – Brookings, Oregon USA – I'm a lover of SCIENCE, TRUTH & I can't stand RELIGION as it's just lies used to frighten & control us. I love wildlife, what there is left of it, photography, learning & of course the internet. I'm currently a 78yo female so I can't get around as much as in the past, I have no family & live alone but I do have a loaded gun for self protection which I needed last winter when a home invader was in my home, he was lucky I didn't shoot him. He was too STUPID to be worth the lead & I also didn't want to have to clean up the mess afterwards!
              Sheila chambers says:

              But neither can the 1st world assimulate so many people from the 3rd world.
              We in the 1st world would be just as “rich” if most of us consumed less, who needs a new car every 5 years? I’m doing just fine thank you with my small 1991 Honda civic CRX.

              People want us to destroy more land so more of us can be fed but we already know where that will lead, even more people demanding to be fed!
              We must stop trying to feed more people, this is a struggle we can never “win” as the more we feed, more people will be produced who will also want to be fed.
              No matter what we do now, too many is still too many & one way or another, a painful population “adjustment” will soon be made.

  24. Uncle Bill says:

    More Hopeum out there….Got to feed the Public Perception …tech will save use Humans

    Before the Electric Car Takes Over, Someone Needs to Reinvent the Battery
    Solid-state technology promises to be cheaper and charge faster than anything on the road today. But no one is close to figuring it out

    Lithium-ion technology, the standard for decades in mobile phones and personal electronics before moving into EVs and utility-scale energy storage, uses a liquid electrolyte to shuttle ions between the anode and cathode to charge or discharge a battery. A solid-state battery, as the name suggests, replaces this liquid with a solid material such as ceramic, glass or a polymer.

    That should reduce the risks of batteries bursting into flames and allow for thinner cells and smaller packs that fit under a car seat. Researchers also want to pair the solid electrolyte with a lithium metal anode to improve energy density and enable EVs to travel longer distances without stopping. That could help stoke sales by erasing consumer worries about running out of juice midtrip.
    To achieve all that, there’s a list of puzzles to solve. Prototypes currently have battery life that’s too short for a vehicle and suffer from poor conductivity, uncompetitive costs and a sometimes violent swelling and shrinking of materials when charged or discharged. When scientists solve one problem, that typically exacerbates another, said Yasuo Ishiguro, managing director of Japan’s Consortium for Lithium Ion Battery Technology and Evaluation Center, or LIBTEC. The group of more than 25 companies—including Toyota, Panasonic Corp. and Nissan Motor Co.—is backed by about $90 million in government funding to speed up progress
    “Among all the players out there, it seems like everyone has solved one or two or three of five of the most important things, but nobody has really solved everything,” said Henrik Fisker, chairman and chief executive officer of his namesake Los Angeles-based EV maker
    https://www.bloomberg.com/amp/news/articles/2019-01-06/before-the-electric-car-takes-over-someone-needs-to-reinvent-the-battery
    There is always a challenge to get it all together… Same for me on the Golf Course….one day my Drive and approach shots are fine, but my pitching and putting aren’t, another can putt like a pro but my Drive off the tee are in the woods! The Cosmos likes to have fun being a party pooper!!!

    • Greg Machala says:

      “Solid-state technology promises to be cheaper and charge faster than anything on the road today. But no one is close to figuring it out” – Not everything has a solution. Even in mathematics there are problems without solution.

  25. fauxscienceslayer
    fauxscienceslayer says:

    There is NO greenhouse gas, NO sustainable green energy and NO peak oil. Photovoltaics is a crude, one way, molecular erosion parlor trick that is a net energy loser.

    “Green Prince of Darkness” > FauxScienceSlayer(.)com

  26. psile
    psile says:

    Australia – it’s coming fellas!

    House prices fall at fastest rate in 35 years as credit tightens, sentiment slips

    https://i.kinja-img.com/gawker-media/image/upload/s–kCBQJ_xg–/ujdksjikossbwvicnwfz.jpg

    House prices are falling at the fastest rate in 35 years, increasing the likelihood of a disorderly market correction and economic recession, according to global investment bank Morgan Stanley.

    In the last three months of 2018 Sydney property prices fell by 15 per cent on an annualised basis, followed by Melbourne’s 12 per cent,with big falls posted in other major capitals.

    “With entrenched weakness across all aspects of the market, 2019 looks unlikely to hold an improvement,” warns Daniel Blake and his team of Morgan Stanley analysis.

    • Gail Tverberg – My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
      Gail Tverberg says:

      Ouch!

    • kschleunes
      Kurt says:

      People can’t sell either because they lose money when they do. So the price just keeps dropping rapidly as desperate people sell at a discount just to get out. It’s called, PANIC.

    • futuresystemsanalyst
      futuresystemsanalyst says:

      it’s happening here in NZ too

      • Oz and NZ may be part of The Periphery…

        who knew?

        • Gail Tverberg – My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
          Gail Tverberg says:

          Long shipping distances. Inability to provide for themselves. Join Puerto Rico and Cuba.

  27. “…the three years from 2014 were characterised by falling oil and commodity prices, which moderated inflation. This gave the global economy a boost it desperately needed, albeit at the expense of oil- and commodity-exporting nations – and the environment. The boost faded in 2017 and left 2018 as a particularly unspectacular year – except in the US, where Donald Trump’s tax cuts more than made up for lacklustre global trade and fed a consumption boom.

    “As 2019 gets under way, things look very different. Consumer debt has risen back to pre-crisis levels in many countries. Corporate borrowing has soared and governments, while they have reduced annual deficits, continue to sit on mountains of debt that dwarf the borrowing seen before the crisis.”

    https://www.theguardian.com/business/2019/jan/05/global-economic-crash-2020-understand-why

    • “Federal Reserve officials, after navigating the U.S. economy through the financial crisis and its rebound, face a fresh test in 2019: engineering an economic soft landing. The central bank’s challenge is to manage a moderation in growth that keeps inflation contained but avoids a recession. It was a main topic at an annual economic conference in Atlanta this weekend that featured top current and former Fed officials.”

      https://www.wsj.com/articles/fed-faces-a-fresh-test-engineering-a-soft-economic-landing-11546822609

      • Gail Tverberg – My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
        Gail Tverberg says:

        Lack of a soft landing is a big deal. The Federal Reserve tried to produce a soft landing before the Great Recession, and did a miserable job. It isn’t doing a good job now either.

        • Greg Machala says:

          I don’t think there is anything the Federal Reserve Bank can do that will measurably extend and pretend any farther. If they drop rates to zero, oil prices tend to rise, slowing the economy. If they raise rates oil prices tend to fall making oil unprofitable to extract. It seems to me the Federal Reserve Bank is between a rock and a hard-place.

          • Gail Tverberg – My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
            Gail Tverberg says:

            You may be right. Unless somehow these problems can be pushed off onto other countries of the world.

            • Ed says:

              Well, we just need China, India & Europe to stop importing energy, then the US can import it in exchange for food.
              There, My problem solved, but maybe not so good for everyone else.

            • Gail Tverberg – My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
              Gail Tverberg says:

              The US actually has quite a bit of food to export, and is no longer a huge importer itself. So I am not sure that it actually works this way.

  28. “Latin America is reaching the end of its fifth consecutive year of anemic economic growth. From 2014 to 2018, annual GDP growth has averaged just 0.5 per cent, slower than during the first five years of the Latin American debt crisis (1981-85) and the five that followed the 1997 Asian financial crisis (1998-2002). It is safe to say that Latin America has suffered a “lost half-decade.””

    https://timesofoman.com/article/67928

  29. “Australia has not seen a recession since the June quarter of 1991 but if house prices can be a harbinger of economic wellbeing, storm clouds are gathering… But Sydney house prices have recently recorded their biggest monthly fall for 14 years. Melbourne is close behind and the OECD has told the Australian government to prepare for a hard landing in the housing market.”

    https://www.irishtimes.com/business/economy/australia-braces-for-hard-landing-in-housing-market-1.3749277

  30. “A decade ago, China played a vital role in rescuing the world economy from the financial crisis by launching an unprecedented Rmb4 trillion ($833 billion) stimulus programme. Today, the fear in markets is the opposite. Already unnerved about rising rates in the US and slowing growth in Europe, many investors now worry that China could lead the global economy into the next recession…

    “A warning from Apple on Thursday about slowing iPhone sales in China has heightened concerns following a drumbeat of grim economic data, including outright declines in auto sales, home sales and factory profits…

    “”Domestic sentiment is definitely very bad, perhaps even worse than during the 2008 global financial crisis,” says Fred Hu, founding partner of Primavera Capital, a Hong Kong-based private equity group, and former Greater China chairman for Goldman Sachs.

    “”In theory, China has wide latitude to boost domestic demand to offset the trade war hit on external demand. But with sagging business and consumer confidence, private spending on both capital expenditure and personal consumption is more likely to trend down.”

    “The signs of decelerating growth are by no means confined to China. Five advanced economies including Germany and Japan recorded contractions in the third quarter. In the US, almost half of US chief financial officers surveyed by Duke University believe the economy will be in recession by the end of 2019, and 82 per cent expect a recession by the end of 2020. In addition, the pent-up effects of nine quarter-point interest rate increases by the Federal Reserve may drag on the US economy.

    “But even more than these concerns, the question that is hanging over global markets is just how vulnerable is China to a much sharper slowdown?

    “Ominously, the recent downturn has occurred even though the expected hit to Chinese exports from the trade war has not yet materialised. In fact, analysts say exports probably received a one-off boost in recent months as traders front-loaded shipments to beat the expected tariff rise from 10 per cent to 25 per cent that US president Donald Trump threatened would take effect in January…

    “”They [Beijing] will soon have no choice but to launch massive stimulus,” says Alicia García Herrero, chief Asia Pacific economist at Natixis in Hong Kong. “They do not want to give away their credibility because they said they wouldn’t do it, but there is no time to be cautious any more. Not having growth is ultimately the worst outcome of all.””

    https://www.afr.com/news/world/nervous-markets-how-vulnerable-is-chinas-economy-20190106-h19rou

    • “China’s foreign debt has been rising rapidly, and that’s becoming an increasingly big problem — for the country and, potentially, the world… Short-term debt accounted for 62 percent of the total as of September, according to official data, meaning that $1.2 trillion will have to be rolled over this year. Just as worrying is the speed of increase: Total external debt has increased 14 percent in the past year and 35 percent since the beginning of 2017.”

      https://www.financialexpress.com/economy/chinas-dollar-debt-a-crisis-in-the-making/1434719/

    • Gail Tverberg – My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
      Gail Tverberg says:

      China has a severe energy problem. People don’t understand this. It can’t keep growing, no matter how much it wants too. Imports start becoming too much of a problem. Industrial production needs to slow.

      https://gailtheactuary.files.wordpress.com/2018/06/china-energy-production-by-fuel-plus-consumption-to-2017.png

      • Rodster says:

        And the Catch 22 for them is that they can’t afford to slowdown because of their large population that needs to be kept busy with work for fear the could become restless and turn that anger towards their Government. China has incurred massive levels of debt building out their infrastructure as well as Ghost Cities and Ghost Factories.

        China is a classic example of needing to run faster and faster or else, collapse.

        • that is the world problem in a nutshell

          every country/political party preaches the same thing, and nothing can dissuade almost every individual from believing it too

          every relevant political speech says it—and almost everyone votes for it

          growth forever

        • Gail Tverberg – My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
          Gail Tverberg says:

          I agree. There is a lot of wage disparity. As long as the hope can be kept alive that everyone has a chance of getting richer sometime, then things go well.

  31. “If oil producers are not hiring service firms and deploying equipment, that suggests they are rather price sensitive. The fall in oil prices forced cutbacks in drilling activity. Oilfield service firms in particular are bearing the brunt of the slowdown. Executives from oilfield service firms told the Dallas Fed that their operating margins declined in the quarter… early data points already suggest that the U.S. shale industry could struggle if WTI remains below $50 per barrel. But the longer WTI stays low, the more likely we will see a broader slowdown.”

    https://oilprice.com/Energy/Crude-Oil/New-Data-Suggests-Shocking-Shale-Slowdown.html

    • Gail Tverberg – My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
      Gail Tverberg says:

      Lower price translate to less drilling activity.

  32. UK not inspiring confidence right now:

    “Britain could suffer a Donald Trump-style Government shut-down under a Remainer plot to block a no deal Brexit. Remainer Tories are joining with Labour and Lib Dem MPs to back changes to a key piece of legislation to bind the Government’s hands if Theresa May refuses to take no deal off the table.”

    https://www.dailymail.co.uk/news/article-6561945/MPs-plan-mount-Donald-Trump-style-shutdown-Government-stop-no-deal-Brexit.html

  33. Yoshua says:

    Some say that the mother of all credit events will be the implosion of the eurodollar market ( offshore dollars held by central banks, which finances the global trade).

    The eurodollar market is not regulated by the Fed, in fact some say that the Fed is controlled by the eurodollar market and the rate is regulated by the LIBOR (London inter bank offered rate).

    I tell you: GB rules the world!

    Take some more tea,” the March Hare said to Alice, very earnestly. “I’ve had nothing yet,” Alice replied in an offended tone, “so I can’t take more.” “You mean you can’t take less,” said the Hatter: “it’s very easy to take more than nothing.”

    • worldofhanumanotg
      worldofhanumanotg says:

      Correct to some extent.
      USD and FED are only host entities, subgroup in larger organized system. But it’s not exactly as you put that the GB should rule the world after-all, yes some of the major operational levers and key lieutenants reside and work daily in the City. But the true owners of the money reside elsewhere, notable places with much higher degree of comforts, safety in all respects etc. (for now), not hard to figure it out.. has been like that for centuries.

  34. Yoshua says:

    The credit market and the stock market.

    Everything seems to be interconnected. When credit expands…the stock market rises. When credit contracts…the stock market falls.

    https://pbs.twimg.com/media/DwQhhr5W0AIVi0b?format=jpg&name=large

    • Gail Tverberg – My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
      Gail Tverberg says:

      Right! More debt makes the economy grow.

  35. Chrome Mags says:

    https://community.oilprice.com/topic/4605-electric-cars-making-gas-cars-as-obsolete-as-%E2%80%98flip-phones%E2%80%99/

    “Last week, Wall Street Journal auto columnist Dan Neil discussed why buying a new IC engine car would be a big mistake — the equivalent of buying a flip phone in a world of smart phones.
    This financial calculus is based not just on the fact that EVs have become technologically superior in every respect and have a vastly lower operating cost. But it’s also the result of the price and performance of EVs improving so rapidly that many major countries, like China, India, the UK, and France, are planning to ban or phase out gas-burning cars in the coming years. “Buying a gas car today would leave you with a financial “albatross” that has little resale value”, warns Wall Street Journal.”

    It’s occurred to me before reading this article, that its a good idea to at least take a wait and see approach in deciding to buy another vehicle, ICE or EV. Meaning, it all depends on how things go. If things collapse that’s one thing, but if somehow BAU has some more life and you need to replace your ice, it may not be a good investment to get another ICE because the resale value won’t be there if EV’s are mandated in your area or if the price comes down enough to make them more easily affordable. It’s also possible that gasoline could be taxed at a much higher rate, especially if someone lives in California. Raising taxes on gasoline could be like the approach that was taken with cigarettes.

    • worldofhanumanotg
      worldofhanumanotg says:

      The article deals mostly with tangential innuendo and corralling people into financial abyss for overpriced gear.

      Instead the basic problem is that (all) most of big automanufs decided “you need” way above 100km range for EVs, i.e. trying directly to compete with range of gas/diesel cars, hence you get mammoth battery sizes ~40-60-80-100kWh which obviously cost a fortune..need heavier platform etc. The only partly ~sensible manufacturer in this mania seems to be Kia at the moment offering at least something in the more affordable ~40kWh batt size segment within more compact car envelope, but still relatively pricey anyway..

      And if you get out of manufs anything smaller say <25kWh (~100km range) batt pack it goes only in the special package as plugin hybrid, i.e. also including all the components of the combustion system, engine, gearbox, fuel and exhaust systems, .. Pricey again..

      If you have the money (and or can charge it on the company's expense/tax deductible account) it's precautionary advisable now to get an EV as well, it's relatively mature at this point, and you can get ~15yrs out of it.. providing you have means to get 'private' electricity.

      If you don't have the money, assort a stable of used combustion cars in maintainable condition; gas, natgas and diesel vehicles preferably from larger volume runs (for spare parts availability) and you are set as long as the fuel/parts are available.

      Also don't forget smaller mobility like bikes and animal power options.

      Not only for the possible tax and other regulatory schemes which might hammer down eventually through the first stages of the bottleneck. Eventually in deeper depression phase people won't be driving as much any longer anyway.

      • Gail Tverberg – My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
        Gail Tverberg says:

        I expect that the kind of electric vehicles that makes sense is mostly something like this.

        https://gailtheactuary.files.wordpress.com/2019/01/gem-auto-at-ksu.jpg

        These little electric cars by GEM are pretty much like modified golf carts. If they can substitute for an auto or pickup truck, there can be significant savings.

        • Chic! Every young, male driver will want to be seen in one, I’m sure. 😀

          • worldofhanumanotg
            worldofhanumanotg says:

            It depends, yes in some countries-cultures horse power seeking immature teenagers definitely prevail over utilitarian mindset favoring family/sport station wagons (or lite offroaders) and vice versa.

            My previous post was more or less along these lines as well.
            It’s not a problem to mass manufacture decent smaller mid sized cars upto ~1500kg ala say Ford Focus with ~150km range. But the manufacturers (and very stupid legislators) don’t see it that way, they believe $50k “entry level” car must have way above 300km range per charge to succeed – to supposedly out compete legacy internal combustion production..

            With regard to GEM/golf carts that Gail mentioned, they are usually under different law/specs, i.e. not allowed on highways etc. But for some application are worth the limitation.

            Basically, the most efficient transport is a network of fast long distance trains, regional train, local sub/urban trams/trolleybuses, and last mile hop on/off minibuses (diesel/natgas), plus electric bikes on dedicated lanes. Unfortunately only few countries realized the true nature of the humanoid transportation challenge and implemented anything near or partly full filling these specs.

        • Artleads says:

          Thanks for this little bit of cueing to help me not be so obnoxious with putting down all electric vehicles, thus making a much less persuasive case than I could. These little modifications to the story really help!

          • Artleads says:

            Actually, come to think of it though, I still don’t like these things. 100 years ago a half of all vehicles must have still been running on electricity. A wild guess would be that that electric vehicle use at that time–trolleys, trams, etc,–was the equivalent in electricity use to one of these little cars per 1000 people. Today, how its progressing, it would be more like one of these for every ten people. The web of complexity in all of this feels like trouble.

            • Gail Tverberg – My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
              Gail Tverberg says:

              By the way, China makes use of a lot of electricity in its rapid transit and also in its trolley busses. With coal available, China has aimed for electric transport for a long time.

    • Duncan Idaho says:

      “— the equivalent of buying a flip phone in a world of smart phones.”

      Only an idiot would have a smart phone.
      And I worked for Apple, and had my hands on it months before it was released.

  36. Japan 10 year bond is -0.02%…

    if you look closely, that’s a negative sign in front of the 0.02%…

    I don’t know the exact details of what that means…

    but I do know if that’s a “new normal”, there must be problems ahead…

    • DJ says:

      I think it means Japan has free money next 10 years and whoever lends it is ok only (almost) getting their money back.

      Maybe the money will become even freer in the future.

      • Gail Tverberg – My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
        Gail Tverberg says:

        How long can Japan really hold up? Can it get enough fuel exports to keep its industrial output going?

    • doomphd – Honolulu – I really hold a doctor of philosophy (phd) in geological sciences and study pretty doomy topics like giant landslides, volcanic eruptions and megatsunamis.
      doomphd says:

      maybe it’s a statistical error as the rate nears zero? why would the lender pay you to take their money? hope of a sound investment?

  37. Chrome Mags says:

    https://oilprice.com/Energy/Crude-Oil/New-Data-Suggests-Shocking-Shale-Slowdown.html

    ‘New Data Suggests Shocking Shale Slowdown’

    “U.S. shale executives often boast of low breakeven prices, reassuring investors of their ability to operate at a high level even when oil prices fall. But new data suggests that the industry slowed dramatically in the fourth quarter of 2018 in response to the plunge in oil prices. A survey from the Federal Reserve Bank of Dallas finds that shale activity slammed on the brakes in the fourth quarter. “The business activity index—the survey’s broadest measure of conditions facing Eleventh District energy firms—remained positive, but barely so, plunging from 43.3 in the third quarter to 2.3 in the fourth,” the Dallas Fed reported on January 3. The 2.3 reading is only slightly positive – zero would mean that business activity from Texas energy firms was flat compared to the prior quarter. A negative reading would mean a contraction in activity.

    The deceleration was true for multiple segments within oil and gas. For instance, the oil production index fell from 34.8 in the third quarter to 29.1 in the fourth. The natural gas production index to 24.8 in the fourth quarter, down from 35.5 in the prior quarter.

    But even as production held up, drilling activity indicated a sharper slowdown was underway. The index for utilization of equipment by oilfield services firms dropped sharply in the fourth quarter, down from 43 points in the third quarter to just 1.6 in the fourth – falling to the point where there was almost no growth at all quarter-on-quarter.”

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